The Airline Analyst Financial Ratings


The Airline Analyst (TAA) Financial Ratings are the latest addition to The Airline Analyst and are based on a single quantitative score for each airline based on average fleet age and four key financial ratios. TAA Financial Ratings offer a powerful insight to the financial strength or weakness of any given airline. Unlike public credit ratings that are only available for 15 airlines, TAA Financial Ratings are currently available for over 135 airlines, cover the unique characteristics of the airline industry and are based on data from The Airline Analyst.


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What can The Airline Analyst Financial Ratings be used for?

         •   For a comparative analysis of ratings for a large airline population
         •   As an indication of absolute and relative financial strength or weakness 
         •   To ascertain the ratings trend for individual airlines
         •   To help benchmark or sense-check existing ratings that you have
         •   To assist in understanding public credit ratings for individual airlines
         •   To help predict the impact of operating performance and corporate finance decisions on credit ratings
         •  To assess the financial health of the airline industry as a whole


How do The Airline Analyst ratings differ from credit ratings?

Unlike credit ratings, The Airline Analyst ratings are not intended to be predictors of financial default or bankruptcy. Credit ratings are forward looking and take into account such factors as ownership, strategy, management, labour relations, market position, government relations, sovereign ceilings and availability of credit. They may also involve due diligence and meetings with management, whereas The Airline Analyst ratings provide a more objective approach and are based solely on historic data and ratios.

How does TAA Financial Ratings rate an airline?

After reviewing the key parameters used by rating agencies, TAA Financial Ratings have selected five criteria that are based on the unique characteristics of the airline industry.

         •   Average fleet age
         •   EBITDAR Margin
         •   Fixed Charge Cover
         •   Liquidity
         •   Leverage

After identifying these, we then:

         •   apply a weighting to each of the five criteria
         •   calculate the overall Financial Ratings Score for each airline

The airline's Financial Ratings Score is the weighted arithmetic average of the airline's score on each criterion. Each Financial Ratings Score corresponds to The Airline Analyst's rating following a scale from AAA to CC.

The Airline Analyst Financial Ratings is based on the three most recent ‘Latest Twelve Month’ (LTM) periods for each airline so that trends are clearly identified.


For more information on The Airline Analyst Financial Ratings contact Harry Sakhrani on +852 2842 6975 or via our Contact us page.

*These criteria are similar to those evaluated by the credit rating agencies.