xxx

SO.....before the bodies of the WTC victims have even been recovered, the airlines execs are lined up for a government bailout of their industry. They need taxpayer cash to save the future of aviation in this country...or so they claim.

Aren't these the same airlines that discouraged any sort of government regulation or intervention during their record-profit years of the 1990s? Aren't these the same airlines which ignored years of consumer complaints about seat size, delayed schedules, air rage, carry-on bag limits, etc, etc... and advised the government that they would investigate and "police" themselves? Aren't these the same airlines that ignored security concerns and hired the cheapest, most unskilled labor possible to serve as "security" in the airports while their profits soared?

Yes, these same airlines are now lined up in D.C. with their hands extended for a bailout. NOW they WANT government involvement. Oh yes, they would also like very much to be relieved of any and all liability claims from relatives of the hijacking victims. And Congress is bending over to funnel taxpayer funds to them with no conditions whatsoever.

And as a cherry on top of their sundaes, the airlines get to lay off tens of thousands of workers as this cash is handed over. Seems as if a few execs will be receiving VERY large bonuses this year!

I say, the airlines are vultures, not victims. What do YOU, the taxpayers of America, say?

just

Well, if the airlines can get a bailout, why not the hotel industry? Or the restaurant industry? Or cab drivers, travel agents, and others who also earn their living from the traveling public? Maybe those other industries should start employing more highly compensated lobbyists, as the airlines do.

x

I, an American taxpayer, not employed in any way, shape or form in the airline industry, say, F.U., you ignorant slut, xxx!

Abe

We are quite the simpletons today, aren't we?

Airlines have HUGE fixed costs. A scenario +/- 5% load factor can result in billions in profits or billions in loss. We're now -20% or -30%. It's no "vulture" thing, xxx. These guys are bleeding cash at a major rate and like all companies who run out of money, they'll close.

Consolidation will only prolong the situation and we'll wind up with just 2 or 3 airlines. This, of course, is something we've tried to avoid for years.

Airlines are vital to U.S. security as well as the economy. (Airlines, by law, have to help ferry troops overseas if called on to do so.) Hotels are not. (I'm a hotel manager and our place is suffering greatly now, but it will pass.)

Cindy

Vultures is a bit strong, but I think the airline execs ought to do what Lee Iacocca did when Chrysler received its bailout -- cut his annual salary to $1. They should also be forced to waive their golden parachutes, which would force the airlines to pay millions to them if they left their positions.

Yes, they are all rich guys and probably have all sorts of other "compensation" in the form of freebies and perks. But I, for one, would appreciate the gesture.

Tin Man

Thanks Abe for trying to infuse some sense into this ridiculously simple minded thread.
Are you serious, "xxx"?
You think the airlines have any way to control the loss of revenues they're seeing now and will suffer for months to come?
You think without a bailout that they would survive?
Can you imagine this country without airline service...and how business/economy would be affected?
And the airline industry is much more vulnerable to economic fluctuations and and critical to the economy than thge hotel industry.
This one's a no brainer, Scarecrow.

L

Certainly give the airlines the financial aid they require, and do it soon. And use it to leverage the companies, unions and related service industries to take a few actions, both symbolic and real. Pay cuts for executives .. sugested by another ... excellent idea. Cancel the parachutes!! And no strikes ... limited price increases ... and no buyouts or mergers for five years. An example: US Airways. Wolf would give us that horrendus parachute and stay and manage the airline. No more talks with United. He wants National open too. Okay, he gets National open ... and in return, he acts like an airline manager and ceases acting like a merger artist. The pilots stay on the job, flight attendants too ... no more talk of job actiosn. Allow US Airways to have more regional jets ... and let the pilots just accept it as their part. America is giving the airlines its taxes to keep them in business ... let them show some awareness in what they say and how they act. Are we all in this or what? Ciao

Cindy

Yes, L, those golden parachutes are a real threat. I read that one of the execs (or maybe it was several) would get $45 million if they resigned. Make them waive those parachutes before the airlines get a dime. Then, if one of the execs decides to refuse, his airline doesn't get the bailout. That airline would declare Ch. 11, and the exec's stock options would be worthless.

No one (and I mean no one) would have the guts to refuse to waive the parachute in the current climate. I hope Congress plays hard-ball.

OK, I'm off to look at lawnmowers.

