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Comment by oarabbus_ | Hacker News Reader

Well, hate it or not but they're an absolutely vital industry in the modern day. It would be better for the world to bailout the airline industries, than to not have airlines.

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I think the world would be better off if the incompetently run airlines went bankrupt, and a few better run ones took their place.

Otherwise you're just setting the scene for large corporation bailouts every time there is a hiccup in the world.

Who says they’re incompetently run? You, are you a business expert? The fact is that they were victims of an incredible shock to their business model, no different than if a plague wiped out all the chickens in the world. Would you call chicken farmers incompetent in the same situation?

> Who says they’re incompetently run?

I'd say any company that requires a bailout is incompetently run. Maybe that's too strong of a word, but by definition they're not "successfully" run.

There is obviously a huge demand for airlines. To me that implies that new airlines will appear when old ones go bankrupt. Since airlines don't own any infrastructure, I don't think much would be lost.

Yes and no. As we've seen with empty or mostly empty flights to keep an airline's spot at the gate, airports are a finite resource. If airlines go bankrupt, you're likely to see consolidation exacerbated by a barrier to entry, absent regulation and/or antitrust enforcement.

You can save the industry without bailing out the stock holders and bond holders, as those are three different things.

So, what is important?

1. Maintaining a functional airline industry

2. Making sure the bondholders get back 100% of their loans?

3. Making sure shareholders don't lose their equity stake?

I would agree that #1 is important.

Well if airlines go bankrupt, that's a lot of assets that could be sold at fire-sale prices, and an opportunity for other surviving airlines to jump in and take over those planes and routes. Since China seems to have contained the outbreak, and probably have the economic power to do it, maybe they'll buy up a bunch of failed airlines...

1 and 2 are important. 3 is not important. Shareholders should lose everything in a bailout, that's the deal when one decides to buy equity in a company.

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