S&P trims Southwest Airlines

S&P said it lowered all its Southwest Airlines Co. ratings, including the issuer rating to BBB from BBB+, and placed them on CreditWatch with negative implications.

“We expect Southwest's credit metrics to weaken sharply in 2020 from previous expectations because of the impact from the coronavirus outbreak. While the company is reducing capacity and some associated costs and benefits from the steep decline in oil prices, we expect these to be more than offset by much lower traffic. We expect passenger traffic to begin to recover later this year, continuing into 2021,” said S&P in a press release.

S&P expects to resolve the CreditWatch placement after it learns more about the effect of the coronavirus on the company’s financial position.

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