Peach Corps Gate Agents?
#111
Yes, but returning the money via buybacks manipulates the value of stock based compensation. Returning the money to shareholders via dividends does not have the same effect.
#112
If Delta Air Lines had a $20B cash reserve, we would still furlough 2,500 pilots on October 1st, because management does not care about any of us. They only care about turning red boxes green on the excel spreadsheet.
#113
Gets Weekends Off
Joined APC: May 2012
Posts: 1,418
What other things? Dividends and buybacks were the vehicles of choice, The theory of stock appreciation with balance sheet improvement is just as valid as the buybacks. We will never know if that money would have served the shareholders better by increasing shareholders equity book value (balance sheet) by reducing debt. That also side steps the real motivation, management compensation.
That philosophy however is not what they teach in B-school anymore. Stock buybacks and LBO’s are de riguer. The formula for determining how much money should go to stock buybacks is taught. Now it’s suck out as much money as you can, while you can rather than plow all the money back into the business. I mean, why would you want to plow all your money back into a highly cyclical business like the airlines?? Your opportunity and time to suck money out is limited.
Not to mention all your like-minded buddies are on the board, and yes, 90% of your compensation is stock options. What could go wrong?
When it doesn’t work out - declare bankruptcy.
#114
Gets Weekends Off
Joined APC: Mar 2020
Posts: 140
Yes, it's actually really simple. It all goes back to the basic framework we have for distribution of operating cash: 50% of operating cash flow goes back into the business, 30% goes to debt reduction, and 20% to shareholders.
#115
Gets Weekends Off
Joined APC: Jul 2010
Position: window seat
Posts: 12,522
In this extremely cyclical industry the braintrust has, once again, lit billions on fire only to go hat in hand to the taxpayers to get billions in handouts, so they can try and return to lighting billions on fire. Bonus points to those using US taxpayer money to buy Airbus planes. Truly B-School brilliance. And they still think the multibillion dollar burnbacks are going to return along with the next temporary upswing.
#116
Denny
#117
Gets Weekends Off
Joined APC: Mar 2020
Posts: 140
#118
I think that’s been the point of a lot of posters. As I’m sure you can gather, the vast majority of pilots look at stock buybacks as way for management to enrich themselves under the guise of returning shareholder value. Right or wrong, that’s the impression.
Denny
#119
As it should. Change that is....
I think that’s been the point of a lot of posters. As I’m sure you can gather, the vast majority of pilots look at stock buybacks as way for management to enrich themselves under the guise of returning shareholder value. Right or wrong, that’s the impression.
Denny
I think that’s been the point of a lot of posters. As I’m sure you can gather, the vast majority of pilots look at stock buybacks as way for management to enrich themselves under the guise of returning shareholder value. Right or wrong, that’s the impression.
Denny
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