Large U.S. airlines are carrying about $20 more debt per passenger than before the pandemic, according to the chief executive officer of Frontier Group Holdings Inc., who predicts the carriers will start addressing those obligations with higher fares, Bloomberg News reported. “How long can that last?” asked Barry Biffle, CEO of ultra-low-cost Frontier Airlines. “They either have to raise their leisure fares or you reduce capacity so you can raise prices.” U.S. carriers amassed roughly $60 billion in new debt last year to contend with the collapse in business from the pandemic. Their interest expense is likely to reach $20.7 billion through 2025, according to the trade group Airlines for America. Frontier’s debt rose about $1 billion, or $1 a passenger, by the same accounting, according to the company. U.S. airlines also face higher costs now and into next year from crew training, pricier jet fuel, and rising airport and aircraft-maintenance expenses. “Cost issues remain topical and continue to run hot with our view that pressures will be more elevated into 2022 than Street estimates suggest,” MKM Partners analyst Conor Cunningham wrote in a Nov. 18 note to clients.
