Fitch Ratings changed its Boeing outlook to “stable” from “negative” during Monday’s announcement because of improved financial flexibility and better aircraft production and reduced labor disruptions.
The ratings agency confirmed Boeing’s BBB- rating and predicted the company will reduce its gross debt to below $50 billion by 2026. The debt repayment plan includes $7.95 billion for 2026 debt maturity which will be supported by operational enhancements and the Jeppesen unit sale.
The company resolved its major labor dispute which had stopped jet production and now increases its 737 MAX aircraft manufacturing. The ratings agency predicts Boeing will achieve its credit metrics because the company maintains steady progress in production and free cash flow generation.
The agency predicts Boeing will establish detailed plans for future capital distribution and will assess its defense operations for potential asset disposal opportunities.
S&P Global removed Boeing from negative CreditWatch in April because of the same positive developments. Fitch suggests Boeing could receive a rating upgrade between 6 to 12 months if it maintains its current recovery trajectory.
The rating change demonstrates increasing optimism about Boeing’s recovery under CEO Kelly Ortberg as the aerospace company recovers from pandemic impacts and production challenges.
