America's bailed-out airlines are not 'playing fair' with customers • Hacker News Board

Re: America's bailed-out airlines are not 'playing fair' with customers

#41

Post by dboreham » Sat, Mar 28, 2020, 6:02 PM UTC

dominotw wrote: post #11

orthecreedence wrote: post #4

If we give bail outs, we should get stock/control. End of story. All bailed out companies should be nationalized to some extent, depending on the value of their stock and how much the government buys. A board/council of nationally elected representatives should manage whatever share of these companies the government owns. It's time the citizens started getting a return on their tax dollars if they're being used for p…

>All bailed out companies should be nationalized to some extent Is there an example of nationalized company that operates in free market and still manages to turn a profit for the investors(citizens). I wouldn't make an investment in usps or amtrak as a citizen with profit motive as a tax payer.

Yes but not many because Chicago School Economics says you immediately privatize them in that case.

Re: America's bailed-out airlines are not 'playing fair' with customers

#42

Post by coredog64 » Sat, Mar 28, 2020, 6:03 PM UTC

soperj wrote: post #33

chki wrote: post #22

Earlier quoted context omitted.

How could an airline company possibly be equipped to handle this kind of situation? If you want to be competitive on the market you need to lower costs and cut down on margins. You can't just have a big pile of money lying around "in case all flight is halted for a few weeks/months"

Maybe by not doing billions worth of stock buybacks over the last 10 years? They've literally been shut down for what... a month??

If AAL had saved their entire 2019 free cash flow (literally impossible), they would still be $6B short of their projected expenses. There is very little of their cost structure that declines when the planes are parked: Employees need paychecks. Lease payments are due on the engines and airframes. Rent needs to be paid on facilities. The fuel savings from not flying are offset by the need to mothball aircraft.

Re: America's bailed-out airlines are not 'playing fair' with customers

#43

Post by jdsully » Sat, Mar 28, 2020, 6:05 PM UTC

cbanek wrote: post #8

jdsully wrote: post #2

If you were flying to europe they should be reimbursing per EU261. So far its been hit or miss actually getting the refunds with the people I’ve helped. Its amazing how when the contract of carriage is in the customer’s favor somehow it no longer applies.

Despite not having any information on American Airline's website, I was able to get my money for a cancelled flight last year from Europe to the US (due to technical problems on the plane) by just doing the contact us form and putting in all the info. But of course, they didn't have any of this info listed on their website in a way that told me I needed to do that. The check was mailed on time, and I was actually pre…

In normal times you should also get 600EUR in additional compensation although they fight hard against that. Obviously this doesn’t apply here.

Re: America's bailed-out airlines are not 'playing fair' with customers

#44

Post by Reedx » Sat, Mar 28, 2020, 6:05 PM UTC

pgsbathhouse2 wrote: post #29

Reedx wrote: post #21

The government is failing badly at every level. That's more clear now than ever. Serious question: Why would you want to give them more to fail at?

>The government is failing badly at every level. Just the executive branch, which was elected by a certain segment of our society. Thankfully (hopefully) it only lasts 4 years, and not 20.

There's no assurance at this point it'll be improved the next 4 years, and who knows what's after that. It could be even worse for all we know. So it's not wise to increase what they might be in charge of.

Anyway, let's be real, it goes into the state and city levels too. NYC health leaders encouraged people to go to parades in Feb, in defiance of Coronavirus. Their mayor was encouraging people to go to bars and theaters into March. March!

Example from March 2nd: "Since I’m encouraging New Yorkers to go on with your lives + get out on the town despite Coronavirus, I thought I would offer some suggestions."

https://twitter.com/BilldeBlasio/status/1234648718714036229

Do they not bear any responsibility for that? And for not generally ensuring their health system could handle a surge? We knew of this specific problem back in January. We knew pandemics would be a problem generally. It's not exactly a surprise.

Re: America's bailed-out airlines are not 'playing fair' with customers

#45

Post by doubleunplussed » Sat, Mar 28, 2020, 6:06 PM UTC

tehwebguy wrote: post #16

T-hawk wrote: post #12

Earlier quoted context omitted.

