S&P trims Western Global

S&P said it lowered its ratings on Western Global Airlines Inc. to B- from B and its senior unsecured notes to CCC+ from B-. The 5 recovery rating on the notes is unchanged.

“The downgrade reflects WGA's weak cash flow generation in 2022, which has resulted in a limited liquidity cushion. WGA's financial performance in 2022, particularly in the first half, has been affected significantly by staffing shortages and other operating disruptions. As one of the smaller cargo airline operators in the U.S., WGA experienced higher levels of attrition as some of its employees have shifted to other, larger airlines amid an industrywide pilot shortage,” S&P said in a press release.

The agency said it forecasts WGA's funds from operations to debt to retreat to the low-teens percent area through 2023, compared to the low-20% area in 2021. “This forecast incorporates our assumption that market conditions will soften in 2023 but remain stronger than 2019 levels.”

The outlook is negative.

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