June 19 (Bloomberg) -- The biggest threat to the global airline industry isn’t the swine flu outbreak, according to AirAsia Bhd.’s Tony Fernandes.
“We’ve been through SARS, bird flu, tsunami, you name it,” Fernandes, the founder and chief executive officer of Southeast Asia’s biggest discount carrier, said at the Paris Air Show this week. “The only swine now are bankers.”
Carriers from Air France-KLM Group to AirAsia, already coping with a slump in travel, also have to deal with banks that are unwilling to finance aircraft purchases. Airlines have to come up with money to pay for jets ordered years ago or face penalties for cancellations. In 2010, the funding shortfall may reach $36 billion, or as much as 60 percent of the spending on larger aircraft, said Nick Cunningham, an analyst at Evolution Securities in London.
“Debt is the critical component of any strategy right now,” said Steve Rimmer, CEO of Guggenheim Aviation Partners LLC in Issaquah, Washington. Guggenheim has 56 aircraft either owned or under contract with a value of $2.5 billion and makes money by leasing them to carriers in return for regular payments. “We, like everyone, are chasing debt.”
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