Some Global Airlines Are Pulling Out of Credit Default Risk Tailspin

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The COVID-19 pandemic has not been kind to global airline credit quality. As of February 2021, a total of 21 major global airlines have been downgraded to high yield (HY) status since the start of the pandemic, according to Credit Benchmark data. But that grim statistic does not tell the full story. A handful of airlines are starting to see their credit quality improve and two in particular – Singapore Airlines and Ryanair – have recently been upgraded and are sitting squarely in investment grade (IG) territory.

Singapore Airlines currently has a Credit Consensus Rating (CCR) in the range of a to aaa and Ryanair has a CCR in the range of bbb to a-.

In the quadrant below, Credit Benchmark has mapped the credit risk profiles for the major global airlines over the past 6 months, spotlighting those who have recently been upgraded, those who are at risk of downgrade and those who are hovering in the middle.

Global Airline Credit

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Credit Benchmark brings together internal credit risk views from over 40 leading global financial institutions. The contributions are anonymized, aggregated, and published in the form of consensus ratings and aggregate analytics to provide an independent, real-world perspective of credit risk. Risk and investment professionals at banks, insurance companies, asset managers and other financial firms use the data for insights into the unrated, monitoring and alerting within their portfolios, benchmarking, assessing and analyzing trends, and fulfilling regulatory requirements and capital.