(Reuters) - Fitch Ratings lowered its outlook for Boeing Co (BA.N) to “negative” from “stable” on Monday, citing regulatory uncertainty around the timing of its 737 MAX jets’ return to service.
The downward revision comes a week after Boeing said it would take a charge of $4.9 billion in the second quarter to account for the grounding of its MAX jets this year.
Boeing is facing one of the worst crises in its history as its fastest-selling jetliner has been grounded since March after crashes in Ethiopia and Indonesia that killed a total of 346 people.
The rating agency said here MAX will remain a concern for the aviation sector in 2020, and expects a lingering impact on Boeing's operating margin for several years after the jet returns to service.
The outlook 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.
As of March 31, Boeing had total debt of $14.7 billion according to Refinitiv data, and Fitch said it estimated that consolidated debt for Boeing would rise by almost $10 billion to nearly $24 billion in 2019.
“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.
It also flagged the risk of higher concessions to airlines, especially if the MAX grounding extends into the end-of-year holiday season.
It also said the MAX situation was
