The airline stocks are beginning to report and I like what I see. Terrific numbers from United Airlines (UAL) before there's even international business to speak of. No degradation from the variants. I bet we see the same from the rest of the airline gang. They are going to be very profitable by yearend.
Which brings me to hindsight, something that's so bogus that it drives me crazy. Last year we were looking at certain bankruptcies for not just United but all of our airlines, even possibly the best of the best, Southwest Air (LUV) . It was a given they had to go, because it was a given that you would get COVID if you flew. Sometimes I wonder if people even recall those days, the days when we thought planes were death traps.
But you know what? Treasury Secretary Steve Mnuchin, knew that you couldn't let our airlines go down the drain, especially when they had been lucrative businesses that had been destroyed through know fault of their own.
When I saw Scott Kirby, CEO of United, talk positively about the numbers for the first time on CNBC, I chatted with Secretary Mnuchin and reminisced about those days. He pointed out that he was heavily criticized at the time for backstopping United Air to the tune of more than $7 billion, but you had to remember that until we figured out that airplanes weren't the scourge that we thought, there was no way any airline could bridge the gap until we got a vaccine, a vaccine that was thought to be years away.
Mnuchin told me that instead of a recession, we would have had what he described as a "global depression" and a national security risk, had these airlines been let go. You can only imagine the worldwide ripple effect.
More so, it's an almost quaint reminder how the secretary helped cobble together a several trillion dollar package with the consent of both parties. He talked to me about how strong our country could be if both parties were, once again, to find a way to work together as they did during the crisis.
I know it's a terrible time in Washington with the rancor endless and the inability to work together an embarrassment.
But we do have to remember how much was done right during that period. I read today that Fed Chief Jay Powell's term is up in February and the Journal says "he's not a lock."
How in heck is that possible? How could you not want the man who did more to save us from a global depression than any one in this country. If you recall, all he had to say was he would buy the bonds of troubled companies and that put the floor in for almost every struggling company except Hertz (HTZZ) , which somehow came out of this morass any way.
Powell made that statement when the stock of Carnival (CCL) , the giant cruise ship operator looked like a sure bet to go under. But it put a bid under the stock, which then allowed the company to raise capital in the market and sell bonds to stay afloat. Now it is talking about operations being back almost to normal by the end of the year. Who could have thought that would be the case?
And don't you think Boeing (BA) , which directly and indirectly supports two million workers could have been the biggest casualty? Again, though, Fed Chief Powell and Treasury Secretary Mnuchin helped then CFO, Greg Smith, raise an astounding $25 billion dollars at the end of April of last year, saving one of our biggest employers.
It could not have been done without them. So as we look back on the first quarter that anniversaries the bad times of the airlines, let's remember, the government working together, can accomplish great things, things like stopping a decline in time to get us through to immunization and avoiding perhaps the worst downturn this nation and this world has ever seen.
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