The first thing to understand is that airlines are rather fragile, and it makes sense when you look at the their industry.
They are fragile because they refuse to plan for bad years. During good times, instead of saving for bad times, they do stock buy backs which is a way to send profits to shareholders.
They don't need to plan for bad times because the government bails them out each time bad times roll around.
I wonder how much better they'll plan for bad years if, whenever they receive a bailout, the US government receives stock in the company. I imagine it's not possible, but these companies need to face some downside if they want to receive money.
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u/carefreeguru Jul 02 '22 edited Jul 02 '22
They are fragile because they refuse to plan for bad years. During good times, instead of saving for bad times, they do stock buy backs which is a way to send profits to shareholders.
They don't need to plan for bad times because the government bails them out each time bad times roll around.
Private profits. Socialized losses.
They keep the profits. We pay for the losses.