Jet fuel costs, a strike and Canada-US trade friction all landed inside four months
WestJet Airlines Ltd.’s 8 percent bond maturing in 2031 traded around 85 cents on the dollar on the morning of October 20, down about 3 percent from the previous close.
Bloomberg reported the Calgary-based carrier’s debt had fallen to its lowest level since the bond was issued in June, paring a steeper decline earlier in the session.
The bond has slid steadily since early October, when it changed hands at around 95 cents.
Cbonds data lists the issue as US dollar denominated, at US$500m with an 8 percent coupon.
S&P Global Ratings cut WestJet to B- from B in September, moving it deeper into junk, Bloomberg reported, following earlier downgrades from Moody’s Ratings and Fitch Ratings.
Fitch lowered the airline to B- from B on April 9, warning that elevated jet fuel prices would prolong pressure on profitability and delay improvement in its credit profile, Aviation News reported.
WestJet reported weaker-than-expected second-quarter results, S&P said in commentary carried by Bloomberg.
The ratings agency described the August flight attendant strike as causing “meaningful disruptions” that it expected to affect third-quarter results.
CBC News reported that about 4,400 flight attendants represented by CUPE Local 8125 walked off the job on August 2, and that the airline cancelled hundreds of flights before the two sides reached a tentative deal the following day.
WestJet said in an update dated August 25 that the second collective agreement with CUPE had been ratified.
Jet fuel price increases and volatile trade negotiations between Canada and the US also pose risks for the company, according to the same S&P commentary.
According to Bloomberg, WestJet cut 10 US-bound flight routes from Canada in 2026, Simple Flying first reported.
JetBlue Airways Corp’s US$2bn bond due 2031, backed by collateral tied to the carrier’s loyalty program, fell to 72 cents on the dollar on October 8, the lowest since issuance in August 2024, the same outlet reported, citing Trace pricing data.
Over the preceding month the bond’s yield spread against the benchmark moved past 1,000 basis points, which Bloomberg said typically indicates distress in junk-rated debt.
Outside aviation, the cost of insuring Oracle’s debt against default reached levels usually associated with high-yield credit in October while the company still held an investment-grade rating, according to a previous report by Wealth Professional.
Gavan Nolan of S&P Global Market Intelligence said the range sat more in line with BB and B credit, the publication reported.
Canadian corporate debt markets absorbed record primary supply earlier in 2026, with Amazon’s $14bn maple bond sale ranking as the country’s largest and investment-grade spreads widening roughly two basis points on the day, Wealth Professional reported in June.
