Qantas has had its debt rating cut to junk status by Moody’s Investors Service on the back of a recent first-half loss of (USD225-270 million) and rising competition on domestic routes.  As such, we expect that Qantas' business risk and financial leverage will remain at elevated levels and inconsistent with an investment grade rating," said Ian Lewis, a Moody's Senior Vice President.In its report, Moody's blamed the deterioration in the airline's operating profile on aggressive competitive actions by Qantas' key domestic competitor, Virgin Australia,Brisbane Int'l. "These actions, which include capacity additions, have shifted the market dynamic against Qantas in a structural way. Lewis went on to add that in the absence of any policy changes from Canberra or any viable counter-measures to Virgin Australia's tactics, Qantas' status would remain unchanged. "Whilst the issue is currently a matter of discussion and the government has not yet detailed how it plans to proceed, a form of government support would, depending on form and structure, also potentially provide support for Qantas' liquidity position and/or credit profile. Moody's will observe any potential for positive credit impact when and if such counter-measures are announced and depending on the form of the support".