Originally Posted by
Excargodog
The problem is that interest rates ARE NOT cheap for any of the airlines. Recently United paid 10% on their bonds. This summer AA paid 12% while my mortgage company is trying to talk me into refinancing at 2.5%. I agree with Rickair that with the current surplus of used aircraft and white tail aircraft, existing bond holders might cut the airlines some slack, but with their bonds essentially junk bond rated, I think the airlines are still going to have to refinance their maturing bonds at a lot more than the 2.5-3.5% they were financed at five or ten years ago when - yes, the Fed was ALSO flooding the market with money to try to get us out of the Great Recession.
And there is competition. The future will be brightest for the airlines whose flying comes back first, and that would not appear to be those highly dependent on business and international flying.
That makes sense. I wasn't tracking United's 10% bonds, so it is good to know we're not the only ones. I know there's a big difference between personal finances and corporate finances and I'd like to think that there's a plan, but I know with corporate finance that plan could mean my entire company is an expendable line item. But hey, if the wheels come off, at least I got a decent amount of turbine time this year!