Airlines raise debt at near-record pace at start of 2021

Airlines tapped a wave of investor enthusiasm to raise more than $16b from bond markets in Q1, shoring up their finances as travel disruption stretches into a second year. The figures highlight how the world’s biggest carriers have been able to raise a wall of money to help them through a period of unprecedented turmoil, with a third of the world’s fleet of commercial aircraft still in storage as passenger numbers collapse. They also underline investor confidence in the long-term prospects of the strongest companies in the sector, as Covid-19 vaccines offer a way to reopen travel once curbs on movement are eased in major economies. Airlines raised $16.6b in Q1 this year, according to data provider Dealogic, just short of the record $17.5b set in Q2 2020 as companies dashed for cash during the initial, frantic stages of the pandemic. Overall, airlines raised $42.6b in the debt markets in 2020, the most on record. The activity has proven a boon for investment banks, which made more than $200m in fees from airlines, a Q1 record, Dealogic said. Investors have been willing to lend to strong airlines that are expected to emerge from the crisis relatively unscathed, but benign market conditions have also helped carriers, said Josef Pospisil, head of utilities and transport at Fitch Ratings. “I am not sure it would be exactly the same if it wasn't for the stimulus across the board,” he added.<br/>