S&P lifts British Airways

S&P said it raised its ratings for British Airways plc to BB+ from BB following a similar action on its parent International Consolidated Airlines Group SA.

The agency also raised its issue ratings by one notch on BA's 2019-1 class A enhanced equipment trust certificates to BBB (sf) from BBB- (sf), its 2021-1 class B to BBB+ (sf) from BBB (sf), and its 2013-1 and 2021-1 class A to A+ (sf) from A (sf). S&P also hiked the airline’s 2020-1 class B to A- (sf) from BBB (sf).

“We raised our forecast for BA's air traffic and assume that its yields will remain high and EBITDA margins will improve. Following BA's capacity guidance for 2023, we raised our forecast for BA's air traffic (revenue passenger kilometers; RPK) to 85%-90% of pre-pandemic levels in 2023 and 95%-100% in 2024, from 67% in 2022. This reflects our view of the still-unsatisfied demand for leisure travel across BA's domestic, European short-haul, and international long-haul routes. We also note the change in consumer behavior to favor experience-based expenditure,” S&P said in a press release.

The outlook is stable.

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