Fitch downgrades WestJet

Fitch Ratings said it downgraded WestJet's and WestJet Airlines Ltd.'s long-term issuer default ratings to B- from B. Fitch also trimmed WestJet's secured term loan B and revolver to B+/RR2 from BB-/RR2.

“The downgrade is driven by a combination of pandemic impacts on WestJet's balance sheet, expectations for a prolonged recovery due to mounting macroeconomic concerns and operational issues, and competition in the domestic Canadian market. While Fitch expects both air traffic and profitability to continue to improve from pandemic lows over the forecast period, potential consumer pressures and rising costs could slow WJET's progress toward generating healthy levels of profitability.

“As such, Fitch expects leverage and coverage metrics to remain outside of levels that would support a 'B' rating at least through 2023,” the agency said in a press release.

The outlook is stable.

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