Moody's alters Allegiant Travel view to positive

Moody's Investors Service said it changed the outlook to positive from negative and affirmed its ratings of Allegiant Travel Co., including the Ba3 corporate family rating, the Ba3-PD probability of default rating and the Ba3 senior secured rating. Moody's also upgraded the speculative grade liquidity rating to SGL-1 from SGL-2.

"Allegiant is leading the performance recovery of the U.S. airlines, both operationally and financially," said, Jonathan Root, Moody's lead analyst, in a press release.

"Its low-cost airline operating model, with a network serving leisure travelers, mainly in smaller US cities, is proving to be resilient through the pandemic," continued Root.

The outlook reflects an expectation for continuing recovery of demand and growth of air traffic, strengthening of credit metrics with debt-to-EBITDA approaching 2.75x by the end of 2022 and sustained strong liquidity, the agency said.

The speculative grade liquidity rating upgrade reflects an expectation that cash and short-term investments will remain above $1 billion, at least through 2022 and that aggregate free cash flow across 2021 and 2022 will be positive, Moody’s said.

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