Abu Dhabi-Mubasher: Fitch Ratings affirmed Etihad Airways’ long-term issuer default rating (IDR) at “A”, with a “Stable” outlook, according to a statement.
The rating agency published its senior unsecured rating of “A”.
The ratings reflect Etihad’s strong strategic and operational links and legal links with the airline's sole indirect shareholder - Abu Dhabi (AA/Stable). Such links are reflected in the IDR being notched down from the emirate's rating by three notches.
“We expect substantial moderation in Etihad's capacity growth over 2016-2020 due to slowing traffic growth as a result of economic slowdown from low oil prices in the Middle East and terrorism threats,” the statement said, adding that “we expect Etihad's revenue passenger kilometres (RPK) to grow in line with the market in 2016 and forecast RPK to increase at a 9.2% CAGR over 2015-2020, compared with a 20% CAGR over 2010-2015”.
Fitch expected further pressure on Etihad's yields in 2016 and 2017 due to oil price decline, slower traffic growth, capacity growth outstripping demand for Middle Eastern carriers, and focus on transfer traffic.
