Potential Airline Bailout

[777Aviate]

https://www.theglobeandmail.com/politic ... t-package/

['97 Tercel]

[777Aviate]

Will it even provide relief? 1 billion in CEWS has been take by airlines. America dosent have any travel restrictions yet American Airlines is burning 44 million a day. I dont see how giving handouts increaes demand for travel when even no quarantine restrictions aren't increasing demand (international. Domestic is showing signs of recovery).

[DHC-1 Jockey]

Will it even provide relief? 1 billion in CEWS has been take by airlines. America dosent have any travel restrictions yet American Airlines is burning 44 million a day. I dont see how giving handouts increaes demand for travel when even no quarantine restrictions aren't increasing demand (international. Domestic is showing signs of recovery).

Could a bailout of airlines be dependent on the Canadian government acquiring a stake in the same airlines?

Example: "We'll give you a loan now so you can survive. When things just start to pick up again, we'll come calling for repayment, or else we'll just take over and own you ourselves."

[flying4dollars]

I don't know that bailout is the right term for all airlines. A few are asking for a government repayable loan with low interest. I don't know that any of the airlines are asking for taxpayer handouts with no strings attached. How those funds are going to be used is probably on the governments need to know list. For example, there will be stipulations ie - no money is to be used for bonuses, aircraft acquisitions, uniform or brand changes etc.

I think expecting assistance is absolutely reasonable, considering it was the government who imposed the restrictions, and is still keeping them in place when many of them could be either lifted or adjusted to allow resumption of business services.

[7ECA]

The industry needs to change the narrative; stop calling this a bailout - people (read, taxpayers) really hate the term bailout. They remember the Big Three getting "bailed out" and look how that's turned out...

You've got to start thinking like the Banks; those fuckers are smart (read, devious). See, the banks got "bailed out" in 2008 - but, it wasn't a bailout. The banks received a "liquidity injection" or a "liquidity loan". It's a fucking bailout; but by another name. Confuses the public, and you can argue it's not a bailout until they tire themselves out.

And hey, look at that, the banks are still managing to make record profits even as the "economy" goes to hell.

[spinaxis]

The industry needs to change the narrative; stop calling this a bailout - people (read, taxpayers) really hate the term bailout. They remember the Big Three getting "bailed out" and look how that's turned out...

You've got to start thinking like the Banks; those fuckers are smart (read, devious). See, the banks got "bailed out" in 2008 - but, it wasn't a bailout. The banks received a "liquidity injection" or a "liquidity loan". It's a fucking bailout; but by another name. Confuses the public, and you can argue it's not a bailout until they tire themselves out.

And hey, look at that, the banks are still managing to make record profits even as the "economy" goes to hell.

But the banks did get a bailout, unless I'm mistaken that money never was to be paid back. The support we're talking about here is not a bailout, as it's in loan format. If it was money free and clear (like the USA's) then you could call it a bailout.

[Old fella]

Bums in the seats is what will save your airlines nothing else will. Governments of all levels and political persuasions need to make that happen. Certainly no sign of that here in Atlantic Region as of yet.

[7ECA]

But the banks did get a bailout, unless I'm mistaken that money never was to be paid back. The support we're talking about here is not a bailout, as it's in loan format. If it was money free and clear (like the USA's) then you could call it a bailout.

No idea, because the banks have been anything but forthcoming on the details of any arrangements. As a matter of fact, they'll argue to the death over the semantics of being accused of taking a "bailout" versus a "liquidity injection" - before they'll ever even consider disclosing what the terms of any agreement actually were.

We do know, though, that the banks got a combined $114 Billion in 2008/2009 - from both Canadian and US sources. Ultimately, it'll take numerous FOIA requests to break down the wall of silence and get something even vaguely resembling clarity - and odds are, the lawyers from both the banks and the government will do everything in their power to stop any disclosures of documents (the main reason being, Canadian banks have always upheld the story that they were never in any financial difficulties - notwithstanding that story, why then did they require/take funds?).

