Brookfield – “Would you work for free?”

Infamously known as a front for pay-to-fly with then-client Ryanair, as we explained back in 2015, flight crew leasing company Brookfield Aviation International is back at the forefront of our attention for all the wrong reasons again.

There will NEVER be a better time…

With the world that grinded to a grisly halt following the outbreak of the coronavirus and associated government responses across the globe, the aviation sector is scrambling to restructure in its wake, given indicators such as the global airline index are pointing towards valuations back to 2012 levels, or said otherwise, 8 years of growth erased in 4 months.

[Note to the financially savvy: American investor Warren Buffet liquidated all airline holdings this early May].

To the acute observer, 2018 and 2019 had already shown signs of weakening with a series of notable bankruptcies involving:

  • Danish “Primera Air”,
  • Lithuanian “Small Planet Airlines” (good riddance),
  • Swedish “Nextjet”
  • Cypriot “Cobalt”
  • Germania (no tears shed),
  • Flybmi,
  • WOW,
  • French “Aigle Azur” and “XL Airways”
  • “Avianca Brasil/Argentina”
  • TAM Bolivia
  • Greek “Astra”
  • Thomas Cook

…among others,

COVID-19 adding to the mix:

  • Flybe
  • Avianca Comlombia
  • South African Airways
  • Air Mauritius
  • Virgin Australia
  • Sweedish “Braathens Regional Airlines” (as ATR lovers, we bid you farewell)
  • Miami Air International
  • RavnAir
  • Air Deccan
  • Compass Airlines
  • Trans States Airlines

Taking into account subsidiary mergers (e.g. Germanwings into Eurowings), employees being furloughed (e.g. Airfrance) or dismissed (Norwegian slashing at least half of its employees, Ryanair reportedly letting crews go, contractors working via brokers being laid off on short notice…), the opportunity is obviously too “good” to pass up for some to shape a whole paradigm shift, while employees are in no position to bargain.

…to KICK you while you’re down

In the long tradition of polling greater fools valued employees, it’s in that context that Brookfield mustered the courage to issue a survey with the essential questions to “support airlines during hardship”, the questions that have undoubtedly been on all our collective lips:


Would you accept to…

  • fly without pay, only receive accommodation, and travel allowances for a limited time?
  • work with no pay for a limited time and have free re-current training provided by the airline?
  • fly for free for a limited time, negotiate terms after?
  • be retributed at 50% of pre-Covid-19 market rate or local terms?
  • be paid per hour (no minimum guarantee) + accommodation & travel allowance?
  • have a roster of 10 weeks on/ 2 weeks unpaid off?

“Any helpful ideas?”

Well, glad you asked. Dear Brookfield, instead of promoting vacuous polls, tell your airline clients to swallow their losses like they reaped decades of profits while, curiously, having no cash cushion to show for it (unable to weather 2 months of economic downturn).

Instead of bleeding dry the same taxpayers that will soon bail them out, tell them to funnel dividend and executive compensation packages “for a limited time” into the issuance of shares to employees and more stock buybacks (since some are already addicted) to crank up their valuation for a tide that, for once, could lift all boats.
See, financial engineering can be juiced every which way.

You’re welcome.

Edit June 4th: Safran repurchases own shares for allocation or sale to employees.

Edit May 26th: and sure enough… in a move that represents the largest bailout rescue package for any airline so far if approved (Airfrance $7.7 billion, American Airlines $5.8 billion, Delta Air Lines $5.4 billion…), Lufthansa (incidentally a Brookfield client) will receive $9.8 billion from the German government in exchange for a 20% stake, agree to limit dividends and management pay, and will sell its shares by the end of 2023.

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