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Qantas regains investment grade ratings on lower debt
[SYDNEY] Australia's Qantas Airways Ltd regained on Monday its investment grade status after Moody's upgraded its credit rating by one notch, citing falling debt levels and successful changes within the organisation.
"The upgrade of the senior unsecured rating to Baa3 is based on the significant reduction in leverage since FY2015, on the back of lower fuel prices and continued success of its transformation programme," said Ian Chitterer, a senior analyst at Moody's.
The airline's debt ratings fell to speculative territory, or junk, in 2013, while Standard and Poor's moved them back to investment grade late last year.
Qantas is one of only three airlines to enjoy an investment grade ratings from both Standard & Poor's and Moody's. The two others are Easyjet and Southwest Airlines.
Qantas Group's chief executive Alan Joyce said Moody's upgrade was a reflection of the company's hard work to bring the balance sheet back to good shape.
Investors warmed to the news, sending the airline's share price 1 per cent higher, though it was still down 4 per cent so far this year.
Last week, Qantas posted a record first-half profit in a major turnaround after drastic job and cost cuts.