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Coronavirus: Heathrow credit rating downgraded amid global recession fears

Credit rating agency Standard & Poor’s has lowered Heathrow’s credit rating amid ongoing uncertainty surrounding the spread of coronavirus.

The decision reflects an updated view on airports and forecast for a global recession that will result in a slower recovery in passenger traffic.

The firm said that “the airport sector in Europe is facing an unprecedented decline in air traffic as Europe has become the epicentre of the Covid-19 pandemic and the governments have introduced travel restrictions and quarantine orders.

“In addition, S&P Global Ratings now expects a eurozone and global recession in 2020, which will likely slow the recovery in passenger traffic.”

Heathrow insisted that its financial position remains “robust” with £3.2 billion of cash and committed facilities available to the business, while efforts are being made  to reduce the airport’s cost base.

Heathrow chief financial officer Javier Echave said:  “The spread of Covid-19 is having a tragic human cost and significant effects across the global aviation industry.

“Prudent management and investment in the airport over the past decade puts Heathrow in a strong financial position.

“We’ve taken steps to reduce our cost base and reorganise our operation which will help us keep Britain’s hub airport operating and protect vital supply lines throughout this crisis.

“We will continue working to restore our strong rating as soon as possible.”

Further updates will be provided as part of first quarter results due on May 1, according to the London hub.

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