Kroll Bond Rating Agency (KBRA) releases a comment on the Wuhan coronavirus outbreak in China and beyond, and its potential impact on the airline industry.
The commercial airline industry is cyclical and continually faces many challenges including volatile oil prices, weak economic conditions, labor issues, and competition. However, the industry is also vulnerable to event risks such as terrorism, pandemics, political instability, and natural disastersall of which could curtail passenger travel in a very short time following a major event.
KBRA notes that while external shocks are often followed by a decline in passenger travel, such drops have been temporary and passenger growth has rebounded quickly. That said, the impact on revenues for affected airlines, while temporary, has in most cases led to consequences for these airlines credit profiles and access to capital marketseven if in the short term. Further, airlines globally are at risk of a change in consumer travel behavior as a result of the coronavirus.
To access the comment, click here.
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
Thomas Moore, Senior Analyst
Marjan Riggi, Senior Managing Director
Nish Kumar, Senior Director