Moody's downgrades Qantas to 'junk'

[webfact]

Moody's downgrades Qantas to 'junk'

Australian carrier Qantas said it was facing some of its toughest-ever challenges as Moody's downgraded its credit rating to junk, with the airline battling intense competition and spiralling costs.

Moody's cited "a sharp deterioration in the company's core domestic business" following the airline's shock profit warning and announcement of job cuts in December.

This had already prompted Standard and Poor's to assign it junk status.

Qantas is now rated Ba2 by Moody's and BB+ by Standard and Poor's, meaning it is considered a "junk" product by professional investors.

It will increase the cost of financing for the carrier and restrict access for investors that do not put their money in lower-rated companies, deepening woes for the cash-strapped airline.

The downgrades follow a dire forecast in December of a half-year loss of up to $300m and the decision to cut 1,000 jobs due to "immense" cost pressures.

Qantas chief financial officer Gareth Evans said the news was not unexpected and underscored the difficulties faced by the company, which include record fuel costs and fierce competition from domestic rival Virgin Australia.

"Earnings conditions have deteriorated rapidly in recent months and we now face some of the most challenging circumstances in our history, including an uneven playing field in Australian aviation," Evans said in a statement to the Australian stock exchange.

"We continue to talk to the Australian government about options for resolving this situation," he added.

Full story: http://www.eturbonews.com/41599/moodys-downgrades-qantas-junk

-- eTN 2014-01-11

[jackr]

That would be a most apt moniker for the Aussie national carrier. Awful service from a flag carrier, almost on par with AA.

[Gsxrnz]

Time to buy now before the Aussie government bails them out and the share price skyrockets. Air New Zealand did the same thing about 20 years ago - got me a free house out of that fiasco.

[age4short]

Used to be an excellent airline 20 yrs ago, now I avoid at all costs, rather pay more money on another carrier

[JoeThePoster]

Perhaps Thai Airways can buy them out.

[chooka]

One of the most expensive airlines in the world with the worst service and the rudest and most arrogant old trolley dollies. Thai airways if far better airline.

[Jay Sata]

Rubbish airline with bad service and terrible cabin crew.

The same as Thai and KLM.

Avoid at all costs

[Patje]

Rubbish airline with bad service and terrible cabin crew.

The same as Thai and KLM.

Avoid at all costs

Yep, ever tried Aeroflot ?

[Prbkk]

Rubbish airline with bad service and terrible cabin crew.

The same as Thai and KLM.

Avoid at all costs

Yep, ever tried Aeroflot ?

Even Aeroflot offers something better than a toasted sandwich in J on a 9 hour flight.....

[masuk]

I'd use QANTAS any day in preference to Garuda. Rated Garuda as 'worst meal' when I was given a warm Coke and a cold doughnut for my flight from Bali to Jakarta. Equal last was KLM, who issued newly boarded passengers on a flight from Singapore to Jakarta with a cheese sandwich. I was doubly p...d off as I'd purposely skipped dinner to have a repeat fantastic meal from JKT to SIN a few days earlier.

I've been using AA the past three years, as I can afford to use them on my pension. Other airlines I'm afraid can't match their prices. Yes, I pay for every extra, but it's a saver.

[chrisrazz]

I'm not surprised at all. A couple of years back I was late for work by 5 days due to the management unilaterally shutting the airline down. Not only that, after years of loyalty on my behalf they changed the loyalty program, first by devaluing the points earned system, then later wiping off any points if you didn't fly with them or their affiliates within a certain period. Simply, they will not get any of my money ever again. There are cheaper and better airlines.

[Trentham]

WELL !! So far I agree with everybody.

[jacko45k]

Moody Qantas customers did years ago!

[Ulic]

No surprises here.

[weegee]

What do you expect from an airline that uses "Old bags and drags" to serve you.......

[bushman1666]

Perhaps Thai Airways can buy them out.

Blind leading the blind (No offense intended to blind people)

[Radar501]

Mixed fortunes for The Flying Kangaroo. This week, AirlineRatings.com rated Qantas as the safest airline in the world.

"Top of the list is Qantas which has a fatality free record in the jet era (since 1951)."

Full story here: http://www.airlineratings.com/news/201/qantas-the-safest-airline

Qantas can also boast that it has never had one of its jet aircraft destroyed in a crash.

In September 1999, a QF 747-400 skidded off the runway at BKK Airport in a storm and fortunately came to rest on a sandy golf course. My understanding is the damage was in excess of AUD $100 million and should have resulted in a hull write-off, but Qantas insisted on repairing the aircraft to keep its record intact.

Although Qantas has a fine safety reputation and a proud pioneering record, only time will tell if the carrier, in its present form, can survive in the medium term. Maybe the vultures are already circling.

