Moody’s alters Delta Air view to positive

Moody’s Investors Service said it changed the outlook for Delta Air Lines, Inc. and subsidiary SkyMiles IP Ltd. to positive from stable and affirmed their ratings, including Baa3 senior unsecured, the Baa2 senior secured assigned to the company's slots, gates and routes financing and the Baa1 senior secured assigned to the loan and notes co-issued by Delta and SkyMiles.

“The positive ratings outlook reflects Moody's projection for debt/EBITDA falling towards 2x by the end of 2024 as Delta continues to use free cash flow for debt retirement. Moody's projects annual free cash flow near $3 billion in 2024 and 2025. This compares to Delta's published guidance of $3 billion-$4 billion of free cash flow in 2024 and reflects that Delta expects to begin paying cash taxes in 2025. Moody's projects only a modest expansion of operating margin as mid-single-digit top-line growth helps to offset cost inflation,” the agency said in a statement.

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