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Fitch downgrades Boeing outlook to 'negative' on 737 MAX concerns

By Michele Maatouk

Date: Monday 22 Jul 2019

Fitch downgrades Boeing outlook to 'negative' on 737 MAX concerns

(Sharecast News) - Fitch downgraded its outlook on Boeing to 'negative' from 'stable' on Monday, citing regulatory uncertainty over when the plane maker's best-selling 737 MAX jets will return to service.
The ratings agency said the revision was also based on "the growing logistical challenge of returning parked planes to service and delivering stored post-production aircraft, the substantial financing needed for temporary working capital build-up, and the risk of higher concessions to airlines, especially if the 737 MAX grounding extends into the end-of-year holiday season".

Fitch said it expects the impact on Boeing's operating margin to linger for several years even after the jets return to service.

"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," Fitch said.

Boeing's 737 MAX jets were banned from flying back in March after the model suffered its second deadly crash in five months, killing a total of 346 people in the two accidents.

At 1555 BST, Boeing shares were down 1 .2% at $372.73.

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