Just being a famous iconic aviation brand for well over half a century doesn't necessarily guarantee survival. Think Pan Am, Swissair, Ansett.

Edited January 11, 2014 by Radar501

[thhMan]

I miss TAA

I wont be missing Qantas though

[Benmart]

Time to buy now before the Aussie government bails them out and the share price skyrockets. Air New Zealand did the same thing about 20 years ago - got me a free house out of that fiasco.

Congratulations on your "free house". However, someone must have paid for it in one fashion or another.

[ronrat]

They force people onto to Jetstar and closed a number of routes. Now they have ditched Singapore in favour of Dubai. Som nom nar

[ozyjon]

Another airline goes under in Australia,, could this be the headlines in the papers in the near future, Tiger, Anset, they are gone, anyone miss them?

[Scott]

A homophobic remark has been removed.

[Konini]

Used to be an excellent airline 20 yrs ago, now I avoid at all costs, rather pay more money on another carrier

Except you wouldn't - pay more that is! I agree that 20 years ago they were fantastic, but as the standards dropped the fares rose. And rose. Even if they were up to standard, I wouldn't pay more to fly them as other very good airlines. The fees and surcharges are at the ridiculous level and have been for a long time now.

[marcusd]

Junk?. Ever since Alan Joyce took over its been junk. Such a shame from an airline that once SET standards

Sent from my RM-892_apac_laos_thailand_219 using Tapatalk

[marcusd]

Time to buy now before the Aussie government bails them out and the share price skyrockets. Air New Zealand did the same thing about 20 years ago - got me a free house out of that fiasco.

I think the government in now will let them fail

Sent from my RM-892_apac_laos_thailand_219 using Tapatalk

[jaiyen]

Qantas has always tried to screw every other competitive airline that flew in Australia. They tried it with Richard Branson for many years and I remember him saying that it was his goal to eliminate Qantas. It seems his dream is getting closer but we will be well <deleted>**ed if Virgin ever rule the Aussie skies.

[Scott]

An inflammatory post has been removed.

[sam sen]

Mixed fortunes for The Flying Kangaroo. This week, AirlineRatings.com rated Qantas as the safest airline in the world.

"Top of the list is Qantas which has a fatality free record in the jet era (since 1951)."

Full story here: http://www.airlineratings.com/news/201/qantas-the-safest-airline

Qantas can also boast that it has never had one of its jet aircraft destroyed in a crash.

In September 1999, a QF 747-400 skidded off the runway at BKK Airport in a storm and fortunately came to rest on a sandy golf course. My understanding is the damage was in excess of AUD $100 million and should have resulted in a hull write-off, but Qantas insisted on repairing the aircraft to keep its record intact.

Although Qantas has a fine safety reputation and a proud pioneering record, only time will tell if the carrier, in its present form, can survive in the medium term. Maybe the vultures are already circling.

Just being a famous iconic aviation brand for well over half a century doesn't necessarily guarantee survival. Think Pan Am, Swissair, Ansett.

i know an engineer who works for them, they've always repaired aircraft to keep the safety record - doesnt seem to be doing them much good at the moment

[GAZZPA]

Qantas has always tried to screw every other competitive airline that flew in Australia. They tried it with Richard Branson for many years and I remember him saying that it was his goal to eliminate Qantas. It seems his dream is getting closer but we will be well <deleted>**ed if Virgin ever rule the Aussie skies.

Why would it matter if Virgin or any other airline rule the Aussie skies if Qantas goes pop?

[RaoulDuke]

I'd use QANTAS any day in preference to Garuda. Rated Garuda as 'worst meal' when I was given a warm Coke and a cold doughnut for my flight from Bali to Jakarta. Equal last was KLM, who issued newly boarded passengers on a flight from Singapore to Jakarta with a cheese sandwich. I was doubly p...d off as I'd purposely skipped dinner to have a repeat fantastic meal from JKT to SIN a few days earlier.

I've been using AA the past three years, as I can afford to use them on my pension. Other airlines I'm afraid can't match their prices. Yes, I pay for every extra, but it's a saver.

There is not a single airline in the United States that will give you anything nearly as luxurious as a cheese sandwich on a 5-6 hour flight from New York to Los Angeles. The best you can hope for is a bag of chips, and I only know of one airline that does that. Some will even charge you for the Coke. I wish we could get a cheese sandwich or a donut. I would take Qantas or KLM over any North American airline any day of the week, and gladly pay a hefty surcharge for the privilege.

Last year, I flew both Virgin Australia and Qantas on domestic flights in Australia, Qantas was infinitely better in every possible way compared to Virgin, which is a bare-bones economy airline. At least Virgin America has nice interiors and inflight entertainment to offer. Virgin AU offers nothing but a seat.

Edited January 11, 2014 by RaoulDuke