Fitch Ratings on Tuesday upgraded Delta Air Lines’ credit rating to investment grade, citing improvements in its balance sheet in the past three years. The Atlanta-based carrier’s rating was cut to junk during the pandemic when a slump in air travel brought the industry to its knees. A junk credit rating makes it harder and more expensive for companies to raise capital. After the pandemic, Delta has been focusing on paying down debt and getting back its investment-grade rating. Fitch upgraded Delta to ‘BBB-’ from ‘BB+’ with a stable outlook. The carrier also has an investment grade rating from Moody’s, but S&P rates it in junk territory. Fitch said Delta’s credit metrics have improved considerably after the pandemic as it has reduced its gross debt and operating leases by roughly $11b in the past three years. It said travel demand will remain healthy through 2024, helping Delta generate free cash flow. It expects the company to reduce unencumbered assets to $30b by the end of the year. Delta forecast last Thursday a lower-than-expected third-quarter profit as excess industry capacity has dampened airfares at the low end of the market. Fitch, however, said it expects Delta to remain among the most profitable airlines, citing a pickup in corporate travel bookings and sustained demand for premium travel.<br/>
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After four straight years in the red, embattled Vietnam Airlines is looking to raise fresh funds to accelerate its turnaround even amid continued headwinds in costs and passenger traffic. "We're planning a private placement of new shares in the near future targeting a select group of investors," Chairman Dang Ngoc Hoa said during a recent shareholders meeting. Hoa said the plan awaits government approval. He did not disclose a timeline or the fundraising amount. The Vietnamese flag carrier's liabilities exceeded its assets in the first quarter of 2022. It is expected to face a negative equity of over 10t dong ($394m) at the end of this year. When asked at the June meeting when the carrier will resolve its excess debt, Hoa said the company hopes to escape from negative equity by the end of 2025. Vietnam's legislature on June 29 approved an extension of up to five years for the airline to repay 4t dong in state-backed loans. But lawmakers reportedly expressed harsh views of the state-owned carrier. "It should think about a fundamental solution to get out of the red," one legislator was quoted as saying. The airline's consolidated revenue rose roughly 30% last year to 93t dong, yet the company recorded its fourth straight year of net losses. Passengers groupwide increased 16% to over 24.1m, but the weak Vietnamese currency and rising fuel prices squeezed earnings. Vietnam Airlines logged its first net profit in 17 quarters in January-March. The results were credited to staff cuts, a reduction in equipment and other belt tightening. "Thanks to Vietnam Airlines' efforts, the operating situation is improving, and the most difficult time has passed," Hoa said.<br/>