Question

Considering the effect that the pandemic may have on some businesses and larger companies, would your decision to lend to American Airlines change when considering the current situation?

Answer 1

Current situation has put a dent in the profit of American airlines revenue and its apparent how pandemic is showing it's influence on a larger basis over the this airline business. Apparently the flights and transportation is put on halt for a while and everything is either cancelled or postponed. Which is quite uncertain about the longevity of this situation, one cannot decide on lending money for it's operations. In the cases of pandemic severity, the decision of lending could be supported to an extent. Cancelled and postponed tickets need to be refunded where the same can create even more losses to the current capital the airlines has. But again, if luckily pandemic begins to end it's influence and there comes a time where everything starts like as it was before, there will be huge demand that can be created in transportaion, since all the plans and events are called off or postponed to the future. Where in nearest future on the grounds of reaching to the end of pandemic, there are very higher chances of airline and other transportation demand could uprise and debt provided can be paid back on agreed term. To conclude, it depends on the severity and timing of the lending to an affected industry.