Investing.com -- S&P Global Ratings has upgraded United Airlines Holdings (NASDAQ:UAL) Inc. to 'BB+' from 'BB' with a stable outlook, citing the airline’s resilient credit metrics and profitability despite challenging market conditions. The rating agency noted that United has maintained steady operating results in a subdued passenger travel environment this year. The airline’s stable cash flow amid macroeconomic and geopolitical uncertainty, along with its debt reduction efforts, supported the upgrade decision. S&P expects United to sustain favorable credit measures and profitability through 2026, with funds from operations (FFO) to debt remaining above 30% over the next two years and adjusted debt to EBITDA in the low-2x range. The airline recently repaid its remaining $1.5 billion of higher-cost, loyalty-backed debt two years ahead of schedule while maintaining an industry-leading liquidity position of $18.6 billion. United is targeting sustained leverage below 2x, compared to its current S&P Global Ratings-adjusted leverage of 2.3x as of June 30, 2025. S&P highlighted United’s premium, loyalty (MileagePlus), and international revenues as providing earnings resilience during periods of demand softness. These segments have outpaced main cabin passenger revenue growth and contributed significantly to United’s improved margins over the past two years. The rating agency noted that United generates the largest share of revenue from international travel among network carriers, with key coastal hubs complementing its main central hubs in Chicago, Denver, and Houston. This positioning offers increased opportunities to expand higher-margin premium and loyalty sales. United has produced profitability levels comparable to Delta Air Lines (NYSE:DAL) since 2023, with quarterly average EBITDA margins over 15% and operating margins over 9% since the second quarter of 2024. The airline’s free cash flow generation has exceeded S&P’s expectations, supporting balance sheet strength. While share repurchases are likely to account for a meaningful use of excess cash, S&P assumes they will not be debt funded, consistent with United’s financial policy. S&P acknowledged potential headwinds, including higher aircraft expenditures beyond 2025. United’s annual capital expenditure guidance remains at $7 billion-$9 billion beyond 2025, which could pressure credit measures if accompanied by weaker-than-expected earnings. The stable outlook reflects S&P’s expectation that United will maintain its strong financial metrics, supported by recent debt repayment and meaningful free cash flow generation.

S&P Global Ratings upgrades United Airlines to 'BB+' on strong metrics

S&P Global Ratings has upgraded United Airlines Holdings to 'BB+' from 'BB' with a stable outlook, citing strong credit metrics, profitability, and debt reduction efforts. The airline has maintained steady operating results despite a challenging travel environment, with stable cash flow and an industry-leading liquidity position of $18.6 billion. United recently repaid $1.5 billion of higher-cost loyalty-backed debt two years ahead of schedule and is targeting sustained leverage below 2x. Premium and international revenues, particularly through its MileagePlus loyalty program, have driven earnings resilience. The airline's free cash flow has exceeded expectations, supporting balance sheet strength. While higher aircraft expenditures beyond 2025 could pose headwinds, S&P expects United to maintain favorable credit measures and profitability through 2026.