Next airline to default from this fixed list only.
All non-listed airlines are irrelevant.
No airlines will be added to this list.
When an airline defaults, we will settle and start a new market.
Resolution criteria
This market resolves to the first airline from the provided list to file for bankruptcy or enter formal insolvency proceedings. Resolution will be determined by official bankruptcy filings or insolvency declarations from relevant regulatory authorities (e.g., U.S. Bankruptcy Court for U.S. carriers, national insolvency courts for international carriers). The market resolves to "Other" on December 31, 2029 if none of the listed airlines defaults by that date. Only defaults by the specifically listed airlines count; defaults by other carriers are irrelevant to this market.
Background
The airline industry experienced a 3.7% default rate in 2024, compared to a historical average of 3.4% annually since 1990. In 2025, multiple airlines ceased operations, including Scandinavian carriers Play and Braathens Aviation, as well as Ravn Alaska, Air Belgium, and SKS Airways. Spirit Airlines filed for bankruptcy in late 2024 and exited Chapter 11 in March 2025 after equitizing $795 million in debt and securing a $350 million investment. Several airlines filing for bankruptcy have cited COVID-19-related financial issues, with many still working to repay debt accumulated during the pandemic.
Considerations
The listed airlines vary significantly in financial stability and market position. Major carriers like American Airlines and Delta dominate with extensive global networks but face higher operating costs, while low-cost carriers like Spirit and Frontier operate on razor-thin margins and are particularly vulnerable to financial shocks. North American ultra-low-cost carriers face negative margins, while Allegiant and Frontier have outperformed through fleet modernization and cost discipline. Note that bankruptcy filing (Chapter 11) differs from complete operational failure; some airlines may restructure and continue operations.
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Hmmm....
While I could see it being reasonable to think of 2% odds that each airline listed there might default,
It seems unreasonable to think each one will be the first to default. I would expect it more like 1% or .5% as the baseline "this company seems fine."
Anyone with mana to burn want to bet "no" on all those unlikely options? I'm not doing it because I'm a poor newb.
JetBlue (5%)
Q3 2025: net loss ~$143m, revenue down ~1.8% YoY; still burning cash, equity price crushed. JetBlue Investor Relations+2Wall Street Journal+2
But management is clearly in “turnaround” mode with cost cuts and capacity discipline. Not a picture of a micro airline about to keel over tomorrow.
Frontier (3%)
Q3 2025: net loss ~$77m, but expects a better‑than‑expected Q4 profit thanks to higher fares after Spirit shrank under its second Chapter 11. Frontier Airlines+2Frontier Airlines+2
Yes, it carries about $5B in debt and trades like a distressed equity, but the business is still scaling routes and talking profitability, not imminent insolvency. Finbox+1
American / United / big legacy carriers
American is clearly the scariest balance sheet: roughly $30–38B of debt, distressed-zone Altman Z‑score (~0.7), and lots of commentary about its leverage. Seeking Alpha+2GuruFocus+2
But credit agencies still rate it B+ with a stable outlook, and its secured financings are getting A+ / BBB (sf) ratings, which is not a “default likely soon” signal. Cbonds+3S&P Global+3S&P Global+3
United, Lufthansa, Air Canada, etc., are all levered but still have decent access to capital and strong franchises; if things go bad, they likely restructure earlier via refinancings, sale–leasebacks, etc., before we get a hard default.
So I’d assign them non‑trivial default risk by 2030, but not as concentrated / near-term as Bermudair’s.
Why Bermudair looks like the standout
Among the list, Bermudair is:
Tiny and young – about 4 aircraft, ~14 destinations, ~10 daily flights. ch-aviation
Already had a serious cash crunch: Skyport (the Bermuda airport operator) sued them over millions of dollars in unpaid airport charges and fees going back to 2023. Royal Gazette+2AirlineGeeks.com+2
Pattern of non‑payment / stress: local coverage and community chatter have mentioned a history of not paying vendors and disruptions around that. Reddit+1
Route pullbacks: they’ve already exited several U.S. airports (Bradley, Rhode Island, Fort Lauderdale) after very short stints, framing it as “network strategy” changes. https://www.westernmassnews.com+6Stamford Advocate+6Hartford Business Journal+6
They did reach an agreement with Skyport on the unpaid fees, which temporarily defused the legal dispute. But that came in the form of a payment plan rather than “actually we’re flush with cash and it was all a misunderstanding,” which still screams undercapitalized start‑up to me. Royal Gazette+1
So, relative to:
giant airlines with access to capital markets and/or implicit state support, and
highly profitable LCCs like Ryanair and Singapore Airlines,
an 8% market-implied chance that Bermudair is the first to hit formal insolvency before 2030 looks low to me.