Throughout the COVID-19 pandemic, we’ve heard a lot from various airlines about their financial positions and risk exposure, but the corporate gobbledygook makes it hard to really gauge how an airline is actually fairing during these difficult times.
Credit ratings, however, are arguably the simplest way to see the economic situation that a carrier finds itself in. Instead of having to process the airline’s drop in traffic, revenue and subsequently profit, this financial indicator helpfully gives the companies a score based upon an assessment by the agency providing them.
Unlike personal ratings – which are usually numeric – corporate ratings use letters. Starting at AAA, then down to AA+, AA, AA- and so on. Unfortunately, no airline group holds a rating at this level with the majority occupying the B range.
COVID Comparison
A report from S&P, one of the world’s largest credit ratings agency, shows the impact that COVID-19 has had on airlines and the aviation industry as a whole.
Most notably, the three airlines with the best ratings, Ryanair, Southwest Airlines and easyJet are all low-cost carriers. Before the pandemic struck, they were all occupying the BBB+ group, but …