Bailing out airlines and other businesses

[Brendan Burgess]

Ryanair has enough zealots of its own to try and screw honest people out of hard earned money already and championed by their money grabbing boss. I don't believe in giving them a cent of public money. If Ryanair lived by the sword, it should die by the sword.

Which is why they are profitable and why they have €3 billion of cash and have said that airlines should not be bailed out.

It's more a case of those who live by the sword, do not need to the taxpayer to swing the sword for them.

Brendan

 

[Sunny]

Which is why they are profitable and why they have €3 billion of cash and have said that airlines should not be bailed out.

It's more a case of those who live by the sword, do not need to the taxpayer to swing the sword for them.

Brendan

Except they have 3 billion in cash are yet still expect the State to pay their employees for the next couple of months

 

[Purple]

Except they have 3 billion in cash are yet still expect the State to pay their employees for the next couple of months

Any company with no work for their employees to do is entitled to lay them off. It doesn't matter how much money they have.

 

[Sunny]

Any company with no work for their employees to do is entitled to lay them off. It doesn't matter how much money they have.

They are not letting them go. They are taking the Government Wage Subsidy Scheme which is State Aid for the s local business and a multi-billion euro airline with 3 billion in cash. So how exactly are we defining Ryanair not needing State support like other airlines then? Despite their 3 billion cash pile, they are not shy in ta king any State support that will be available. They have taken State subsidies to set up routes across Europe. When they were founded, they were given protected routes that Aer Lingus couldn't compete on. If it comes to it, Ryanair will be in the queue for State Aid just like every other Airline. Michael O'Leary going on about Airlines should fail (and a lot of them should) is fine but he won't be long changing his tune when he needs to.

 

[Leo]

Despite their 3 billion cash pile, they are not shy in ta king any State support that will be available.

To play devil's advocate, they do have a legal duty to serve the interests of their shareholders. Which is best for them? Availing of state aid or being an outlier and refusing it?

 

[Purple]

They are not letting them go. They are taking the Government Wage Subsidy Scheme which is State Aid for the s local business and a multi-billion euro airline with 3 billion in cash. So how exactly are we defining Ryanair not needing State support like other airlines then? Despite their 3 billion cash pile, they are not shy in ta king any State support that will be available. They have taken State subsidies to set up routes across Europe. When they were founded, they were given protected routes that Aer Lingus couldn't compete on. If it comes to it, Ryanair will be in the queue for State Aid just like every other Airline. Michael O'Leary going on about Airlines should fail (and a lot of them should) is fine but he won't be long changing his tune when he needs to.

Welfare support for employees who have been laid off, or would otherwise be laid off, is different from bailing out airlines which need money to repay debts etc.

 

[seamus m]

Why bail out someone who doesn't need it.If it was your own money you would need a return shares for money etc.Let them pay it back not our grandchildren .There is also so much wrong with furloughing of staff that it's not even funny ,succesfull companies can take a hit on past success and not what they are missing out on.

 

[Purple]

Why bail out someone who doesn't need it.If it was your own money you would need a return shares for money etc.Let them pay it back not our grandchildren .There is also so much wrong with furloughing of staff that it's not even funny ,succesfull companies can take a hit on past success and not what they are missing out on.

I totally disagree with the State providing capital to publicly quoted businesses.

I don't have a problem with the State providing welfare to people who have lost their job or supporting any business which continues to pay the wages (or part of the wages) of employees which otherwise would be made redundant.

If we are talking about the debts we have foisted on our grandchildren then I'd start with pensions, the bailout of bondholders during the last financial crisis and the generally out of control spending on public services which requires us to continue to borrow money each year.

 

[Brendan Burgess]

Lufthansa is looking for a bailout

Lufthansa losing €1m an hour, will need state aid - CEO

Lufthansa is losing €1m an hour as the coronavirus pandemic paralyses travel, CEO Carsten Spohr said, warning that the German airline giant would need state aid to survive.

www.rte.ie

 

[Brendan Burgess]

the bailout of bondholders during the last financial crisis

Hi Purple

The big cost was the bailing out of the depositors. Mainly in Anglo and Irish Nationwide. The cost of the bondholders was much less.

Brendan

 

[Sunny]

To play devil's advocate, they do have a legal duty to serve the interests of their shareholders. Which is best for them? Availing of state aid or being an outlier and refusing it?

Absolutely but dont get on high horse lecturing other airlines and Countries about state aid like o'Leary does.

Welfare support for employees who have been laid off, or would otherwise be laid off, is different from bailing out airlines which need money to repay debts etc.

