Assets of American airlines have both been tangible and intangible but they have been more tangible in nature because they are owning a fleet of ships.

This will have a significant impact on their debt policy because higher amount of tangible fixed asset is associated with higher amount of operating leverage and degree of higher operating leverage so it will mean that they will always have a higher amount of debt capital in their overall capital structure and hence they need to maintain the debt adequately.

Current covid-19 situation will have an effect upon this because current covid-19 situation will mean that there will be a high risk related to non payment of debt because the companies are not operational in nature and this debt repayment can have a impaft on the liquidity of the company and it can also lead to higher financial distress cost.