Fitch Raises Aeroflot’s Long-term Credit Rating to BB

25 September 2019

Moscow, 25 September 2019 – Fitch Ratings has raised Aeroflot's credit rating from BB– to BB with a Stable outlook as part of its annual review of the airline’s rating.

The rating agency noted that “the group’s operations are supported by a strong market position on domestic and international routes, which is enhanced by a multi-brand strategy, a relatively diversified route network and an ability to maintain adequate leverage despite costs pressure over the last couple of years.” The agency also mentioned that despite Aeroflot continues to be exposed to FX fluctuations as its lease liabilities are denominated in foreign currencies, the company “is favourably placed compared with other European network carriers based on its cost position. The group's cost per available seat-kilometre (CASK) is also comparable to LCCs'.” However this “cost advantage is offset by immense pressure on yields due to the highly competitive nature of the industry” and “price sensitivity of customers.”

Andrey Chikhanchin, Aeroflot Deputy CEO for Commerce and Finance, commented:

“We welcome the agency’s decision to upgrade Aeroflot’s rating. This decision confirms the high credit quality of the company and the balanced business model of the Group, which operates in every single market segment from premium to budget.”