Earlier quoted context omitted.
She who pays the piper calls the tune
That “she” is very forced.
I assume it’s a Merkel reference.
German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
41–50 of 178 posts
Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
#42>The company will take the money but the state won't get a say: this is a concise summary of what Lufthansa's Executive Board, headed by CEO Carsten Spohr, has been telling German politicians in the past few weeks. That's awesome. Create a crappy business, hire 130k employees, and get the state to pay for your failures. At this point, I would be happier that they would just give the money to Google and Facebook which…
Isn’t the German government taking a stake in the company again, as a state holding? They can sell that to recoup the investment later on. Letting it fail seems like it would drop GDP / tax revenue while pushing thousands onto social welfare.
Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
#43Based on my experience with Lufthansa. That's an organization that should fail. If anything happens on your journey that is not average, the agents always blame you first.
>If anything happens on your journey that is not average, the agents always blame you first. So basically every airline ever? Unless you are in the ultra premium VIP exclusive membership club.
United has treated me better than LH.
Just one of the many examples about how LH has treated me badly:
LH has to downgrade the plane from FRA-LHR, and people will get involuntarily denied. (LH Metal FRA-LHR, UA Metal LHR-ORD) I have 2 award tickets on my iterary. I offered to voluntarily reroute we can go United metal leaving Germany, the agent's response was "WHO TOLD YOU THIS!" They tried to offer both of us FRA->ORD direct via LH, I rejected. They ended up sending my bag to JFR later for me to claim missing baggage. (United had to fix their problem) My dad's bag arrived just fine in ORD.
Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
#44>The company will take the money but the state won't get a say: this is a concise summary of what Lufthansa's Executive Board, headed by CEO Carsten Spohr, has been telling German politicians in the past few weeks. That's awesome. Create a crappy business, hire 130k employees, and get the state to pay for your failures. At this point, I would be happier that they would just give the money to Google and Facebook which…
How is it a crappy business? It literally took countries shutting down their borders and people not traveling at all to bring them to their knees.
Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
#45Shrewd negotiation by the CEO! Unlike, say, Volkswagen which has a significant stake owned by Niedersachsen and politically appointed board directors, Lufthansa will have two non-politician directors and no state veto.
Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
#46Yahoo finance says their market cap is 4 billion [0] and yet they are getting a bailout worth 2.5 times their market cap. That's crazy. [0]: https://finance.yahoo.com/quote/lha.de/
They are trading at a really small fraction of their book value, currently 0.37[1]. In addition, their book value is being weighed down by debt. I don't know why people fixate on market cap in cases like this. [1] https://finance.yahoo.com/quote/LHA.DE/key-statistics?p=LHA....
Because huge debt might decrease future returns?
Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
#47Meanwhile American Airlines needs like 12 trillion dollars to keep the lights on. Can't wait for the day where we let that pathetic airline fail.
The world didn't end when Pan Am failed, although many thought it would. No reason to prop up shitty businesses that continue to make bad decisions, I don't care how large they are. If there is demand for their service supply will appear. Rewarding bad decision making with artificial demand is degenerate.
And it also didn't end when TWA, Eastern Airlines, Braniff or Tower failed either.
It seems oddly perverse that these same American carriers who made billions by "nickle and diming" their customers with fees, penalties and taking basic services away now want a bailout from them. And it's hard to imagine a future where these same carriers don't go back to these same practices with a fervor in order to pay that money back or return to profitability.
Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
#48One thing that I think the business world has finally learned during the COVID-19 social distancing is that business travel isn't nearly so important as we had imagined. And attending conferences was always fun but it's been amazing to watch how fast conferences have switched to an on-line format (well ... the technical ones that I would attend).
So it's my opinion that the airlines, hotels, conference centers and taxi/ride-share companies are in for a rude awakening. Tourism might increase when this isolation ends, but I think there's going to continue to be a serious contraction in the market segments that support business traveling. And when you combine it with the financial damage done to businesses during the pandemic, they've got two fiscal reasons for eliminating business travel.
Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
#49>The company will take the money but the state won't get a say: this is a concise summary of what Lufthansa's Executive Board, headed by CEO Carsten Spohr, has been telling German politicians in the past few weeks. That's awesome. Create a crappy business, hire 130k employees, and get the state to pay for your failures. At this point, I would be happier that they would just give the money to Google and Facebook which…
How is it a crappy business? It literally took countries shutting down their borders and people not traveling at all to bring them to their knees.
If an average person were laid off today and couldn't find a job for 1-2 months, would they go bankrupt? I think most people would be able to survive on their savings for a month or two. Companies should also be held to the same standard. They should have enough savings to survive this sort of disruption, just like a person would.
So yeah, if your company can't survive a month without revenue, it is a crappier than average business.
Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid
#50The German media does not have this story (yet?).
The best I can find that the German govt made an offer for a EUR 9B bailout, which would be (in large part) a credit which would lead to a commitment of EUR 500M per year in repayments (which the Lufthansa doesn't want), and the govt wants two board sets (which the Lufthansa doesn't want).
It is also reported that the Lufthansa is looking into opening a "Schutzschirmverfahren" (special case of bankruptcy law, which you can file when you're not yet insolvent but soon might be, aimed at allowing a company to become viable again mostly by itself), has EUR 4.4B in the bank, and wants to have a final decision by end of May. (from a story published less than 1h ago in SZ).
Maybe BI knows something everybody else doesn't...