Research Update: Grupo Aeromexico Outlook Revised To Stable From Developing On Stronger Margins; 'B-' Issuer Credit Rating Affirmed

Mexico's leading airline, Grupo Aeromexico S.A.B. de C.V. (Aeromexico), faced accelerated fuel price increases, which that it mitigated by passing through to passengers in ticket prices, allowing Aeromexico to achieve adjusted EBITDA margins of about 18.5% for this year up to Sept. 30, 2022 (versus 8.0% in the same period in 2021). On Nov. 7, 2022, S&P Global Ratings revised its outlook on Aeromexico to stable from developing. We also affirmed our 'B-' global scale issuer credit rating on Aeromexico. At the same time, we also affirmed our 'B' issue-level rating on the company's 8.5% senior secured notes due 2027, one notch above the issuer credit rating, with a recovery rating of '2' reflecting our expectation for substantial recovery (70%-90%;

...- Mexico's leading airline, Grupo Aeromexico S.A.B. de C.V. (Aeromexico), faced accelerated fuel price increases, which that it mitigated by passing through to passengers in ticket prices, allowing Aeromexico to achieve adjusted EBITDA margins of about 18.5% for this year up to Sept. 30, 2022 (versus 8.0% in the same period in 2021). - On Nov. 7, 2022, S&P Global Ratings revised its outlook on Aeromexico to stable from developing. We also affirmed our 'B-' global scale issuer credit rating on Aeromexico. - At the same time, we also affirmed our 'B' issue-level rating on the company's 8.5% senior secured notes due 2027, one notch above the issuer credit rating, with a recovery rating of '2' reflecting our expectation for substantial recovery (70%-90%; rounded estimate: 75%) in the event of a payment default. - The stable outlook reflects our view that Aeromexico will continue to execute operational strategies to minimize the negative effects of fuel price volatility, while maintaining growth...

Research Update