(Reuters) – S&P Global on Wednesday lowered Boeing Co’s <BA.N> credit rating closer to junk due to the expected impact of the coronavirus on the U.S. planemaker’s earnings and cash flow over the next few years.
S&P, which downgraded its rating to ‘BBB-/A-3’ from ‘BBB/A-2’, said it expects a significant decline in cash flow as Boeing tackles lower aircraft deliveries and aftermarket sales resulting from the impact of the coronavirus on air travel.
This will only be partly offset by the company’s efforts to reduce costs to match lower demand, S&P said.
The coronavirus pandemic, which has led to travel bans, has added to the crisis the company faced over the grounding of its 737 MAX following fatal crashes.
The company reported a second consecutive quarterly loss on Wednesday and said it would cut its 160,000-person workforce by about 10%, further reduce 787 Dreamliner production and try to boost liquidity as it prepares for a years-long industry recovery from the pandemic.
(Reporting by Shanti S Nair in Bengaluru; Editing by Maju Samuel)