Qan­tas up­graded from junk to BBBMELBOURNE:

Kuwait Times - - BUSINESS -

SYDNEY: Aus­tralian car­rier Qan­tas yes­ter­day 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, and pre­emp­tive. It places greater em­pha­sis on act­ing pre­emp­tively to pro­tect the bal­ance sheet when the air­line an­tic­i­pates pe­ri­ods of fi­nan­cial stress.” 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.

But the car­rier roared back into the black in Au­gust, post­ing a stun­ning turn­around of for­tunes driven by ag­gres­sive cost-cut­ting. 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. Qan­tas chief ex­ec­u­tive Alan Joyce said the as­sess­ment was “a wel­come en­dorse­ment of the hard work we’ve been do­ing”. “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.

In an­nounc­ing its an­nual re­sults in Au­gust, Qan­tas said its cost-cut­ting pro­gram 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. 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. Qan­tas shares, which have ral­lied strongly over the past 12 months, jumped 5.35 per­cent to Aus$3.74 yes­ter­day in an over­all ris­ing mar­ket. — AFP

Photo shows a Qan­tas Boe­ing 747 in the skies above Mel­bourne. Aus­tralian car­rier Qan­tas yes­ter­day, 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. — AFP

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.