S&P changes British Airways to positive

Standard & Poor's said it revised its outlook on British Airways plc to positive from stable and affirmed the BB long-term corporate credit rating.

The agency also affirmed its long-term issue rating on British Airways’ class A and B enhanced equipment trust certificates at A and BBB, respectively, and the BB rating on its £250 million unsecured bonds due 2016.

The B issue ratings on the €300 million notes of subsidiary British Airways Finance (Jersey) LP was also affirmed.

S&P said the outlook revision reflects its view that the British Airways’ standalone credit profile is bb+ and hence could support a higher rating.

However, the rating is constrained by the agency’s view of the credit metrics of parent IAG. S&P believes there is uncertainty around IAG's credit metrics at this stage due to the potential acquisition of Aer Lingus and the subsequent impact on its credit ratios.

The agency said it could raise the ratings on British Airways if IAG acquires Aer Lingus and is able to maintain credit metrics that would support a higher rating on British Airways.

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