穆迪航空运输评级方法

RATING METHODOLOGY CORPORATES MAY 24, 2012 Table of Contents: SUMMARY 1 ABOUT THE RATED UNIVERSE 2 ABOUT THIS RATING METHODOLOGY 3 DISCUSSION OF THE KEY GRID FACTORS 5 ASSUMPTIONS AND LIMITATIONS, AND RATING CONSIDERATIONS NOT COVERED IN THE GRID 12 CONCLUSION: SUMMARY OF THE GRID-INDICATED RATING OUTCOMES 14 APPENDIX A: GLOBAL PASSENGER AIRLINES METHODOLOGY FACTOR GRID 15 APPENDIX B: OBSERVATIONS AND OUTLIERS FOR GRID MAPPING 17 FACTOR 1 OUTLIER DISCUSSION 18 FACTOR 2 OUTLIER DISCUSSION 19 FACTOR 3 OUTLIER DISCUSSION 19 FACTOR 4 OUTLIER DISCUSSION 20 MOODY’S RELATED RESEARCH 21 Analyst Contacts: SYDNEY +612.927.08111 Ian Lewis +612.9270.8120 Vice President-Senior Credit Officer ian.lewis@moodys.com Surani Meegahagi +612.9270.8177 Associate Analyst surani.meegahagi@moodys.com Terry Fanous +612.9270.8125 Associate Managing Director-Corporate Finance terry.fanous@moodys.com » contacts continued on the last page Global Passenger Airlines Summary This rating methodology explains Moody’s approach to assessing credit risk for companies in the passenger airline industry. This methodology is intended as a reference tool to use when evaluating credit profiles within the passenger airline industry, helping companies, investors, and other interested market participants understand how key qualitative and quantitative risk characteristics are likely to affect rating outcomes. This methodology does not include an exhaustive treatment of all factors that are reflected in Moody’s ratings but should enable the reader to understand the qualitative considerations and financial information and ratios that are usually most important for ratings in this sector. This rating methodology replaces the Global Passenger Airlines Industry Methodology published in March 2009. While reflecting many of the same core principles as the 2009 methodology, this updated framework incorporates refinements that better reflect in our opinion the key credit fundamentals of the industry. Publication of this rating methodology will not result in any rating changes. This report includes a detailed rating grid and a mapping of the companies rated against the factors in the grid. The purpose of the rating grid is to provide a reference tool that can be used to approximate credit profiles within the passenger airline sector. The grid provides summarized guidance for the factors that are generally most important in assigning ratings to passenger airlines. The grid is a summary that does not include every rating consideration, and our illustrative mapping uses historical results while our ratings also consider forward- looking expectations. As a result, the grid-indicated rating is not expected to match the actual rating of each company. The grid contains four key factors that are important in our assessments for ratings in the passenger airline sector: 1. Cost Structure 2. Market Conditions 3. Coverage and Leverage 4. Financial Policy CORPORATES 2 MAY 24, 2012 RATING METHODOLOGY: GLOBAL PASSENGER AIRLINES Each of the factors (except the Financial Policy factor) also encompass a number of sub-factors that we explain in detail. Since an issuer’s scoring on a particular grid factor often will not match its overall rating, in the Appendix we include a discussion of “outliers” – companies whose grid-indicated rating for a specific sub-factor differs significantly from the actual rating. This rating methodology is not intended to be an exhaustive discussion of all factors that Moody’s analysts consider to be pertinent for ratings in the passenger airline sector. We note that our analysis for ratings in this sector covers factors that are common across all industries (such as ownership, management, liquidity, legal structure in the corporate organization, corporate governance) as well as factors that can be meaningful on a company-specific basis. Our ratings consider qualitative considerations and factors that do not lend themselves to a transparent presentation in a grid format. The grid represents a compromise between greater complexity that would result in grid-indicated ratings that map more closely to actual ratings, and simplicity that enhances a transparent presentation of the factors that are most important for ratings in this sector most of the time. Highlights of this report include: » An overview of the rated universe » A summary of the rating methodology » A description of the key factors that drive rating quality » Comments on the grid assumptions and limitations, including a discussion of rating considerations that are not included in the grid. The Appendices show the full grid (Appendix A), tables that illustrate the application of the methodology grid to the covered issuers with explanatory comments on some of the