Stocks in Qantas Airways have been downgraded to "junk" by the ratings agency Standard & Poor's (S&P) following the release of its latest financial results.
The airline had revealed it will lose up to A$300 million (£165 million) in the July-to-December period and confirmed hundreds of job losses in a bid to save money.
S&P has now cut the outlook for shares in Qantas from the lowest investment grade, BBB-, to BB+, which has hurt the share price of the company even more.
Stocks in Qantas dived by over 20 per cent earlier in the week after the release of the results.
Gareth Evans, chief financial officer of Qantas, admitted that the S&P downgrade of the firm's credit rating was "not unexpected".
But in a bullish statement, he said: "Qantas retains a strong financial position, including a large cash balance and a significant asset base."
Chief executive Alan Joyce admitted that the airline is facing "massive challenges" when he announced over 1,000 jobs are being cut by the company earlier in the week.
Find up to date information on the FTSE 100 and spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.