S&P upgrades Delta’s credit rating on strong financial performance, air travel demand

S&P International Rankings has upgraded Delta’s credit standing, citing the corporate’s monetary efficiency and continued sturdy demand for air journey.

The agency, which evaluates and assigns rankings to corporations based mostly on how they measure monetary outcomes, upgraded Delta to a “BB+” score, one step under an investment-grade score.

“The corporate, together with its mainline friends, has benefited from persevering with sturdy passenger airline demand and industrywide capability constraints which have led to full planes and excessive fares,” S&P mentioned in its report, points Thursday. “Delta is on tempo to generate sharply greater earnings and money stream in 2023, led by capability development and regular working margin enlargement.”

S&P additionally famous that its outlook for the U.S. airline market stays optimistic, and that it anticipated continued enchancment from Delta via 2024 regardless of value headwinds.

“Delta’s credit score profile has not totally recovered from the pandemic, however it’s getting nearer,” the report acknowledged.

Lowering debt continues to be a precedence for Delta. Its sturdy monetary efficiency within the first half of the 12 months has enabled accelerated debt discount, with a complete of $3 billion repaid within the first half of 2023 and a aim of retiring $4 billion in debt by the top of the 12 months.

Moody’s Investor Service, one other score company, presently has Delta rated investment-grade. Fitch Rankings additionally has Delta at one step under funding grade.

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