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Cash is King but
Debt Rules OK? — December 2021

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The Covid-19 pandemic has had a calamitous impact on airline operations and finances. With the closure of borders, mandated cessation of services, a collapse of demand, and an inability quickly enough to halt fixed cost cash burn, all airlines round the world were in desperate need of liquidity to stay alive. Cash was king. Some were lucky enough to get support from their governments. All have had to raise huge amounts of debt. Will the industry ever be able to return to the healthy pre-pandemic financial status?

Analysis from Bloomberg (see chart) shows that the world’s airlines have taken on an additional $140bn liabilities in loans and bonds since the start of the pandemic giving a total of $340bn, 70% higher than at the end of 2019. (These numbers seem a little on the low side for the industry as a whole and presumably only covers public figures in their databases.)


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