Most airlines face bankruptcy by end of May, industry body warns

Like an airline: people can hop on planes and go to places, to do business or meet people.

You can't do that with an ATM. ATMs don't fly.

I don’t understand Amazon so I can’t really comment on it.

Netflix would probably do fine.

Apple would also likely do fine overall, but growth would reduce. It remains to be seen if the slowing growth would lead them to throw away what’s made them successful.

https://www.statista.com/statistics/756093/ryanair-net-profi...

Edit: As does EasyJet

Theres just less room for error.

Any sane airline is going to try to file bankruptcy of some form now to protect themselves from new competitors that come around. There is bankruptcy provision for not paying debts for a few months while your reorganize. If you are in a tourism industry you should contact a lawyer and figure out the pros and cons of what you can do now to protect yourself in the future.

Why, then, can’t the airlines just issue bonds, like governments do in this situation? Large companies already do this to fulfill short-term dips (see https://en.m.wikipedia.org/wiki/Commercial_paper); this would just be the longer-term version. As long as the dip will predictably resolve, banks should be willing to secure the bonds.

In the US, half of all people having almost nothing to put away. Comparing this state of affairs to what corporations do with billion in profits is beyond parody.

Companies typically do not keep a ton of money around because they're supposed to be distributing profits to the public (i.e., shareholders). Companies that do keep money around, like Apple, are correctly criticized for not re-investing the money into the economy (thus creating jobs and growth) and not returning it to investors (who would, with the dividend, presumably invest the money in another company that had a growth opportunity).

Like it or not, re-using profits is how we have achieved the modern way of life. Keeping money lying around does not spur the economy, which means fewer jobs, fewer products, and a stagnating economy.

Assuming they could sock all $28B in profit into a rainy day fund... how can you make any reasonable claim about airline responsibility without also addressing their operating expenses? taxes? investments into remaining competitive? While I absolutely don't favor bailouts no matter whether they acted irresponsibly or responsibly... all I can tell from your position is that you think $28B is a big number and so beat 'em up on that without any further consideration.

This is like asking Google to prepare for operation of their datacenters for three months without electricity. It’s so unthinkable in a modern society that you simply can’t plan and set aside resources for that.

The virus spread so fast thanks to airlines. I think more expensive plane tickets make sense: cut back some of the travel & emissions, make people look more into local holidays, make companies look more into video conferencing.

So basically all airlines in the world would have to save 100% of profit for 5 years to survive a force major type of event?

This is simply not possible in any line business.

I strongly recommend you read a primer on corporate finance, but the gist is that creditors have first dibs on assets in a bankruptcy (and there may be multiple tiers of creditors), and shareholders usually get wiped out.

The tradeoff is that when times are good, shareholders can gain far more than creditors.

Now, if creditors really believe that the bad times will only be short-term, the credit markets may refinance the debt, or allow the airlines to issue more debt to cover the existing debt, allowing airlines to avoid bankruptcy, assuming that good times return in a timely fashion, as predicted / hoped.

If creditors believe that the bad times will last for the long-term, they can force bankruptcy, and then liquidate the assets in the hopes of recovering as much of their original investment as possible. As mentioned before, shareholders would get wiped out.

You said that this would be a "senseless destruction in value," but it's really not that simple. As an example, perhaps the proceeds from the sale of an airline's assets can be invested into promising treatments for COVID. Or perhaps the creditors have debts of their own to repay, and by liquidating the assets of an airline to cover their debts, they prevent a cascade of defaults that could take out an outsize portion of the economy. So it's not actually clear that the net effect on the economy would be a "senseless destruction in value."

Things change. New things often don't show up until the old thing has died.

The world existed for a long time before we had airlines. It won't cease to exist if many of them go out business.

I haven't flown in years. Lots of people would like to see people stop flying because it's hard on the environment.

This is potentially an opportunity to see something better rise from the ashes of a suddenly dying civilization that the world has long decried as unsustainable anyway.

airlines do bankrupt very often

https://simpleflying.com/bankrupt-airlines-2019/

They are hardly too big to fail (the ones who consider themselves essential can increase fees)

Someone else with immense capital and assets would buy American Airlines (maybe Steve Ballmer or Larry Ellison would lean into that; Ellison likes airlines). Someone else would buy United, perhaps a major financial firm, private equity.

Capitalism is not ill suited for this crisis. This is not the first time we've seen this. We had Capitalism in 1860-1870 and 1918 as well. What people didn't like about this process in the past, is the way it often consolidates economic returns further, it generates huge winners and losers (in a way that seems to most to be particularly predatory or unfair, as an emotional take), and society often feels taken advantage of by people with vast well-stocked fortunes.

Don't confuse whether it would work with whether people like it or not. It works in fact and we've seen it multiple times in the past, we know exactly what happens: there are big winners (those that were prepared to take advantage) and big losers.

Many people took vast economic advantage of the Civil War, not least of all by buying their way out of serving (hiring legal substitutes). Rockefeller for example did well in commodities at this time, prior to the Standard Oil days.

In a free society every free individual can think up a solution in a totilitan society on the other hand a smaller set of people will make the decision.

I like to think for myself and would prefer to let the question of a solution be handled by as many people as possible and based on reasoning and politely asking instead of appointing a group of technocrats to be worshipped as priests.