Qantas credit rating cut to 'junk'.

[rotornut]

BBC News - Qantas: S&P cuts airline's credit rating to 'junk' (http://www.bbc.co.uk/news/business-25252286)

[davidjohnson6]

Remarkably few airlines have a credit rating of BBB- or better. I stand to be corrected but believe there are less than 5 airlines in the world with a non-junk credit rating. It's almost as if being considered as investment grade marks an airline out as an oddity...

[Heathrow Harry]

it would be an oddity

and not surprising when you figure out how many quoted airlines have gone bust and how many state owned airlines exist on a constant drip, drip of taxpayers money

It is very very hard to make money in the airline business

cost of entry is low, you can't control your major cost (fuel) and it is very hard to forecast demand (bums on seats) accurately

as soon as you try and push up your margins your competitors undercut you

there is almost no "brand loyalty" that can't be overcome by a £ 25 lower ticket

[rotornut]

I took a course on aviation law. During the first lecture the prof discussed the profitability of several major airlines. Back then over 20 years ago they were lucky to make 2.5% per year. So why would anyone want to go into the airline business he asked.