The debt of the nation's three largest airlines -- American, United and Delta -- was downgraded yesterday to junk-bond level, one of the lowest points in many years.
While the downgrading to below-investment grade reflected the uncertain economic outlook for the carriers, industry executives and analysts doubted that it would have much effect on the companies, few of which will be borrowing large sums of money in the next several years.
"The biggest impact is that the pool of funds available for borrowing is much smaller and at higher rates," said Paul Karos, airline analyst for First Boston. "The big years of borrowing money are mostly behind the industry. They have all cut their capital spending radically."
Donald J. Carty, American's executive vice president for finance and planning, said the carrier did not expect to make any major loan requests in the next two years.
The action yesterday, by Standard & Poor's, comes as the industry has begun to stem some of its losses with a recovery in passenger traffic.