Topic: Virgin Atlantic Goes Bankrupt, Bailouts? - page 2. (Read 345 times)

This bothers me, those companies are incredibly capitalist when they are getting profits and they want to pay as low taxes as possible and receive all kind of perks and do not care when the little guy is the one suffering, but when they are the ones dealt a bad hand they immediately leave all of that behind and ask for the support of the government to help cover their mistakes.

If they were not prepared for a black swan even then that is their fault and they should pay the consequences of their lack of foresight, yes this means losing jobs and letting companies go through bankruptcy but if we do not let this to happen and suffer small crisis from time to time the next big crisis we face is going to be many times worse than the crisis we saw in 2008.

The aviation industry requires large operational costs so cash flow is also very influential. Although air transportation is a bridge of the economy, the government's decision to save one airline industry will spread to other airlines. Even if this sector collapses, then the economy will not run optimally, but I don't think there is a need for a bailout policy that only needs to be done because the business climate or increasing airline revenues will be very difficult in this situation. As long as the vaccine has not yet been found, people's interest in traveling certainly decreases and all pandemic protocols actually make operational costs go up and ticket prices will be more expensive which certainly adds to people's reluctance. The potential of the aviation industry survived very little before the vaccine was discovered and the pandemic ended.

In fact, if the aviation industry does not survive, a gap will occur, prices will differ significantly in each region. In addition, mobilization will also be hampered and will have an impact on other economic sectors such as tourism. Transportation is the economic heart of society. Its sustainability is very helpful in achieving development goals. Smooth transportation can increase investment and economic equality, maintaining the aviation industry in the midst of a pandemic must be considered but not a priority.

Some things to consider here:

- Airlines are not returning money in some places , they are expecting the people to actually wait till the flight resumes and giving them merits

- Some Airlines are working with the Government and some big personalities in evacuating citizens stranded abroad and they are charging *2 the normal fare , those airlines might survive the big picture.

- There are many countries who are thinking of resuming the flights soon , maybe the domestic one's right now. But travel bans are slowly getting better .

- Some countries are shipping cargo internationally like : when Donald Trump Asked Ukraine to help US , those airlines might survive somehow

* Unfortunately this is how the situation is in every sector and therefore they cannot just ask the airlines to bail out since it would set up a bad example at the same time they might give them certain period of time in which they are supposed to pay the amount due. But total bailout is not something that should ever happen for anyone.

It doesn't sound like there's any real plan for a government bailout based on what that article says.  Even if Virgin Atlantic took bailout money, the amount would be nowhere near what the banks took in 2008-09, so I don't think this is a huge deal. 

Airlines are suffering right now because of COVID-19, but as I keep saying this is a temporary situation.  Bankrupt airlines can still remain in business without taking a penny from the government.

They're not going to get bailed out IMO.  What I'm more worried about is how the US government is going to pay for all of these stimulus checks.  Somebody has to foot the bill for those, and while I haven't heard many complaints about them, they're still an issue that's going to have to be addressed somewhere down the road.

The fact that those sectors would likely not return to normal operations soon could also be an argument for not bailing then out. They will not be reviving or restoring jobs to vital workers as we are still in a pandemic, so what exactly would be the result of funds pumped in, would it be to keep the company barely afloat while we await the global situation? If so, they could be filing for such grants sometime soon.

Looks very like a large cooperation exploiting its importance for financial gain. This leads to a much more distorted market system, with smaller businesses getting the short stick.

It's not just Virgin Atlantic but a lot of airlines around the world is going bankrupt due to the current pandemic situation. In my country, all airlines have stopped paying salaries to their employees just to save themselves to fly through this tough situation. Travel & tourism industry is also in a bad situation. In a nutshell, every industry related to public travel, is hit by the pandemic. Virgin Atlantic is no exception but it is sad to see one of the major international airline is going bankrupt. Thousands of jobs will be lost worldwide - direct or indirect!

I think that government should come forward to bailout such companies related to travel & tourism because there's no guarantee that the situation will normalize soon. Doesn't look very plausible. It may change quickly if an effective vaccine can be found but that doesn't look plausible either! More pain is waiting for the stakeholders for these industries if governments don't come forward!

