This archive report was first published on 5 June 2020.
Published on June 5, 2020, S&P Global Ratings downgraded American Airlines' credit to B-, the lowest rating among its airline peers.
The credit rating agency cited a substantial cash flow deficit due to the impact of COVID-19, with the airline expected to generate a substantial cash flow deficit in 2020. However, it is expected to return to positive cash flow generation in 2021.
As part of its efforts to reduce costs, American Airlines announced plans to reduce total operational and capital expenditures by $12 billion in 2020. This includes cutting capacity by 80% in April and May, and by 70% in June, as well as retiring four aircraft types and suspending marketing and hiring campaigns.
Despite these efforts, the airline posted a $2.2 billion net loss in the first quarter of 2020, its first quarterly loss since emerging from bankruptcy in 2013. The loss is a shift from $185 million profit recorded in the same period last year.
According to S&P, American Airlines is the world's largest airline when measured by fleet size, scheduled passengers carried, and revenue passenger mile. The airline operates an extensive international and domestic network with almost 6,800 flights per day to nearly 350 destinations in more than 50 countries.
S&P rates the credit of United Airlines Holdings at BB-, Delta Air Lines at BB, Southwest Airlines at an investment-grade level of BBB, and JetBlue Airways at BB-.
