[koolba]

50 small airlines would all individually collapse in this economic climate. None would have the capital position to weather a multi month lull of this magnitude.

I’m not saying I agree with the bailout cycles but I don’t think they’d inherently weather this storm any better. On the plus side it’s more likely smaller localized capital would be able to get them back up again when things finally turn around.

[arcticbull]

WestJet in Canada for instance is basically going into hibernation. They're laying off 50% of the workforce, and cancelling all US and international flights [1]. They are however not yet being bailed out by the government, and they are also not going out of business.

I'm not sure any small carrier need go bankrupt. They park their planes, furlough their staff, and in a few months, open up with some summer promos. Not flying doesn't mean a trip through Chapter 11.

[1] https://torontosun.com/business/money-news/canadian-airlines...

[cjbassi]

This plan of action makes perfect sense to me, and I'm confused why American companies aren't doing the same? Or are they? If so, why would they need to be bailed out?

[arcticbull]

My question exactly. Especially as airlines have very tight relationships with credit card issuers who historically have provided debtor in posession financing as the us majors have exited bankruptcy. They do this by prepaying for large quantities of miles to hand out in reward for credit card spending. Ask them first before coming by with hat in hand.

[kingaillas]

Let them fail.

I'm tired of this getting-more-frequent cycle where corporations come crying to the government for bailouts. You want balls-to-the-wall free market capitalism? Then live with the downsides, including that "changing market conditions might render your company insolvent on very short notice."

Otherwise, it's just corporate socialism; seemingly a dirty word only when people and healthcare is involved.

If corporations only get rewarded for maximizing profits, they'll never learn to store some for a rainy day (or weeks/months/quarter, etc.) Without heavy restrictions, who can say the money will be spent directly benefiting people?

So airlines (probably will) get bailout money... why? So they can keep operating and don't have to layoff employees? Well how about giving bailout money directly to those employees without filtering it through the corporation first which will skim a certain amount off the top?

If the goal is to keep the airline in business... why? Leisure travelers have dried up, leaving business passengers... how about jacking up the rates for business travel instead of essentially subsidizing it?

I thought corporate taxes were a waste of time because corporations would just increase their prices to make up for it. Well if that's true, how about skipping them in the bailout process, let them jack up their rates, and consumers can opt in/out of the services they offer at the going rate. Isn't that how the free market is supposed to work?

Bailout money should go to PEOPLE who need to eat. Corporations can renegotiate contracts, delay payments, raise prices afterwards, etc.

Maybe some good will come from this pandemic, namely a rethinking of the importance of a safety net for citizens, and a readjusted attitude that wall street's metrics shouldn't be the only goal of a corporation.

[arcticbull]

> Bailout money should go to PEOPLE who need to eat. Corporations can renegotiate contracts, delay payments, raise prices afterwards, etc.

This x100. Let corporations fail and pay unemployment to the staff until new business can take it's place. You can't look me in the face and tell me if all the major US air carriers go under people in America will stop flying.

[rumanator]

> Bailout money should go to PEOPLE who need to eat.

I'm pretty sure the workers employed by these companies need to eat, and they depend on the company existing to buy their food.

[blaser-waffle]

They sure do need to eat. And if the C-levels and the board were thinking ahead, they might have the liquidity to keep those people. Instead they opted for stock buybacks and fat bonuses for themselves. Now they're sitting pretty while all their people are looking at eviction or starvation.

They don't need a bailout. Give the money to the people who actually need it.

[arcticbull]

Why hope the money trickles down to the employees if that's your goal when you can just cut them a check?

[rumanator]

It has rigorously zero to do with beaten cliches like "trickle down". I'm stating the fact that these employees are already receiving their salary from these companies and thus, obviously, their livelihood is already ensured and covered by them. Their paycheck is already signed and paid by these employees. There is no magic or hand-waiving.

[arcticbull]

My statement had nothing to do with the cliche. Why would you apply money to the top of the organizational structure and hope it makes its way down to the employees when you could just pay the employees directly and remove all doubt?

To guarantee it made its way down you'd have to mandate the employer pass it down to the employee using some defined and agreed upon formula, that you'd then have to monitor compliance of and enforce. Or you could mail a check from the IRS which has all the addresses and bank account details. Seems like much less work and much less guess/hope.