It boils down to semantics. Taxpayers or the electorate, consumers, Joe Blow, what ever you'd like to call them; do not like governments handing out money to large corporations. Large corporations, on the other hand, like to privatize profits and socialize losses - they've learned how to do that over the years... If the airlines are going to get any kind of money from the government, they've got to change the narrative, change the vocabulary; or they're fucked. Well, they may not "fail" but we all know how it goes when governments are given the power to pick and choose which companies survive (the ones which get financial assistance - or are "too big to fail") and which ones fail (ones that get nothing - and end up having their carcasses scavenged).

The biggest fallacy of them all, though, is still believing that "Capitalism" exists. It hasn't existed since 1929, when the market was allowed to chart it's own course - after that, governments got involved.

[Gilles Hudicourt]

1 billion in CEWS has been take by airlines.

That is an outright lie. Not by yourself but by the person you are quoting.

I dont see how giving handouts increaes demand for travel

How could you when no one ever made such a claim.

[iflyforpie]

If all the airlines need is a loan... let them go to the banks and ask—just like any of us would. Let the banks look at assets and liabilities and cash flow and come up with an amount and interest rate that is satisfactory.

If the banks say no... why on gods good earth should the taxpayer say yes!?

This isn’t a 14 day quarantine. Lots of people like me have plenty of accrued vacation from not going anywhere and the required extra time off is not a deterrent whatsoever.

It’s a lack of consumer cash; a lack of consumer confidence in the airlines; and a population that doesn’t want to risk getting the disease regardless of what measures are in place. Not travelling is a small sacrifice to most people.

[altiplano]

If all the airlines need is a loan... let them go to the banks and ask—just like any of us would. Let the banks look at assets and liabilities and cash flow and come up with an amount and interest rate that is satisfactory.

If the banks say no... why on gods good earth should the taxpayer say yes!?

Because 650,000 jobs depend on it. Not to mention in the event of the industry tanking there would be a loss of a huge amount of Government revenues and a large associated expenditure. Over 4% of our country's GDP and future economic growth and development across multiple sectors and regions depend on it. Supply chain certainty and other strategic issues are reasons we need our own industry. This isn't airlines' fault, and they need to be kept viable until the recovery is in sight for the benefit of the while country.

[Blowin' In The Wind]

If all the airlines need is a loan... let them go to the banks and ask—just like any of us would. Let the banks look at assets and liabilities and cash flow and come up with an amount and interest rate that is satisfactory.

If the banks say no... why on gods good earth should the taxpayer say yes!?

This isn’t a 14 day quarantine. Lots of people like me have plenty of accrued vacation from not going anywhere and the required extra time off is not a deterrent whatsoever.

It’s a lack of consumer cash; a lack of consumer confidence in the airlines; and a population that doesn’t want to risk getting the disease regardless of what measures are in place. Not travelling is a small sacrifice to most people.

Shortsighted.

[TT1900]

Because 650,000 jobs depend on it. Not to mention in the event of the industry tanking there would be a loss of a huge amount of Government revenues and a large associated expenditure. Over 4% of our country's GDP and future economic growth and development across multiple sectors and regions depend on it. Supply chain certainty and other strategic issues are reasons we need our own industry. This isn't airlines' fault, and they need to be kept viable until the recovery is in sight for the benefit of the while country.

The numbers you're quoting are for the entire aviation sector including indirect employment, not airlines, and are highly misleading. Even among airlines many of the smaller operators are doing reasonably well, so really it's just Air Canada and Westjet that lose big and they've already laid off as many as economically viable for the moment. Yes, the big players being right-sized will hurt the bottom line of airports and NavCan, but subsidizing companies that are now significantly oversized for the foreseeable future is unsustainable. Add to that, the rest of the G7 has shown subsidizing/bailing-out large airlines to be a bottomless pit, efficient only at burning public funds with minimal effect.

If the government is hell bent on spending money to make aviation better I'd much rather see a change to the operating model of airports. Treat them as critical public infrastructure, same as highways and ports. Will alleviate some pain on the airlines buying them time to rightsize while strengthening and enabling growth in the rest of the sector.

[paddy]

I love the shortsightedness of going to a bank comment. Revenues are close to zero no bank would lend in this instance. Letting airlines die would in fact work as the foreign carriers would just pick up the pieces. The problem of course is the significant loss of tax revenue both from the corporations and the subsequent personal income tax of the employees. Then of course there is the social burden of unemployment level increases. This is why government support of a struggling industry (aviation in this case) makes good economic and social sense. The benefit both middle and long term outweigh the cost almost every time.

