The debt owed by global airlines has surged by 23% since 2020 to $340 billion, according to data collected by Bloomberg. So far this year, bond and loan sales for global airlines have reached around $63 billion. The growth in debt serves as additional evidence that the industry faces a rocky road ahead, as many border restrictions remain in place and the summer holiday season in the United States and Europe nears its end.
EasyJet and Japan Airlines announced new fundraising plans this month to help them cope with the prolonged pandemic. Susannah Streeter, a senior analyst for investment and markets at Hargreaves Lansdown, stated, "The spread of the Delta variant could lead other countries to impose stricter quarantine rules on visitors."
Many airlines have returned to the bond market, with large bond sales indicating investors' readiness and willingness to provide significant financing to the industry. EasyJet raised $400 million in new debt alongside £1.2 billion ($1.7 billion) in equity. The funding will provide a cushion to get through the slow winter season and position the airline for a temporary recovery in leisure travel.
Meanwhile, Japan Airlines secured nearly 300 billion yen ($2.7 billion) in new financing through bonds and subordinated loans. Japan Airlines mentioned that the funds would also be used to modernize its fleet with the purchase of Airbus A350-1000 aircraft to lead international routes. Australian airline Qantas has also announced plans to sell bonds.
