It is now rated as ‘Ba1’, which is ‘below investment grade’, also known as junk bonds.
The airline’s rating with rival agency Standard and Poors is BB+, which shows it ‘faces major ongoing uncertainties to adverse business, financial and economic conditions’.
The downgrade comes a week after BA unveiled a pre-tax loss of £70m in the nine months to 31 December, and it forecast an operating loss of around £150m for the year.
In its interim statement, the airline said: ‘The industry continues to face very difficult trading conditions on the back of a weak economic environment.’
A British Airways spokeswoman said: ‘The rating downgrade reflects extremely difficult trading conditions but highlights the strength of our cash position and committed borrowing facility.
‘We continue to review all aspects of the business to further control costs and preserve our cash position.’
BA has £4bn of planes on order from Boeing and Airbus, with 10 Boeing 777s due to be delivered by 2012.
Moody’s concern reflects that of easyJet founder Sir Stelios Haji-Ioannou, who fears the no-frills carrier is expanding too fast in the current climate.
See also:
BA in union talks as £70m loss unveiled (06/02/09)
BA predicts £150m loss (26/01/09)
Walsh gloomy about UK plc (23/01/09)