Southwest Airlines Co. Ratings Lowered To 'BBB-' From 'BBB' On Acquisition Of AirTran Airways Inc.; Outlook Is Stable May 11
- Language: English
- Published: May 2011
Standard & Poor's Ratings Services' ratings on Dallas-based Southwest Airlines Co. reflect its strong competitive position in the markets it serves, relatively low operating costs, and consistent annual profitability, even during industry downturns. These factors mitigate, to a large extent, the high-risk and cyclical nature of the airline industry and exposure to high fuel prices (despite the significant levels of fuel hedging). The $3.2 billion May 2, 2011 acquisition of AirTran Holdings Inc. (parent of low-cost airline AirTran Airways Inc.), included the assumption of AirTran's roughly $3 billion of debt and leases. This will weaken Southwest's financial profile somewhat, but we expect it to remain the strongest among U.S. airlines. The acquisition was funded through equity issuance of $523 million...
Companies mentioned in this report are: Southwest Airlines Co.,AirTran Holdings Inc.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included.
SHOW LESS READ MORE >
Southwest Airlines Co.,AirTran Holdings Inc.