Boeing 2024 Aircraft Delivery Cut by Fitch - Big Implications!
Boeing 2024 aircraft delivery cut by Fitch - Big implications for the aviation industry are expected. Fitch Ratings has recently downgraded Boeing's 2024 aircraft delivery and free cash flow forecasts, signaling potential challenges ahead for the aerospace giant.
Major Update: Fitch Lowers Boeing 2024 Aircraft Delivery
Fitch Ratings lowered its 2024 estimates for Boeing's airplane deliveries and free cash flow on Friday. The plane maker is facing investigations and declining production of its best-selling plane.
"The delivery forecasts were affected by the Civil Aviation Administration of China's (CAAC) decision to restrict certain airplane model deliveries to Chinese customers while it requests additional documentation regarding voice recorder and battery information," Fitch said.
The forecast change also reflects the US Federal Aviation Administration's decision to maintain oversight within Boeing's factories while independently verifying newly produced airplanes. Boeing currently has a BBB-minus rating, one level above "junk" status, with a negative credit outlook from multiple agencies. This is a result of its 737 MAX deliveries dropping to single digits at times this spring. The US plane maker said recently it would spend cash rather than generate it.
Fitch and other agencies do not currently expect these latest changes to result in rating adjustments. Jonathan Root, senior VP at Moody's Ratings, said on Friday that Boeing's recent comment about negative free cash flow was unexpected.
"This is another example of ongoing negative surprises from Boeing while it rebuilds its commercial planes business." However, he said Boeing's strengthening of liquidity after a $10 billion debt issue in May currently reduces "potential ratings pressure." Nick Varone, a senior director at Fitch, told Reuters that the possibility of Boeing consuming free cash for 2024 was generally included in the agency's negative outlook. Varone mentioned a return to a 737 MAX production rate of around 38 per month or inventory reduction as things Fitch is looking for to return to a stable outlook.
The rating agency forecasts from 350 to 370 737 MAX deliveries and around 65-70 787 deliveries in 2024, below previous expectations of around 400 and 75, respectively.
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