Bailout of airlines….what do we get in returnBack to Forum
Fortunately I believe that most of those reading this thread would have understood that. Cool it.
I may have misunderstood, in which case apologies. However whilst it might have been absurd 6 months ago it certainly isn’t now.
People do have strange ideas – if you pop over to FT you will see the usual suspects clinging on and trying to defend BA at all costs…this is all the Government fault, BA should get a bail out with nothing in return etc etc. Plus those numpties whose greatest concern is they haven’t heard whether their FF status will be extended.
1 user thanked author for this post.22 Mar 2020
By the way, very interesting to see Carolyn Fairbairn, DG of the CBI, defending how Easyjet paid out £170m of dividends only 2 days ago.
Or attempting to, as it was all huff, puff and avoidance.
I wonder how many staff that might have paid?22 Mar 2020
In a similar vein to the previous quote, I would hope that the British government would look to Delta and Richard ‘Man of the People’ Branson to dig into their pockets before agreeing to any bailout of Virgin Atlantic. And yes, rather than a loan, perhaps the government / taxpayer should be looking for a share of the company which they can then sell at a later date.
Let’s face it, the UK government finances are going to take one hell of a battering in the short term.
It can only be a matter of time before Branson asks for a bailout of his new ferry company.23 Mar 2020
The usual thoughtful analysis from Head for Points – End of IAG? UK Government may take stakes in British Airways, Virgin Atlantic and easyJet this week23 Mar 2020
Two things should happen I think, and not just for the airlines. The government should ban all short selling of shares, as some EU governments have already done, for the duration of this crisis. They should then go into the market and buy shares through a SPV which they can then hold and gradually sell into the market when all is well again, and probably make a good profit to help pay back some of the cost of this virus. I know there will be arguments about free markets etc but I think this is vital to protect pensions and so on.23 Mar 2020
Two things should happen I think, and not just for the airlines. The government should ban all short selling of shares, as some EU governments have already done, for the duration of this crisis. They should then go into the market and buy shares through a SPV which they can then hold and gradually sell into the market when all is well again, and probably make a good profit to help pay back some of the cost of this virus. I know there will be arguments about free markets etc but I think this is vital to protect pensions and so on.
I may be wrong here, but I don’t think that Virgin Atlantic is a listed airline – so any buying of shares will have to be negotiated directly with Delta & Richard Branson. They will want to do so in private (that’s after they have first asked for a bailout / interest free loan) while IAG will be clamering for them to be left to go bust.
And yes, and support for the airlines should be conditional on all investors pumping in their own cash, top management working for free etc.
The other issue is…..just how much support can the British government provide and for how long? It’s not as if there is a bottomless reserve of cash for them to draw on and this year is going to see their expenditure rocket and their income collapse.23 Mar 2020
G-d I hope we can start this discussion soon, but my thoughts about “what do we get in return” are more about the how the airlines will return to service, especially if a Government bail out plan is created.
A poster once said the main objective of any company is to return profit to shareholders. However, I would hope that there would be strict conditions to any bailout plan to cover (not in any particular order)
** returning service levels
** VERY IMPORTANTLY, positive industrial relations for all staff
** consideration to passengers who have lost money and bookings
** a general all round empathy from the business to its customers or clients
** when the business makes a profit, tax payers money must be returned and CEO’s / shareholders should be paid / dividends against these targets
Listening to Corbyn over the weekend, he sounded a totally broken man in terms of the way he was appearing to agree with Boris – he harped on again about protecting workers rights. I think this part will be far more important for the recovery, use existing or laid of staff.
The final point whilst competition is very healthy in a booming market, I would hope ‘we also get in return’ – the airlines working together to get the system back up and running. I sure hope this all will happen sooner than later.23 Mar 2020
Interesting re Corbyn. To be honest he is largely an irrelevance, heavily beaten at the election and awaiting someone to fill his shoes. Same with John McDonnell and Diane Abbott, part of the failed Labour 2019 team and on the way out.
It’s noticeable that none of the leadership candidates have been in the media, perhaps they need to await the result before having a view.
I don’t think the airlines have covered themselves with glory so far, BA caught on the hop a bit and Easyjet paying out £170m on dividends last week while at least 4 other companies have cancelled theirs to save cash.23 Mar 2020
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Do you seriously think that when the election was held the airlines or Government were contemplating that 90% of aircraft fleets would be grounded? And that the economy would be on the verge of collapse?
A very fair question. But, is this not the self-same bunch which were fully contemplating (indeed, such is the heady mix they’ve been smoking for quite some time now, they could very possibly still be thinking of doing this…) driving the UK off a cliff-edge on 31Dec20? I know that the UK likes to consider itself “exceptional” and has long thought of itself as a ground-breaker but this would be the first country in recorded history to impose economic sanctions upon itself. So, come to think of it, after a fashion, yes they had contemplated this and seem(ed) to have been remarkably insouciant at the prospect.
Now, to refashion Lady Bracknell, to have one economic meltdown is unfortunate but to risk a second immediately on top of this could be considered downright “careless”.23 Mar 2020
Maybe we see who steps up to fly back all the folks stranded, subject to governments working with us to facilitate that, and we help those airlines out first.
We should also remember who it was who cancelled their flights with no notice and who shut their transit points so that even other carriers could not get people home.
I have my own personal list and will certainly not be giving them any of my money in the future if I can avoid it.24 Mar 2020
As per the BBC website this evening:
“The UK chancellor has told airlines to find other forms of funding and not turn first to the government for help getting through the coronavirus crisis”.
Article in full at – https://www.bbc.co.uk/news/business-52027342
Virgin Atlantic in particular will be feeling somewhat weak at the knees right now. If they go bust, what happens to all those vouchers / credits?24 Mar 2020
Yes BackOfThePlane looks like there may be a backtrack.
Public perception seems very important for Boris. I doubt he’d want to see on the from page of the Daily Mail (Easyjet gets billions of taxpayers money whilst it gives Stelios £60m’. ‘Sir Richard Branson watches from his private island while taxpayers gives VS billions and major US share holder Delta does nil’. ‘Willie Walsh gets billions for BA while sitting on a cash pile of near £10B’.
Part of me thinks Willie Walsh will not be displeased about this. Without a government bail out soon he knows Virgin will go belly up without a major cash injection from DL and will only make a move with a begging bowl once BA is well and truly on its knees.25 Mar 2020
Looks like Virgin is about to ask for a government bailout. Delta will be part of the US bailout, so presumably they are hoping to double dip and get one here too.A very cash rich foreign airline being bailed out by UK taxpayers – not sure how well that will go down with the hordes of people in this country losing their livelihood.
1 user thanked author for this post.27 Mar 2020
Looks like the day of reckoning is approaching.
BBC reporting that Virgin will seek a bailout in coming days.
It will be interesting to see how that works – will US Government/Delta also contribute? Will UK Government buy shares?27 Mar 2020
Not going to give my opinion on this article for obvious reasons. I encourage all to read it. It’s quite the article and many will totally agree.28 Mar 2020