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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.
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(END) Dow Jones Newswires
July 22, 2019 10:10 ET (14:10 GMT)
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