Qantas shares fall below dollar mark after S&P review

Qantas planes
Image caption Any credit rating downgrade could hurt Qantas' plans to expand into Asia

Qantas Airways shares have fallen below the one Australian dollar mark for the first time, after ratings agency Standard & Poor's put the airline on review for a possible downgrade.

Shares in Australia's largest carrier fell 8.5% to 97 cents, before recovering slightly to 99 cents.

Qantas said this week that profits could drop by 90% because of mounting losses on international routes.

The airline has struggled with slowing demand and higher fuel prices.

Qantas shares have fallen by nearly a third in four days of losses. That has wiped 1bn US dollars off its market capitalisation from $3.2bn (£2.01bn) to $2.2bn, according to data compiled by the Bloomberg news agency.

On Tuesday, Qantas said that international losses would reduce the airline's profit this financial year to as low as A$50m ($48.6m; £31.6m).

The company blamed the worsening aviation landscape because of the European economic crisis, and its "highest ever jet fuel bill".

S&P said the earnings projections were below expectations when it put Qantas on credit watch.

It said Qantas' BBB investment grade, which is two levels above junk status, would undergo a review in the next 90 days.

A downgrade to junk status would make debt funding more expensive, and potentially hurt Qantas' plans to expand in Asia.

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