Research Update: American Airlines Group Inc. 'BB-' Issuer Credit Rating Affirmed; Two EETC Ratings Raised

We expect Fort Worth, Texas-based American Airlines Group Inc.'s (AAG) credit measures to weaken slightly in 2018, as a result of higher fuel prices trimming earnings, but they should still support our rating on the company. We are affirming our 'BB-' issuer credit rating on AAG. The outlook remains stable. In addition, we are affirming most issue-level ratings. We are raising our ratings on two enhanced equipment trust certificates (EETCs) to 'A+' from 'A' as a result of debt amortization improving collateral coverage. The stable outlook reflects our expectation that, despite some near-term softening, AAG's credit ratios should improve in 2019 and continue to support the rating, with funds flow to debt averaging in the high-teens percent area during 2018-2019.

...+ We expect Fort Worth, Texas-based American Airlines Group Inc.'s (AAG) credit measures to weaken slightly in 2018, as a result of higher fuel prices trimming earnings, but they should still support our rating on the company. + We are affirming our '##-' issuer credit rating on AAG. The outlook remains stable. In addition, we are affirming most issue-level ratings. + We are raising our ratings on two enhanced equipment trust certificates (EETCs) to 'A+' from 'A' as a result of debt amortization improving collateral coverage. + The stable outlook reflects our expectation that, despite some near-term softening, AAG's credit ratios should improve in 2019 and continue to support the rating, with funds flow to debt averaging in the high-teens percent area during 2018-2019....

Research Update