The damage from airlines going under (to other sectors of the economy) is greater than bailouts. It would set off a chain reaction, the airline industry supports hotels (all the pilots and flight attendants stay at hotels) and tourism.
On my next tshirt
For the record, I would bail these fuckers out, but it would come with some hefty costs. Loans at 12%, reserve requirements, no ability to carry forward losses, more leg room, emissions requirements, and no more share buy backs. You want to return money to investors, you do it through dividends.
Leveraged stock buybacks are essentially a bet that the company will fail as it maximizes investor ROI to fail with as much debt as possible. That destabilizes the economy and should be flat out illegal due to moral hazard.
It’s really simple. If companies can’t issue buybacks or dividends with outstanding debt or unfounded pension liabilities society is simply better off. Compromising to say cash on hand + 1/2 the value of physical property > debt is probably fine. Notice how neither of them would change the theoretical stock price of a company and thus invested returns, yet it’s a significant difference in reality.
This is just the sort of fun financial engineering challenge that will not end the way the rulemaker intended...
https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#...
Airlines spending every spare penny they had, and in some cases taking out debt, to gamble on the market and keeping nothing in the bank as a safety net is one such side-effect.