US Airways''s Bankruptcy Grounds Airport Muni Bonds
FORT WORTH (Bloomberg News) - US Airways Group''s filing for bankruptcy protection is depressing prices of municipal bonds from airports that rent gates, hangars and equipment to the biggest U.S. airlines, new data show.
About $14 billion of bonds sold by airports and backed by UAL Corp.''s United Airlines Inc., AMR Corp.''s American Airlines and other airlines fell as much as 50 percent in September, according to the Municipal Securities Rulemaking Board, as investors fretted that airlines will reduce payments to the airports.
If one airline is able to cut costs in Chapter 11, then the others may have to do it to remain competitive, said Thomas Futrell, vice president at John Nuveen & Co. in Chicago, which owns about $46 billion of municipal bonds.
After US Airways, the nation''s seventh largest airline, filed for Chapter 11 bankruptcy protection on Aug. 11, No. 2 UAL warned it might follow suit and No. 3 Delta Air Lines Inc. said it expected a larger-than-anticipated loss for the third quarter. Airline executives last month asked Congress to help them with rising security and insurance costs.
FORT WORTH (Bloomberg News) - US Airways Group''s filing for bankruptcy protection is depressing prices of municipal bonds from airports that rent gates, hangars and equipment to the biggest U.S. airlines, new data show.
About $14 billion of bonds sold by airports and backed by UAL Corp.''s United Airlines Inc., AMR Corp.''s American Airlines and other airlines fell as much as 50 percent in September, according to the Municipal Securities Rulemaking Board, as investors fretted that airlines will reduce payments to the airports.
If one airline is able to cut costs in Chapter 11, then the others may have to do it to remain competitive, said Thomas Futrell, vice president at John Nuveen & Co. in Chicago, which owns about $46 billion of municipal bonds.
After US Airways, the nation''s seventh largest airline, filed for Chapter 11 bankruptcy protection on Aug. 11, No. 2 UAL warned it might follow suit and No. 3 Delta Air Lines Inc. said it expected a larger-than-anticipated loss for the third quarter. Airline executives last month asked Congress to help them with rising security and insurance costs.
