Standard and Poor's has today dealt another blow to British Airways with news that the company’s long-term credit rating has been downgraded from BB to BB-. This comes just days after the company admitted it will report a record loss for the current year although there has been significant progress in the area of cost-cutting and refocusing of the operation.

In all honesty the downgrade of the credit rating for British Airways does not come as a massive shock to investors in the market but it does yet again show the very difficult trading environment in the UK. While the third-quarter figures from the company were better than many had expected it is still forecast to report a full-year loss in excess of last year's record loss of £401 million.

Despite all the doom and gloom surrounding British Airways at the moment we have started to see light at the end of the tunnel with a drastically reduced cost base, an array of one-off write-downs and a feeling that the company is starting to consolidate at lower levels. While there has been significant short-term pain at British Airways there is still more to come in the immediate future.

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