Fitch cuts outlook for Boeing to ‘negative’ on 737 MAX issues
Fitch Ratings lowered its outlook for Boeing Co to “negative” from “stable” on Monday, citing regulatory uncertainty around the timing of its 737 MAX jets’ return to service.
The rating agency said in Washington that MAX would remain a concern for the aviation sector into 2020, and expects a lingering impact on Boeing’s operating margin for several years after the jet returns to service.
The downward revision was also based on the challenge of returning parked planes to service, delivering stored post-production aircraft and the financing needed to build up working capital, Fitch said.
It also flagged the risk of higher concessions to airlines, especially if the MAX grounding extends into the end-of-year holiday season.
“The MAX situation also presents significant public relations challenges and the impact on Boeing’s reputation and brand will be a watch item for the next year or more,” the agency said.
Boeing ended 2018 with net debt for a second consecutive year, and Fitch said it expects this to continue in 2019. (Reuters/NAN)