more significant differences between the grid-implied rating for each sub-factor and our actual rating (Appendix B)1. About the Rated Universe We presently rate fourteen passenger airlines using this methodology, covering approximately $30 billion of rated debt. These companies represent a diverse group of issuers with ratings (senior unsecured rating or Corporate Family Rating) ranging from Baa3 to Caa1. Seven of the rated airlines are based in the US; three are from Europe and the remainder come from either Australia, Brazil, Canada or New Zealand. Of the rated airlines, only three are investment grade being; Qantas, Air New Zealand and Southwest Airlines. The median rating for the industry is situated at B1.2 The relatively low ratings for the sector reflect the effect of high fuel prices on these companies ability to generate earnings and free cash flow at levels that would lead to more supportive financial leverage measures. Additionally, sustained pressure on non-fuel costs, particularly labor as the work force becomes more tenured and the need to replace older, less fuel-efficient aircraft should limit the extent of any improvement in credit profiles in upcoming years. 1 In general, the actual rating utilized for comparison to the grid-implied rating is the Corporate Family Rating (CFR) for speculative-grade issuers and senior unsecured rating for investment-grade issuers. 2 For the purposes of comparability in this methodology, Moody’s compares individual corporate family ratings (CFR) and senior unsecured ratings. As both Air New Zealand (ANZ) and Scandinavian Airlines System (SAS) are partially owned by their respective governments, their corporate family ratings reflect implied government support. However for the purpose of grid outliers, we will refer to the Baseline Credit Assessment (BCA) of these airlines, which represents an assessment of their credit standing excluding government support. ANZ’s BCA is 11, equivalent to Ba1, and SAS’ BCA is 18, equivalent to Caa2. CORPORATES 3 MAY 24, 2012 RATING METHODOLOGY: GLOBAL PASSENGER AIRLINES The following table illustrates the distribution of ratings in the passenger airline industry. FIGURE 1 Table of Passenger Airline Ratings Company Name Moody’s Rating Outlook Domicile Rated Debt Instruments (US$ millions) 1 Qantas Airways Ltd Baa3 Stable Australia 1,285 2 Air New Zealand Limited Baa3 Negative New Zealand - 3 Southwest Airlines Co Baa3 Stable United States 2,677 4 Deutsche Lufthansa Ba1 Stable Germany 2,755 5 Allegiant Travel Company Ba3 Stable United States 125 6 British Airways Plc B1 Positive United Kingdom 985 7 Continental Airlines, Inc B2 Stable United States 10,661 8 Delta Air Lines, Inc B2 Stable United States 8,282 9 United Continental Holdings, Inc B2 Stable United States - 10 Gol Linhas Aereas Inteligentes B3 Stable Brazil - 11 JetBlue Airways Corp B3 Stable United States 793 12 Air Canada Caa1 Stable Canada 1,100 13 U.S Airways Group Inc. Caa1 Stable United States 1,168 14 Scandanavian Airline System Caa1 Stable Sweden 138 About This Rating Methodology This report explains the rating methodology for global passenger airlines in six sections, which are summarized as follows. The first three sections are embedded in the rating factor discussions. The fourth section (Mapping Issuers to the Grid and Discussion of Grid Outliers) is in Appendix B. The last two sections follow the rating factor discussions. 1. Identification and Discussion of the Key Grid Factors The grid in this rating methodology focuses on four broad rating factors and weightings. The four broad factors are further broken down into eight sub-factors. FIGURE 2: Global Passenger Airline Industry Broad Rating factors Factor Weightings Rating Sub Factor Sub-Factor Weighting Cost Structure 16% Fleet Age (average in years) 8% EBITDA Margin 8% Market Conditions 28% Business Profile 20% Geographic Diversity 8% Coverage and Leverage 36% EBIT/Interest 12% RCF/Net debt 12% Debt/EBITDA 12% Financial Policy 20% Financial Policy 20% Total 100% 100% CORPORATES 4 MAY 24, 2012 RATING METHODOLOGY: GLOBAL PASSENGER AIRLINES 2. Measurement or Estimation of the Key Grid Factors We explain below how the sub-factors for each grid factor are calculated or estimated for the grid and the weighting for each individual sub-factor. We also explain the rationale for using each particular factor, and the ways in which we apply them during the rating process. The information used in scoring the sub-factors in the grid is found in or calculated from information in company financial statements, derived from other observations or estimated by Moody’s analysts. Moody’s ratings are forward-looking and incorporate our expectations for future financial and operating performance. We use