If they fail en masse, the ripples effect would be enormous through the economy. Yes, others might pick up the pieces down the road, but it would take time, and those others might not know how to run an airline or have the right pieces to do so.
The System can manage ONE airline going under, but not all of them at the same time. You'd have GE going under and probably Boeing as a result coupled with massive unemployment at the same time which would ripple to other businesses.
Yeah, I don’t buy this argument. Last go round, the banks actually had to be bailed out. Banks are too intertwined and integral to the system to just let go under. It would’ve been pandemonium- run on the banks, massive credit freezes- it could’ve been disasterous.
Airlines, cruise ships, GE, and Boeing are not.
And The one airline that is really in serious trouble is American, and that’s because it’s executive team loaded up on debt and exhausted literally all of it’s cash on stock repurchases. Why? Because they thought the good times were always going to be and the interest on the debt was cheap- the idiot CEO said so himself in a letter he released to shareholders- and because he and his executive teams compensation is tied to the stock. Pump the stock price up- and him and his executive teams compensation goes way up. You can’t have executives compensation tied to stock price- it flat out encourages them across the board to sell out tomorrow for today in order for executive class to make more $ today. Executive compensation for publicly traded companies should always be tied to the bottom line. Period.
GE and Boeing were already on the brink of going under before this due to horrible executive teams running those companies into the ground. Boeing is a joke. They booked $400 billion in sales on a plane that doesn’t work and isn’t safe. GE & Boeing & American Airlines can go through packaged bankruptcies and private companies, other public companies, and private equity groups that are run properly with great executive teams and that are flush with cash- would buy up those companies and assets.
They can call Warren Buffett and get a loan. He’s got $130 billion in cash. They don’t need tax payers to give them a handout. Look at what happened the last go round. 5.1 million families kicked out of their homes. Who bailed those people out? No one. And that number could be WAY worse this time around.