S&P Takes Away the A- Rating of Southwest Airlines

Standard and Poor's Ratings Services downgraded the debt ratings for Southwest Airlines, citing a financial situation that's not as good as it used to be. S&P knocked Southwest's long-term corporate credit rating, which had been rated A-, to BBB+, the second downgrade in 14 months.

Standard & Poor's credit analyst Betsy Snyder, who focuses on airlines, had this to say:

The downgrade is based on a moderate weakening in the company's still-strong financial profile that began in late 2007 and continued into 2008.
While we expect Southwest's earnings to improve in 2009, reflecting continuing benefits from the company's fuel-hedging program and potential market share gains as its competitors reduce capacity in many of its markets, we don't expect its credit metrics to return to the peak levels reached in 2007.