Moody’s Investor Services lowered the Australian carrier’s senior unsecured rating to Ba2 (outlook negative), following a decision to place the company on review in December 2013. “The Group has made significant progress over the past two years to reduce costs and increase competitiveness, as part of Qantas’ biggest transformation since privatisation,” Qantas chief financial officer Gareth Evans said. An update on the Qantas Transformation program is due to be released in February 2014. The downgrade was issued in response to Qantas’ projected underlying losses before tax of up to AU$300 million for the first half of FY2014. “In addition to cost-cutting, substantial reductions to our planned capital expenditure pipeline will be vital to ensure a return to positive free cash flow in FY2015 and beyond. Qantas Airways has responded to Moody’s Investor Services’ outlook downgrading, emphasising its ongoing transformation program will assist in retaining financial strength and flexibility.