Joyce predicts Int’l profit by 2015; S&P downgrades Qantas stock

written by australianaviation.com.au | September 10, 2012
Qantas International will return to profit by 2105, Alan Joyce says. (Seth Jaworski)

Qantas’ sweeping alliance with Emirates will help return the Flying Kangaroo’s international operations to profit by 2015, CEO Alan Joyce has predicted.

“This is a big step in the right direction for Qantas International,” Mr Joyce told the ABC’s Inside Business this weekend. “We see a path through to this business breaking even by financial year 2015. We do want to make sure Qantas International goes back to profits.”

But while the 10-year tie up with Emirates has received generally positive reviews, it has not served to turn around Qantas’s business overnight. A day after the deal was announced, ratings agency Standard & Poor’s downgraded Qantas’s debt rating from BBB to BBB-minus, the lowest grade above junk status.

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S&P attributed the downgrade to Qantas’s eroding market share and “structural pressures” affecting its international operations. The downgrade did not appear to be a reflection of the Emirates deal.

Even with the downgrade, Qantas remains one of only two airlines in the world to hold investment-grade status from two ratings agencies, with Moody’s also giving Qantas its lowest investment grade rating.

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