S&P lowers Qantas ratings to junk grade; might cut further
SYDNEY Dec 6 (Reuters) - Ratings agency Standard & Poor's has cut Qantas Airways Ltd's credit ratings to junk grade with a negative outlook after the Australian carrier shocked investors on Thursday with a loss warning.
S&P said on Friday it cut its ratings on Qantas by a notch to BB+/B. The agency said a structural shift in the domestic competitive landscape had weakened Qantas' business risk profile.
It said a sizeable loss expected in the six months to December 31 had caused the company's financial risk profile to deteriorate.
"Notwithstanding Qantas' strong financial flexibility, we expect the cyclical and structural headwinds facing the airline to persist, which could hinder a timely recovery of its financial risk profile and credit metrics," S&P said in a statement.
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