Standard and Poor's upgrades British Airways's outlook despite uncertainty over parent company IAG's bid for Aer Lingus

 
Billy Ehrenberg
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The ratings agency changed BA’s rating to BB after assessing the company’s finances (Source: Getty)

Standard and Poors (S&P) has upgraded British Airways’s (BA) outlook to positive from stable.

The ratings agency changed BA’s rating to BB after assessing the company’s finances.

S&P said:

profitability was materially above our expectations in 2014 and we expect it to remain strong for 2015-2016.

It did emphasise, however, that BA’s rating was constrained by the uncertainty surrounding its parent company IAG, and in particular IAG’s proposed takeover of Aer Lingus.

… the rating on BA remains constrained by the group credit profile of its parent, IAG. IAG is currently in discussions to acquire Irish airline Aer Lingus and we are therefore unable to determine the impact of this on IAG's credit metrics at this time.

S&P said BA’s risk profile would remain ”fair”, reflecting both the cyclical nature of the air transport industry and the volatility of fuel prices.

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