Credit rating agency Standard & Poor's said today it may cut its ratings for 11 airlines and 14 aerospace companies because a US-Iraq war looks "imminent."
Nine US airlines, including three of the five largest - Delta Air Lines Inc, Northwest Airlines Corp and Continental Airlines Inc - as well as European carriers British Airways and Deutsche Lufthansa AG are covered by the airline review. S&P said it may cut British Airways to "junk" status.
"Airlines, particularly large US hub-and-spoke airlines, have already been hurt by high fuel prices, an accelerating erosion in bookings on international routes, and, indirectly, by the depressing effect of uncertainty on business activity," S&P analyst Mr Philip Baggaley said in a statement. A war would cause "further financial damage," he said.
The credit rating agency's review of aerospace companies includes Boeing Co, the world's largest commercial aircraft maker, and European Aeronautic Defence and Space Co, which owns most of Airbus SAS, Boeing's largest rival.
United Airlines, a unit of UAL Corp, warned for the first time yesterday that there is a "distinct possibility" that it may go out of business.
Some analysts, meanwhile, have said AMR Corp unit America Airlines Inc, the world's largest airline, might soon follow United and US Airways Group Inc into bankruptcy court.
Transportation Secretary Mr Norman Mineta yesterday acknowledged a war might hurt US airlines, and said the government is ready to assist them if necessary.