Poll: airline bailout

User avatar
OKkayak
Walks on Forum Water
Posts: 14241
Joined: May 14th, 2018, 11:10 pm

Re: Poll: airline bailout

Post by OKkayak »

ksnosheeple wrote:Trudy's got the money printing press fired up and giving everybody or their dog (but not their grandparents) money. Wrong approach but we are so far down this road why not the airlines too.

You think that this is unique to Canada? Pretty much every other country is in the exact same boat as we are and doing the same thing.
GordonH wrote:User fees target those using the services, imo works very well. Why should all taxpayers have to pay, since many don't use the airports.
Because airports are incredibly vital to the Nation's infrastructure. Airports aren't passenger only entities.

On a positive note, WestJet got the go ahead and has started operating some cargo only flights with their new 787s between Canada, the US, Europe, South America and the Middle East.
ksnosheeple
Fledgling
Posts: 157
Joined: Apr 16th, 2020, 11:32 am

Re: Poll: airline bailout

Post by ksnosheeple »

GordonH wrote:
ksnosheeple wrote:Trudy's got the money printing press fired up and giving everybody or their dog (but not their grandparents) money. Wrong approach but we are so far down this road why not the airlines too.
To those that are blaming the airlines for high prices. That's like blaming the grocery store for the high cost of milk. Don't forget the airport improvement fee and you don't see the landing fees and other charges to the airlines. YLW isn't too bad, but all that glass & stainless steel in those other Canadian airports is all tacked on your ticket. Don't forget the carbon tax on the jet fuel too. If you compare costs with other countries we're getted hosed bigly. A bit of it is from the restrictions to competition but most of the high costs is all the taxes.


User fees target those using the services, imo works very well. Why should all taxpayers have to pay, since many don't use the airports.

Nothing wrong with user pay.
Issue one; when airports changed to locally run model the feds put in a very high rental rate on the land. So although it's moved to user pay, it can also be looked at as user also pay for past costs too.
Issue two; airport boards are appointed by local politicians. That means some good, some bad. A lot of monuments have been built on the backs of users instead of practical buildings. Think high end mall vs. big box store. It's now a competition between airports on who can built the fanciest, have the most art work, etc. Then comes the increases in ticket fees to pay for the luxury.
issue three; airport boards are appointed by local politicians. Croneyism. One airport a lot of the management staff was hired from a board members workplace. Best for the job or best for friends? Look into construction projects, most boards limit bidding. That likely extends into other purchasing.
User avatar
Hurtlander
Walks on Forum Water
Posts: 11076
Joined: Jun 23rd, 2013, 10:48 am

Re: Poll: airline bailout

Post by Hurtlander »

OKkayak wrote:
wisdom01 wrote:Air Canada not a chance, they have been gouging us for decades

No they haven't actually. Well, maybe to those who don't understand airline economics.


I’ll respectfully disagree with you on that, at least as to how Air Canada handled the Covid-19 situation..
The exact moment Trudeau ordered all Canadians abroad to return home, every Canadian airline immediately cancelled everyone’s pre-booked flights home, and forced all their customers to re-book on “rescue flights”... Every major Canadian airline, WestJet, Air Transat, SunWing, Swoop, charged rescue flight rates at, or below regular rates.. Air Canada more than double their rates in most cases. Air Canada was taking full advantage of the fact that Trudeau announced that if Canadians couldn’t afford the cost of the rescue flight, the government will lend them $5000.00 interest free.. Friends of mine were forced to pay $3400.00 for a one way flight for two from Puerto Vallarta to Toronto, a flight that usually costs around $950.00 all in.

Now if only those of us that booked “rescue flights” on the other airlines can get our money back in full for the canceled flights instead of a credit towards our next flights... I was told by WestJet that I have to book my next flight within one year to use my credit.. unfortunately this virus might keep us looked down with border closures and physical distancing rules for the next 24 months, will I get to use my credit before it expires ? .. Fortunately there’s a very good possibility of a class action lawsuit against the airlines.

ETA: There was absolutely no good reason why the credit from the canceled flights couldn’t have been used towards the rescue flights... but they refused to do that.
Keep on Truckin
User avatar
OKkayak
Walks on Forum Water
Posts: 14241
Joined: May 14th, 2018, 11:10 pm

Re: Poll: airline bailout

Post by OKkayak »

Hurtlander wrote:Every major Canadian airline, WestJet, Air Transat, SunWing, Swoop, charged rescue flight rates at, or below regular rates..
Actually, that is not correct. With the exception of Sunwing that offered limited free seats on some flights, Swoop (which is owned by WestJet) was charging $1500 from Mexico to Toronto. Both Air Canada and WestJet were capping their fares at the lowest economy fare, however, that price is not fixed, it goes up as more seats sell. The lowest one way economy fare ticket price from say London to Vancouver can range anywhere between $500 and $3000 depending on seats available.

