S&P may downgrade several airlines

Standard & Poor's said it placed the corporate credit ratings for several airlines on CreditWatch with negative implications because of record high fuel prices.

Affected are Continental Airlines Inc.'s B long-term corporate credit rating, US Airways Group Inc.'s B- corporate credit rating, UAL Corp. and subsidiary United Air Lines Inc.'s B corporate credit rating, Southwest Airlines Co.'s A- long-term corporate credit rating, JetBlue Airways Corp.'s B- long-term corporate credit rating, Alaska Air Group Inc. and subsidiary Alaska Airlines Inc.'s B+ ratings, Delta Air Lines Inc.'s B+ ratings, and AMR Corp. and subsidiary American Airlines Inc.'s B ratings.

Other affected companies are Northwest Airlines Corp. (B+/Watch negative), AirTran Holdings Inc. (B-/Watch negative), and US Airways Group Inc. and its subsidiaries US Airways Inc. and America West Airlines Inc. (B-/Watch negative).

Ratings on AAA-rated bond-insured enhanced equipment trust certificates are not included in the watch.

The review is prompted by the dramatic increase in jet fuel prices, which has caused a material weakening of the financial outlook, according to the agency.

"Although airlines will seek to recover the higher costs through additional fare hikes and higher fees, we believe that this will prove increasingly difficult in a weak U.S. economy," S&P analyst Philip Baggaley said in a written statement.

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