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Non-Tech : Airline Discussion Board -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (1212)	7/9/2020 3:40:53 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 1868

One might have thought the government would be wise enough to provide bailout money for airlines in return for something akin to convertible preferred stock. Yet this government appears to have simply provided the money as a gift, provided that the airline company doesn't fire employees, or if it does fire them, then the money is in the form of a low interest loan. The companies could still declare Chapt. 11 bankruptcy, in which case the pubic funds might never be recovered, but the post-bankruptcy airlines might do well. In any case, existing common shareholders remain at risk – more risk than I would want in my own portfolio. Previously, the U.S. government bailed out General Motors in exchange for preferred stock. The subsequent sale of the stock allowed for complete recovery of the government investment. What is more likely is that continued historically low interest rates (real interest rates now less than zero) will entice leveraged buyouts of the airlines or some sort of consolidation. The resulting companies could suffer from extremely large long term debts, which also doesn't interest me as an investor. I don't see anything better among foreign owned airlines either. Art