How Well Prepared Are European Airlines For The Turbulence Of Another Recession? Mar 12
- ID: 2088383
- March 2012
- Region: Europe
- Standard & Poors
Just as Europe's airlines have recovered from the sharp downturn of 2009, a weakening economic environment is again threatening to blow them off course. Standard & Poor's Ratings Services' economists currently see a 40% likelihood of a true double-dip recession, leading to a decline in GDP in Western Europe over 2012. Yet we believe a recession would likely not affect the ratings of European carriers Deutsche Lufthansa AG (BBB-/Stable/A-3) and British Airways PLC (BB-/Stable/--), because they benefit from strong liquidity positions that should cushion them against short-term industry shocks or unavailability of funding. In contrast, SAS AB (B-/Negative/--) would in our opinion be vulnerable to weakening conditions. Our downside credit scenario assumes a modest recession in the airlines' home markets...
Companies mentioned in this report are:
- Deutsche Lufthansa AG
- British Airways PLC
- SAS AB
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Research Type: Commentary
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