Fitch Affirms Boeing Ratings But Revises Outlook to Negative
July 22 2019 - 10:25AM
Dow Jones News
By Colin Kellaher
Fitch Ratings on Monday said it affirmed its "A" ratings on
Boeing Co. (BA) and it Boeing Capital Corp. unit but revised the
outlook to negative from stable as the aerospace giant continues to
grapple with the prolonged grounding of its 737 MAX plane.
Fitch said the negative outlook reflects, among other things,
regulatory uncertainty regarding the timing and global sequencing
of the 737's return to service and the risk of more concessions to
airlines, especially if the grounding extends into the holiday
season.
Boeing last week said it would set aside about $5 billion to
compensate airlines for the grounding of the planes.
Fitch said it expects a lingering operating margin impact for
several years after the 737 MAX returns to service, and it said
other concerns include lawsuits, investigations and the potential
impact on Boeing's reputation and brand.
The agency cautioned that the 737 MAX situation will reduce much
of the financial cushion Boeing has at the current "A" rating,
leaving the Chicago company more exposed to other unforeseen events
or industry developments.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
July 22, 2019 10:10 ET (14:10 GMT)
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