Airline Fleet/Management in a crisis

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Originally Posted by john_pifer
Originally Posted by Astro14
The conundrum is this: to what degree do we want foreign governments to choose our airlines for us? No airline can survive this revenue climate without government help. So, the airlines that get that help may (not certainly, but may) survive. The airlines that don't get that help will certainly fail and cease to exist. It takes decades to start and grow an airline into anything more than a niche. And that requires a great deal of financial leverage, even used airplanes aren't cheap. Since foreign governments own and support their airlines, would we be best served by letting those carriers take over our air travel industry? If they won by government action, and not by safety record, or service, or efficiency, would that make sense? It doesn't to me...
Agree. If anyone here disagrees with you on this, I'd certainly be interested to hear their argument.
Astro touched on this early in this thread and I agreed with him in reply that it would not be in our interest to allow foreign carriers to take over international travel. To the extent that government support is required to maintain the US industry it would probably be a good investment to provide that support. This is a the wheels have come off the world event and not a mere garden-variety recession for which any business should have planned.
 

Astro14

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I know that we agree on this particular point, and I thank you for recognizing that, as governments around the world shut down flights directly and then indirectly by issuing stay at home orders. I brought the point up again simply as rebuttal to the specious, and superficial, posts that seem to suggest that a bankruptcy will fix everything and to let that process work. But it won't work. The magnitude of this problem (8 weeks at ZERO REVENUE with no bookings for several more months) can't be addressed simply in bankruptcy.
 
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Originally Posted by Astro14
I know that we agree on this particular point, and I thank you for recognizing that, as governments around the world shut down flights directly and then indirectly by issuing stay at home orders. I brought the point up again simply as rebuttal to the specious, and superficial, posts that seem to suggest that a bankruptcy will fix everything and to let that process work. But it won't work. The magnitude of this problem (8 weeks at ZERO REVENUE with no bookings for several more months) can't be addressed simply in bankruptcy.
Bankruptcy is an option 3-5 years AFTER things open up. Now? NO!
 
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Without bankruptcy..... what is the solution ? It will take 2-3 years for passenger volume to return and airlines keep bleeding cash even with the grants from the government. Major layoffs later this year after a certain date which was agreed upon by taking the grant. What if there is another CV outbreak later this year ? What if CV a regular yearly occurring event, then what ? I saw a debt to equity ratio chart of all airlines in the USA and some airlines are a lot worse than others as previously stated earlier.
 
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Astro makes some good points, despite having flaws the US airline industry provides a public good and service, and can be used for national defense or disaster support in certain circumstances should US military equipment be needed elsewhere. Allowing the sector to collapse also potentially invites a certain cash flush pacific nation to buy it up and remake it to serve their interests. The cruise industry should be allowed to go the way of the Titanic and Lusitania.
 
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Originally Posted by Mr Nice
Without bankruptcy..... what is the solution ? It will take 2-3 years for passenger volume to return and airlines keep bleeding cash even with the grants from the government. Major layoffs later this year after a certain date which was agreed upon by taking the grant. What if there is another CV outbreak later this year ? What if CV a regular yearly occurring event, then what ? I saw a debt to equity ratio chart of all airlines in the USA and some airlines are a lot worse than others as previously stated earlier.
We are then in extraordinary time. You nationalize airline industry until vaccine is here. But that would be the least of an issues.
 
