iahflyr

30% of the bailout money now has to be repaid to the government, along with an ownership share for the government of 10% of the value of the loan.

Politicians gave airlines a bailout in the amount of 6 months of their 2019 payroll. That made the corporate bailout politically easier to pass. But it in no way means that the bailout money can only be spent on payroll. Airlines have other expenses too. Plus this bailout only lasts for 6 months. The drop in demand will certainly last longer. Finally, do you expect airline employees to pay 30% back to the government with interest when this is over.

https://www.reuters.com/article/us-h...-idUSKCN21S1Y7

TyWebb

Ok, a lot to tackle here in your post since it seems you forgot or didn't read my original post. The grants are a different pot, so when you speak of bailout money we all need to look at it as different money ... so yes I expect the pot that the government wants to go to payroll to do just that. Why I mention you didn't read my original post, is because I’ve answered two questions you asked me... Can this last longer? Yes, it can and if it does, I expect the government to continue with grants for 3 or 6 months more. Maybe not to the level of this current grant and loans but enough to keep a certain level of employees from the unemployment line. But yes, to your point we all see furloughs coming if we get to that point. The government's motivating factor behind these grants to keep people off the books for unemployment just as much as anything else.

The article you post uses grants, bailout, and other language relating to the complete stimulus synonymously at times. They, Reuters, isn't the only outlet doing this so I can see the confusion it's causing.

I am not a bleeding heart union guy. I hate to see my union dues leave my check as much as I hate to see taxes leave it. I see that management has a **** sandwich to eat and I feel for them. It’s hard to predict and stay ahead of, and additionally, it’s hard to scale down quickly in this industry and it will be hard to scale up once demand comes back. This whole thing sucks, but it's what the current situation is, so... we all have to drive on.

My original point and only point was I was frustrated by the numerous emails/townhalls and numerous other forms of company communication pulling at my heartstrings to bid min credit when I know a pot of money is coming in just for payroll. The government wants this money to be sent out just as much as the people who want to keep their monthly income the same want it. Because if it didn't, then the economic stats from the labor department would be even worse than it is now. IMO, in the eyes of Wall St. that matters. It's not that complicated and I didn't ask for a debate that this has become but it is also eye-opening that more airline employees aren't informed as well as they should be.


Your issue about repayment and 10% equity the government will get. The details are very ambiguous. Will the airlines pay them back, probably at some scale, but look at the language: U.S. Treasury Secretary Steven Mnuchin told major airlines on Friday he wants them to repay some of the $25 billion in cash grants the U.S. Congress approved last month to cover payroll.

There’s no timeline and airlines always have the excuse you changed the rules after the game started. This came out yesterday the 10th and the treasury wanted everyone to apply for the assistance by the 3rd. However, all companies have until the end of the month to apply but what CEO/CFO is going to wait when they all know they are competing for bits of the same pie?

I do feel the airlines should repay and 30% and low to no interest seems very fair. Also, having no timeline means they can take their time and still shoot for recovery then back to growth. A lot of companies were doing just fine during the bull market of the last 10+ years while also repaying the government from ‘08/’09 bailouts. GM for example.

Also, look at the two statements from the Treasury Sec… Mnuchin spoke with the chief executives of major airlines in separate calls on Friday and told them the department was offering 70% of the aid in grants that would not need to be repaid, and 30% in low-interest loans for which the airlines would be required to offer warrants, the sources said. The interest rates would rise over time if airlines had not repaid them, the sources said.

Then:

Warrants do not generate any balance sheet debt and thus should not hamper the ability of airlines, which can also apply for a separate $25 billion government loan package, to finance in the future, experts said.

So all debt owed to the government doesn’t even go on the companies balance sheet? Deal of the century!

So if you worried about the 30% that’s not free money then go do the math on what a company is obligated for unemployment if their workers left in mass numbers. The 30% has to be close to what the company would be on the hook. So, in my opinion, it’s a damn trade-off. Read this if you want to see what companies are required to fund for unemployment - https://www.unemployment-services.co...cost-employer/. I would do the math but I’m not that bored yet. As you know it differs by state but since AAG is mostly Washington, Oregon and California have fun with that. So 30% is fair, this isn’t corporate socialism.


The Treasury said in a statement Mnuchin will not require passenger air carriers that will receive $100 million in payroll assistance or less to provide compensation and “funds will be available promptly upon approval of their applications.

I am sure AAG asked for more than $100 Million but there is the above tidbit from the article you posted. Possibly beneficial to Republic or the ULCC.

Finally, do you expect airline employees to pay 30% back to the government with interest when this is over. I am not sure why you are asking this? How are the employees on the hook for 30%? You don’t repay unemployment benefits because you pay into the “fund” via taxes. I do think that would be a good way for the government to run. What you take beyond what you and your former employer put in towards unemployment could be paid back over a long time with no interests.

DashAviator

Well, the reduced credit lines must have gone pretty senior. Either that, or the senior guys couldn't figure out how to modify their bid in PBS to get a reduced credit line, and ended up getting full-time lines instead. With only a few dozen pairings, the "regular lines" went very, VERY senior.

I bid in the top half for my seat and base. Result: Reserve, and not even my first choice. It's shaping up to be a long summer. Thanks for listening!

BigfatQ

What do you mean by not even your first choice? How do you know which type of reserve you have?

DashAviator

Well, at this point anything in PBS is just preliminary. It's easy to tell which type of reserve you have by looking at the start and end times associated with the reserve period (a.m., p.m., or the "24-hour" long call reserve). My first choice would have been a.m. reserve, but looks like I ended up on long call. On the plus side, I DO have a reserve preferences bid in PBS, and it honored the days off that I had requested.

hydrostream

Reserve type shows up in e-crew based on the preference form in Comply365. You can bid whatever you want in PBS but it doesn’t make a difference other than the days.

BigfatQ

That's what I thought. It always looks like long call in PBS. You might still get AM short call Dash

DashAviator

That would be excellent! Thanks for the information. Unfortunately (and what may have fooled me) is that it looks just like the time I got long-call reserve a couple of years ago.

One thing that seems interesting about the trips out of Portland is that nearly all of them start AFTER 6 a.m. and end prior to 10 p.m. Even the time for a.m. reserve has been adjusted, from 6 a.m. to 6 p.m. (it previously started at 4 a.m.). It will be nice to get a break from the super early shows and/or the super late releases.

Stinger6

...If you live in base. For the half of us or so that commute, May is a disaster. With showtimes of ~730~8 and release times of ~1700~1800, it's not commutable given the cancellations here and at other airlines. My crashpad has closed during the virus, so it's a hotel at the front end and the crew room couch at the back end, so 5 nights away for a 4 day trip. And I bid top 20%.

So, when the going gets weird, I guess the weird turn pro.

Stinger6

People t deer dr.