Qantas hits new low on downgrade - share wrap

Qantas shares fell to a new low on 20-Feb-09 after Moody's Investor Service cut its long-term unsecured credit rating on the airline from ‘Baa1' to ‘Baa2', citing a deterioration in the airline's credit profile. The rating outlook is ‘stable'. Qantas shares opened lower today, trading at AUD1.62 at 11.40am.

Moody's stated, "Qantas has been adversely impacted by relatively high debt and strained profitability and cash flow, putting pressure on the rating at a time of worsening industry fundamentals".

Qantas CEO, Alan Joyce, stated the airline is one of few in the world with an investment grade credit rating. CEO, Alan Joyce, stated, "some of our competitors have fallen below this level because they have found it hard to reposition themselves in such a tough economic environment". He added, "the Qantas Group has both a diversity of revenue streams and a portfolio strategy based on two strong brands, Qantas Airlines and Jetstar, which provide us with considerable flexibility to respond under various market conditions".

Virgin Blue shares slumped 4.1% on Friday, while Air Arabia (-6.3%) and Asiana Airlines (-5.0) capped a bleak day in equity markets worldwide.

Asia Pacific selected airlines daily share price movements (% change): 20-Feb-09