Credit crisis and airlines
JF Mezei
hyperbolic words such as "The whole country of Iceland may be bankrupt",
I am somewhat at a loss trying to understand how real this issue is.
Some politicians make it look like banks are no longer lending any money
to companies/individuals. Yet, I still see Capital One credit card ads
on TV.
The only airline related news I have heard so far is the fact that ILFC
is part of AIG and that AIG may spin it off, and that ILFC drew on its
credit line to ensure it had cash to cover its obligations in case its
credit capabilities were affected by AIG's bailout in short term.
Has anyone read of any stories about the so called credit crisis causing
airlines any problems getting financing ?
With airlines not needing/ordering new aircraft, are they able to cover
operating losses caused by lower demand and high fuel costs by living
off their cash reserves long enough to ride through this credit indigestion?
I note that the planned privatisation of Bell Canada by the Ontario
Teachers Pension plan is still officially ON. This will involve
borrowing from a small number of banks about 30 billion dollars.
(largest privatisation in history). So it appears that the major banks
still have cash available. Does this mean that airlines still have
access to credit if they need because they are good customers ? or is
the crisis such that credit is also being cut to airlines ?
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