Research Update: Mexican Airline Grupo Aeromexico Upgraded To 'B' From 'B-' On Improved Metrics And Profitability; Outlook Stable

Mexico's leading airline Grupo Aeromexico S.A.B. de C.V. (Aeromexico) maintained strong margins despite higher inflation and fuel prices. We believe that its leading position in domestic and international routes, as well as its strong position in Mexico, will allow the company to keep its competitive advantage, while further strengthening load factors and maximize fleet investments. On Oct. 19, 2023, S&P Global Ratings raised its global scale issuer credit rating on Aeromexico to 'B' from 'B-'. We also raised our issue-level rating to 'B+' from 'B' on the company's 8.5% senior secured notes due 2027, one notch above the issuer credit rating. The recovery rating of '2' reflecting our expectation for substantial recovery (70%-90%; rounded estimate: 75%) in the event of

...- Mexico's leading airline Grupo Aeromexico S.A.B. de C.V. (Aeromexico) maintained strong margins despite higher inflation and fuel prices. - We believe that its leading position in domestic and international routes, as well as its strong position in Mexico, will allow the company to keep its competitive advantage, while further strengthening load factors and maximize fleet investments. - On Oct. 19, 2023, S&P Global Ratings raised its global scale issuer credit rating on Aeromexico to 'B' from 'B-'. We also raised our issue-level rating to 'B+' from 'B' on the company's 8.5% senior secured notes due 2027, one notch above the issuer credit rating. The recovery rating of '2' reflecting our expectation for substantial recovery (70%-90%; rounded estimate: 75%) in the event of a payment default, remains unchanged. - The stable outlook reflects our view that Aeromexico will continue delivering above-average profitability and improving funds from operations (FFO) to debt above 20% and solid liquidity...

Research Update