Jetrigger

I would absolutely use that same standard! Being in the business has risks and this IS one of those risks. However, I don't see small business owners lining up for billions these airline/travel jokers are asking for! Wipe out the current shareholders, wipe out the current management teams/boards, give them a loan that has to be repaid first with interest before any of stock buybacks can be done, etc. Absolutely NO "grants" whatsoever!!

To be honest, these airlines WILL get their blank checks....until the next crisis. Rinse and repeat! That's the "capitalism" we're really in for!

rickg523

Why should they do that? What incentive is there for that kind of responsibility when they have paid flunkies in elected government willing to use the taxpayers as their rainy-day fund?

PHL

Congress has a great opportunity to force airlines to make some changes in how they operate in order to get the loans. Upholding and even enhancing the passenger bill of rights that airlines have been lobbying to change (for their benefit) should be a top priority.

rickg523

I agree. It's an opportunity. But I hold little hope that this bunch of crooks will do anything of the sort. In fact, I'll guarantee we will hear speeches on the Floor and talk show morons saying that we need to "unleash the airlines from the onerous regulatory requirements that forced them into this precarious economic situation requiring assistance."

GotCalcio4

I don't think that I've ever seen anyone on this forum claim that they can do an exceptional job at running a huge international airline, and I certainly haven't ever claimed this as an ability of mine. I am, however, able to identify and differentiate between good and poor business decisions. I understand the concepts of risk management, business continuity planning, and brand perception as a value driver. I'm a consultant who specializes in strategy and transformation and have experience across a variety of sectors, including major airlines as clients. From what I've observed as a member of this community for over 15 years, is that while many posts on this forum do address things as non consequential as bourbon selections in premium cabins, by and large the frequent contributors on this forum offer thoughtful insight and perspective that is clearly the product of a strong understanding of how large enterprises work in today's globalized economy. The best leaders learn from both the good and bad decisions that they see around them. We're able to read between the lines and decipher the true driver behind many of the decisions that are made by this management team.

What do you know about running a global airline that so many of us don't?

diver858

While we should be sympathetic to employees who lose jobs over no fault of their own, let us not forget that it was labor who helped Parker take control of AA, after making promises he was unable to keep, resulting in yet another round of AA labor unrest. Horton had a plan to right the ship, but it required some concessions that labor has never been willing to make (going back to the Crandall regime), instead made a deal with the devil, contributing to the current predicament.
From this perspective, any bailout should also include provisions related to labor contracts - reasonable wages, benefits, possibly equity participation - while further limiting actions, such as when AA pilots and mechanics intentionally slowed operations to a crawl.

Stripe

It would have made no sense for an airline to keep a ton of cash idle on the off chance that the economy would collapse and their revenue disappear for a month or two or more. No one would have considered this a reasonable possibility until very recently. I agree, however, that they should have reinvested more of the profits into the business (better employee training, for example) rather than spinning out cash to shareholders. Much of the share price was predicated on that continuing but the party is over and those same shareholders now have a fraction of what they had a short time ago. All airlines are somewhat guilty of this but AA was probably the worst.

jordyn

Why not? I keep cash around assuming several months' worth of expenses in case I lose my income, and that's pretty standard "Financial Planning 101" for normal humans. And the overall trend in recent years is for corporations to have fairly large cash reserves. Keeping enough cash around to keep your business going during an unexpected event seems like financial prudence if you're managing for the long-term. Instead, AA's management was just trying to goose the share price so that their stock-based compensation was worth more and maybe it would help keep the board off their back given how crappy the stock's performance was generally compared to AAL's peers.