The airline industry is not profiteering from our misery — we’re still not prepared to pay for the service we want
Ronald Reagan Washington National Airport on July 11 2022. Picture: NATHAN HOWARD/GETTY IMAGES
Airlines would dearly love to tempt passengers back with the promise of a return to business as usual. The stubbornly persistent debts they are holding make that almost impossible. Banks start to get worried when their corporate borrowers have debts amounting to more than three or four times their ebitda. That number went to 4.7 this time two years ago, before heading off the charts last year when ebitda turned negative. This year, it is worse than it was in 2020, at 14.7 — almost unimaginable levels for any solvent company, let alone an entire industry.
Investors have taken notice. The Bloomberg World Airlines index, a share price tracker which staged a remarkable recovery in the year through March 2021, has been trending down ever since. It is currently at levels comparable to the darkest months of the pandemic.
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