Yeah, it's a crisis. Beyond the absolute devastation that the financial crisis is working on such things as passengers and the fares they pay, the US markets meltdown is having an effect in a few other things such as corporate financing. This is hurting airports in a big way, and a few airport authorities are suffering particularly hard. Take St. Louis, where Lambert Field has had to hold off on a $100 million bond sale to finance new construction after the lead broker, Lehman Brothers, collapsed. Some $16.9 million in construction that's already financed will go forward. In Denver, the city had to pay 12% interest on some $52 million in bonds, up from 2%, when the interest rates, called auction rates, had to be raised to attract buyers. The rates went back down the next week. In Washington, the airport authority that runs both Dulles and Reagan National postponed a $175 million bond issue until January, hoping for more certainty in the markets.
Much more uncertainty though afflicts the travel distribution side of things, where new starts have always depended on venture capital. Obviously, new financing is drying up, but there's also the question of existing enterprises and how they will fare. Take for instance Kayak and SideStep. These are both travel search and aggregation and fare-finding sites and both were funded by a Lehman Brothers unit. And Lehman is no more. Its VC unit is trying to find a buyer, but in today's market...
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