Australian carrier Qantas on Tuesday got shot of its “junk” status when Standard & Poor’s lifted its rating from ‘BB+’ to the prized investment grade ‘BBB-‘ as the airline bounces back from a tough few years. <\/p>\n
The upgrade of Qantas’ long-term corporate credit and issue rating comes after the airline completed a profit turnaround this year, supported by lower fuel prices, and adopted a more conservative financial framework. <\/p>\n
“We view this framework to be materially more prudent and creditor-friendly than previously announced policies,” S&P credit analyst Graeme Ferguson said in a statement. <\/p>\n
“Qantas’ revised financial framework is more formal, forward-looking, and preemptive. It places greater emphasis on acting preemptively to protect the balance sheet when the airline anticipates periods of financial stress.” <\/p>\n
The ratings agency downgraded Qantas to “junk” in December 2013 after the airline issued a shock profit warning and announced job losses as it struggled with record high fuel costs and fierce competition from rivals. <\/p>\n
But the carrier roared back into the black in August, posting a stunning turnaround of fortunes driven by aggressive cost-cutting. <\/p>\n
It booked a Aus$557 million annual net profit in the year to June 30, 2015 — a sharp recovery from a net loss of Aus$2.84 billion in the previous corresponding period. <\/p>\n
Qantas chief executive Alan Joyce said the assessment was “a welcome endorsement of the hard work we’ve been doing”. <\/p>\n
“Our focus has been getting the business to an optimal capital position and to keep it there throughout the cycle,” he said in a statement. <\/p>\n
In announcing its annual results in August, Qantas said its cost-cutting programme had helped save Aus$894 million over the year and allowed it to pay down debt, while lower fuel prices also helped bolster the bottom line.<\/p>\n
The reversal in fortunes appeared to vindicate its strategy to slash Aus$2.0 billion in costs, cut routes, freeze growth at Asian offshoot Jetstar and axe 5,000 jobs to help counter a price war with domestic rival Virgin Australia. <\/p>\n
Qantas shares, which have rallied strongly over the past 12 months, jumped 5.35 percent to Aus$3.74 on Tuesday in an overall rising market.<\/p>\n","protected":false},"excerpt":{"rendered":"
Australian carrier Qantas on Tuesday got shot of its “junk” status when Standard & Poor’s lifted its rating from ‘BB+’ to the prized investment grade ‘BBB-‘ as the airline bounces back from a tough few years. The upgrade of Qantas’ long-term corporate credit and issue rating comes after the airline completed a profit turnaround this year, supported by lower fuel prices, and adopted a more conservative financial framework. “We view this framework to be materially more prudent and creditor-friendly than previously announced policies,” S&P credit analyst Graeme Ferguson said in a statement. “Qantas’ revised financial framework is more formal, forward-looking, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[229],"tags":[],"class_list":["post-42187","post","type-post","status-publish","format-standard","hentry","category-civil-aviation"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/42187","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=42187"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/42187\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=42187"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=42187"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=42187"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}