Qantas hit by credit rating drop

<p>The credit rating of Qantas Airways has been reduced.</p>

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.

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