Qantas has finally shed its junk credit rating from Standard & Poor's.
The ratings agency slashed the airline's credit rating to junk status in December 2013 after Qantas warned of hefty financial losses and mass job cuts.
But with the airline having returned to profit following a massive restructure, S&P has returned Qantas's ratings to investment grade (BBB-).
"This is a welcome endorsement of the hard work we've been doing to build a stronger Qantas, guided by our financial framework," Qantas chief executive Alan Joyce said on Tuesday.
Qantas has spent nearly two years cutting costs and paying down $1 billion in debt to help return the airline to profit.
It is only one of six airlines, including Air New Zealand and Ryanair, around the world to have an investment grade credit rating.
S&P credit analyst Graeme Ferguson said the agency upgraded Qantas's credit rating because of the airline's more prudent financial framework, which is focused on protecting its balance sheet in difficult times.
Lower fuel prices, a weaker Australian dollar and an easing of the intense price war with rival Virgin Australia combined with the restructuring initiatives should help further strengthen the airline's credit metrics, he added.
However, Qantas could face another ratings downgrade if the measures it has put in place struggle to cope with issues like increased competition, a higher dollar, rising fuel costs, and shocks such as a terrorist attack or mass-pandemic event.
Qantas launched its restructure in 2014, including plans to cut 5,000 jobs after it plunged to a $2.8 billion loss.
In August, the airline returned to the black with a $557 million profit for 2014/15.
Qantas shares closed 21 cents, or 5.9 per cent, higher at $3.76.
