Originally Posted by
Olecal
You seem to ignore one major fact; UAL was mortgaging aircraft parts at 17.25% before the merger. The credit risk to UAL was 'CCC, they were not going to be able to order aircraft. The reason they were able to order after the merger was because they increased due to CAL's credit rating to a 'B'. 'B' is now investment grade, whereas 'CCC' is speculation grade. It's amazing that nobody here understands this. I certainly understand that you bring more widebodies to the mix, and I fully expect some credit to you for that, but no windfalls either way!
CCC: An obligor rated 'CCC' is currently vulnerable, and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments.
All different types of financing out there.
Continental divide
01 November 2006
American Airlines and Continental Airlines have shown that bond investors like spare parts and engine bonds. So why has no one else followed?
Read more: American Airlines; Continental Airlines
In 2002 Continental Airlines closed the first spare parts enhanced equipment trust certificate (EETC). The deal was a success, despite closing during tough capital markets, at a time when many aircraft EETCs were downgraded. American Airlines then successfully closed an unwrapped spare parts financing deal in 2003.
Continental Airlines bounced back by closing its first wrapped deal in June 2006, obtaining the lowest-ever pricing on an EETC when it closed at Libor plus 35 basis points.
All three deals have proved that investors like the assets. All three deals have performed well. So why has not every US airline closed a spares deal yet?
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United placed its aircraft orders before the merger...
United Air Splits 50-Jet Order Between Boeing, Airbus (Update3) - Bloomberg
United Air Splits 50-Jet Order Between Boeing, Airbus (Update3)
By Mary Schlangenstein and Mary Jane Credeur -
December 8, 2009 16:18 EST