Qantas revises debt repayments

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By admin July 4, 2014 18:36

Qantas revises debt repayments

Qantas Airways is cutting the amount of unsecured debt it must repay within three years by 47%. The change will allow the airline to concentrate on flight operations and revenue.

The airline is paying off A$724 million ($677 million) of bonds and loans early this year, after raising A$700 million via the nation’s first junk-rated domestic note sales. This means that more than half of the company’s debt will not become payable until after 2019, leaving it free to focus on an operational restructuring plan aimed at reversing losses. Forecasters expect the airline to record its lowest revenue in 15 years, and to not return to profit until 2016.

Scott Rundell, Sydney-based chief credit strategist at Commonwealth Bank of Australia, said: “The next couple of years are going to be very busy for Qantas and they’ve got a lot of restructuring to do. The last thing they want to do is have to worry about refinancing at the same time, accordingly they’re terming-out their debt profile while markets are buoyant.”

The airline’s restructuring plan is set to include job losses, spending cuts, pay-freezes and the sale of its frequent flyer loyalty scheme.

admin
By admin July 4, 2014 18:36
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