Moody’s lifts Qantas outlook to positive

** FILE ** A Tuesday, July 24, 2007 file photo of the tail of a Qantas Boeing 767 in Sydney. Qantas will axe at least 1000 jobs and cut the pay of chief executive Alan Joyce and the airline's board as the national carrier looks to achieve cost savings of $2 billion over the next three years, Thursday, Dec. 5, 2013. (AAP Image/Paul Miller) NO ARCHIVING

Ratings agency Moody’s has lifted Qantas’s outlook rating to positive from stable as the airline completes its cost cutting program and moves to profit.

Moody’s said in a statement on Wednesday the ratings upgrade reflected Qantas’s reduced debt and the progress it had made on its “transformation program”.

Moody’s vice president and senior analyst Matthew Moore said it also reflected the positive effect of a weaker Australian dollar and lower fuel prices on the airline’s operations.

“The company is on track to achieve its targeted $1 billion of net debt reduction and we are expecting a substantial improvement in EBITDA (earnings before interest, taxation, depreciation and amortisation) for FY15,” Mr Moore said.

“Our expectation for improved EBITDA generation is a result of the company’s solid progress under its large transformation program and the ongoing improvement in competitive and operating conditions, particularly in the domestic market.

“The ratings could be upgraded if the company is able to continue to execute on its transformation program and if current operating conditions continue to improve in both the domestic and international market.”

Qantas posted a $203 million net profit for the half year to February, a turnaround from a $235 million loss at the same time last year.

It is completing a program to cut 5,000 jobs.

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