To be fair there’s rainy days and then there’s the biblical flood. This is the latter as Spirit and most every airline not named American was well situated to weather the run of the mill recession.

I agree that the stock buy back money should have been put aside for a bigger emergency fund, but no one knew what that meant until now. I suspect the new gold standard for airline health will be the ability to shutter the doors for 4-6 weeks and still be viable at the end of the year.

 

Not to defend any particular airline's fiscal practices, but how many businesses of ANY kind can do that?

 

Traditional thinking was that idle cash was useless, why give up equity if you’re not going to use the cash? I think this will change things, as I’m sure there will be strings attached to the forthcoming govt money.


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What is your source for this information? I have been monitoring multiple sources and have not seen anything of the sort (United looking for paycuts) as of now.

I'm hoping you tell us that your source is one of idiots who post on APC or perhaps the JBLU FA who started the 'United is buying JBLU' rumor a couple of years ago that didn't really die until coronavirus.
I have, to date, seen zero from either UALALPA or UAL management hinting at paycuts. Not much overall news, except that we can expect to be offered more leaves of absence (0 hrs pay) and surplus reduction lines (50 hrs pay). If one views those as paycuts, OK - but not a pay rate cut.

It's safe to say that there are some pretty intense discussions going on right now at all airlines and I'm sure there's a whole gamut of options on the table at every airline. All we can do is prepare for the worst and hope for the best.

We're all in the airline business so we're all screwed. Take care of each other and watch out for fellow workers who get deeply depressed - there have already been a couple of suicides out there. .

In closing, this calls for a little bit of Ozzy. https://www.youtube.com/watch?v=-9yYJ6ZAYns

All the best to everyone.

 

i don’t blame you for not seeing it, but I’ve argued that very point several times on this forum. Up til now that hasn’t been something any group of execs would have contemplated. Simply being able to weather a normal downturn, which every airline was in pretty good shape to do, was the standard.

This is may be the new one. And maybe not so hard to achieve if things like stock buybacks are stopped or at least delayed until that level of liquidity is attained by the respective organization. Honestly, that kind of emergency fund is recommended for our personal lives. It’s not so far fetched for it to be valid in the business sector. There may be s legislative benchmark set going forward as a strong attached to any government assistance, or as part of some blowback to the stock buy backs.

 

So if a person gets his paychecks and spends money to buy things, had a 6 month emergency fund, and decides to spend some of his extra cash on a vacation, new surround sound system and a boat...and then an economic collapse happens, so we say “you shouldn’t have spent money on luxury items like boats, you should have had 2 years savings!” So that person shouldn’t be eligible for financial assistance?

You can’t use hindsight for the airlines and say “they should not have done stock buybacks, they should have had unprecedented levels of liquidity, in case of a global pandemic that nobody had forecasting models for or if Godzilla himself walked in from the ocean and destroyed all cities in his wake. Just as the banks learned that more liquidity is needed for what was once unforeseen events, the same will be needed for airlines and should be tied to any government backed loan.

I don’t remember anyone ever saying the airlines needed more liquidity in the bank for a mass event like this. I do remember everyone asking for more profit sharing and higher wages from that idle cash. Hey, don’t blame anyone for that, but let’s not act like the pilots on this forum were screaming for more cash in the bank. We didn’t like that the cash was going to buy backs and not the pilots.

revisionist history perhaps....

 

To add to that, popular opinion up to this point was that extra liquidity would lead to a company being a merger target.

 

It has been determined that the OP over on the United thread that started that, had interestingly enough, created that username in March of 2020. Seems to be a troll account.

Outside of Oscar and Kirbys letter there hasn’t been anything.

 

That's where poison pill strategies MUST be employed by all airlines. We're tremendous targets for greenmailers and robber barons because the business is so capital intensive.

 

OK, that's what I figured that the OP was using for a source. I put as much credence in his posts as I did the stupid rumors that UAL was going to buy JBLU in the last couple of years. UAL is going to be fighting for survival, but so are every other airline out there. This is a tsunami that will cause major damage to every airline's balance sheet.