American Airlines Group upgraded by Fitch

admin
By admin December 9, 2015 15:35

American Airlines Group upgraded by Fitch

Fitch Ratings has upgraded American Airlines Group to ‘BB-‘ from ‘B+’. The ratings also apply to American’s primary operating subsidiaries, American Airlines, Inc., US Airways Group, Inc. and US Airways, Inc. The Ratings Outlook is Stable.

Fitch has also upgraded or affirmed various classes of American and US Airways EETCs.

The corporate rating upgrade is supported by the strong financial results that American has posted since its merger with US Airways and concurrent emergence from bankruptcy. The upgrade also reflects fading integration risk. Now nearly two years into the process, American’s integration with US Airways has gone smoothly. Fitch considers most of the ratings pressure from integration risk to be in the past now that the two companies have successfully merged on to one reservation system.

Fitch expects continued solid financial results from American over the intermediate-term based on a stable domestic travel environment, low fuel costs, and the benefits of the company’s on-going integration and fleet renewal processes. The ratings are also supported by American’s sizeable liquidity balance, which includes $8.9 billion in cash and short-term investments and newly upsized revolver capacity of $2.4 billion.

The ‘BB-‘ rating also incorporates the risks in American’s credit profile, including a significant debt balance and expectations for leverage to be somewhat high for the rating over the next two years, heavy upcoming capital requirements, and shareholder focused cash deployment.

admin
By admin December 9, 2015 15:35