both historical and projected financial results in the rating process. Historical results help us understand patterns and trends for a company’s performance and facilitates peer comparisons under a particular set of industry conditions. We utilize historical data (in most cases, the last 12 months of reported results) in this methodology publication to illustrate the application of the rating grid. All of the quantitative credit metrics incorporate Moody’s standard adjustments to income statement, cash flow statement and balance sheet amounts for restructuring, impairment, off-balance sheet accounts, receivable securitization programs, under-funded pension obligations, and recurring operating leases. For definitions of most common ratio terms please see Moody’s Basic Definitions for Credit Statistics, User’s Guide (June 2011, document #78480). For a description of Moody’s standard adjustments, please see Moody’s Approach to Global Standard Adjustments in the Analysis of Financial Statements for Non-Financial Corporations (December 2010, document #128137). These documents can be found at www.moodys.com 3. Mapping Grid Factors to the Rating Categories . After estimating or calculating each sub-factor, the outcomes for each of the eight sub-factors are mapped to a broad Moody’s rating category (Aaa, Aa, A, Baa, Ba, B, Caa, or Ca). 4. Mapping Issuers to the Grid and Discussion of Grid Outliers In this section (Appendix B), we provide a table showing how each company maps to grid-indicated ratings for each rating factor and sub-factor. The weighted average of the sub-factor ratings produces a grid-indicated rating for each factor. We highlight companies whose grid-indicated performance on a specific sub-factor is two or more broad rating categories higher or lower than its actual rating and discuss (also in Appendix B) general reasons for such positive and negative outliers for a particular sub- factor. 5. Assumptions and Limitations and Rating Considerations Not Included in the Grid This section discusses limitations in the use of the grid to map against actual ratings, additional factors that are not included in the grid that can be important in determining ratings and limitations and assumptions that pertain to the overall rating methodology. 6. Determining the Overall Grid-Indicated Rating To determine the overall grid-indicated rating, we convert each of the eight sub-factor ratings into a numeric value based upon the scale below. Aaa Aa A Baa Ba B Caa Ca 1 3 6 9 12 15 18 20 CORPORATES 5 MAY 24, 2012 RATING METHODOLOGY: GLOBAL PASSENGER AIRLINES The numerical score for each sub-factor is multiplied by the weight for that sub-factor with the results then summed to produce a composite weighted-factor score. The composite weighted factor score is then mapped back to an alphanumeric rating based on the ranges in the table below. For example, an issuer with a composite weighted factor score of 11.7 would have a Ba2 grid-indicated rating. Grid-Indicated Rating Grid-Indicated Rating Aggregate Weighted Total Factor Score Aaa x < 1.5 Aa1 1.5 ≤ x < 2.5 Aa2 2.5 ≤ x < 3.5 Aa3 3.5 ≤ x < 4.5 A1 4.5 ≤ x < 5.5 A2 5.5 ≤ x < 6.5 A3 6.5 ≤ x < 7.5 Baa1 7.5 ≤ x < 8.5 Baa2 8.5 ≤ x < 9.5 Baa3 9.5 ≤ x < 10.5 Ba1 10.5 ≤ x < 11.5 Ba2 11.5 ≤ x < 12.5 Ba3 12.5 ≤ x < 13.5 B1 13.5 ≤ x < 14.5 B2 14.5 ≤ x < 15.5 B3 15.5 ≤ x < 16.5 Caa1 16.5 ≤ x < 17.5 Caa2 17.5 ≤ x < 18.5 Caa3 18.5 ≤ x < 19.5 Ca x ≥ 19.5 Discussion of the Key Grid Factors Moody’s analysis of passenger airlines focuses on four broad factors: » Cost Structure » Market Conditions » Coverage and Leverage » Financial Policy CORPORATES 6 MAY 24, 2012 RATING METHODOLOGY: GLOBAL PASSENGER AIRLINES Rating Factor 1: Cost Structure Why it matters Operating costs are an important factor in the ratings of most issuers, and particularly so in the airline industry, given the usually high operating leverage and the continued growth of LCC’s (Low Cost Carriers) with lower cost structures. The increased presence of LCCs focusing on lower operating costs and competing on price has prompted legacy airlines, with higher cost bases and less operating flexibility, to react by attempting to reduce costs or operate their own low cost carriers. LCC’s have benefitted from economic downturns in recent years relative to legacy carriers with their higher cost structures, but their inroads into the market have changed the structure of the industry. LCCs also tend to focus on point-to-point routes, which are simpler to schedule than the routes of legacy carriers. The latter tend to have a hub-and– spoke network, which has more complicated schedules and connections. This difference results in lower costs for LCCs. Airlines tend to lease a high proportion of their fleet, which we capitalize