Paid out 96% of FCF for stock buybacks over the past 10yrs. Let that sink in... for the most capital intensive biz ever.. let the stockholders bail them out 😂

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Exactly....all done because the executives comp was mostly bonus based on share price. F them, I’ll work from home.

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Think about the impact in the city of Atlanta alone if something happens to delta. Delta is the states largest employer, the airport is an employment hub for thousands of low skill labor in the form of baggage handlers, tsa/customs officers, restaurant workers, etc. The impact will be vast. And that doesn’t consider the other hubs like nyc, Minneapolis, etc etc.

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Ok. Let’s nationalize the airlines. If we’re bailing them out, let’s do it and get equity, not through 0% loans. Because at this point socialized capitalism isn’t working.

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I’m hoping there is some mandatory airline reform. Missed in the airline and corona drama was a roasting of airline executives two weeks ago for their abysmal management of our aviation infrastructure. I’m hopeful that airlines will learn a lot of empathy coming out of this

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AA is a clear outlier here and is throwing off the total % - but your point still holds true.

Exec comp & share buybacks is the biggest scam that very few are talking about...

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Seriously, that number drops from 96% to 60% when you remove AAL.

It’s still grossly irresponsible- if someone managed their personal finances like that, we’d lambast them for their irresponsibility.

likefunny

IF bailout, more legroom, reduction in change and baggage fees, severely limit buybacks, no more excessive bonuses for executives...aaaaand I would like an extra pretzel bag in coach thank you very much!

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Can you please add biscoff cookies to that list?

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Every single one of you with any of those firms in your 401ks or investment portfolios are equally guilty. Stock buybacks are a very common way to return to stockholders just like paying out dividends. If you really want to preach from your higher moral ground divest every fund containing airlines. Nobody saw this coming, it’s easy to point fingers in hindsight. Take it easy.

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Take it easy guys, BCG1's father was an airplane.

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Airlines never have enough cash on hand and are quick with their hands out every time there’s a crisis. We’ve played this game before and we’ll play it again, but let’s make sure their CEO’s all make $10M+.

We should let United fail, no one would miss them.

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Clearly airlines need to be bailed out. Clearly their buybacks are a problem. The solution is some middle ground: loans provided but with stipulations on future reserves necessary or the like.

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@AM - so you're completely incapable of working if you're not on site? You believe people getting to Omaha for dinner with a client is equivalent to banks in '08 not having cash to perform critical functions that keep the economy alive? The world will be fine without airlines for 3 months. Next time you're in the airport, take a look at the people in there and ask yourself how important their travel is. The notion that air travel is similar to roads, banks, utilities is absurd.

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Can someone explain stock buybacks in layman’s terms?

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Yes. Delta CEO salary $900K, total compensation $15M incentive based mostly on share price. Buy back the stock and the price goes up.

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What does an airline do with excess cash though?

1) buy the business by lowering prices to get a monopoly, not better for consumers in long term
2) paying all their workers above market, doesn’t help make them more resilient to a downturn
3) cash stockpile, that isn’t helpful to anyone

D2 you do also realize the market cap of even the S&P 500 is $28T right? (That’s a T, for treeleann). And you’re saying WB has cash reserves to buy not just this, but also the entirety of the rest of the “stock market”? And then it would only make a “dent”?

Plain and simple. It has to do with policies and the beneficiaries of those policies in general. And less with the airline industry.

So what is the alternative if the airlines fail? We can’t exactly expect a number of startups happen to take their place.

Airlines companies often file for bankruptcy. If they do their current equity will go to 0 and their capital structure will be reorganized where the equity will go to one of their debt holders. Alternatively they can sell themselves in an auction process pursuant to section 363 of the bankruptcy code

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