airlines bailout - 2020
Airlines spent 96% of free cash flow on stock buybacks
Airline bailout is not strict
- For instance, some of the money is in cheap loans, and some in grants that will be forgiven if the carriers fly right
- But in a less capital-serving bailout, another problem is who the minders would be. Remember AIG? The government appointed three trustees. There’s no evidence they did anything other than collect fees and confer a veneer of legitimacy.
Bailout doesn’t even work for all airlines, such as budget tourist ones like JetBlue
- Very likely more bailouts are needed
- followup bailout of 17 million with second stimulus package