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Originally Posted by Astro14
I know that we agree on this particular point, and I thank you for recognizing that, as governments around the world shut down flights directly and then indirectly by issuing stay at home orders. I brought the point up again simply as rebuttal to the specious, and superficial, posts that seem to suggest that a bankruptcy will fix everything and to let that process work. But it won't work. The magnitude of this problem (8 weeks at ZERO REVENUE with no bookings for several more months) can't be addressed simply in bankruptcy.
I was an early cheerleader for Chapter 11 but I've come around to the view that this isn't a workable solution. There is general agreement that the industry will end up smaller but nobody can now forecast the size and shape of future airline operations. We see carriers everywhere retiring entire fleets and they aren't doing this because they believe that traffic will return to 2019 levels in the next year. Does the airline industry provide a vital public service and is therefore worth saving even if that requires substantial government assistance? I think that the answer must be that it does and should be. Having said that, the question then is how the federal government along with the many state and local airport operators should participate in the restructuring of the industry. Lending is not a workable solution since these companies are already heavily debt laden. They need more equity, not more debt. They also need to shed many employees from rampers to pilots as painful to the workers as this will be. Maybe a legislated restructuring plan with senior employees offered buyouts for early retirement, an enforced haircut for creditors including lessors and substantial funding provided by the federal government in return for which the feds would take an equity share? The current model of giving money to companies of all sorts with the proviso that they maintain their current employment headcount is a stopgap and not a solution. Nobody can know the future for any industry but we have to come up with realistic models for that future and then decide just how much money will be required to bridge the current chaos in reaching it. Airlines are worth sustaining for that future as an important part of national transportation infrastructure while I concede that cruise lines are not.
 
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My suggestion on the cruise liners was in jest but that doesn't come across well on the interwebs. There will have to be some kind of a workable plan to allow the airlines to continue after this is over. I do suspect that the cheap fare era is over though. The other decision to be made is do we rescue a airline that was in poor shape financially before all this? It's a complicated question that affects a lot a variables. Which airline fleets will be retired and which will be expanded? That affects pilots too. We are seeing some of that already.
 
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Originally Posted by 4WD
This is interesting since it is now the 2021 Olympics. A side story that may play into this decision; the athletes village buildings were sold already as condos to buyers. They were supposed to take occupancy after the Olympics. Now with the postponement until next year, maybe those buildings are no longer available to athletes? A bit of a domino effect.
 
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Quote
Maybe a legislated restructuring plan with senior employees offered buyouts for early retirement, an enforced haircut for creditors including lessors and substantial funding provided by the federal government in return for which the feds would take an equity share?
fdcg27, Kenneth Feinburg is well known for helping the American government resolve some big money issues. Maybe they will have him evaluate all the airlines and come back a month later with his recommendations and advice on how to restructure the entire airline industry here in the USA. It would not surprise me in the near future they ask him for his help. https://en.wikipedia.org/wiki/Kenneth_Feinberg
 
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Originally Posted by Mr Nice
Quote
Maybe a legislated restructuring plan with senior employees offered buyouts for early retirement, an enforced haircut for creditors including lessors and substantial funding provided by the federal government in return for which the feds would take an equity share?
fdcg27, Kenneth Feinburg is well known for helping the American government resolve some big money issues. Maybe they will have him evaluate all the airlines and come back a month later with his recommendations and advice on how to restructure the entire airline industry here in the USA. It would not surprise me in the near future they ask him for his help. https://en.wikipedia.org/wiki/Kenneth_Feinberg
That is not happening, at least now.
 
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every year I fly to vegas for SEMA. This year, drive out IF they even have it. It is HUGE money. But if canceled, nothing I can do. I could ride, but for work event, they want us to drive in the company car or truck, worried about workman's comp. Rod
 

4WD

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Seems my first of many was a brand new United B777 in the mid 90's … they have been around a while … My February flight from NRT on UAL was soooo much nicer … My last on a Delta B777 was the Johannesburg to Atlanta long haul … nice, but way long flight … Well, a true game changer aircraft that does not fit their current game plan …
 

CT8

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Call me a fool and you all can beat up on me,,,, but Airline and trucking industry deregulation may not have been the best thing in the long run to happen.
 
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Originally Posted by 4WD
Seems my first of many was a brand new United B777 in the mid 90's … they have been around a while … My February flight from NRT on UAL was soooo much nicer … My last on a Delta B777 was the Johannesburg to Atlanta long haul … nice, but way long flight … Well, a true game changer aircraft that does not fit their current game plan …
I've been on a number of 777 flights. I liked the ones with 3-3-3 seating. United decided to be different and had a 2-5-2 layout. Unfortunately I had the aisle seat in the middle row and kept getting bumped and when someone wanted in the overhead bin I just got up. Not sure why they did that but I heard it was for faster boarding. (?) With the new 777X coming out it will be interesting how the demand for that aircraft will be affected by all of this going forward?
 
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