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Charlotte-Douglas Airport (CLT) Expansion


uptownliving

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Do you mean lawsuits that go after a CEO who isn't optimizing profits today vs.  cementing the future health of their business?

Generally the big lobbies seem to get what they want from congress.  Have they tried in this environment? Maybe not because they are given huge incentives to, in effect, look the other way.  A few times NOT getting bailed out might change some perspectives. In either case though it's only the little guy who gets hosed.

 

Never mind, the last few posts were not there when I posted. Same points...

Edited by elrodvt
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I think we should take a similar approach to how we structured the car company bailouts.  We need the airlines and can't afford to let them fail.  It will ultimately be worse for consumers if we do let them fail since there will be zero competition if only a couple survive.  We should provide them with loans and have them repay with interest over time as they are able.  It is a win for the businesses, employees, consumers, and government.  

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19 minutes ago, cltheel.sdl said:

I think we should take a similar approach to how we structured the car company bailouts.  We need the airlines and can't afford to let them fail.  It will ultimately be worse for consumers if we do let them fail since there will be zero competition if only a couple survive.  We should provide them with loans and have them repay with interest over time as they are able.  It is a win for the businesses, employees, consumers, and government.  

It's basically a monopoly in CLT anyway.

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If, after 10 years of profits with the last 3 and one-half years being the greatest economy in the history of the world, American, Delta, and United do not have enough cash reserve to survive a downtown that will last a few months. let them go bankrupt and allow the federal bankruptcy courts and the corporate creditors to re-organize the entities and sell off unneeded assets.  Every one of these airlines has gone through bankruptcy previously and the predecessor entities to them have gone through multiple bankrutpcies, with the shareholders being 'wiped out' each time.  These three airlines are well acquainted with insolvency and receivership.   This is merely part of the capitalistic economic process--poorly managed, inefficient entities are replaced.  Moreover, the airline oligopoly--just 4 airlines (including Southwest) that control 90% of the air passenger market could be dissolved and replaced by a multi-company, comeptitive air transport system.  And, don't feel bad for the shareholders of these airlines--when you are an equity holder, that is the primary risk you assume.  And, the shareholders are well aware of it--after all, the surest way to have lost money during the last 90 years is to have invested money in airline stocks.

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9 hours ago, Old Carolinian said:

If, after 10 years of profits with the last 3 and one-half years being the greatest economy in the history of the world, American, Delta, and United do not have enough cash reserve to survive a downtown that will last a few months. let them go bankrupt and allow the federal bankruptcy courts and the corporate creditors to re-organize the entities and sell off unneeded assets.  Every one of these airlines has gone through bankruptcy previously and the predecessor entities to them have gone through multiple bankrutpcies, with the shareholders being 'wiped out' each time.  These three airlines are well acquainted with insolvency and receivership.   This is merely part of the capitalistic economic process--poorly managed, inefficient entities are replaced.  Moreover, the airline oligopoly--just 4 airlines (including Southwest) that control 90% of the air passenger market could be dissolved and replaced by a multi-company, comeptitive air transport system.  And, don't feel bad for the shareholders of these airlines--when you are an equity holder, that is the primary risk you assume.  And, the shareholders are well aware of it--after all, the surest way to have lost money during the last 90 years is to have invested money in airline stocks.

The problem with smaller airlines, is historically they have to charge more money per ticket because they lack the connections and volume. I say that with the caveat of historically. some smaller airlines have been doing great recently.

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This isn't just a downturn.

Unless you were out flying right now you have no idea.

All of our flights have less than 30 people on them.

A few weeks ago they were full and oversold.

We ceased all international flights.

Nobody could have predicted this no amount of savings could stop this.

 

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2 minutes ago, xapostrophe said:

This isn't just a downturn.

Unless you were out flying right now you have no idea.

All of our flights have less than 30 people on them.

A few weeks ago they were full and oversold.

We ceased all international flights.

Nobody could have predicted this no amount of savings could stop this.

 

I agree this is something extraordinary that is happening to the airlines, lodging and restaurant industries.  As the banks got TARP and had to repay it so should the airlines but thinking we should have a complete take over of the industry is insane.  

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This isn't just a downturn.
Unless you were out flying right now you have no idea.
All of our flights have less than 30 people on them.
A few weeks ago they were full and oversold.
We ceased all international flights.
Nobody could have predicted this no amount of savings could stop this.
 

