(Reuters) -Fitch Ratings on Friday downgraded Spirit Airlines long-term credit rating to ‘CCC-‘ from ‘CCC+’, citing a high likelihood of near-term default.
“The downgrade reflects the heightened possibility that Spirit may be unable to avoid a default given its ongoing operating losses and declining liquidity,” Fitch said in its report.
The move follows Spirit’s warning earlier this week about “going concern” risks, just months after the carrier emerged from bankruptcy. The airline’s operations have been strained by weak domestic demand and shrinking cash reserves.
In its quarterly report Monday, Spirit said elevated domestic capacity and softer leisure travel demand in the second quarter have created a tough pricing environment, further pressuring results.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Tasim Zahid)
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