News notes from around the interweb:
- Thailand reports that they had Literally no visitor arrivals in May
- Marriott will tighten its cancellation policies eliminating some of its COVID generosity, giving even more of a reason to choose Hyatt instead given the rapidly changing situation across the U.S. and uncertainty in international travel openings.
- With Qantas withdrawing Airbus A380s from its fleet effectively indefinitely, they’re being flown to California’s Mojave Desert for storage.
- The New York/New Jersey/Connecticut quarantine for inbound travelers from coronavirus hot spots will exclude people who just connected in airports in covered states. If you merely connect at Dallas Fort-Worth, in Miami, Charlotte or Phoenix you won’t be required to quarantine on arrival.
- If American is paying 11.75% on $2.5 billion in new debt what does that say for the airline’s prospects of actually paying back the debt, or at least the market’s bet on their ability to do so? 5 year credit default swaps are priced at literally 10 times as much as swaps for Southwest.
Powered by AssetMacro.com Macroeconomic Indicators – Financial Data – AMERICAN AIRLINES 5Y Credit Default Swaps
I’ll tell you what that says about AA concern for debt: no worries, because once again the US government–that’s us, the taxpayer–will eventually bail ’em out.
I’ve got a lot of money invested in junk bond mutual funds, and you know why? Because I know those bonds aren’t going to go under! I know those junk bond mutual funds are being propped up by Uncle Sam. So I can pull in a nice 6%, relatively guaranteed.
Some airline should issue bonds where the interest is paid in frequent flier miles. .
I’m a bit surprised that Qantas is storing their planes in the US. I would’ve thought that they would have a perfectly suitable desert of their own to use.
KimmieA is correct sadly I fear that it might be outcome, unless more level headed actions take place. The US economy like most of the world is in shambles, our grandkids forget about our kids will be paying for this mess we’re in, mostly through no fault of our own. Had this began in an open society we might have had a better chance.
Back on point, 12% in todays market is absurd it shows you how the credit analysis view American and it’s current management, I submit part of this is Parker. I am surprised the shareholders are approving this deal. One might think rapid inflation could cause rates to jump but not sure thats going to happen anytime soon.
Keep up the good work Gary and stay safe.
What a farce. If the New York/New Jersey/Connecticut quarantine was real then the states should ban connecting passengers. People connecting through airports in states with outbreaks are just as likely to get coronavirus or transmit it as someone who merely lives in those states.
Does the NY rule mean that pax from hot-spot Texas can’t connect at LGA or JFK to a flight heading elsewhere?
@ Christian – You need the right environment, but also relatively convenient access and on-site vendors to complete the storage tasks and other maintenance. That may require a certain critical mass of activity that coalesced more easily around the de-commissioned military airfields in the US that also happen to have the massive runways to park aircraft on (sitting aircraft on dirt isn’t always desirable)
For anyone who was sorely disappointed that the bankruptcy court did not allow Hertz to sell $500 million in stock, here’s a new investment opportunity of a lifetime 😉
How about all of the flight attendants and pilots who live in these hot states? They are not going to be subject to lock down according to my flight attendant friends. The travel industry is in shambles and these 3 states are going to make it worse. Not that I have any desire to travel to any of those states or pretty much anywhere at the moment. Maybe a trip to NC in the fall but until the airlines get their act together I’m not jumping the pond.