Qantas says it is in a strong financial position despite having its credit rating downgraded by Moody's ratings agency.
Moody's on Tuesday lowered its long-term senior unsecured rating on Qantas from Baa2 to Baa3, reflecting the agency's expectation of ongoing pressure on the airline's credit profile from high fuel prices, strong competition and a difficult operating environment.
Qantas responded by defending its financial strength, saying the group's operating cashflow was strengthening in the 2011/12 financial year, its cash balance was more than $3 billion, and it had the ability to adjust capital investment as appropriate.
" ... The Qantas group remains in a strong funding position," it said in a statement.
"Qantas continues to be one of only two airline companies rated investment-grade by both Moody's and S&P."
Financing was in place for its 2011/12 aircraft deliveries, and the company intended to fund the balance of its future capital commitments from operating cashflow, cash reserves and available debt, it said.
Qantas acknowledged there had been a significant deterioration in the global aviation operating environment in the last year, and that fuel prices were adding about $450 million to its fuel bill in the first half of the 2011/12 financial year.
But, it said, the depth of its business portfolio gave it the flexibility and resilience to manage operational disruptions and economic volatility.
