Fitch Ratings downgraded Boeing’s outlook from ‘stable’ to ‘negative’ on Friday, citing fallout from a safety crisis impacting the U.S. planemaker’s production and cash flow.
While Fitch reaffirmed Boeing’s ‘BBB—’ long-term issuer default rating, it highlighted concerns over the company’s ability to navigate ongoing challenges.
The rating agency specified conditions to stabilize the outlook, including Boeing’s liquidation of over 100 pre-2023 built 737 MAX aircraft and half of its 787 inventories by early 2025. Additionally, Fitch suggested increasing the production of MAX jets to 38 per month as a potential measure to improve the company’s outlook.
Fitch’s downgrade follows similar actions taken by S&P and Moody’s earlier in the week, reflecting the turbulence in Boeing’s cash flow management amidst the safety crisis.
Boeing has faced intensified regulatory scrutiny and reduced production rates for its 787 widebody jets and 737 MAX aircraft following safety incidents. The recent emergency landing of an Alaska Airlines-operated 737 MAX 9 flight, triggered by a blown-off cabin panel, has further heightened concerns over the safety and reliability of Boeing’s aircraft.
As Boeing navigates these challenges, the company will need to address safety issues promptly, enhance production efficiency, and restore confidence among stakeholders to mitigate the negative outlook’s impact on its operations and financial performance.