So

How many times have airlines gone out of business? And yet the industry has never shut down, because there's always a new group of investors who are willing to purchase devaluated commodities and start afresh. So the big airlines go down. They'll be purchased by other investors, and perhaps they will be forced by some new laws to consider people before profits.

rah

Yes we are simple simpletons today, aren't we? Every wealthy person knows that the way to create wealth is to use OPM - Other People's Money. Tax money is the best of course, easy pickings, no strings. Just ask our president, the guy who enriched himself with a taxpayer-financed sports stadium.

No promises or conditions have been extracted from the airlines in return for this money. They are protecting their personal financial interests, not the interests of national transportation or security. If the industry is so vital to national interests as to warrant this type of cash infusion, then why is it privatized at all? Oh yeah, so they profit when times are good and reap taxpayer bailout money when times aren't so good. It's just a win-win situation for them!

Joe

To me cutting thousands of jobs should keep the ratio intact. In other words, if you make 100 million in revenue and have 40 million in costs, your profit is 60 million. They want to cut costs like most large corps in this country but still want the huge profits too. Using this example their costs will go down say to 20 million but they probably expect the government to make up the difference so their revenue is still 100 million. Actually giving them a bigger profit, and as usual, some CEO will get a 1-2 million dollar bonus while some maintenance guy gets a pink slip.

Nan

...but Joe, you've forgotten one really critical item: revenues have nearly fallen off the charts during the past 10 days.
And they're not going to return to pre-attack levels for quite some time.
The government bailout will not make up for lost revenues. But bailout $$ plus layoffs might.
C'mon. This is not a conspiracy to line big businessmen's pockets.
You guys need to get a grip.
This is a genuine crisis.

And for "so what", can you please tell me the last time that revenues for ALL airlines dropped to 20% of usual SIMULTANEOUSLY...across the board? This is FAR different than a single carrier or two going under.
Who's writing in to this forum today, Mrs. Huxtable's sixth grade social studies class?

class

If you'd care to read a far more intelligent discussion of this same issue, minus the idiotic verbal assaults and insults which characterize this U.S. Fodor's Travel Talk board, visit this same topic on the Europe board. People on that forum actually know how to debate and discuss issues, rather than simply hurl mindless insults at those with whom they happen to disagree.

lena

Isn't this part of the terrorist attack to have our nation fall apart from within? We haven't begun to see the fallout from all of this. The immediate loss of lives was dreadful but the drastic change to our economy is going to effect everyone of us. I wonder, too, if the airlines are strategically laying off right now and I wonder where all this money is coming from all of a sudden and who is going to suffer by shifting the moneies around. It's great that we're collecting all this money for the firefighters and police in NY but what about all the other people who have been in need in this country before Tuesday's attack. I'm praying that our leaders are looking at the big picture and taking care of all of America. They're getting great support right now for this crises but let's spend it wisely. The Red Cross and Salvation Army need money all around not just in NYC.

Lan

When one part of the economy is suddenly devastated by an event, it's usually an indication that it had gone too far in some direction, over-specialized, over-invested, or some such -- and unable to adapt to a changed environment. Economic Darwinism, maybe.

One problem here is that we haven't been thinking of our transportation system as just that, a system -- including buses, trains, and planes.

And airlines were behaving as if the only problem they faced was funding endless expansion, without paying attention to the limitations on runways, air lanes, etc. The hub system was about to bring things to a major crisis because of the crunch on the hubs and the abadonment of non-hubs.

And where is it written that a return of 4-5% is a "poor" rate of return?

Victimes or vultures? Yes, to both.
The management of the airlines were incredibly short-sighted, basing all their decisions on the assumption that the over-heated economy was a permanent condition, that the number of lanes and runways were infinitely expandable, and that they could keep up profitability, increasing over themselves year after year.

They were already in deep trouble before the attacks, which nobody could expect the CEO's to have foreseen.

But the attacks are definitely going to force a profound shake-out of the entire industry that was already badly weakened by shortsightedness. And mebbe some upper-level greed.

xxx

Anybody know if the airline CEOs and other executives were made to sacrifice any of their annual seven figure salaries before they could receive the bailout?

My guess is NO.

Nan

Wrongo, xxx.
Frozen at $300K I read.
Not peanuts, but they'll have less leftover after the $10,000 per month mortgage and private jet payments.