JAPAN AIRLINES (JAL) has lost its A-grade long-term credit rating following concerns over the speed of the group's recovery and the weakness of its balance sheet.
Standard & Poor's (S&P) rating agency warns that JAL's recovery is likely to be "more gradual than anticipated". It highlights the pending deregulation of domestic air fares, which could slow efforts to repair load factors and yields damaged, during Japan's economic downturn.
S&P also notes that debts of '100 million ($1 billion) have left JAL showing the weakest debt-to-equity ratio of any of the investment-grade airlines, at 80%.
S&P anticipates the need for further capital expenditure, at Haneda and Narita in the next few years, to meet additional capacity. The rating is notched down by one point.
Source: Flight International
