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German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

businessinsider.com

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Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#51

Post by buboard »

smoyer wrote: post #48

One 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 ta…

TBH i expected this to happen some time. I wonder how much funding agencies like NIH , ERC etc spent on travel grants per year. From my experience it s a lot

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#52

Post by joyj2nd »

gumby wrote: post #38
joyj2nd wrote: post #28

Earlier quoted context omitted.

Many major national carriers have national importance. So, no, they won't go bankrupt. Be it Lufthansa, Air France, Air China, or whatever. Airlines like Ryanair and Wizz air might be different.

Curious what you mean by “national importance?” Do you mean ego/national pride, or that without a state provided carrier there would be no flights (unlikely for a Germany or Belgium, but possible for, say, the Marshall Islands or Togo)? Or that there is some sort of treaty-mandated interlink that requires a designated flag carrier (I know this last case was true decades ago, but I’m not sure the US even has one any m…

Well, a country with a decent population size and a decent economy has to rely on air transport. Just now many countries flew out their citizens for example.

As far as I know, Lufthansa, like some other airlines, have a government owned golden share. https://en.wikipedia.org/wiki/Golden_share

In fact, if I remember right, an EU based airline is not even allowed to be owned by more than 50% of non EU share holders.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#53

Post by BalinKing »

hanniabu wrote: post #24
whalesalad wrote: post #6

Meanwhile 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.

No, we can't let them fail, that'd be capitalism!

The fact that the shutdowns are government-enforced is where the "it's capitalism" argument breaks down. The market's no longer free due to the government, so it makes sense that they would then try to offset the corresponding economic damage.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#54

Post by HenryBemis »

rndgermandude wrote: post #50

The 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 "Schutzschirmv…

It's like the Chapter 7 vs Chapter 11 for our friends in the US.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#55

Post by jotm »

smoyer wrote: post #48

One 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 ta…

I've got a friend who now works from home. Took them all of 3 days to set up. And yet they want her back in the office as soon as possible. Mind boggling to be honest. She's saving so much time and money not commuting and still does the same amount of work.

She says she doesn't like it though, the office environment is better. So there's that.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#56

Post by lainga »

smoyer wrote: post #48

One 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 ta…

I assumed it was important as a power game thing (if you care about my business so much come out here and stand in front of me). When this is all over the people who say "why do you need to fly me out there, we teleconferenced for 2 months" will get slowly written out of the e-mail chains.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#57

Post by ISL »

buboard wrote: post #51
smoyer wrote: post #48

One 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 ta…

TBH i expected this to happen some time. I wonder how much funding agencies like NIH , ERC etc spent on travel grants per year. From my experience it s a lot

There's still a huge difference between meeting people in the halls at conferences or working with them during a seminar-visit and looking at video-conference screens.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#58

Post by curiousgal »

dingo_bat wrote: post #49
curiousgal wrote: post #44

Earlier quoted context omitted.

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 a…

That is a gross oversimplification. They are a huge multinational, even if they had saved their entire net income of over a billion euros it would not have been enough.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#59

Post by new2628 »

joyj2nd wrote: post #28
hanniabu wrote: post #24

Earlier quoted context omitted.

No, we can't let them fail, that'd be capitalism!

Many major national carriers have national importance. So, no, they won't go bankrupt. Be it Lufthansa, Air France, Air China, or whatever. Airlines like Ryanair and Wizz air might be different.

Never mind that several smaller airlines of national importance went bankrupt in recent years because of EU regulation against state aid. Now that the big ones need it, the regulation is out the window.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#60

Post by ISL »

vonmoltke wrote: post #12
mrep wrote: post #5

Yahoo 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 it, in ideal terms, is how much it costs to buy the company outright?
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