New Qantas CEO Alan Joyce knows how to moody the waters to perfection.
Moody’s Investor Services reduced its credit rating today from Baa1 to Baa2, causing the share price to tank by 4.28 % to a record low closing price of $1.675.
In its commentary, the investment and risk rating company said “Qantas’s credit profile has been adversely impacted by relatively high debt and strained profitability and cash flow, putting pressure on the rating at a time of worsening industry fundamentals.”
Almost simultaneously the new chief Qantas spin doctor, David Epstein, broadcast a media release in which the new Qantas CEO, Alan Joyce, said “Moody’s confirmation that Qantas maintained an investment grade rating and a stable outlook affirmed the strength of the business.”
The Qantas claim is completely defensible in terms of the performance of its competitors at home, near home and further abroad and it may look near stellar on Monday after Virgin Blue reports its results for the half year to 31 December.
However the selectivity with which the Qantas statement is framed resembles Joyce’s first public speech in November in which he blamed the damaged safety reputation of the airline on media generated negativity and exhibited total amnesia in relation to an adverse safety audit by CASA or several really serious deficiencies in its maintenance performance and the inability of its head of engineering, David Cox, to acknowledge the meaning of compulsory airworthiness directives.
Today’s effort ought to remind everyone that every line uttered or attributed to Joyce needs to be researched and cross checked very carefully.
That said, Qantas under Joyce is looking formidable in terms of focus on exploiting the weaknesses of its competitors. It announced expansions on its dry season Northern territory schedules which take advantage of the Virgin Blue’s failings in that market and is understood to be finalising a range of initiatives to chase Virgin Blue and Air New Zealand even harder than it signalled this week when it announced it would expand Jetstar’s reach into the New Zealand domestic market.
In tough times the easiest source of new customers is from competitors who are doing it even tougher.
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