S&P upgrades Delta Air Lines to ‘BBB-‘ with stable outlook

S&P Global Ratings expects Delta Air Lines (DAL) will generate sustainably stronger credit measures than we previously forecast, supported by its steady margin expansion and increasing revenue. “In addition, we assume the company will generate material free operating cash flow, which it could use for further debt reduction. Delta has announced a new, more-conservative leverage target, which we view as signaling management’s increased commitment to strengthening its balance sheet. Therefore, we raised our issuer credit rating on Delta to ‘BBB-‘ from ‘BB+’… The stable outlook reflects our expectation that Delta will generate funds from operations to debt of about 40% in 2025 on continued favorable passenger demand, which will support increasing revenue, higher margins, and debt reduction,” S&P Global Ratings stated.