Qantas Airways Limited
(ASX:QAN) faces rising borrowing costs after yet another credit ratings agency downgraded the airline to junk status, citing a sharp deterioration in its core domestic business.
A month after Standard & Poor’s cut the airline to junk, Moody’s made a rare two-notch downgrade, cutting Qantas to Ba2 from Baa3.
The loss of its investment-grade rating threatens to further push up Qantas’ borrowing costs.
The downgrade comes after Moody’s put Qantas on review last month following the airline’s warning that it will post a first-half loss of up to $300 million and would axe as many as 1000 jobs.
Qantas generated a net profit of $6 million in fiscal 2013.
