This installment of The Pomp Letter is free for everyone. I send this email to our investors daily. If you would also like to receive it every morning, join the 45,000 other investors today. To investors, The airline industry was bailed out to the tune of approximately $50 billion by the federal government. The goal of this money was to help companies retain workers and prevent even greater levels of unemployment. As you would expect, the federal relief came with specific rules that each company had to follow in order to be eligible for the funds.
Pomp, you have hit the nail on its head here. I live in Australia and our government has done the same with airlines here as well. Horrific capital management was undertaken by Airline execs whilst they got lucky with lower oil prices over the last 5 years. What did they do with the cash? Distribute them as dividends. They did nothing but line their own pockets and continually sucked the cash out of the Balance Sheet. Australian taxpayers have no equity upside after the recent bailout of Qantas - if you were the Government, why would you not have issued the capital as a loan or equity of some sort?! Love your work Pomp, keep it up!
The Airlines Have Officially Fleeced The Government Twice In The Airline Bailouts
Pomp, you have hit the nail on its head here. I live in Australia and our government has done the same with airlines here as well. Horrific capital management was undertaken by Airline execs whilst they got lucky with lower oil prices over the last 5 years. What did they do with the cash? Distribute them as dividends. They did nothing but line their own pockets and continually sucked the cash out of the Balance Sheet. Australian taxpayers have no equity upside after the recent bailout of Qantas - if you were the Government, why would you not have issued the capital as a loan or equity of some sort?! Love your work Pomp, keep it up!