News National PM backs easing Qantas ownership limits

PM backs easing Qantas ownership limits

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Prime Minister Tony Abbott has backed unshackling Qantas from restrictions on foreign share ownership.

But independent Senator Nick Xenophon said it was not the Qantas legislation which needed to be changed but the management and board.

Mr Abbott said Qantas’ desire for easing of the 1992 Qantas Sale Act was not unreasonable.

“Where we can be helpful we will certainly try to be helpful but as I understand it, what Qantas wants is to be unshackled,” he told the Financial Review newspaper.

Qantas is facing tough times, with a sinking share price and plans to shed 1000 jobs, impose pay freezes and make cuts across the board as confronts the prospect of massive losses.

The Qantas Sale Act, under which the airline was privatised, limits foreign ownership to 49 per cent

Qantas chief executive Alan Joyce said the airline was not competing on a level playing field, with competitor Virgin receiving a $350 million injection from its foreign owners Etihad, Air New Zealand and Singapore Airlines.

Senator Xenophon challenged Mr Joyce to show one dollar of profit since setting up Jetstar Asia and other offshoots.

“If the CEO Alan Joyce and the chairman Lee Clifford go, that will transform the airline because they have presided over monumental strategic mistakes including the failed Jetstar experiment in Asia where they have burned hundreds of millions,” he told AAP.

“The airline is now vulnerable to a private equity takeover because the share price is so low. The private equity buccaneers are now circling the airline.”

Neither is Labor convinced, with MP Matt Thistlethwaite saying the restrictions in the Qantas Sale Act existed for a good reason.

“Given what happened to private equity in the global financial crisis you could probably fairly say if we didn’t have the Qantas Sale Act…..Qantas would not be here today,” he told Sky News.

Liberal Josh Frydenberg said Qantas was an iconic Australian brand which should survive and proper.

“It would be negligent of us not to investigate the various ways we could help Qantas to survive and prosper,” he said.

“Ultimately if you were to change the ownership restrictions, that would be an issue for the Australian parliament.”

A spokesman for Qantas welcomed the acknowledgment of an uneven playing field.

He said the company was in ongoing talks with the government about how it could be levelled.

“But we’re not in a position to comment on those discussions other than to say we’re certainly not looking for a handout from taxpayers,” he said.

The spokesman said Qantas had previously called for review of the legislative framework distorting the Australian aviation market.

“Access to foreign capital has become a major factor in this market and Qantas is denied the same access as its competitors. But ultimately, the Qantas Sale Act is a matter for Parliament,” he said.