S&P lowers Lufthansa

S&P said it lowered its ratings on Deutsche Lufthansa AG and its senior unsecured debt to BB- from BB, and its junior subordinated debt to CCC+ from B-.

“Air passenger demand and consumer confidence look bleak. There is considerable uncertainty regarding the overall outlook for air travel following a spike in Covid-19 cases and the resulting new round of lockdowns and travel restrictions.

The airline continues to battle the plunge in its revenues by adjusting capacity, containing costs and capital investments, and safeguarding its liquidity position. Still, these measures will only partly offset the steep decline of up to 80% in air passenger traffic in 2020 and up to 55% in 2021 versus 2019, and likely significant redundancy payments, subject to negotiations with unions, S&P said.

The outlook is negative.

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