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S&P affirms US Airways
Standard & Poor's said it affirmed its ratings on US Airways Group and its major operating subsidiaries America West Holdings Corp., America West Airlines Inc. and US Airways Inc., including the B- corporate credit ratings.
The ratings were removed from CreditWatch, where they were placed with developing implications on Nov. 15, the agency said.
The outlook is now positive.
S&P said that the affirmation is based on US Airways' announcement today that it has withdrawn its offer to merge with Delta Air Lines, after US Airways was informed by Delta's unsecured creditors' committee that it would not meet its demands by the Feb. 1 deadline that US Airways had established.
Although US Airways estimated that successful completion of the merger would result in synergies of $1.7 billion, the combined debt burden would have increased by more than $5 billion, S&P said.
According to the agency, the ratings on US Airways reflect the inherent high risk profile of the U.S. airline industry, a still substantial debt burden and limited financial flexibility and ratings also incorporate the company's relatively low-cost structure and significantly improved liquidity.
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