S&P: British Airways still on positive watch

Standard & Poor's said its BB+ long-term corporate credit rating on British Airways plc remains on CreditWatch with positive implications following the vote by E.U. ministers to approve a proposed "open skies" aviation treaty with the United States. The ratings where originally placed on positive watch in January.

The treaty will increase price competition at British Airway's major hub at London's Heathrow International Airport and is likely to reduce revenues and earnings on the airline's key trans-Atlantic routes, S&P said. However, access to Heathrow is constrained by the limited availability of takeoff and landing slots and terminal space. The effects on British Airways are expected to unfold gradually, the agency said.

The company's trading performance and financial profile have improved materially over the past several years, with further strengthening of the credit profile likely to be achieved following the conclusion of the group's agreement with its unions, the agency added.

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