S&P Global Ratings has upgraded Delta’s credit rating, citing the company’s financial performance and continued strong demand for air travel.

The firm, which evaluates and assigns ratings to companies based on how they measure financial results, upgraded Delta to a “BB+” rating, one step below an investment-grade rating.

“The company, along with its mainline peers, has benefited from continuing strong passenger airline demand and industrywide capacity constraints that have led to full planes and high fares,” S&P said in its report, issued Thursday. “Delta is on pace to generate sharply higher earnings and cash flow in 2023, led by capacity growth and steady operating margin expansion.”

S&P also noted that its outlook for the U.S. airline market remains positive, and that it expected continued improvement from Delta through 2024 despite cost headwinds.

“Delta’s credit profile has not fully recovered from the pandemic, but it is getting closer,” the report stated.

Reducing debt continues to be a priority for Delta. Its strong financial performance in the first half of the year has enabled accelerated debt reduction, with a total of $3 billion repaid in the first half of 2023 and a goal of retiring $4 billion in debt by the end of the year.

Moody’s Investor Service, another rating agency, currently has Delta rated investment-grade. Fitch Ratings also has Delta at one step below investment grade.