S&P Lowers its Credit Rating on Southwest

[pberg]

S&P Lowers its Credit Rating on Southwest

There are three credit rating agencies—Moody’s, Standard & Poor’s (S&P), and Fitch—which regularly assess debt and credit risks.  S&P announced yesterday that they are lowering Southwest Airlines’ credit rating from A- to the next level, BBB+.  Their decision was based on volatile fuel prices and overall economic weakness impacting demand for domestic travel.  S&P also acknowledged that we have some cost pressures, and that the industry as a whole is struggling.

The S&P rating is “stable,” which is positive—given what’s going on in the economy.  Southwest is still considered to be “investment grade” at a BBB+ rating, and we are currently the only investment grade airline. 

[godsmissionform]

I have no worries about investing in a company with a work culture like Southwest. I recently had the opportunity to, or should I say, made the opportunity to speak with Southwest about bringing them global. I'm just wondering if they're going to conjure up a one act play on the flights, because there is nothing better than being entertained when you fly across the deep blue ocean. I'm thinking the first play should be tested on a local flight out of Love field. Here's an idea for the play: The name: Lovey Dovey Fly Away The tagline: What goes up, must come down. The plot: Two seperated lovers on a quest for Hollywood. They are challenged by the many stops that the Wright Amendment and the economy has held them to. Having to stop in many citites to come up with unconventional ways to earn their next leg of the flight from the boarding passengers that donate thier miles at each airport. Throw Elvis in the mix somewhere and Bam! Thats a Hollywood Blockbuster on a plane!

Warm regards and open arms,

 Elizabeth Rose Byrom

P.S. Yes, I would love an amazing career with Southwest as a Free Lance writer for the on flight entertainment???? How bout it??? Say YESSS you know you wanna!

[Glen_R__DeCosta]

S & P as a rating agency should not be given much credibility given their fine performance with the bank stocks and AIG. Southwest fuel costs are hedged until 2012 in case S& P doesn't know or understand that and the presssure of declisning economic activity will only accelerate the number of travelers who will utilize the low cost structure of Southwest Airlines. Is it possible that the cabal of Rating agencies and compnaies that provide them with all kinds of goodies such as free air fare could be slightly biased or is it just because they are woefully inadeqaute to rate the majority of companies that they make prognostications about concerning their credit worthiness. Doesn't this mean that AMR, UAl, Northwest, Delta and all but one or two airlines are junk bond status. Have they mentioned that witht he same amount of press coverage?