I’ve written that in the U.S. the major airlines at the most risk are American Airlines (by a wide margin) followed by United. American is likely to end the pandemic with over $45 billion in debt to service, far more than their next-closest competitor. And they underperformed the industry financially to begin with. Unsecured American Airlines debt is a risky bet over the coming years.

Even American though isn’t likely to face Chapter 11 in the coming year, after nearly $6 billion in payroll support and over $7 billion they can draw from in subsidized loans from the U.S. Treasury. If travel doesn’t return, if we don’t overcome Covid-19, that’ll be a problem for the airline (and the world).

In much of the world – though not all – we’ve seen governments stepping in giving taxpayer money to airline shareholders and creditors. Sometimes that’s just government support for state-backed airlines. Pakistan International Airlines says their poor balance sheet doesn’t matter because the government pays the interest on their debt.

The governments of the U.A.E. and Qatar have provided support to Emirates, Etihad, and Qatar Airways. Singapore Airlines has gotten an injection from the government’s investment fund. Cathay Pacific has gotten a bailout – and the government took an ownership stake.

Lufthansa and Air France have gotten major bailouts, and they’re not alone in Europe either. Nonetheless, several airlines are on the brink of collapse – in some cases even after a first bailout, facing risk of bankruptcy without a second bailout. (In the U.S. we’re considering a second bailout even though none of the major airline face near-term bankruptcy risk, go figure.)

Looking at “liquidity, solvency, profitability, leverage and recent financial performance” Bloomberg ranked the biggest airline insolvency risks. They rank the greatest risks as:

1. Pakistan International (Pakisian)
   
2. Precision Air (Tanzania)
   
3. Azul (Brazil)
   
4. Medview Airlines (Nigeria)
   
5. AirAsia Indonesia (Indonesia)
   
6. Thai Airways (Thailand)
   
7. Gol (Brazil)
   
8. Aeromexico (Mexico)

PIA isn’t just government-owned, it has very strong unions and may continue to be able to extract government support. Thai Airways is already restructuring. Aeromexico and Gol have accessed some financing arrangements to assist them as well.

AirAsia X Bhd., AirAsia’s long-haul budget arm, is restructuring more than $15 billion of debt and the future of state-run Malaysia Airlines Bhd. remains uncertain. The director of aviation development at the Malaysian Aviation Commission, Germal Singh, said recently the government is unlikely to intervene to help out.

In Latin America, Grupo Aeromexico SAB last month received a $1 billion bankruptcy loan, while Colombia’s largest airline, Avianca Holdings SA, is awaiting court approval for a $2 billion financing plan as it reorganizes under Chapter 11. Mexican President Andres Manuel Lopez Obrador has ruled out bailouts for large companies, while a Colombian court in September temporarily blocked a $370 million government loan to Avianca after a citizen expressed concern about a lack of guarantees.

Airline bankruptcies would have knock-on effects for new aircraft orders at Boeing and Airbus, as well as potentially putting more used aircraft onto the market driving down those values. However Bloomberg calculates only a 12.6% of of additional deferments or calculations for Airbus and 14% for Boeing, though of course American Airlines just announced some deferral plans. The most likely order changes would come from American (again) and United in their analysis.