Another view

Implications: Today our fellow GLG colleague Doug McVitie made a great case for the the industry being able to keep going - he believes there is finance out there to fund the airlines and their huge orders. This post is not to argue with his cogent thesis - merely to provide readers with another view.

Analysis: Reading the Bloomberg story was something of a shock to me. After reading Doug's post and his well laid out argument, the story by Andrea Rothman at Bloomberg was an eye opener.

She quotes the big names in the game and they are rather down. As Doug states, OEM financing is going to come to play in a much bigger way.  With states shoring up banks, its hard to see how these banks will fund airplanes for an industry on its knees. Of course Boeing's deliveries are all on hold with the strike, giving its customers extra time to find money for planes that will eventually arrive.

As the Bloomberg story points out, there are few airlines that can carry their fleet growth on their own.  Even then, one airline that expresses great confidence, Emirates, must be chewing their nails. All those A380s and who is going to fly them? The Al-Maktoum's are putting on a brave face - but they must, and so must Airbus.

If GE is needing help from Uncle Sam, then who is safe? Who's pockets are deep enough? Airplanes are long term assets; they need long term capital loans. But now long term is anything over a week.

There are brave voices out there. But clearly the clouds are not on the horizon, they are right here in front of our eyes. Flinching is quite normal under these circumstances.