Delta Credit Rating Cut to Junk by S&P
Delta Air Lines' (NYSE: DAL) long-term credit rating was cut to junk status on Tuesday due plummeting travel demand caused by the COVID-19 coronavirus pandemic.
S&P Global Ratings downgraded Delta to "BB" from "BBB-" on expectations that the airline's 2020 credit metrics will be "much weaker" than 2019. Delta is taking steps to try to offset the decline, including cutting flights, freezing hiring, and tapping liquidity sources, but S&P analyst Betsy R. Snyder in issuing the downgrade wrote she believes the actions will be "insufficient" to make up for the lost revenue.
"Currently, we expect passenger air traffic to begin to recover in late 2020. However, any further delays will prolong the weakness in the company's credit metrics," Synder wrote.
Source Fool.com
