The value of bonds issued by airlines all over the world in 2020 alone is way over half of the total bond issuance value of the past four decades. All sorts of lame jokes made surprise landings on the barren runways of our mind the moment we came to know of this. For instance, even as airlines grapple with the pandemic having left them at a fraction of their usual traffic, what secret agent is it relying on to bail them out? Well, the name’s Bond, Paper Bond.
As the scourge of the Coronavirus theoretically set to ebb with successful vaccine trials by BioNTech SE and Pfizer Inc., the Bloomberg World Airlines Index shot up by 9.7%. That’s not all—shares in Cathay Pacific Airways soared to their highest since 2008 while those in Singapore Airlines reached their highest since 1999, after Hong Kong and Singapore announced their air travel bubble starting November 22. Bizarrely enough, stock in the defunct Jet Airways spiked to 150% after reports of two new owners came in earlier in November.
At a time when ticket sales are cutting a sorry figure, cashflows from investing and finance alone have brought some airlines close to three times as much money (figures for Delta Air Lines and United Airlines). According to Bloomberg data, airlines have issued bonds worth $88 billion in 2020 alone, as against the $153-billion figure of the preceding four decades.
Read: COVID-19 Impact: Airlines Running Ghost Flights
In September, Irish budget carrier Ryanair issued €850 million in five-year bonds after raising €400 million in share placement. Finnish carrier Finnair raised €200 million in hybrid debt, that too with a 10.25% coupon rate.