Moody's lifts IAG

Moody's Investors Service said it upgraded International Consolidated Airlines Group, SA's (IAG) ratings on the company's €500 million of senior unsecured notes due 2025, €500 million pf senior unsecured notes due 2027 and €700 million of senior unsecured notes due 2029 to Ba2 from B1.

Concurrently, the agency raised the corporate family rating to Ba1 from Ba2 and the probability of default rating to Ba1-PD from Ba2-PD and changed the outlook to stable from positive.

“IAG has had a very successful spring/summer season this year, characterized by (i) continued high leisure demand meeting capacity increases of +18% in the third quarter and 26% year-to-date September 2023 and (ii) yields remaining strong, still on par with a very high prior-year comparison in the third quarter. On the cost side, lower year-on-year jet fuel prices in particular have helped drive IAG's operating profit to nearly €3.5 billion for the 12 months to Sept. 30, 2023,” Moody’s said in a press release.

The outlook reflects expectations that the rate in any improvement in credit metrics will slow over “the next 12 to 18 months, in particular, given further capacity growth and uncertain demand inelasticity,” The agency said.

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