Boeing’s credit rating is at risk as the grounding of the company’s 737 Max jetliner drags into a fifth month, with Moody’s Investors Service joining Fitch Ratings in sounding a warning. The planemaker faces a US$5b cash-flow drain this year as it continues to churn out aircraft it can’t deliver until regulators around the globe clear the Max to resume commercial flights, Moody’s said Monday. Like Fitch, Moody’s affirmed Boeing’s rating at the sixth-highest level of investment quality while cutting the outlook to negative. “Financial risk relative to the company’s pre-grounding profile has meaningfully increased, and the resolution and ultimate impact for Boeing, both financially and reputationally, remain unknown,” Moody’s said. The grounding of Boeing’s best-selling jet will clip operating margins for years to come. <br/>
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The prolonged grounding of Boeing’s 737 MAX aircraft is rippling through the US economy, hurting the nation’s trade balance and clouding the outlook for airlines, suppliers and their tens of thousands of workers. Companies ranging from American Airlines to engine maker General Electric and smaller parts suppliers have cited the grounding and halt in deliveries of the jetliner for financial damage or the suspension of profit guidance. Several US and foreign airlines are cutting back on routes and capacity growth or delaying pilot hiring and promotions because of the MAX. Economists say the production cuts likely weighed on US gross domestic product in Q2, and warn the negative impact could intensify as long as the plane maker is unable to resume deliveries. <br/>
The airport lounge isn't what it used to be. Once seen as quiet retreats for businessmen on expense accounts looking to get some work done, lounges are now trying to serve a variety of purposes and, in the process, have become one more area of competition among the airlines and independent operators. Some lounges are offering spa treatments and expansive views of the tarmac, and most are upgrading their food options. With the robust economy, more passengers than ever are willing to pay to get into the lounges, said Gary Leff, creator of the travel advice website View From the Wing. And that has added to a problem: The clubs have become victims of their own success — at times too full to accommodate all who are allowed to enter. <br/>