S&P lifts Qantas to stable

Standard & Poor’s said it revised the outlook on Qantas Airways Ltd. to stable from negative.

The agency also said it affirmed the BB+ long-term issue rating on Qantas and the airline’s senior unsecured debt, along with its B short-term rating.

The recovery rating on the debt also is affirmed at 3, indicating 50% to 70% expected default recovery.

The outlook revision reflects a view of the meaningful improvement in Qantas’ operating environment, which is expected to translate to improved credit metrics, S&P said.

The agency said it believes that the immediate threat to the BB+ corporate credit rating on Qantas has receded.

But, S&P said it expects underlying demand conditions to remain weak for the Australian airline industry.

Qantas remains somewhat vulnerable to sudden changes in its operating environment that are a common and recurring feature of the airline industry, the agency said.

Underpinning the ratings is the company’s strong domestic market position, S&P said.

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