Airlines Piling On Debt

United Airlines is putting 31 of its jets in hock to raise $659 million, the Associated Press reports. This raises an interesting question: how do you repo a 777?

United is not the only airline to borrow big sums in the past couple of months. American and Delta have also taken on significant debt, as Dan Reed reported last week in USA Today.

George Hobica at the Airfarewatchdog blog wonders whether United’s recent offer of a $249 luggage “plan” is yet another attempt to get some up-front money. I was wondering the same thing about some fare sales that were extended well into next year.

All this suggests the airlines are banking on an economic recovery to pull them out of their, to put it kindly, slump. If that doesn’t work, bankruptcies, mergers and higher ticket prices are probably going to have to do the job.


Leave a Reply

Your email address will not be published. Required fields are marked *