Webmaster, I hope this is okay. It's only meant to be a discussion of business in general. No politics.
Well jennifer I found something attributed to him on another site... I dont pay for NYT access.
US airlines haven’t saved for a rainy day, and that’s on them
I agree, business are responsible to run themselves. Not my business.
Wu argues that airlines have spent the past several years making
billions of dollars through a series of mergers and customer
unfriendly policies. He uses American Airlines as an example:
In 2015 the company reported $7.6 billion in profits, and it has
earned billions per year in profits ever since American CEO Doug
Parker even bragged in 2017 about how he didn’t think the company was
ever going to lose money again Between 2014 and 2020, American
Airlines has blown through most cash reserves through stock buybacks,
which have amounted to more than $15 billion
When we want to promote an ideology we speak in Dollars. When we want to examine a situation we talk in Net Profit as a percent of the total. Its 5%. Meaning it doesn't take much for that $7.6 billion profit to become a $7.6 billion loss. But when we talk in billions of dollars everyone gets excited and that's what the author is going for. Go back to the first statement, saying that airlines should be saving for a rainy day.
The company has heavily financed new planes, meaning American has more
than $30 billion in debt, which is more than five times the company’s
current market value
If a butcher wants to stay in business he needs meat. If an airline wants to stay in business they need planes. I would imagine a lot of it has to do with older stock and newer more cost effective (lower fuel costs, lower maintenance) planes. Hey, they are switching to planes with lower carbon footprints. Isn't that what we want them to do? Money has to come from somewhere and millions of retired Americans are hoping that the Airlines and all of the US giant corporations are managing their companies to be as profitable in the long run as possible. Assuming that the top people aren't intentionally trying to put themselves out of business, I would suspect they made educated judgments that might have worked had it not been for this flu popping up in China. Was your company ready for this? All those who work for a company that was ready for this, stand up.
They’ve done that in lieu of building up cash reserves, in lieu of
settling labor disputes with employees, and in lieu of investing in a
better product
No new plans, but a better product? I happen to think they provide an excellent product for the price. Best in history if you look at the cost of travel 10, 20, 40 years ago. More flights to more places, and the safest in the history of flight. Absolutely nothing to complain about.
Bail them out? I am not a big bail out fan. But at least I will put sensationalized agenda driven opinion to the side and try and find the facts.
Unless you are willing the nationalize the airlines, you aren't going to get something for nothing. They will go out of business if they cant make a profit. You will have few choices and it will cost you a lot more to fly.
Remember when trashing "Big Business", its nothing but a bunch of our friends, neighbors, associates all working to make a living. I dont know any evil people, so I suspect there are few in Big Business.