as debt in our debt metrics (including Debt/EBITDA and RCF/Net Debt). Airlines have been able to terminate certain leases to adjust to changes in demand, although this can be a slow process while demand can fluctuate much more rapidly. In addition, airlines are frequently reluctant to give up slots at airports during a downturn, meaning that certain routes operate at sub-optimal capacity. Finally, a substantial portion of an airline’s costs are partially out of its control, such as fuel prices and landing charges, or are subject to regulatory requirements, such as maintenance and mandated sizes for flight crews. These characteristics make it challenging to adjust the cost base to changes in demand. Fleet age We use fleet age as a proxy indicator for operating efficiency. More specific data, such as operating and maintenance costs, are not transparently and consistently disclosed by the airlines. A young fleet has several advantages: » Younger fleets need less maintenance (in the near term), which in some cases is covered by manufacturers warranties, and thus are generally cheaper to operate in the early years; » Newer aircraft are more fuel efficient, also decreasing operating costs; and » Newer aircraft are better matched to the near-term needs of the airline, as opposed to older fleets. The latter may have outlived the needs prevailing at the time of their purchase and are now used sub-optimally. » An airline with a younger fleet has more time before major capital expenditures are required for re-fleeting, whereas an older fleet implies greater capex over the near to medium term Fleet age doesn’t encompass all fleet characteristics that are important to credit quality. Our ratings also consider other fleet characteristics on a qualitative basis. Some other characteristics that can result in credit differentiation are: More homogeneous fleets (as exhibited by some LCCs) are cheaper to maintain as there is less demand for maintenance staff to become qualified across different aircraft types, and such fleets require lower parts inventories and can be advantageous when routes are of similar distance. Airlines that operate on CORPORATES 7 MAY 24, 2012 RATING METHODOLOGY: GLOBAL PASSENGER AIRLINES regional, short-haul and long-haul routes will require a number of different types of aircraft due to range considerations, passenger demand on certain routes and differing airport infrastructures; and Differences in the way an airline finances its fleet. Some airlines own large portions of their fleet, financed with retained cash flow, equity and unsecured debt, others enter into operating or finance leases to finance particular aircraft, while others enter into wet leases3 which have more flexibility, but will generally be subject to more price variability than either of the two other options; EBITDA Margin Personnel, fuel costs and maintenance account for most of the individual elements of the operating costs of any airline. EBITDA margin is an indicator of overall cost efficiency. An airline’s EBITDA margin captures the relationship between the revenue gained from all airline revenue-generating activities (both passenger and non-passenger) and the costs of operations. It illustrates the airline’s cost discipline and flexibility in line with its revenue-generating opportunities. The ratio reflects the changes in a number of underlying variables (including revenue yield, load factors and cost structure). Such variables are also considered in isolation. In addition, most larger airlines tend to be members of one of the major global airline alliances (Oneworld, Star Alliance, SkyTeam), which enables them to codeshare or maintain virtual networks, share airport lounges, and other facilities and services and provides a cost advantage. Cost Structure - How We Measure or Estimate It For The Grid: Fleet age Average age of the fleet in years EBITDA Margin EBITDA divided by net revenue FACTOR 1 Cost Structure Factor Sub-Factor Moody's Weight Aaa Aa A Baa Ba B Caa Ca 1 3 6 9 12 15 18 20 COST STRUCTURE Fleet Age (average in years) 8% <3, with one aircraft type <3, with more than one aircraft type 3-5 5-8 8-11 11-15 15-18 >= 18 EBITDA Margin 8% >= 40% 35% - 40% 30% - 35% 25%- 30% 20%- 25% 15%- 20% 10-15% <10% 3 A wet lease is generally a short-term lease under which an airline leases aircraft and crew. CORPORATES 8 MAY 24, 2012 RATING METHODOLOGY: GLOBAL PASSENGER AIRLINES Rating Factor 2: Market Conditions Why it Matters The business profile and geographic diversity sub-factors consider how differences in an airline’s operating model affect its ability to preserve its credit standing over the course of the economic cycle. We typically consider diversification, be it product, service line, or geography,