Hurtlander wrote:I was told by WestJet that I have to book my next flight within one year to use my credit.. unfortunately this virus might keep us looked down with border closures and physical distancing rules for the next 24 months, will I get to use my credit before it expires ?

Both Air Canada and WestJet have extended flight credit refunds to 24 months. If travel restrictions persist, that could very well end up being extended.

As I've pointed out in other threads, this isn't unique to Canada, pretty much every other airline in the world has not offered refunds.
User avatar
Hurtlander
Walks on Forum Water
Posts: 11076
Joined: Jun 23rd, 2013, 10:48 am

Re: Poll: airline bailout

Post by Hurtlander »

OKkayak wrote:
Hurtlander wrote:Every major Canadian airline, WestJet, Air Transat, SunWing, Swoop, charged rescue flight rates at, or below regular rates..
Actually, that is not correct. With the exception of Sunwing that offered limited free seats on some flights, Swoop (which is owned by WestJet) was charging $1500 from Mexico to Toronto. Both Air Canada and WestJet were capping their fares at the lowest economy fare, however, that price is not fixed, it goes up as more seats sell. The lowest one way economy fare ticket price from say London to Vancouver can range anywhere between $500 and $3000 depending on seats available.


I don’t know where you get your information from, but it’s not exactly accurate. I’m in a position where I personally know literally dozens of couples that had to take rescue flights home to Canada from Mexico, absolutely nobody I know was gouged except those flying on Air Canada. My friends that flew Swoop back to Winning certainly weren’t gouged. My own flight on WestJet was $80.00 cheaper than my original flight that I bought at a seat sale..

ETA: The seats were selling the instant they were made available, there was virtually zero availability. So according to your statement that the prices go up due to lack of availability, everyone I know should’ve been paying a premium, which simply wasn’t the case.. Furthermore the Canadian airlines pulled the plug to early on not making international flights, there’s still hundreds of Canadians that are desperately trying to get home from Mexico and other countries. The government should’ve forced the airlines to bring home all their customers that had booked flights.

Hurtlander wrote:I was told by WestJet that I have to book my next flight within one year to use my credit.. unfortunately this virus might keep us looked down with border closures and physical distancing rules for the next 24 months, will I get to use my credit before it expires ?

Both Air Canada and WestJet have extended flight credit refunds to 24 months. If travel restrictions persist, that could very well end up being extended.
[/quote]
I guess I better phone WestJet tomorrow to see what’s going on. They originally told me one year, and haven’t been officially told otherwise.
Last edited by Hurtlander on Apr 26th, 2020, 7:50 pm, edited 1 time in total.
Keep on Truckin
User avatar
Hurtlander
Walks on Forum Water
Posts: 11076
Joined: Jun 23rd, 2013, 10:48 am

Re: Poll: airline bailout

Post by Hurtlander »

OKkayak wrote:As I've pointed out in other threads, this isn't unique to Canada, pretty much every other airline in the world has not offered refunds.

Most of the American Airlines are giving a full refund.
Keep on Truckin
User avatar
Jlabute
Guru
Posts: 5339
Joined: Jan 18th, 2009, 1:08 pm

Re: Poll: airline bailout

Post by Jlabute »

Air canada refused me a bereavement fare when my dad passed years back. Their policy states it won’t even be the cheapest fare available. They should really call it a bereavement flight, rather than bereavement fare. I hadn't found it worthwhile to even ask them. So it isn’t as though they like to help, it’s more of a “just pay the fare stupid” and is there anything else we can help you with? If Air Canada flops, it’ll give them a chance to reflect and they will be replaced with something better.
By denying scientific principles , one may maintain any paradox
User avatar
OKkayak
Walks on Forum Water
Posts: 14241
Joined: May 14th, 2018, 11:10 pm

Re: Poll: airline bailout

Post by OKkayak »

Hurtlander wrote:Most of the American Airlines are giving a full refund.

Mandated by the Government. Our Government, and many others around the globe have made a decision to help protect their respective airlines from filing instant insolvency by not mandating airlines to give refunds at this time.
rookie314
Übergod
Posts: 1671
Joined: Jun 11th, 2005, 10:00 am

Re: Poll: airline bailout

Post by rookie314 »

If you have a decent financial advisor they will budget you so you have an emergency fund, 3 to 6 months salary to cope with loss of income. The airlines world wide since 2009 have made over 650 Billion in profits. Where is their emergency fund?
User avatar
OKkayak
Walks on Forum Water
Posts: 14241
Joined: May 14th, 2018, 11:10 pm

Re: Poll: airline bailout

Post by OKkayak »

rookie314 wrote:Where is their emergency fund?

