
British Airways will suspend over 35,000 of its employees - thenewsgateway
The lockdowns and stay-at-home orders as measures to slow the spread of the virus has greatly affected the aviation sector.<p>Amid the worsening coronavirus crisis, the airline industry has taken a hard blow with a drastic decrease in passenger travel.
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noad
After spending hundreds of billions of dollars in share buybacks over the past
decade many of the major airlines now look like they are about to collapse.

Those buybacks made a handful of rich executives and shareholders, much, much
more wealthy, mostly tax free. Nobody else really benefited.

Share buybacks have been the greatest misallocation of resources in the
history of humanity. This was all preventable.

~~~
duxup
The prevalence of stock buybacks is a problem but ...

I'm not sure that in the absence of buybacks that they would have just sat on
a pile of cash (I bet some of them have some cash on hand) and paid everyone
during the COVID crisis until that cash was gone. That just wouldn't make
sense business wise either.

A lack of buybacks wouldn't change anything here. If you're not working these
employees, you aren't going to keep paying them for long generally. Buybacks
or no buybacks.

If you don't like the incentive to layoff people who aren't working for you,
that's a whole other topic IMO.

~~~
fncypants
Its not that the companies should have kept the cash, though. Buybacks are not
inherently bad. But the US, many buybacks were a direct result of the
reduction in corporate tax rate in 2017. Instead of using their greater cash
flow to reinvest, raise wages, etc, they bought back stock primarily held by
wealthy and institutions. Effectively a transfer from the US Treasury to the
wealthy class, leaving the US with fewer options to weather the current storm
for its citizens as a whole.

~~~
duxup
I still wouldn't expect wages to rise just because.

And I'm not sure as far as an airline goes investment isn't going prevent any
of this either.

I get the buyback problem, but laying people off who aren't working seems
entirely disconnected from those topics.

~~~
ferzul
is public assistance also entirely disconnected?

sure, they will lay people off or furlough them. there's genuine problems with
work at the moment. but do they want help beyond that?

~~~
duxup
I guess for any given public assistance you could demand something about
layoffs ... but I would be wary of side effects / worry about killing the
company through such policies.

~~~
toomuchtodo
Nationalize them then. Wipe out management and shareholders, and take control
for the benefit of workers of the company and customers.

~~~
duxup
Would they be able to compete with other airlines if they were paying everyone
for not working?

~~~
toomuchtodo
One would assume that airlines requiring a bailout are financially marginal,
and unable to survive without nationalization, while airlines not requiring a
bailout would be in a financial position to weather the temporary black swan
event causing the need for bailouts in the first place (for example American
Airlines might require a bailout, but Southwest likely will not).

If _every airline_ needs a bailout, you might have to evaluate a program of
greater scale; injecting cash directly into every airline in a coordinated
effort, but taking equity and putting in place governance (with a board seat
or more than one) in those needing the bailout. Those who won't accept such
terms would be permitted to fail.

My apologies it's not a binary answer, and more "it depends."

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shp0ngle
What’s the source of this? Why is it in “Ask HN”? What is “The News Gateway”?

~~~
dwaltrip
I flagged it for not providing a source. Not sure if that is correct usage --
I skimmed the guidelines and didn't see anything -- but it feels correct to
me.

That, and the submitter's account looks like some weird advert.

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nitwit005
Someone out there is probably gathering the money to snap up bankrupt airlines
and their planes.

And I'm sure people with storage are buying up the cheap fuel.

------
samblr
Relevant link :
[https://www.bbc.co.uk/news/business-52130021](https://www.bbc.co.uk/news/business-52130021)

~~~
goatinaboat
From that link

 _Virgin Atlantic, however, continues to press, and has written to MPs
pointing out that it provides the only British-flagged competition to British
Airways on many key routes from Heathrow._

Virgin is owned by Americans (Delta), Air France and a shady billionaire who
pays no tax in the UK. Why would the British taxpayer be on the hook here?

Also why isn’t BA asking the Spanish government for a bailout? Since it is
owned by Iberia...

~~~
eb0la
BA is not owned by Iberia. Both Iberia and BA are owned by the holding IAG.

BA got 55% of IAG and Iberia 45% when IAG was incorporated as part of the
fusion
([http://news.bbc.co.uk/2/hi/8356780.stm](http://news.bbc.co.uk/2/hi/8356780.stm)).

~~~
robjan
IAG is also domiciled in Spain

