TEXT-Fitch publishes global airlines sector credit factor report

Fri Dec 14, 2012 6:49am EST

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(The following statement was released by the rating agency)

Dec 14 - Fitch Ratings has published a special report entitled, 'Rating Airline Companies'. This is part of its ongoing series of Sector Credit Factors (SCF) reports which show how the agency applies its corporate rating methodology to corporate sub-sectors.

Compared with the aggregate corporate curve, the airline sector has a higher-than-average risk profile. Fitch believes that the sector's risk profile can be as high as the 'BBB' rating category, reflecting the industry's competitive, cyclical and capital-intensive nature. However, all participants are prone to exogenous shocks, often outside their control.

Company-specific traits indicate ratings within rating categories using factors such as competitive strength (route structure and market position) and cost structure (encompassing fuel and other costs, labour and fleet strategy). Fitch's assessment of the financial profile focuses on profit margins, cash flow through the cycle, operational liquidity to alleviate financial stress when downturns occur, together with conventional leverage and coverage metrics.

The report, Rating Airline Companies' Sector Credit Factors is available at www.fitchratings.com or by clicking on the link below.

Link to Fitch Ratings' Report: Rating Airline Companies

here

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