C5Drvr

I’m not talking about resigning, I am talking about what furlough protection the two most recent classes would have in the bill. Nothing more.

R57 relay

Okay, screw you and pull up that ladder. Damn son.

Fr8Master

A “grant” is free money. How about a loan or a government takeover similar to the auto industry’s position in GM and Chrysler? Tax revenue would exist anyway, that is for funding ATC, FAA etc...not for “repaying” a “grant.”

Are the taxpayers supposed to bail out this industry every 10-15 years? Why not bail out the coal industry? Why not bail out the restaurant industry or the commercial real estate industry?

American spent over $12 billion on stock buybacks to pump up the share price (does nothing to help the business grow or achieve resiliency). And now you want to give them free money!? That’s like my son spending all of his money partying all weekend then wanting money for gas so he can get to where he needs to go. Nope, no free gas money. Either walk or I’ll give you a loan with terms favorable to me.

How come Southwest is able to stave off bankruptcy during each downtown? Steady leadership and an eye toward building a resilient business. It helps they their CEO doesn’t look like a drunk used car salesman too I suppose.

HobGoblin

Southwest spent $11 billion on stock buybacks...

Pilot X

haha that’s how I felt

whydididoit

https://www.cnbc.com/video/2020/03/2...-industry.html



THIS

Fr8Master

Yes and they shouldn’t get grants either, though they were in a better position to do so regarding their free cash flow. Additionally they don’t have near the debt that AA has.

LUV Cash to Debt ratio is over 1.0
AAL Cash to Debt ratio is below 0.12

see the difference?

ACEssXfer

Ive already said this but what company in any industry in the world does/can plan to have enough cash on hand to survive at 10-25% of their normal revenue for 6 months?

This event is unprecedented(and may force airlines to adopt the above scenario). I’m not defending the actions of these companies but at the same time the sheer scope of the damage done by this particular crisis could not have been planned for.

Fr8Master

Would you agree that it would be easier to survive a huge capacity drop for a few months without crushing debt?

True, you can’t predict the actual cause of a downturn (terrorist attack, financial market collapse, pandemic, shocks to oil supply), but rest assured after we recover from this one there will again be another one (also there will again be another pandemic, since 2000 we have seen SARS, MERS, EBOLA, and now Corona. Historically the Spanish Flue, Black Plague etc.). Why not build up cash and pay down debt? I disagree that this crisis could not be planned for...what can’t be planned for is when it will happen...we know it will happen again at some point. I will never own an airline stock, but if I were a shareholder I’d much rather see a healthy balance sheet than an artificially inflated stock price from buybacks. Healthy balance sheets inoculate businesses from external shocks like these. Though they don’t guarantee survival of the business they increase the odds.

All that being said, no grants, repayable loans only, and strong guarantees for labor and tons of strings attached for management.

DoNoHarm

This would lead to more than 50% of the seniority list at AA being furloughed in the next 30 days. The company would enter bankruptcy and the pay of the remaining pilots would be cut substantially.

With the government taking equity stakes in the airlines, the tax payers will make money off of a "bailout" deal even if it is not repayable loans. After 2001, the government bailout led to the taxpayers making over $300mil from the airlines when the government sold their equity stake.

And yes, everyone agrees AA needs a new Board of Directors and senior leadership.