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Showing posts with the label reevenue

Do airlines survive on unearned money

Not issuing refunds means airlines have been living on unearned revenue and were for all sense and purpose trading while technically bust even before this crisis. The longer they are allowed to go without paying back what they haven't earned, the longer they are in reality now trading on their passengers money as well as their other creditors. All this money should technically have been in a similar to escrow account until either the airline earned it or they refunded it. These airlines have been paying out dividends and share buybacks with money that wasn't theirs. I know large amount of cash sitting in bank accounts are very tempting but when one do a lot of advanced sales is it part of being an honest business. This goes also for they who don't normally issue refunds. The unexpected will always arrive. Hoping it won't arrive during your time at the helm is not an example of good leadership. Prudent is not a negative word in finances.