Well, let's see. They still have to pay the lease payments on their aircraft, and if you think lease payments are expensive on a luxury car, imagine what they'd be on a quarter of a billion dollar 787. Paying storage fees for their now zero revenue fleet of aircraft. Continuing to have to pay for rent at airports. And the list goes on, all while their revenue sources have been literally cut off.

How long do you think those emergency funds will last on a company with an insane amount of expenses and zero revenue?

When travel restrictions are lifted, how much money is going to be left to try and resume their business?

Airlines are always months away from bankruptcy when the economy is good never mind when the economy is bad. And like I've said in another thread, right now airlines are burning through their cash reserves faster than a gambling addict on the Las Vegas Strip.
typhoon44
Übergod
Posts: 1539
Joined: Sep 24th, 2017, 11:23 am

Re: Poll: airline bailout

Post by typhoon44 »

Or the emergency fund went to share buybacks:
They should not get a penny until all the stock option money is clawed back from the executives and board of directors.
Any bailout should be in the form of preferred shares so the government is made whole after this passes, just like was done with the US banks in 2008.

"Since 2015, Air Canada has spent more than $800-million buying back its own shares. Last year alone, the airline spent $378-million on share buybacks, which had the effect of boosting a company’s stock price by reducing the number of shares in circulation. "
https://www.theglobeandmail.com/busines ... taxpayers/
User avatar
OKkayak
Walks on Forum Water
Posts: 14241
Joined: May 14th, 2018, 11:10 pm

Re: Poll: airline bailout

Post by OKkayak »

typhoon44 wrote:Or the emergency fund went to share buybacks:
They should not get a penny until all the stock option money is clawed back from the executives and board of directors.
Any bailout should be in the form of preferred shares so the government is made whole after this passes, just like was done with the US banks in 2008.

"Since 2015, Air Canada has spent more than $800-million buying back its own shares. Last year alone, the airline spent $378-million on share buybacks, which had the effect of boosting a company’s stock price by reducing the number of shares in circulation. "
https://www.theglobeandmail.com/busines ... taxpayers/

Well, let's see. Who are they buying the stocks back from? The Governments in exchange from previous bailouts. Same with the car industry.
typhoon44
Übergod
Posts: 1539
Joined: Sep 24th, 2017, 11:23 am

Re: Poll: airline bailout

Post by typhoon44 »

OKkayak wrote:
typhoon44 wrote:Or the emergency fund went to share buybacks:
They should not get a penny until all the stock option money is clawed back from the executives and board of directors.
Any bailout should be in the form of preferred shares so the government is made whole after this passes, just like was done with the US banks in 2008.

"Since 2015, Air Canada has spent more than $800-million buying back its own shares. Last year alone, the airline spent $378-million on share buybacks, which had the effect of boosting a company’s stock price by reducing the number of shares in circulation. "
https://www.theglobeandmail.com/busines ... taxpayers/

Well, let's see. Who are they buying the stocks back from? The Governments in exchange from previous bailouts. Same with the car industry.

What?
They are using profits or debt to buy back their shares on the open market. It is unrelated to the the government.
Buying back stock artificially props up the stock price so that investors and executives make money.
Using their emergency fund to buy back stocks is patently bad business.
ksnosheeple
Fledgling
Posts: 157
Joined: Apr 16th, 2020, 11:32 am

Re: Poll: airline bailout

Post by ksnosheeple »

rookie314 wrote:If you have a decent financial advisor they will budget you so you have an emergency fund, 3 to 6 months salary to cope with loss of income. The airlines world wide since 2009 have made over 650 Billion in profits. Where is their emergency fund?

It's there, paying staff, mortgage payments on buildings, lease payments on all those planes. Most of those profits were invested in growing their businesses and paying dividends back to their shareholders. Businesses don't keep that much dead money around.
ksnosheeple
Fledgling
Posts: 157
Joined: Apr 16th, 2020, 11:32 am

Re: Poll: airline bailout

Post by ksnosheeple »

Well, let's see. Who are they buying the stocks back from? The Governments in exchange from previous bailouts. Same with the car industry.[/quote]
What?
They are using profits or debt to buy back their shares on the open market. It is unrelated to the the government.
Buying back stock artificially props up the stock price so that investors and executives make money.
Using their emergency fund to buy back stocks is patently bad business.[/quote]

I had no idea basic math was artificial. $1 million company / 10000 shares = $100 share Buy back shares, same $1 million company / 8000 shares = $125 share Executives make nothing from it. Unless they're a shareholder, then they're called an investor.

Return to “Canada”