The Korea Investors Service has marked down the credit rating of asset-backed securities(ABS) issued by Korean Air and Asiana Airlines. 

The investors agency said Tuesday that it lowered the ABS rating of Korean Air from “A” to “A-” and of Asiana Airlines from “BBB+” to “BBB.” The agency cited that the two carriers saw a sharp drop in terms of recovering ABS due to the COVID-19 pandemic. 

An airline's ABS is mainly based on the proceeds from future ticket sales and thus serve as a key means of procuring funds for flag carriers.  

As of the end of March, the amount of ABS owed by Korean Air stood at some one-point-three trillion won and Asiana nearly 469 billion won. 

The agency said the recovery of airlines’ ABS worsened in March compared to February, after most countries around the world implemented strict entry restrictions following the fast spread of the novel coronavirus.  

It quoted the Korea Civil Aviation Association as saying that the number of passengers on international flights operated by domestic airlines plunged 96 percent as of the fourth week of March, after 181 countries either banned or restricted entry of travelers from South Korea.