This NY Times article reports on the growing concern within the lending industry regarding the long-term ability of several of the legacy airline companies to service their existing financing. This follows the move last week reported on here of one of United’s lenders taking steps to repossess a portion of United’s fleet during the busy Thanksgiving travel season. The article notes:

Where once the idea of losing an airline was unthinkable, both the government and lenders now seem perfectly willing to let that happen. The mood swing was foretold in June, when a federal loan board turned down an application by United Airlines that the airline had thought was a sure bet. Since then, lenders have sat on their hands, watching the company take a chainsaw to its operations, refusing to commit until the airline’s final shape is known.
Aircraft lenders, who did their part after the attacks by loosening the terms of some deals, are tightening up again.
What is different now, experts say, is the growth of markets outside the United States, like Europe and Asia, where new airlines are forming, attracting passengers and expanding, making them far more attractive to lenders and airplane leaseholders.

This is a positive development for the airline industry, where allowing a couple of legacy airlines to go belly up would do wonders for the long term health of the industry. Now will the politicians allow it to happen?