iscover
Credit rating agency Standard & Poor’s has downgraded Qantas’s credit rating from BBB minus, it’s lowest investment grade rating, to so-called junk status, but Qantas says it is “business as usual”.
Separately, fellow ratings agency Moody’s said on Thursday night it had placed Qantas on negative watch but that it was maintaining its Baa3 investment grade rating in the interim.
Downgrading Qantas’s prized investment rating is expected to result in higher interest bills for the airline.
“A downgrade was not unexpected following yesterday’s market update. It highlights the unprecedented pressures that the Qantas Group is facing from several external forces but particularly from an uneven playing field in the Australian aviation market,” Qantas chief financial officer Gareth Evans said in a statement.
“The Qantas Group retains a strong financial position, including a large cash balance and a significant asset base. The cost cutting and structural review we announced yesterday is aimed at leveraging these strengths to ensure the Qantas Group continues to deliver for its shareholders and customers.
“It remains business as usual across the Qantas Group.”
Qantas now says it will provide an update of its structural review in February.
The downgrading announcement came after Qantas had earlier on Friday placed its shares in a trading halt.
Comments (3)
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Dane
says:Hopefully someone at Qantas can see the light (unless their heads are stuck too far up their backsides) that the airline is in grave trouble. Alan Joyce’s love affair with Jetstar is killing the red kangaroo and bleeding it dry.
bob
says:Well qantas board and cei has not paid any returns in 4 years for share hilders COME ON sack the ceo and board NOW!
Bobcat
says:Comparing the current state of play between Qantas and Virgin, it makes you wonder why Qantas ever let John Borghetti go – they must be regretting the day he left. From the day Joyce took over, Qantas has been in nothing other than a downward spiral and doesn’t show any sign of recovering. There seem to be no one in the company capable of saving the airline from impact with the ground!!