It’s not the airlines fault of course, but it is and was predictable.

Go just look the quarterly reports for the airlines that get published. Everyone has long sections on possible risks. Everyone has called out viruses as being material risk for ages.

Not saying they would have ever had enough savings to deal with this without govt help. Just saying some care should have been taken to at least appear like they cared to do so.
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4 minutes ago, navigator319 said:

Not saying they would have ever had enough savings to deal with this without govt help. Just saying some care should have been taken to at least appear like they cared to do so.

Look I get all the criticism of the airlines. They're easy to hate on and stock buybacks are pretty repulsive to the average American. But you also had the vast majority of the flying public complaining about how terrible of an experience flying was. And rightfully so. The airlines spent no money on the customer experience for the better part of 20 years because they were all losing money. So over the last decade they all spent tens of billions of dollars (far far more than what was spent on buybacks) buying new planes, refreshing aircraft interiors, adding in-flight wifi, improving onboard food offerings, adding free snacks and other amenities back to the flying experience, improving lounges and other premium offerings, contributing billions to airport improvement projects, and raising salaries and benefits for employees. They were spending a ton of money to give customers a better experience. Should they have put that money into savings instead and kept flying old planes with no amenities and paying bottom of the barrel wages? Because even if they didn't do share buybacks there was a lot of very expensive things that needed to be invested in to improve the companies. Businesses have to balance investing back into the business with profits and shareholder returns, and they still had billions of cash on hand which was more than they had at any time in the history of the industry. I don't like buybacks either and I do feel like most businesses over prioritize shareholders. But it just isn't reasonable to expect airlines to have saved enough to deal with a crisis like this while also running a business that people want to patronize and that is also profitable.

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Again though CLT is basically a monopoly for AA.

I would love to see some fragmentation after we went overboard consolidating. I know that would make individual bankruptcies even more likely but I'm selfish about my personal travel $. Ying and Yang...

Edited by elrodvt
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3 hours ago, TCLT said:

Look I get all the criticism of the airlines. They're easy to hate on and stock buybacks are pretty repulsive to the average American. 

I think this article from Seeking Alpha sums it up nicely (repulsive indeed!): https://seekingalpha.com/article/4332833-american-airlines-feeling-consequences-from-years-of-poor-capital-allocation if analysts see this, why do their board and highly paid executive committee miss this? Short termism? Sheer greed? Share price über alles?

Summary
  • The economic impact of the coronavirus has begun being reflected in share prices, forecasts and government policies, with the airline industry sitting at the forefront.
  • Many are questioning which airline companies can survive. Several months ago, I published an article warning that American Airlines was inadequately prepared for tough times.
  • This stems from them spending billions of dollars on debt funded share buybacks, despite already having high leverage.
  • Since they entered this downturn with a weak financial position, it seems probable that they cannot survive when their earnings collapse.
  • The only reason I believe changing to a neutral rating is appropriate is because it appears that the federal government is preparing to offer assistance to their industry.

Introduction

The economic impacts from the coronavirus are now being felt all around the economy and obviously one of the worst impacted is the airline industry, with warnings that the "Coronavirus Could Bankrupt Most Airlines by End of May". It was only late 2019 that I published an article warning that American Airlines (AAL) was inadequately prepared for any tough times, primarily due to their aggressive debt funded share buybacks. This article provides an updated analysis that now includes their fourth quarter of 2019 results, further commentary on whether they can remain a going concern without a bailout and my new rating for their shares going forward.

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1 hour ago, TCLT said:

I'm wondering if any of American's execs or the board are doing what Delta's CEO, officers, directors, managing directors and Board of Directors are doing? 

  • All Delta officers will take a 50 percent pay cut through June 30, with directors and managing directors taking a 25 percent cut during that same period.
  • As I mentioned last week, I've cut my own salary by 100 percent through the next six months. Our Board of Directors elected to forego their compensation over the next six months as well.

Here is United's summary of actions they're taking:

...sharply reducing schedules, imposing a hiring freeze, introducing a voluntary leave program, dramatically reducing discretionary spending, cutting CEO base salary 100% and deferring a salary increase.  Our competitors have started to follow suit: on Friday, Delta announced a 40% schedule reduction and a 100% salary cut for their CEO and over the weekend, American said it will reduce its international capacity by 75%.

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