Fitch Ratings' Airline Credit Navigator report states that the credit quality and ratings outlook for the largest US airlines remains positive.
US airline are reporting improved operating results for the third quarter this month, despite rising fuel costs and continuing threats to demand.
"Since M&A activity has picked up substantially with the United Airlines-Continental Airlines merger and Southwest Airlines' bid to acquire AirTran Holdings, there should be a more sustainable capacity growth path that will allow the U.S. industry to counter inevitable demand and fuel price shocks more resiliently through the next cycle," said Bill Warlick, senior director at Fitch.
According to the report, progress toward leverage reduction and more consistent cash flow generation has been significant over the last year, and all of the large carriers now have sufficient liquidity to fund upcoming cash obligations comfortably, absent a large external demand or fuel price shock.