Discussions

I'm just wondering how a company like Air Canada, or any other, can lose so much money because of the pandemic. They laid off staff and the Govt paid them, they grounded planes so spent nothing on fuel and staff. I can see a loss or break even by flying at less capacity. I expect when they do have good years they must turn a profit, so do these companies not know how to save. I think it's an excuse to stick it to us when we do start to travel. Maybe there's more to it, I dunno. I'm more sympathetic for the little guy who's had to pay rent and not be open than the big guys.  
Another thing that is annoying to me is people who have been able to work straight thru, and complain they should get more money for it....I know people who haven't worked since last March so I'm thinking they should be happy to still have a job.  
Our Grandchildren will be paying for this for years to come so I wish everyone would do what's asked and quit asking for handouts left, right and center so we can survive this. I don't know much about Communism but having the Govt pay for everything sounds pretty close to me.  
Just me thinking out loud on ebrandon, no need to trash me...I don't know how big businesses run, I don't know how the Govt works or why people/businesses can't save, so just venting...it's been a long 11 months for everyone.

Airlines get bailed out because the rich use them all of the time. They wouldn’t be able to jet-set all over the world if the airlines were bankrupt.  
 
The taxpayer bails out the airline, so the rich can fly. Easy peasy.

Not just airlines bell media also got a massive sum of cash and ended up laying off and shutting down some of their media without notifying their employees properly. They also continued to pay our massive dividends out.  
 
 
I will be changing my internet tv provider.

Even if their revenue is dead, or near dead, airlines still have loans to repay on the multiple aircraft they have. Very few aircraft were bought outright when they were acquired. Many are leased, but the airlines are in contracts that bind them to certain payback terms. They can cut routes and staff, but the bottom line is what's owed to the creditors.

this is humorous! LOL

Are you telling me that airlines don't buy those $150,000,000 planes with cash?! Who would of thunk it. But ya there are A LOT of costs involved in operating airplanes and an airline. Hard to believe but it isn't just all going in those greedy pockets.

If I finance a tractor, a trucking company leases a semi or you buy a new car and then we can’t meet the payments then it has to go back and we lose it.  
When a big corporation receives massive tax payer handouts it looks bad to regular people struggling to meet their rent or mortgage and trying to hold down a job.

I think, like a lot of things, there's a complicated chain reaction that occurs. I don't know all the ins and outs, but a few things seem obvious after reading the replies thus far.  
 
Airlines are corporations. They need to pay their shareholders, regardless of how we feel about or disagree with. Not doing so would have huge implications in stock value, which in turn can influence other types of financial instruments downline, such as anyone with retirement savings tired to a mutual fund.  
 
They could default on their leases on aircraft, but that would make it impossible for them to acquire them again once business resumes. Manufacturers could take them back, but then what happens to the manufacturer? Again, upstream there would be some serious consequences.  
 
And what if the airlines collapse (and some surely have and will), does it matter? A huge part of some economies rely on travel. If no one can travel there (and this is not for the rich - the middle class by and far are the biggest users of airlines for business and leisure), what happens to our world economy should those smaller economies collapse? We're becoming increasingly integrated, and if many smaller economies fail it will have impact on larger ones. Also, lack of competition will drive up prices, making it unaffordable to all but the elite.  
 
So, there are strong arguments for bailing out companies like airlines, at least in the sort term. There are certainly questions about how that funding is utilized (Bell is a good example). But to call it "communism" is very untrue - It's actually supporting the capitalistic structure in which these companies operate.

Do you think that those subsidies should be tied to a commitment towards lower emissions?  
Do you believe that post covid there will be the same demand for air travel as there was prior and do you think that people will be able to afford air travel as the carbon tax kicks in ever more each year.  
Do you think that subsidy should be tied towards cooperations demonstrating better fiscal management and building of reserves and different income streams ?

Profit margins have been minuscule per seat. 30 years ago it cost 300+ to fly to Toronto on a seat sale. You could get there for less than 200 for the past several years. We’ve had it very cheap and post-covid will just show us the real cost to fly.

And use youtube or netflix and stream off apps much cheaper  
and watch whatever you want whenever you want plus much cheaper  
 
Edited by Brian, 2021-02-13 16:45:29

I love yet hate reading discussions like this. Very few people can offer any opinion on a topic like this as very few people have experience or knowledge with a business of this size. Those that do, don’t read eBrandon so, As such all responses are misinformed and or misleading. My blood boils, reading responses from people who have no idea what it takes to make decisions managing a multi billion dollar business like Air Canada.. I know, I know, stop reading these responses if they bother you.

All we do is manage a successful fifth generation family business with minimal borrowing exposed to world market prices, constantly embracing new technologies for greater efficiency , operating with our own money not someone else’s. A business which made a successful transition to operate on a different continent in an extreme climate. Our decisions are made without promise of a massive cooperate bonus at the year end and if the business fails we could lose our entire net worth and our home so we calculate decisions and make them carefully.  
I’m sure that there are lots of other small business owners on here with their own experiences.  
So there you have it , we don’t have a clue.  
Fact is it’s all relative, doesn’t matter how big the business is or the size of the numbers.  
 
Edited by Farmergeorge, 2021-02-14 11:44:55