Who decides who FLIES and who DIES?
It's no secret, but it bears repeating.
"Whoever controls the volume of money in any country is absolute master of all industry and commerce." -- President James A. GarfieldThe folks at Independence Air learned that the hard way. They are taking their last flight Thursday after only 19 months in operation and despite apparently good customer ratings:
"We've flown them quite a bit. They had a lot of flight options and good prices," said Chris Turpin, 37, of Indian Rocks Beach, Fla., who also gave high marks to the friendly staff.But apparently, high marks and booming demand mean nothing in this market.
"I've never been made angry by this airline," said Adrian Burns, 25, as he waited to check in for a flight to Columbus, Ohio.
Parent company FLYi Inc. tried in vain to find a major investor or buyer.So out of curiosity, I took a look at their books and lo and behold.
"There has not been a firm offer put forward that meets the financial criteria necessary to continue operations," Kerry Skeen, Independence Air's chairman and chief executive officer.
Looking at the numbers only, they paid over $14.7 million in interest and received only $5.2 million.
Their "total long-term debt and capital leases, less current portion" amount to over $231.2 million compared to approximately $167.1 million stockholder equity (pp. 38-39, 2004 annual report), with operating lease commitments extending past 2009 of over $2 billion! (p. 48, same report) Holy crap!!!
It doesn't take a financial analyst to see that these numbers are unsustainable. It reminds me of something the former CEO of Citibank said in a PBS interview on the secret history of credit cards (a must read), at a time when usury laws were still in place. Citibank had a credit card division that was hemorrhaging money:
Interest rates went up to 20 percent. And if you are lending money at 12 percent and paying 20 percent, you don't have to be Einstein to realize you're out of business.Left unexplained is, who was collecting 20% interest from Citibank? But, that's another story for another time.
For now, the lesson is simple: he who controls the money supply decides who FLIES and who DIES.
posted by qrswave @ Tuesday, January 03, 2006
6 Comments:
Once again, the lie flies and the truth dies.
maybe it's the fluoride.
I'm going to get a glass of water-all this bitching is making me VERY thirsty.
Great Blog!
right on, q. usury kills creativity, innovation, in the business and the arts. but it din't seem to hurt many no more. looks like america's numb andthe world with it. like slaves we just stand there stoically trying to bear the whipping. good grief!
This is not likely to have immediate significance with respect to Independence, and I haven't checked your entire site, but I'd be interested if you have any familiarity/opinion concerning Grameen --
http://www.gfusa.org/ or http://www.grameen-info.org/
Thanks.
PS - Do/did you ever think/say "Jeeesh, what a greedy son-of-a-... that guy/gal was/is"? Have you been able to determine criteria/properties of the situation (not necessarily the person) that makes/causes you to feel that way? I've gone through the exercise (not entirely pleasant),... and think I've come up with some fragments of an understanding,... not entirely what I was expecting,... which makes me think there may be at least some small worth to the exercise.
Thanks, Gerry, for the link.
I went through the site but found little indication as to whether the microfinancing loans are more like equity investments or traditional interest bearing loans.
If they are the latter, then they are horrendous. All the more so because they target extremely poor mothers willing to work like slaves for their children to have a better chance. I would be shocked (and disappointed) to learn that that is the case especially since the spokesperson or founder (whatever his position) appears to be Muslim and charging interest on money loaned has always been a great sin under Islam.
If you find out whether they charge interest, regardless of whether the loan project is profitable, and find out what their loan forgiveness policy is, please let me know.
I'm also interesting in learning more about your exercise: "jeesh, what a greedy SOB that guy/gal is."
Peace.
Post a Comment
<< Home