Why? Its State Aid to keep employees and stay in business. Yes it benefits employees but are we really saying that a company with 3 billion in cash cant afford to pay their employees for the 12 weeks of this scheme? Of course they can but they also want to keep cash and pay as little as possible while being ready to take advantage once lock downs are lifted. Are the State or employees who are down huge amounts going to get refunded when things get better? Of course not. So it is State Aid. Might not be necessary to keep them in business but it is helping them keep as much of their precious 3 billion of cash as they can.

 

[Leo]

Absolutely but dont get on high horse lecturing other airlines and Countries about state aid like o'Leary does.

I think most would agree that these are very different circumstances. Where has he complained about state aid to an airline who have been forced by the state to cease operations?

 

[Brendan Burgess]

No, Sunny is dead right.

The tax payer should pour money only into badly managed airlines and businesses which have paid out dividends to shareholders during the good time and who have made no plans for a recession or business interruption.

It's crazy contributing to the salaries of well run companies, who don't pay dividends, and who keep their costs and risks low, and who build up reserves so that they can survive in the inevitable difficult times. Such companies should be told to make all their staff redundant. That would be much better all round.

We certainly don't want to be encouraging companies to manage their business affairs well.

Brendan
Ryanair shareholder

 

[Sunny]

No, Sunny is dead right.

The tax payer should pour money only into badly managed airlines and businesses which have paid out dividends to shareholders during the good time and who have made no plans for a recession or business interruption.

It's crazy contributing to the salaries of well run companies, who don't pay dividends, and who keep their costs and risks low, and who build up reserves so that they can survive in the inevitable difficult times. Such companies should be told to make all their staff redundant. That would be much better all round.

We certainly don't want to be encouraging companies to manage their business affairs well.

Brendan
Ryanair shareholder

I dont really get your point Brendan. You are a shareholder in Ryanair so why should I protect your shareholding? I thought you believed in the free market. Ryanair cut their employee wages in half or more before any state support was announced. Just like are lingus. Both companies have vast cash piles to meet those commitments. The state then announce the wage subsidy scheme so suddenly these companies with billions of cash dont even have to pay the 50%. No the taxpayer will do that. And then once this crisis is over ryanair will soon start back using their cash pile to pay dividends and stock buybacks to investors like you while the employees and taxpayers lose out. If they have money, use it. If they dont have it, go under and yea people lose jobs. Not like it will be the first time. Small businesses need help and protection. Publically quoted companies like Ryanair and IAG dont. Not until they use all their existing resources. Then let them come looking for help.

 

[Baby boomer]

Where has he complained about state aid to an airline who have been forced by the state to cease operations?

Flybe. About 2 months ago.

 

[Leo]

Flybe. About 2 months ago.

The British government forced Flybe to cease all operations in February? You have a link to that?

 

[Baby boomer]

The British government forced Flybe to cease all operations in February? You have a link to that?

Mea Culpa! I misread your post and didn't focus in on the "forced by the state" bit. My apologies.
However, the point remains that O'Leary was extremely critical of the UK government's support for Flybe. A bit hypocritical considering the bucketloads of state aid soaked up by Ryanair over the years.

 

[Leo]

However, the point remains that O'Leary was extremely critical of the UK government's support for Flybe.

I think being critical of government support for an airline that can't stay afloat in the good times while the well run ones are taking massive volumes of cash out of their businesses is fair enough though. When the government forces them to cease operations, support then is a different matter entirely.

 

[Baby boomer]

I think being critical of government support for an airline that can't stay afloat in the good times while the well run ones are taking massive volumes of cash out of their businesses is fair enough though. When the government forces them to cease operations, support then is a different matter entirely.

Maybe. However, fact is that Ryanair was "bailed out" by the Irish Government in its early years by virtue of its main rival, Aer Lingus, being ordered by the minister to cease operating to Stansted and some other destinations, thus handing a state-enforced monopoly to Ryanair. This contributed to the financial troubles of Aer Lingus, which then required a cash bailout form the Irish taxpayer. So in a very real sense, the Irish State bailed out Ryanair free gratis and enriched the company and its owners at the taxpayer's expense.
When Government intervenes in a market like that it should, at the very least, take an equity stake.

 

[Sunny]

I think being critical of government support for an airline that can't stay afloat in the good times while the well run ones are taking massive volumes of cash out of their businesses is fair enough though. When the government forces them to cease operations, support then is a different matter entirely.

Nobody has forced them to cease operations. Airlines are free to fly all they like. Aer Lingus are continuing to operate multiple transatlantic flights each day as well as flights to Europe and London. Same with Ryanair. Whether people choose to travel with them is another story. There are currently flights taking off with as little as one or even no passengers on board.

They are not comparable to the thousands of small businesses forced to close.