BA lands in junk territory after Fitch cuts rating

BA has become the first major European carrier to lose its investment grade status amid the Covid-19 pandemic after Fitch cut its credit rating one notch. The company, controlled by the International Consolidated Airlines Group, is unlikely to recover its end-2019 capacity level until 2023, according to Fitch’s baseline forecast. The ratings agency also put the company on negative outlook, reflecting the uncertainty around the air travel industry. Its report cited “the heightened risk for British Airways to adjust its operational base, investment program and capital structure in a fast-evolving environment.” The airline’s $506.2m bonds due 2024 dropped one cent on the dollar to 86 cents on Thursday, 20% down from a 107 cents peak in March 11. S&P and Moody’s also cut BA’s ratings recently to the lowest level of investment grade. Both agencies also put the company on negative watch ahead of potential further downgrades.<br/>