[palebird]

And that is all wonderful. But what about the "plan". Oh yeah, we do not have one. They are still hollering about Covid. There has been absolutely no plan put forward by Trudeau and company on how the country is supposed to move on out of this mess. Why? Are they brainless? Quite possible. And/or they are not finished with the program. What is the program? Not really too sure. Look at sleepy Joe in the US. He actually came out and admitted he was going to shut down fossil fuels in the US in the last debate. Who do the Liberals champion? Most definitely not the Republicans. They are siding with sleepy Joe. That is the plan that they are not admitting to. And that means this industry is done if they carry on. Have fun with that.

[rxl]

And that is all wonderful. But what about the "plan". Oh yeah, we do not have one. They are still hollering about Covid. There has been absolutely no plan put forward by Trudeau and company on how the country is supposed to move on out of this mess. Why? Are they brainless? Quite possible. And/or they are not finished with the program. What is the program? Not really too sure. Look at sleepy Joe in the US. He actually came out and admitted he was going to shut down fossil fuels in the US in the last debate. Who do the Liberals champion? Most definitely not the Republicans. They are siding with sleepy Joe. That is the plan that they are not admitting to. And that means this industry is done if they carry on. Have fun with that.

COVID remains a critical issue. As was anticipated by science, we are pretty much right back to square one in terms of case numbers and hospitalizations. The second wave is here and we are still “in this mess”.

Mr. Biden was being honest about the future of fossil fuels over the longer term. Unfortunately, he was not particularly articulate on this issue during the debate.
The evolutionary transition away from fossil fuels has already started. Just ask people like Elon Musk.

[spinaxis]

And that is all wonderful. But what about the "plan". Oh yeah, we do not have one. They are still hollering about Covid. There has been absolutely no plan put forward by Trudeau and company on how the country is supposed to move on out of this mess. Why? Are they brainless? Quite possible. And/or they are not finished with the program. What is the program? Not really too sure. Look at sleepy Joe in the US. He actually came out and admitted he was going to shut down fossil fuels in the US in the last debate. Who do the Liberals champion? Most definitely not the Republicans. They are siding with sleepy Joe. That is the plan that they are not admitting to. And that means this industry is done if they carry on. Have fun with that.

COVID remains a critical issue. As was anticipated by science, we are pretty much right back to square one in terms of case numbers and hospitalizations. The second wave is here and we are still “in this mess”.

Mr. Biden was being honest about the future of fossil fuels over the longer term. Unfortunately, he was not particularly articulate on this issue during the debate.
The evolutionary transition away from fossil fuels has already started. Just ask people like Elon Musk.

Been watching "The Long Way Up" on Apple TV lately. It's the third installment of the Long Way Round and Long Way Down where Ewan McGregor and his friend ride motorbikes across a continent. In this installment they are doing it completely electric, on Harleys and the support vehicles are the first two prototypes of the Rivian truck. It's quite interesting to watch, and while they have run into issues obviously... it's the future. This is just the start.

[Gilles Hudicourt]

If the banks say no... why on gods good earth should the taxpayer say yes!?

Because all banks will say no to all airlines and most airlines will fail.
Because then all other companies that lived off the airlines will either fail or raise the price of their services by 75%. Some of these will include major airports.
Nav Canada will downsize and increase fees by 50%

Aerospace manufacturers that do not Fail will lay off 50% of their staff. Pratt. Airbus. Bombardier. Bell. Safran. To name just a few.

Because 200,000 or more may lose their aviation or aerospace jobs ?

But who cares ? Is this not the Lukas Gabor Forum now ?

[mbav8r]

So in the US, 15B more to come, Canada, crickets!
Of note, they are giving 15 Billion to bring back 32,000 employees, we have about the same amount on furlough here, clearly they see the economic benefits of strong airlines.

https://simpleflying.com/us-covid-aid-vote/
How will the package affect the aviation industry?

If the stimulus bill passes through Congress and the Senate without a hitch, airlines are set to receive around $15bn in total. As part of the conditions, carriers will be required to call back over 32,000 workers who were furloughed over the fall period