Airlines are taking drastic measures as debt industry-wide climbs to $340 billion due COVID cancelations and loss of business travel.
Some international carriers have turned to selling bonds and crowdfunding to raise money to stay afloat. Even some U.S. carriers that received a federal bailout, are now taking drastic measures to keep flying.
“Airlines like American and others are doing stock offerings to try to raise additional money, which long term investors hate because it tends to drag the price of the stock down, but they need cash and they're going to do anything they can to try to get it,” says aviation expert Jay Ratliff.
Ratliff says airlines worldwide continue to struggle as we hit the slowest time of year for leisure travel.
“We have 700-800 airlines around the world, so the idea that we're going to see some of these not really make it is almost a forgone conclusion,” he says. “One of the surprises as we went through the pandemic is the fact we didn't see 200 or 300 of these go out of business.”
Bottom line, airfares are not coming down as the industry struggles to make up for the loss of business travelers, new COVID variants and debate over whether to require proof of vaccine or not.
“There's a lot of unknown and for people who are buying airline tickets – especially internationally – six, seven, eight, nine, ten, eleven months in advance, they're holding back.”