It's quite common for airlines to operate under very thin margins. Under these pretense, it's also important to remember that none of the airlines on a woldwide level were prepared for a pandemic. Many were betting on low fuel prices to continue and actually went on buying sprees for bigger and newer jets, as well as other investments.

For an airliner of the size of Atlantic, I think there will be some sort of bailout. Or at the very least there will be some leniency in terms of how the rights to foreign debitors are treated like in this case. But even in the worst case a bailout wouldn't bee too unlikely. Virtually every country has helped its biggest airlines in some way or another. Be it via legislation or even through direct funding.

At least I hope after the irresponsible of certain airlines that preceded, that any assistance given by states will also result in stock. Airlines in the past had been getting favorable treatment, more so than almost any other industry by the state. By essentially being provided with free loans. Italy in my opinion did the right thing by nationalizing Allitalia instead of giving it free money. Hopefully if things go south for Virgin Atlantic the state will get out of the transaction with something to keep.

No, I don't think that governments should bailout the airline industry. We have that going on here in Croatia for  many years now, government constantly pumping  money in Croatia Airlines with no effect. They just got used to "free money", they don't care whether their business model has any sense at all.

No, I don't think so. Investing in(and running) businesses has risks in the first place, and they failed to see(though I don't blame them) a potential black swan event that could completely halt their business, so they should pay for the consequences. It's not like Virgin Atlantic is an essential business in the first place anyway.

That's why Branson got lots of criticism because he wanted British Gov to support the airline. AFAIK, the British Gov didn't want to do the bailout. #claps

In the aforementioned article:

So they file bankruptcy to do the reorg.

it is not fair, but it will be done

nobody wants to think about average Joe when they are sending tax-payers money to big companies for bail-out, and that will probably stay as it is, no matter who is on the top to decide
i also do not think that it should not be done, especially since airline business is in trouble that will not disappear tomorrow or next year, this could be a decision making point for airlines and trains, in train favor, Europe is already thinking about building fast-train tracks throughout Europe, and USA should head on the same direction IMHO

No, equity holders should eat the losses and companies like Virgin should be reorganized in bankruptcy.

If airlines are so unprofitable now (and for all we know, this COVID-19 thing is here for good and this is the new norm), the only sustainable thing to do is let the industry scale down. Layoffs, bankruptcies, mergers, consolidation, etc. Propping up zombie companies is what caused Japan's Lost Decade. https://en.wikipedia.org/wiki/Lost_Decade_(Japan)#Causes

I'm also pretty unsympathetic to airlines:


https://www.ft.com/content/97100b6a-6857-11ea-800d-da70cff6e4d3

Interesting. I've read not long ago on the new steps forward made by the sister company "Virgin Galactic".

Clearly the airline businesses are going bad now and if they are not helped the Americans (especially) may have problems when the things get back to normal.
But I think that Virgin Whatever made quite a lot of money in their history and it's not fair for the average Joe to use his money just to help some rich company owners remain rich.

They will. The government already bailed out Delta, United Airlines and others. It's an election year and any job that can be saved with tax money will be saved. What it looks like after the election is a different story. The 2008 bank bailouts led to Bitcoin (as you know, Satoshi pointed this out in his first block with the Times article). We can only hope that the whole bailout orgies around the globe will again mean a big push for crypto currencies.

If he or any stakeholders have arge amounts of cash or loan able assets then why should they get a bailout?

I think a few airlines in the UK got funds at the start of the crisis to try to keep them going, if virgin were one of them it'd be interesting to see what they've actually done with that to not survive where other airlines can - surely that means they're badly run and should be left to fail...

Edit: what happened to this https://metro.co.uk/2020/07/14/virgin-atlantic-secures-1-2billion-bailout-survive-pandemic-12988507/
Fuck 'em.

Source: Reuters

Without bailouts, perhaps the airline industry would be dead, and thousands would go unemployed. Then, it might affects hospitality, tourism, taxi/uber services.

Should the government bailouts the airline industry? What will be the future for the airline industry post coronavirus pandemic?