On a wing and a prayer
War and disease, terrorism and recession have brought the risk of widespread bankruptcies in the US airline sector firmly onto the radar. In an industry plagued by high levels of debt, fierce competition and massive costs, Saskia Scholtes examines the prospects for recovery
“Wholesale bankruptcies, major liquidations and even the forced nationalisation of our airline system are the risks we confront.” If there was ever any doubt that US airlines are in dire financial straits, the Air Transport Association’s (ATA) stark warning about the likely consequences of war in Iraq certainly dispelled it. And with no end to the financial fallout in sight, bondholders in the airline sector can expect some turbulent months ahead.
In the past two years, the airline
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