Some Global Airlines Are Pulling Out of Credit Default Risk Tailspin

4, March 2021

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 a downgrade, and those who are hovering in the middle.

Global Airline Credit

6m Downgrade Deteriorating No Change Improving Upgrade IG1 Singapore Etihad IG2 Ryanair Air China JAL Easyjet Crossover Qatar China Eastern Vueling Qantas United Aer Lingus China Airlines Air Canada Alaska Air France HY1 Air New Zealand Titan Cathay Pacific Southwest Lufthansa Delta BA Jet2 Emirates American HY2 WestJet Korean Spirit