Fitch Ratings has upgraded United Airlines' issuer default rating to BB+ from BB, with a rating outlook of “stable”.
The ratings agency affirmed United's senior secured debt ratings at BBB- with recovery ratings of RR1, and upgraded its unsecured ratings to BB+ from BB with recovery ratings of RR4.
“The upgrade reflects United's solid execution on its strategic initiatives, which has strengthened its market position and margin performance relative to peers,” Fitch said in a statement.
“Debt reduction in 2025, including the repayment of United's remaining loyalty programme debt, and Fitch's expectations that United will continue to prioritise a healthy balance sheet, are also incorporated in the upgrade.”
Fitch said it may consider positive rating actions in the next year should United demonstrate its targeted margin expansion and continue to generate free cash flow.
However, the rating remains “tempered” by significant upcoming capital spending due to United's fleet renewal efforts.
This will limit free cash flow and may delay debt repayment, unless the company generates solid margins, Fitch added.