JetBlue Airways Corp.'s (JBLU) credit rating was downgraded Thursday further into "junk" territory at S&P Global Ratings, which cited an expected "substantial cash flow deficit" in 2020 as the COVID-19 pandemic has resulted in a steep decline in airline traffic. The rating was cut to B+, which is now four notches deep into speculative-grade ratings class. The outlook is negative, which warns of possible further downgrades. "While the company is reducing capacity and some associated costs, and benefits from the steep decline in oil prices, we expect these to continue to be more than offset by much weaker traffic levels," S&P said. JetBlue's stock tumbled 10.2% in afternoon trading, while the Dow Transportation Average dropped 6.3% and the Dow Jones Industrial Average slumped 1,513 points, or 5.6%. Of the Dow transports's six airline components, JetBlue is now the fifth-lowest rated at S&P, the lowest being American Airlines Group Inc. (AAL) at B-. The only air carrier rated investment grade, which is BBB- or higher, is Southwest Airlines Co. (LUV), at BBB. The next highest ratings are Delta Air Lines Inc. (DAL) at BB, United Airlines Holdings Inc. (UAL) at BB- and Alaska Air Group Inc. (ALK) at BB-.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
June 11, 2020 14:24 ET (18:24 GMT)
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