Standard & Poor's (S&P) is planning to review its ratings outlooks on the 10 U.S. airlines it rates because of pressures from rapidly increasing fuel prices and the weaker U.S. economy, The Wall Street Journal reported Wednesday.
Three of the airlines currently have positive outlooks, six have stable outlooks and one has a negative outlook.
But S&P said the three with positive outlooks -- AMR Corp., parent of American Airlines; Delta Air Lines Inc.; and US Airways Group Inc. -- are most likely to be changed because of the dim prospect for improvement soon. The review is expected to be finished by the end of the month, said the journal.
S&P said airlines have been raising fares to offset higher fuel prices and "were able to do so very successfully through most of 2007."
"However, we expect that this trend will stall across the industry in the face of softer demand, likely first on domestic routes and then in international markets," S&P said.
Carriers have increased ticket prices several times this year, passing fuel surcharges on to customers. But with the weakening economy, business and leisure travelers are likely to curtail some travel plans and may balk at higher prices, according to the report.
(Xinhua News Agency March 13, 2008)