Good piece by Phil Greenspun:
"This cycle of union contract negotiation and Chapter 11 bankruptcy is one reason that the airlines lease rather than own airplanes. By having the main assets in the hands of third parties, it turns out to be a reasonably efficient way of allocating airline profits. The stakeholders who suffer the most are public equity shareholders (the 'widows and orphans'), who get wiped out with every bankruptcy filing. The leasing companies get paid, the airline executives get paid, the unionized workers get paid as much as possible, lawyers and Wall Street banks get fees from every bankruptcy, and the public shareholders get 5 cents back for each dollar that they invested."This is consistent with the view that the public markets are for "hanging paper" on suckers.
Previously on Greenspun: