Research Update: American Airlines Group And Subsidiary Downgraded To 'B' On Steeply Lower Demand Due To Coronavirus; Remain On Watch Neg

The steep decline in airline bookings due to the coronavirus pandemic will sharply reduce American Airlines Group Inc.'s revenue and cash flow, causing it to report much weaker credit metrics in 2020 relative to its 2019 results and our previous expectations. American is taking various steps to partly offset this decline, including instituting capacity reductions and cost-savings and liquidity initiatives. However, we believe these initiatives will be insufficient to offset the effect of the reduced demand from the continued spread of the virus on the company's credit metrics. As of now, we expect that air traffic will begin to recover in late 2020, though any delay in the improvement will prolong the weakness in the company's credit metrics. We revised

...- The steep decline in airline bookings due to the coronavirus pandemic will sharply reduce American Airlines Group Inc.'s revenue and cash flow, causing it to report much weaker credit metrics in 2020 relative to its 2019 results and our previous expectations. - American is taking various steps to partly offset this decline, including instituting capacity reductions and cost-savings and liquidity initiatives. However, we believe these initiatives will be insufficient to offset the effect of the reduced demand from the continued spread of the virus on the company's credit metrics. - As of now, we expect that air traffic will begin to recover in late 2020, though any delay in the improvement will prolong the weakness in the company's credit metrics. - We revised our assessment of the company's liquidity to less than adequate from adequate based on our expectation for sharply reduced cash flow generation. - Therefore, we are downgrading American Airlines Group Inc. and American Airlines Inc....

Research Update