Qantas moves one step closer to junk status

[yo yo ma]

On the positive side, QF is one of only two airlines worldwide (Southwest being the other) to be considered investment grade by two ratings agencies.

Qantas has had its credit rating cut to the lowest investment grade by Standard & Poor’s after the airline yesterday struck a 10-year alliance with Emirates to turn around losses on international routes.
Qantas’s debt grade was lowered by one level to BBB- with a stable outlook, according to the ratings company.
‘‘Qantas’s business risk profile has weakened, because of the structural pressures affecting the airline’s international business,’’ S&P analyst May Zhong said. ‘‘Persistent pressures have eroded Qantas’s market share and inflicted losses on the airline’s international operations in the past few years.’’
Qantas yesterday announced a revenue and cost-sharing tie- up with Emirates, the world’s largest carrier by international passenger traffic, to turn around $450 million of annual losses on its international routes.
The airline last month reported its first annual loss for the group since it was sold by the government in 1995.
Qantas holds a Baa3 grade from Moody’s Investors Service, also the lowest investment grade ranking. The carrier is one of just two airlines worldwide, with Southwest Airlines, to be judged investment grade by two separate rating companies.

Qantas moves one step closer to junk status

 

[simongr]

Just shows what a joke the rating agencies are. QFi has been in reported decline for ages and when they do something that might enhance the offering they get downgraded.

 

[Paddy55]

Just shows what a joke the rating agencies are. QFi has been in reported decline for ages and when they do something that might enhance the offering they get downgraded.

QF Shares have dropped from about $6 towards end 2007 to $1.20 now.... I'd say that's a decline :shock:

 

[simongr]

QF Shares have dropped from about $6 towards end 2007 to $1.20 now.... I'd say that's a decline :shock:

Yep so QF shares have hovered around $1 for months now, the point at which they increase by 20% on the back of the EK alignment - S&P downgrade the investment status. That's my point.

 

[eastwest101]

The same S&P ratings agency that failed to predict the GFC or how risky CDO's were?

 

[JohnK]

Well let's hope that the latest deal is positive and ensures Qantas survival.

 

[Sprucegoose]

The market decides these matters.

 

[amaroo]

The market decides these matters.

The short sellers probably think they do.

 

[boylero]

poor standards

 

[777]

Just shows what a joke the rating agencies are. QFi has been in reported decline for ages and when they do something that might enhance the offering they get downgraded.

Could just be a reaction to the fact Joyce may be around a lot longer.

 

[eastwest101]

Maybe some element of truth in that? Its a bit like Telstra under Sol Trujillo, once his management went it took a few years for Telstra and David Thodey to dig themselves out of the hole. I expect the same thing for Qantas in the future - (if it has a future).

Some members here got in when the share price dropped just below $1 and said that they "felt like they were standing in front of a freight train" when they bought, all the comments about catching falling knives came out but they are not looking so silly now.....