Fitch revises Alaska Air view to stable

Fitch Ratings said it affirmed Alaska Air Group, Inc.’s long-term issuer default rating at BB+ and revised its outlook to stable from positive following the company's announcement that it agreed to acquire Hawaiian Holdings, Inc.

Cash purchase price for the transaction will total roughly $1 billion plus about $2 billion in assumed gross debt and lease obligations. Alaska plans to fund the purchase with cash on hand and new debt with the amount of financing still to be determined, the agency said.

“Fitch views the acquisition as manageable in the context of Alaska's relatively strong balance sheet. At Sept. 30, 2023, Alaska maintained nearly $2.5 billion in cash and equivalents on hand, and gross leverage was nearing investment-grade metrics at 2.5x. Fitch expects post-closing leverage to peak in the mid-3x range, depending on the amount of debt raised, and to trend lower thereafter. These metrics are within bounds that are supportive of Alaska's existing rating,” the agency said in a press release.

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