Fitch Ratings has affirmed Delta Air Lines’ (DAL) Long-Term Issuer Default Rating (IDR) at ‘BBB-‘. Delta’s Seattle project bonds have also been affirmed at ‘BBB-‘. Delta’s 2007-1 Class A certificates have been affirmed at ‘BBB+’. The Rating Outlook is Stable.
Delta’s investment-grade ratings reflect the material improvements in its credit profile in recent years as the company has paid down debt, improved profitability, and firmly established its ability to generate meaningful free cash flow (FCF). Importantly, Fitch believes that Delta will be able to maintain credit metrics supportive of an investment-grade rating even in a moderate to harsh economic downturn. The ratings also reflect concerns including Delta’s substantial annual cash needs for capital expenditures, dividends, and debt maturities. Concerns also include the typical operating leverage of an airline, which leads to noticeable financial sensitivity to economic conditions and input prices.Date: May 15, 2017