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Australian Govt rejects Qantas request for $3 billion loan

March 6, 2014 Aviation, Headline News No Comments Email Email

egtmedia59Qantas asked the Australian Government for a AUD 3 billion unsecured loan, but Cabinet rejected the request because it felt the airline didn’t really need it.

That’s the word from Prime Minister Tony Abbott, who confirmed yesterday that the government had instead offered to change the Qantas Sale Act to lift the foreign ownership restrictions that stipulate the airline must be 51% Australian owned.

Any change to the Qantas Sale Act is unlikely to pass into law until July at the very earliest and may come too late for the airline.

Abbott told Macquarie Radio the Government ruled out, on expert advice, giving the ailing national carrier either the requested loan or a debt Eventsguarantee.

“You would never in a fit lend anyone AUD 3 billion on an unsecured basis without doing due diligence on that person,” Abbott commented, colourfully.

“The conclusion that we came to based on their advice was that Qantas does not need an unsecured facility from the Government.”

Deputy Prime Minister Warren Truss said Qantas was not in imminent danger of failure and had about AUD 2 billon worth of cash in hand.

Labor is ready to team up with the Greens and independent Senator Nick Xenophon to launch a Senate inquiry into Qantas.

The Transport Workers Union (TWU) was due to hold talks with Qantas yesterday, with TWU national secretary Tony Sheldon saying he would urge Qantas chief executive Alan Joyce to reveal his future plans for the airline, and to back away from the proposed 5000 sackings. Qantas has already begun sacking middle management staff.

Sheldon said the Qantas Board had announced the 5000 job cuts but had failed to outline a strategy to restore profitability.

“Taxpayers have a right to insist that Qantas and the Government explain how it will protect Australian jobs while they are encouraging foreign control.”

Sheldon said he would seek from Joyce:

  • Details of Qantas’ strategy to return to profitability;
  • A commitment to discuss cost savings to mitigate proposed job losses;
  • A commitment to rethink “the failed Jetstar Asia strategy, which was the cause of the Qantas half-year loss”;
  • A fair and even playing field for family incomes across the aviation industry. 

Sheldon said Qantas had misjudged its sackings announcement.

“Public opinion has united against Qantas’ sacking and foreign takeover plans. Political leaders like Clive Palmer and Senator Xenophon have also made clear the real cause for Qantas’ woes are the decisions of its board.”

On Tuesday, Palmer United party leader Clive Palmer called for the Qantas board and chief executive to be sacked if they were “not up to the task”.

“Maybe the board and management of Air New Zealand should be employed by Qantas,” Palmer remarked cuttingly, referring to the record profit brought home by the New Zealand airline while Qantas posted a crushing loss.

“The Palmer United Party will vote against the changes to the Qantas Sale Act if they come before the Senate after 1 July this year,” Palmer confirmed.

“We just can’t sell off assets when we’re in trouble and Australia needs to keep sovereign assets for Australian people.”

ACTU Secretary Dave Oliver said Qantas workers and their families would be devastated by the news that the Prime Minister had rendered not a single one of their jobs safe.

“The job of any Prime Minister is to protect Australian jobs. Tony Abbott has comprehensively failed this test,” Oliver said.

“Mr Abbott admitted that his decision to change foreign ownership restrictions in the Qantas Sales Act would see Australian jobs go overseas.

“How did it get to the stage where our Prime Minister won’t even stick up for Australian jobs? Governments the world over see the strategic importance of a government backed national airline that supports jobs, skills and infrastructure. Why doesn’t Tony Abbott?

“And mark my words, there’s no going back. Once the airline is gone, we will never get it back.”

Written by : Peter Needham

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