Recap: MileagePlus Investor Info, LATAM Suspends Argentina Operations & More

 

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YoniPDX
YoniPDX (@guest_1000108)
June 18, 2020 11:45

Supriaed it took LATAM so long to make this move.

Considering that on 4.27.2020 Argentina banned all commercial domestic and international flight ticket sales until September 1st. This was one of the toughest coronavirus travel bans in the world, it prompted an industry outcry that the new measure will put too much strain on airlines and airports.

Guess Argentina off my travel plans for the foreseeable future.

Michael
Michael (@guest_1000046)
June 18, 2020 09:30

Does anyone actually believe that the MileagePlus program has any value if United is unable to repay the loan?

It will go something like this:

United defaulted on it’s loan to us. Great let’s foreclose on the MileagePlus program. Now we have this program and all of the customers want value from us for their points…aka a liability.

debit
debit (@guest_1000128)
June 18, 2020 12:34

Why not?

If you don’t repay the loan the lenders become the owners of the company. Happens all the time. The assets don’t become worthless. Just the v shareholders lose money like they should in true capitalism, which the USA doesn’t have anymore.

sdsearch
sdsearch (@guest_1000369)
June 18, 2020 20:18

And if the lender don’t have much use for the company, they presumably try to find a financially sound buyer (who does have a good use for the company) to unload it.

sdsearch
sdsearch (@guest_1000375)
June 18, 2020 20:25

It depends a lot on whether United stays in business but just can’t repay the loan, or whether United goes out business, and in the latter case on whether someone buys up its parts or not.

There are plenty of examples in the world where the loyalty points program is owned and operated by a separate company than the airline itself. So it would not be the first time, if United can’t repay the loan but stays in business, to have someone else own and run Mileage Plus.

But of course, if United goes of business, then in turn it depends on whether some other airline buys up their assets, and then either that airline or someone else may be interested in the MileagePlus program.

So it would have to be the worst possible outcome (United going out of business, and yet no one scooping in to buy up their assets) before it’s not clear if MileagePlus would have any remaining value.