The Airlines Want A $58 Billion Bailout After Spending $45 Billion On Stock Buybacks

[mahatmakanejeeves]

THE MORNING SHIFT

The Airlines Want A $58 Billion Bailout After Spending $45 Billion On Stock Buybacks

Raphael Orlove
Today 10:18AM • Filed to: PLANELOPNIK

For a global industry operating in a global pandemic, the auto industry is operating without any clear unity on coronavirus. All that and more in The Morning Shift for Tuesday, March 17, 2020.

1st Gear: $58 Bn Airline Bailout Brings Unwanted Scrutiny To Airline Companies Being Run By Morons

Small businesses across the country are in a crisis and need government support to stay afloat. Also, the gigantic airline industry is in trouble, and it wants $58 billion to weather this storm. But in asking for that money, the airline industry has put some unwanted attention to its poor planning, as Bloomberg reports:

Help in the U.S. is needed because “this crisis hit a previously robust, healthy industry at lightning speed,” Airlines for America said in a statement. The trade group outlined a proposal for $50 billion for passenger airlines and $8 billion for cargo carriers.

But the request for taxpayer assistance via loans, grants and tax relief comes after a decade of massive consolidation — and billions in profits — that put the industry in a far more robust condition than before.

What’s more, from 2010 to 2019, U.S. airlines spent 96% of their free cash flow, some $45 billion, to purchase shares of their own stock, according to data compiled by Bloomberg. The world’s largest carrier, American Airlines Group Inc., was the biggest buyer, spending $12.5 billion.

Share repurchase programs aim to help boost share prices. And that effort — as opposed to using the cash to build up reserves — is bound to draw attention as the question of aid is debated.

Basically, the airline industry had all the money it needed to prep for a crisis like this, was advised to do so, and instead dumped what it had into boosting share prices. I can’t wait for these morons to get all the money they asked for.

{snip}

[Claustrum]

1. And they will take the bailout and still fires a lot of people n/t

[Sherman A1]

2. Precisely

That is exactly what they are already planning.

[packman]

4. And those executive bonus'

They'll pat themselves on the back for engineering those billions and give themselves a big, fat reward.

[Maeve]

3. Eat your shares, airlines

[Warpy]

5. They bought high to goose the price even higher

and there's no way they're going to recoup those losses.

They're just the first people to go crying to Uncle Sugar with their greedy hands out.

In the meantime, oil is at rock bottom price, so they're saving buckets of money on the flights that are still full enough to take off..

So excuse me if I have very little sympathy for any of them. Let them chop those executive pay packages down to a reasonable level. Then maybe we'll talk about what they need vs. what they want.

And I feel the same about all other industries, banks on down.

Stockholders have been screwed by these assholes for far too long. So have employees. So have taxpayers. Something has to give and it's not us. Not this time.