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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

#61

Post by notahacker »

tasubotadas wrote: post #33

>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…

Ryanair isn't 'doing fine', it's trying to force customers to accept vouchers instead of the cash refunds it is legally obliged to provide.

And the idea that Google and Facebook could do a good job of maintaining the profitability of an airline whilst being obliged to pay the capital costs of aircraft it's banned from flying is the epitome of Silicon Valley arrogance. Let's be honest, Google and Facebook haven't even adapted their core competency of connecting people digitally well to this crisis - otherwise there's no way people would be grudgingly using Zoom instead...

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

#62

Post by jotm »

wiz21c wrote: post #4

Does it mean that every german will have to pay about $10B / 80m = 125 euros for that ? So it means that they'll have, for example, to wait a little longer to buy their next phone, or lunch ? (I ask the question here because that's the kind of reasoning I read in the press but I'd like to know if it's as simple as that)

I guess, if they started paying now. But the (high) taxes have been collected for so long the state has some considerable savings by now...

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

#63

Post by chrisseaton »

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 disagree I think people will go on a business travel binge when they're able to.

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

#64

Post by MattGaiser »

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…

> I think most people would be able to survive on their savings for a month or two.

I think that is optimistic...

https://www.cnbc.com/2019/01/23/most-americans-dont-have-the...

They wouldn't go bankrupt, but surviving would require taking on debt.

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

#65

Post by School-Cotton »

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…

So unemployment insurance for people shouldn't exist?

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

#66

Post by oaiey »

dahdum wrote: post #42
tasubotadas wrote: post #33

>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.

It will be a net positive deal for sure. Germany can currently borrow money for free (they have negative interest) and invest when the shares of the company are super low.

Plus all the welfare stuff mentioned.

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

#67

Post by jotm »

sonthonax wrote: post #32

What does this mean in the context of state aid rules? I'm quite worried that the EU's attempts to pick up the pieces of the economic carnage will clash with Britain's attempts. Inability to agree what counts as fair, will be a major block in any negotiation, and catalyse the economic partition of Brexit.

It means Brexit is stupid as the UK could've done whatever it wanted within the EU.

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

#68

Post by SilasX »

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....

Are we sure that the "market cap:book value ratio" is not an artifact of a) the stock price being marked down by the market, while b) their (e.g.) planes have not been explicitly revalued in light of the lower demand?

That's probably why the board doesn't shrug and vote to liquidate assets and pay shareholders more than their shares are worth.

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

#69

Post by ianhawes »

ISL wrote: post #57
buboard wrote: post #51

Earlier quoted context omitted.

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.

This. I think if anything, there will be a minor bump over the next year or so, but it won't be long until people find out that really connecting still requires meeting in person. We are social creatures after all.

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

#70

Post by abdullahkhalids »

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…

At least in academia, people usually don't go to conferences to attend the talks - they are uploaded on youtube and you could watch them from home. People go because they are good networking events. That is something which you can't really do online.

Edit: of course, a minority of attendees are there to present their work, which can indeed be done online.

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