In this May 16, 2020 file photo, an Air Canada check-in area is shown at Montreal-Pierre Elliott Trudeau International Airport. Air Canada says it was bolstering its summer schedule, which nonetheless remains more than 50 per cent smaller than last year as the COVID-19 pandemic continues to pound the airline industry. (File photo by THE CANADIAN PRESS)

In this May 16, 2020 file photo, an Air Canada check-in area is shown at Montreal-Pierre Elliott Trudeau International Airport. Air Canada says it was bolstering its summer schedule, which nonetheless remains more than 50 per cent smaller than last year as the COVID-19 pandemic continues to pound the airline industry. (File photo by THE CANADIAN PRESS)

Fitch downgrades Air Canada over expected slow recovery for international travel

Heavy reliance on international traffic

CHICAGO — Fitch Ratings has downgraded Air Canada because of an expected slower recovery in demand from the COVID-19 pandemic, especially for international travel.

The Chicago-based ratings agency downgraded the airline’s long-term issuer default rating to BB negative from BB and its unsecured notes to B+/RR5 from BB/RR4.

Fitch says the country’s largest airline is in a strong liquidity position and believes it should have sufficient liquidity to manage through the crisis.

However, the agency revised its forecast to include a steeper downturn in 2020 and slower recovery in 2021.

It says Air Canada carries greater risk of a slower recovery than some airlines because of its heavy reliance on international traffic, with 30 per cent of its revenues in 2019 coming from its domestic business.

The rating is in line with United Airlines, and above American Airlines and Hawaiian Air.

“Reluctance to travel internationally and the possibility of prolonged travel restrictions may delay Air Canada’s recovery compared to more domestically focused carriers,” Fitch says in a news release.

Air Canada’s shares lost 86 cents, or 4.4 per cent, to $18.54 in Monday trading on the Toronto Stock Exchange.

This report by The Canadian Press was first published June 15, 2020.

Air Canada

Just Posted

Alberta Premier Jason Kenney arrives at the 2021 budget in Edmonton on Thursday, Feb. 25, 2021.THE CANADIAN PRESS/Jason Franson
Alberta launches COVID vaccine lottery with million-dollar prizes to encourage uptake

The premier says the lottery will offer three prizes worth $1 million a piece, as well as other prizes

The City of Red Deer sits at 249 active cases of the virus, after hitting a peak of 565 active cases on Feb. 22. (Black Press file image)
Red Deer down to 119 active COVID-19 cases

Province identifies 179 new cases Saturday

Member Terry Parsons’ custom built track vehicle.
Forestburg’s Area 53 Racetrack gears up for action-packed season

Site will also host a portion of the ‘Miles of Mayhem’ event in July

File photo
Sylvan Lake NexSource Centre reopens Monday

As part of the provincial reopening plan, the recreation facility is able to open to the public

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Indigenous Services Minister Marc Miller is seen during a news conference, Wednesday May 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Indigenous child-welfare battle heads to court despite calls for Ottawa to drop cases

Feds are poised to argue against two Canadian Human Rights Tribunal rulings

The Great Ogopogo Bathtub Race has been held in Summerland as a fundraising event. Do you know which Canadian city introduced this sport? (Black Press file photo)
QUIZ: A summer’s day at the water

How much do you know about boats, lakes and water?

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

“They will never be forgotten, every child matters,” says Sioux Valley Chief Jennifer Bone in a video statement June 1. (Screen grab)
104 ‘potential graves’ detected at site of former residential school in Manitoba

Sioux Valley Dakota Nation working to identify, repatriate students buried near former Brandon residential school

Denmark’s Christian Eriksen receives medical attention after collapsing during the Euro 2020 soccer championship group B match between Denmark and Finland at Parken stadium in Copenhagen, Saturday, June 12, 2021. (AP Photo/Martin Meissner, Pool)
Christian Eriksen in stable condition, Euro 2020 match resumes

Eriksen was given chest compressions after collapsing on the field during a European Championship

As stories of the horrors of residential schools circulate after the Tk’emlups te Secwepemc First Nation announced it had located what are believed to be the remains of 215 children, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said he feels a connection with the former students. THE CANADIAN PRESS/Darryl Dyck
2 sides of the same coin: Ex-foster kids identify with residential school survivors

Grand Chief Stewart Phillip says the child welfare system takes Indigenous children from their families

Airport ground crew offload a plane carrying just under 300,000 doses of the single-shot Johnson & Johnson COVID-19 vaccine which is developed by the Janssen Pharmaceutical Companies at Pearson International Airport during the COVID-19 pandemic in Toronto on Wednesday, April 28, 2021. THE CANADIAN PRESS/Nathan Denette
1st batch of Johnson & Johnson vaccines won’t be released in Canada over quality concerns

The vaccines were quarantined in April before they were distributed to provinces

Most Read