Analysts at S&P Global Ratings do not expect travel management companies to re-establish pre-pandemic earnings until 2023. The credit rating agency made the note in a review last month of $400 million in new financing obtained by American Express Global Business Travel, which GBT CEO Paul Abbott addressed during a Monday interview.

“TMCs are affected not only by the overall decline in travel volumes but also by the loss of top-tier incentive payments from global distribution systems because of their inability to deliver sufficient volumes,” S&P wrote. “We expect the recovery of global business travel will lag the recovery of the leisure travel industry.” The firm downgraded GBT’s credit rating to “B” from “B+.”

S&P said it expected GBT to use borrowed funds for restructuring expenses as well as liquidity to weather the crisis. “We believe there is a greater likelihood that 2021 leverage and cash flow generation will be weaker than we previously expected due to our revised forecast for a slower recovery for business travel, the restructuring charges and the additional interest expense from the new debt,” according to S&P.

Analysts pointed to widespread availability of a vaccine as a prerequisite for recovery.

According to S&P, GBT’s second-quarter 2020 transactions were down 94 percent compared with a year earlier. S&P anticipated a total revenue decline of 60 percent for 2020. It estimated that GBT would outstrip its own earlier estimate of $650 million in cost savings for this year, though restructuring charges in the second half will blunt the benefit.

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