S&P views Western Global negatively

S&P said it revised its outlook for Western Global Airlines LLC to negative from stable and affirmed the B- level rating on its $400 million of senior unsecured notes and B issuer rating.

“We expect WGA's 2022 operating performance will be affected by staffing shortages and other operating disruptions before improving gradually into 2023. There is currently an industry-wide pilot shortage, with global passenger airlines attempting to increase their staffing levels to meet the high demand for air travel as pandemic-related restrictions have eased or been eliminated. As one of the smaller airline operators in the U.S., WGA has experienced higher levels of attrition as some of its employees have shifted to other, larger airlines,” the agency said in a press release.

Additionally, S&P said it sees the global economy weakening leading to reduced demand for air cargo.

“We forecast WGA's funds from operations (FFO) to debt to decline to the mid-teens percent area in 2022 due to the various operating disruptions, before improving to the low-20% area in 2023. This forecast incorporates our assumption that market conditions will soften somewhat in 2023 but remain stronger than 2019 levels,” S&P said.

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