Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

businessinsider.com

Post reply on HN
Print view View original

121–130 of 178 posts

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

#121

Post by joshuaissac »

chosenbreed37 wrote: post #74
makomk wrote: post #36

Earlier quoted context omitted.

I think Matt Levine has pointed out before that the amount of money it would take to keep US airlines going was likely to be more than their pre-Covid market cap. It's a big reason why the idea that they should just have saved up enough money to not need bailouts instead of paying out to shareholders is a non-starter; the value of the airlines to shareholders is less than the amount it would cost, because air travel…

Socializing the losses...I like that turn of phrase :-)

That phrase (the full form of which is "privatising the profits and socialising the losses") is often used in criticisms of bailouts of failing companies. This practice even has a name: lemon socialism.[1]

1. https://en.wikipedia.org/wiki/Lemon_socialism

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

#122

Post by smoyer »

abdullahkhalids wrote: post #70
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.

I'm not disagreeing that there are networking opportunities ... I work for a university and have been going to a conference or two a year since I started here simply to meet up with people. I think we'll find a way to recoup some of that value remotely and I think that the business will accept that there is some loss in networking rather than pay for the trips.

Throughout most of the '90s and '00s, I traveled between a week and two weeks a month for work. There was a huge decline in the "luxury" of flying around the world after 9/11 that's continued to get worse and worse since. Flying anywhere these days is simply a chore.

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

#123

Post by viklove »

baq wrote: post #112
StreamBright wrote: post #102

Earlier quoted context omitted.

Or let these companies fail and free up the air routes across Europe and create a more efficient company? I do not think that we need to keep bailing out airlines at all. Lufthansa has so many issues, starting with their website, internal problems (try to get an invoice from them), etc. Why do we (the taxpayers) have to pay for their failures of these airlines?

how long does it take to build an efficient airline? why do you think it won't be a net positive for the tax payer? it's literally the government buying low and selling high when this is over.

Not long, when a massive airline recently went bankrupt and you can purchase their assets at fire sale prices and hire their now-jobless employees.

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

#124

Post by econcon »

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…

It's about control. During bad time like this Covid time, to haul cargo of national importance like masks or ventilators, passenger airline can be used if military one proves insufficient.

And how many countries will allow others military cargo planes in their border?

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

#125

Post by joyj2nd »

joyj2nd wrote: post #27
haunter wrote: post #26

Earlier quoted context omitted.

>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.

Nah. Aeroflot, Turkish, Ethiopian and Delta have pretty good customer service.

Why the downvote? Have you used this airline? Aeroflot, Turkish and Ethiopian are in an excellent geostrategic position for the future.

I hold SU and TK gold elite, both just emailed me: Due to the crisis the both extend my gold elite status for 12 months/6 months without any need to accumulate miles to reach status.

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

#126

Post by lostlogin »

StreamBright wrote: post #98
tannhaeuser wrote: post #88

Sadly, France and The Netherlands bailing out Air France and KLM last week, resp., forced the hand and diminished leverage for the German federal state I guess. I thought subsidies (to former state monopolies, of all things) was the one thing that need explicit consent under EU treaties. Now the people of DE, FR, and NL have to bail out a business that has no perspective to return a profit for the foreseeable future.…

The problem is that these companies are so inefficient and the conserved the 30 years old business practices very well internally because the governments are keep bailing them out. Maybe it would be for the better to let them fall and start over. Build an airliner that operates effectively and widen the margin. There are other alternatives. For 10 - 15B EUR (estimated) we could connect the major European cities with…

Your point brings up rail companies. I can’t see that they would be doing great right now, but a brief search doesn’t seem to show that they are circling the drain. I wonder why?

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

#127

Post by op03 »

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…

Not going to happen. You can't do too many deals of any kind just over video chat. You will just loose out to ppl who make the trip to sit hit and hand hold customers/partners/employees/bankers etc.

China and South Korea have already started issuing spl permits for biz travellers. Some kind of new system being cooked up there that will probably be replicated all over.

Airlines/Tourism/Hotels etc are def going to take a big hit. Many will fold but they will be back in a year or two or however long it takes the vaccines to show up.

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

#128

Post by econcon »

jotm wrote: post #72
znpy wrote: post #2

Aren't state aids forbidden in the EU?

Not for bailouts of struggling business (of special importance) if I understand it correctly.

How is it not unfair advantage?

If you let a business keep trying again and again, yes it offers unfair advantage over companies in other countries which might not have funds to support their companies.

One who flies the highest, falls the highest - these companies remain unaffected by small cities but when large one strucks these are getting bailed out.

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

#129

Post by catalogia »

a3_nm wrote: post #77
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…

> "attending conferences was always fun" Well it's also because there were always disadvantages we forget about: hours upon hours of travel, going on your own, sleeping in unfamiliar rooms, not to mention the cost of it all. Going to a remote place for a few days isn't so fun when you remember all the hours spent in an airplane seat to get there and back.

> hours upon hours of travel, going on your own, sleeping in unfamiliar rooms

How negative those 'negatives' are depends a lot on the individual. Some people prefer routine and freak out when they stray from the routine. But other people find it exciting to stray from routine.

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

#130

Post by econcon »

econcon wrote: post #116
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)

Not only Germans but whole EU. The way EU works is by letting monopolies in a few west European countries expand their market to east and capture more value from everywhere. Yes, East European companies can also do that but usually, there is first mover advantage and other policies at local level which influence the ability to form monopoly through investment and expansion.

I'd love to know why downvoters disagree, if you start a competition between companies where some companies have better technology, state help or finance and put them against companies who don't have all that, yes big companies are more likely to become bigger if you combine the market where all these companies operate.
Post reply on HN