June 30 (Reuters) -

Global ratings agency Fitch on Monday revised its outlook on

U.S. planemaker Boeing ( BA ) to 'stable' from 'negative' and

affirmed its 'BBB-' rating, citing improved financial

flexibility and production.

The revision in outlook comes as a relief for Boeing ( BA ),

which has resolved its labor dispute and is undergoing a broader

transformation under current CEO Kelly Ortberg.

Major ratings agencies had last year

warned

of a possible downgrade after a strike by about 33,000

workers halted production of Boeing's ( BA ) best-selling jets.

Fitch now expects Boeing ( BA ) to reduce its gross debt below

$50 billion in 2026 by repaying notes worth $7.95 billion

maturing in that year, following a production ramp-up after the

strike and the sale of its Jeppesen unit.

"Sustained operational improvements, particularly

continued 737 MAX production progress, should drive FCF (free

cash flow) generation and EBITDA leverage metrics consistent

with 'BBB-' thresholds," Fitch said in its report.

The ratings agency said it will monitor Boeing's ( BA ) ability

to sustain operational momentum and offer clearer guidance on

long-term capital allocation, which could support a rating

upgrade in six to 12 months.

It also expects Boeing's ( BA ) management to continue reviewing

its defense portfolio and sell non-core assets.

In April, S&P had removed Boeing's ( BA )

rating

from CreditWatch negative on improving aircraft production

and lower cash burn. A CreditWatch listing reflects the

increased likelihood of a downgrade.