Thursday, September 25, 2008

How the AIG Bail Out Saved the Airlines Too

Something that has not been commented on in the press as much as it should have was the fact that the AIG rescue package did far more than just bail out their financial products division. It also kept the aircraft leasing subsidiary of AIG, International Lease Finance Corporation (ILFC), out of receivership. This stopped ILFC's 900 planes from going into the hands of creditors. If this had been allowed to happen, it would have thrown the major airlines' operations into a tailspin. As ILFC leases lots of their planes to the majors, a bankruptcy would have derailed flights worldwide at a time when flight operators cannot afford to lose any revenue.

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