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Tinkering with Qantas Sale Act ‘could devastate airline’

November 29, 2013 Aviation, Headline News 1 Comment Email Email

egtmedia59Any easing of foreign ownership restrictions on Qantas could expose Australia’s national airline to takeover, with devastating results, a federal parliamentarian warns.

Current law requires 51% of Qantas to be Australian owned but Qantas says this is unfair and is lobbying to have the rules changed.

Independent Senator for South Australia, Nick Xenophon says that with 35,000 jobs at stake, the government needs to act to prevent the break-up of Qantas. Rembrandt - www.rembrandtbkk

Xenophon feels it’s high time for Qantas chief executive Alan Joyce and Qantas chairman Leigh Clifford to resign.

The government needed to “forensically examine” Qantas’s latest claims and then act in accordance with the national interest, he said yesterday.

Xenophon pointed out that in 2011 he introduced legislation to strengthen the Qantas Sale Act to prevent offshoring of jobs and the dilution of the Qantas brand via overseas-based subsidiaries.

“The ALP and Coalition both opposed the proposed changes,” he said.

Qantas has been lobbying the Australian Government over the proposed AUD 350 million capital-raising by Virgin Australia Holdings, which Qantas says will effectively see Virgin Australia being over 70% controlled by foreign interests, as well as having cheap access to funds.

“Qantas is right to say there’s an unlevel playing field over the proposed Virgin deal, but Qantas has other problems that directly relate to their own decisions,” Xenophon said.

Xenophon was scathing of the “cannibalisation” of Qantas by its offshoot Jetstar, in particular “the apparent black hole that is Jetstar’s Asian experiment”.

He also singled out Alan Joyce’s decision to ground Qantas on 29 October 2011, during an industrial dispute, which cost the airline upwards of AUD 200 million.

Xenophon said that abandoning the safeguards of the Qantas Sale Act would be a “massive mistake that would put at risk not only a national icon, but tens of thousands of jobs”.

“Since Mr Joyce commenced his term on 28 November 2008, there has been no clear long term, consistent strategy for the airline, and his Chairman Mr Clifford must share responsibility for this haphazard approach as well,” Zenophon said.

“They both need to go to give Qantas clear air.”

“Before the Government considers any action on Qantas, it needs to examine Qantas’ books forensically to determine if there’s been any cost-shifting between Qantas and Jetstar.”

Xenophon said the economic and social impacts of losing Qantas to foreign or private equity interests would be enormous. He called on the Federal Government to:

Delay the Virgin capital raising, pending an examination of Qantas’ claims;

Examine all policy settings that impact on Qantas, especially the operation of foreign state-backed carriers, including the more the more generous depreciation allowance overseas; and Examine price-capping of Australian airport charges, which are amongst some of the highest in the world.

Written by : Peter Needham

Currently there is "1 comment" on this Article:

  1. Mark says:

    The jobs of our top cricket and rugby coaches have reverted to being done by an Australian and the same needs to happen at Qantas !

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