- downgrades Qantas to Ba2 from Baa3; outlook negative
Moody’s has cut QANTAS rating to junk status, citing:
- Increased competition from Virgin in the domestic market (marked sharp deterioration in the company’s core domestic business, which has been a key supporting factor of its previous investment grade rating)
- Actions, which include capacity additions, have shifted the market dynamic against Qantas in a structural way
- We expect that Qantas’ business risk and financial leverage will remain at elevated levels and inconsistent with an investment grade rating
Not a positive for the shares, not for the AUD either (AUD sitting on a bid zone at present, stops below … market orders here)