Poll: airline bailout

[OKkayak]

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.

Most bailouts are more or less loans, and just like when you go to the bank to get a loan, you have to meet certain terms and conditions for repayment of the loan, just like a bailout. One of the more popular options is that a large company, whether it be an airline or car manufacturer, is that in exchange for the loan, the Government gets "X" amount of stocks under the condition that the company buys back those stocks within a given time frame or they have to pay a lot of interest on the bailout.

[ksnosheeple]

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.

Right on the expenses side comments. Insurance companies need a good chunk of fast cash for payouts. What other companies would have a stack of cash sitting around earning next to nothing? How many trucking companies would go down with this kind of revenue drop?

[rookie314]

They are not flying. They can cut their insurance down, just as if you were not driving your car. They are not buying fuel, they are not consuming time on components, engines etc. Their costs have been slashed. They don't need an emergency fund to cover their typical operational daily costs, just the basics to park the aircraft and pay crews, unless they lay them off.

[wisdom01]

No sympathy for AC ... they used to be a great airline decades back but have lead the race to the bottom as far as price gouging, poor service and scrapping flights for any old reason then trying to weasel out of their obligations. We would be well served to see something new come out of the ashes.

[ksnosheeple]

They are not flying. They can cut their insurance down, just as if you were not driving your car. They are not buying fuel, they are not consuming time on components, engines etc. Their costs have been slashed. They don't need an emergency fund to cover their typical operational daily costs, just the basics to park the aircraft and pay crews, unless they lay them off.

I imagine their insurance carriers are reducing insurance fees, unlike ICBC. Some car insurance companies in the US are giving rebates to consumers because of the reduced traffic. I look out the window every morning. When I don't see flying pigs, I know there will be no rebate announcement from ICBC today.
Just aircraft parking & crews? Would you be interested in purchasing a bridge?

[OKkayak]

They are not flying.

Thats the problem.

They can cut their insurance down, just as if you were not driving your car.

Can they? What does their lease agreement and Transport Canada say about what insurance they can cut down?

They are not buying fuel, they are not consuming time on components, engines etc.

While they may not be "consuming" engines, etc. Parking a modern airliner isn't like your car, there is still required maintenance that is required on the aircrafts multitude of systems during down time to keep the aircraft's certificate of airworthiness active and it is costly.

Their costs have been slashed.

Their traditional costs have been reduced, but with grounding almost the entire fleet, new costs are introduced, and what makes it more difficult is that now, they have close to zero revenue.

They don't need an emergency fund to cover their typical operational daily costs, just the basics to park the aircraft and pay crews, unless they lay them off.

And maintain the aircraft, cover the lease payments, cover the rent at airports, cover the costs of any required Government fees to operate their business, cover the costs it'll take to get the aircraft back into the air, cover the cost to sustain the business during the recovery phase when they'll be operating the aircraft at a significant loss, etc, etc, etc.

No sympathy for AC

So you're OK with tens of thousands people loosing their jobs, many of which who have invested their lifetime getting to where they are, just because you have a personal grudge?

price gouging,

Charging what the market and economics dictates is not "gouging". Charging more than what you "think" is the price they should be charging is not "gouging".

poor service

Many frequent flyers seem to disagree with you.

and scrapping flights for any old reason then trying to weasel out of their obligations.

How's about a documented example of scrapping a flight for "any old reason"? Curious as to what constitutes "any old reason".

We would be well served to see something new come out of the ashes.

Canada Jetlines is still looking for investors, there's your chance, lead the way

[Blindeyes2020]

Here we go again. Turdeau willing to help air Canada employees just like he did with the automotive sector, but he doesn't mind putting 100,000 people in the firearms industry out of work. Range workers, store employees and any other firearms related job can become unemployed but he doesn't care about them. Resign already turdeau your an embarrassment.

[ksnosheeple]

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?

Does your financial advisor invest your money in companies that are sitting on cash that equals 3 to 6 months of their revenue? Seeing that you're an expert on corporate financing you can enlight us.

[lesliepaul]

ZERO sympathy for West Jet or Air Canada........when you me over the way you did last year and your customer relations does not acknowledge or answer a simple question to back themselves up...........karma!

Between these two Canadian airlines and the THOUSANDS of employees they have........they should maybe look at the "perks" they are giving their employees and the ALMOST FREE travel available to them and their entire families. We are not talking 1/2 price here........closer to 80%-90% off......even overseas flights.

[Urban Cowboy]

poor service

Many frequent flyers seem to disagree with you.

As if said frequent flyers have so many options to choose from, in the way of major Canadian airlines that fly internationally.

[casey60]

WestJet used to be a discount carrier. But that is long gone. Both Air Canada and WestJet should not get a federal subsidy. They had a gravy train for a long time from the travelling customers. Those days for now are gone. Bet if the feds do give them money, airline tickets will still increase massively.

[Omnitheo]

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.

Well, I'd totally agree with you if I as a taxpayer didn't have to support the arts, parks, schools when I don't have kids, etc ... make them pay their own way and I'll have lots left over for airport fees. Airports are part of the national infrastructure and I would argue more critical than a lot of things us taxpayers pay for.

Whether you have kids or not, you are still benefiting off of arts parks and schools. From the TV you watch, to the educated employees who produce goods and services to utilize, to decreased crime, to decreased medical expenses due to the overall health of people.

[Urban Cowboy]

Sometimes it's best to let nature take its course and see what rises from the ashes.

I can only imagine how much fat could be trimmed if the industry had no option but to reset.

[iSnack]

If a bailout has to happen, I support stockholder liposuction in favour of funding for the people.

'Merican but this reflects my sentiments.

"Letters to the Editor: Airline bailouts benefit shareholders. Why not bail out people? "

https://www.latimes.com/opinion/story/2 ... areholders

[Hurtlander]

I agree, the Canadian airlines shouldn’t be bailed out until airline customers have been bailed out by either the airlines or the government. Friends of mine had a flight booked back to Canada on March 21, their flight was cancelled because of Covid 19, they had to rebook and pay in full for a repatriation rescue flight.. their rescue flight turned out to be on March 21, on the exact same flight they were originally scheduled to fly on ! This is nothing more than corporate greed taking advantage of a bad situation, the customer should’ve been allowed to either transfer the tickets to the rescue flight, or be reimbursed in full. Instead all they get is a voucher for a future flight .. What if you’re an older senior, there very well might not be any future flights..
Other friends of mine were forced to book and pay for a rescue flight back to Canada on March 19, they got to the airport the mandatory two hours early after checking out of their condo, only to find out that they were bumped from their flight because the Trudeau government made arrangements to fly out a bunch of stranded cruise-ship passengers on that flight.. my friends were forced to rebook on yet another rescue flight at their own expense.. In this instance the government should’ve reimbursed them, but once again all they get is a voucher for a future flight. In the second instance they now have a voucher for their original flight and one for their cancelled rescue flight which all must be used within two years. The question remains, will there be any flights abroad with that particular airline within two years, and if there is will it take both vouchers combined just to pay for one way ?
Airline tickets are predicted to skyrocket because of new permanent safety measures such as permanent physical distancing on all flights...I predict the government will bail out the airlines, yet unfortunately a good number of former passengers will be never get to use their bought and paid for vouchers.

ETA: A few airline travellers were able to use travel insurance to get reimbursed for cancelled flights, but the vast majority of insurance companies didn’t cover the cancelled flights because of the pandemic loophole..