Qantas gets back its investment-grade rating, and its shares jump

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Qantas shares jumped after Standard & Poor’s returned an investment-grade rating to the airline.

A short time ago, Qantas was up 4.3% to $3.705.

The agency raised the long-term corporate credit to BBB- from BB+. At the same time, the short-term corporate credit rating has been raised to A-3 from ‘B’.

The upgrade follows the announcement that Qantas has adopted a more conservative financial framework.

“We view this framework to be materially more prudent and creditor-friendly than previously announced policies,” says Standard & Poor’s credit analyst Graeme Ferguson.

“Qantas’ revised financial framework is more formal, forward-looking, and preemptive. It places greater emphasis on acting preemptively to protect the balance sheet when the airline anticipates periods of financial stress.”

Qantas just completed one of the biggest turnarounds in Australian corporate history.

The airline in August posted full year underlying profit of $975 million, reversing last year’s record $2.8 billion loss.

The return to profit was driven by a massive restructuring, including cost cutting and redundancies.

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