Ratings agency S&P on Tuesday downgraded the outlook for Boeing, citing concerns the aerospace giant may have misled regulators about the 737 MAX.
The plane has been grounded in the wake of two deadly crashes that killed 346 people, and Boeing has faced investigations into how it designed the flight handling systems for the popular plane, while the Federal Aviation Administration also has faced growing criticism.
S&P Global Ratings kept the debt grade stable at ‘A’ but cut the outlook to negative from stable on the potential for “lasting damage” to the company’s finances.
“The outlook revision reflects concerns that recent reports that Boeing may have misled the FAA about the problems with the 737 MAX MCAS software that likely caused two accidents could have wide-ranging effects on the company’s competitive and financial positions,” S&P said in a statement.
The ratings agency cites revelation of a transcript between two pilots discussing problems with the flight system in the plane that was only recently submitted to the FAA.
Boeing has said it is working with regulators worldwide to return the plane to the skies but has repeatedly pushed back the expected date, while saying it may reduce production of the top-selling jet.
“A significant further delay could require Boeing to cut or suspend production of the MAX, saving cash in the short term but risking disruptions to the supply chain and likely reducing the long-term profitability of the program,” S&P said.