Chapter 11 bankruptcy that wipes out shareholders is the correct solution for collapsing share-buyback queens. US airlines already know this from experience. It works.
Of immediate concern is how much cash Boeing is burning due to the 737 MAX fiasco and now the coronavirus, and how much cash it can pile up to avoid a liquidity crisis.
Airline bonds, holy moly.
Estimated hit to global air passenger revenues quadruples to $113 billion. Stocks of top-seven US airlines plunged 30% in 15 trading days, after getting massacred today.
“We are preparing for the possibility of further reductions to our schedules as the virus spreads.”
Boeing got battered too but not nearly enough. Introducing my SADJAUS stock index tracking the 7 largest US airlines.
Throwing good money after bad as a business model.
It’s not only Chinese tourists, business travelers, and property buyers who’re not showing up, but also travelers from all over the world who’ve gotten second thoughts about sitting on a plane.
Having become a master of financial engineering instead of aircraft engineering. UPDATED with the announcement on Jan 21 that “ungrounding” of the 737 MAX will be further delayed.
And the year has just started.