Fitch reduced Boeing rating to “BBB-” level. Part 1

International Rating Agency Fitch Ratings reduced long-term rating of emitter’s share price slump and rating of the senior unsecured debt of Boeing Co, from “BBB-” to “BBB”. As press release of the Agency informs, the forecast is “negative”.

Decline in ratings reflects longer recovery after COVID-19 pandemic than Fitch analysts initially supposed and also continued pressure on the company due to problems with 737 MAX airplanes. It will be difficult for Boeing to return financial results to the levels that confirm to rating category “BBB” till the end of 2022, they suppose.

At present moment Fitch doesn’t expect that world volume of passenger air transport will return to previous levels earlier than at the end of 2023.

“Negative” forecast takes into account enduring uncertainty in pandemic influence on aviation industry, showdown of production rates of some models of airplanes, potential advance buying due to low demand on new airplanes from airline companies. Besides, experts point at significant volume of Boeing debt obligations that makes company vulnerable to new possible shocks.

In 2020 will increase debt for more than 42 billion USD based on the already finished and planned orders. Agency’s analysts forecast that to the end of the current year company’s gross debt will surpass 60 billion USD while the volume of free cash will make 25 billion USD.