Airlines are piling on more debt as surging coronavirus cases force travelers to cancel plans and stay home.
The industry’s outstanding debt has jumped 23% since 2020 to $340 billion, according to data compiled by Bloomberg. So far this year, global air carriers have sold $63 billion in bonds and loans.
It’s more evidence that the industry faces a bumpy road ahead, with many border restrictions still in place and the high-season of summer vacations in the U.S. and Europe coming to an end. EasyJet Plc and Japan Airlines Co. announced new fundraising plans this month to help them weather the prolonged pandemic.
“The spread of the Delta variant may lead to other countries imposing tougher quarantine rules on visitors,” said Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown.
Many carriers are returning to the bond market after last year’s dash-for-cash when the pandemic first struck. The big sales show that investors are still ready and willing to give ample funding to the industry.
Here are some recent examples of companies in the market:
The European Union’s latest pandemic recovery bond sale is expected to spur a hectic week of sales from Europe’s safest borrowers.
The pipeline for Asian dollar bonds is looking strong as issuers jumped on a global rush to lock in funds before rates move higher.
The U.S. saw hefty sales following Labor Day holiday last week that chalked up $76 billion of issuance.
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