Serious question: do we have historical comparisons, can we refer to instances where nationalizing in the wake of a bailout led to positive results? The one comparable I can think of in the US is Amtrak, which is functional although not exactly wildly successful.

This is a bad faith question. The real question is, “Why were the airlines so poorly equipped to handle a cataclysmic event when the last one was only 19 years ago?” The answer is short term profitability. And the follow up question is, “Why would ANYONE bail any for-profit company out to the benefit of the shareholders only, ever?”

It's not just for the benefit of the shareholders though. If it were I'd agree with you - but bailing out these companies is for the benefit of consumers, who would otherwise be without an airline industry for a while.

We should try to get the shareholders to pay for as much of it as possible though, whilst allowing the industry to stay solvent. This seems like some of the intention of making bailouts in the form of low-to-zero-interest loans (not sure if that's the form the bailout ended up taking).

Re: America's bailed-out airlines are not 'playing fair' with customers

#46

Post by Consultant32452 » Sat, Mar 28, 2020, 6:07 PM UTC

ceejayoz wrote: post #38

greglindahl wrote: post #28

Earlier quoted context omitted.

GM and AIG are two examples from the last financial crisis. Both went back into private hands.

At a small profit to the US taxpayers, even.

We lost $11 billion according to this article.

https://www.reuters.com/article/us-autos-gm-treasury/u-s-gov...

Re: America's bailed-out airlines are not 'playing fair' with customers

#47

Post by Merrill » Sat, Mar 28, 2020, 6:07 PM UTC

The airline industry needs to be resized as well as bailed out.

Business travel will be permanently impacted by the shift to digital communications that is being forced upon business now.

Leisure travel will not come back until there is a Covid-19 vaccine, which is 12 to 18 months at least. Even then, higher ticket prices due to the lack of the more profitable business travelers, combined with a lack of consumer expendable income, will curtail demand for another year or two.

Re: America's bailed-out airlines are not 'playing fair' with customers

#48

Post by jacobolus » Sat, Mar 28, 2020, 6:10 PM UTC

threatofrain wrote: post #10

orthecreedence wrote: post #4

If we give bail outs, we should get stock/control. End of story. All bailed out companies should be nationalized to some extent, depending on the value of their stock and how much the government buys. A board/council of nationally elected representatives should manage whatever share of these companies the government owns. It's time the citizens started getting a return on their tax dollars if they're being used for p…

These companies were shut down under extraordinary circumstances, and the economy also shut down in a very uneven way and for an indefinite time, with another potential shutdown to counter a winter resurgence. About half of Americans are still not under lockdown. The picture to me is that the country does not consider itself as in the same boat.

These companies have made incredible profits for many years by nickel-and-diming customers, squeezing employees, and ignoring large-scale environmental costs, and then diverted the proceeds into the pockets of a small number of extremely wealthy people instead of using it to prepare for possible shocks.

If the people are going to bail them out, the people should get an ownership stake.

Re: America's bailed-out airlines are not 'playing fair' with customers

#49

Post by dionian » Sat, Mar 28, 2020, 6:10 PM UTC

orthecreedence wrote: post #4

If we give bail outs, we should get stock/control. End of story. All bailed out companies should be nationalized to some extent, depending on the value of their stock and how much the government buys. A board/council of nationally elected representatives should manage whatever share of these companies the government owns. It's time the citizens started getting a return on their tax dollars if they're being used for p…

Bailouts for government-mandated shutdowns in crises are different than saving the banks for screwing up while trying to make more money.

Re: America's bailed-out airlines are not 'playing fair' with customers

#50

Post by jliptzin » Sat, Mar 28, 2020, 6:12 PM UTC

The pandemic is not their fault, but it is their fault for not being prepared for something like it. It’s even listed as a risk factor in investor disclosures, so it’s not totally unforeseen. An electrical fire can burn your house down through no fault of your own, and that’s why you have homeowner’s insurance. How about keeping cash in reserves instead of doing huge stock buybacks the last 10 years? How about having a plan to wind things down and “hibernate” until the business can be spun back up again? No sympathy for them. No bailout. Let them fold, let them sell the planes so new management can manage them better.