Thread: Bankruptcy
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Old 01-24-2022 | 09:50 AM
  #833  
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Excargodog
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Originally Posted by Varks

Interest rates on AA debt are really low. Cost of new aircraft will rise because of inflation and supply pressures. Interest rates on future purchases will be hire. Increase in oil costs will be less significant due to new fleet of very efficient aircraft. Every time I fly the NEO I am amazed at such low fuel flows.



NEOs and Max’s certainly are more fuel efficient, but they remain a relatively small percentage of the AA fleet. Interest rates are going up and unless one can generate the free cash flow to pay off the old bonds as they mature, you must refinance at the higher rates. Most aircraft orders are backed up for years and will largely have their prices set by the deal that was made when the order was finalized although sale and leaseback terms are likely headed higher in the future because of higher inflation and the fed upping interest rates.
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