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Who should own Qantas? Looks like it’s over to you!

November 29, 2013 Aviation, Headline News 4 Comments Email Email

egtmedia59The thorny question of who should own Qantas is back on the table and it seems the public will be the ones who decide. Australia’s Treasurer Joe Hockey is keen for a debate on the issue – and the outcome will affect the travel industry.

Qantas chief executive Alan Joyce is lobbying hard to free Qantas of provisions that stipulate 51% of the airline must remain in Australian hands. Joyce says this places Qantas at a big disadvantage to rival Virgin Australia, which is currently anticipating a major capital injection from its prime shareholders: Air New Zealand, Singapore Airlines and Etihad Airways.

The restrictions on Qantas are enshrined in the Qantas Sale Act, which keeps the airline Australian with its 51% rule.

Speaking on the subject yesterday, Hockey was kindly disposed to easing the restrictions on Qantas. He labelled the ownership rules “regulatory handcuffs”. He even hinted that Qantas could get state money if a national debate on the issue considered it was worth it. EGT_Artical Banner B 250x250

Hockey said it was up to the public to decide, telling Fairfax Radio: “And if Australians understandably say ‘no, we think it should remain not only Australian owned but Australian controlled, and we need to have a national carrier, and I think there are many good reasons for that as well’, then we’ve got to accept we may have to pay a price for that.”

A “price for that” would be funded by the taxpayer.

Hockey didn’t say quite how he would go about finding the opinions of Australians on the matter – whether, for instance, a referendum might be held.

Joyce says the current rules on Qantas are an “unfair playing field”. He has welcomed government focus on the issue.

Other people, like Independent Senator from South Australia Nick Xenophon, feel tinkering with the Qantas Sale Act could lead to Qantas being taken over by foreign interests, spurring big layoffs of Qantas staff.

Others point out that Qantas not only employs thousands of Australians, it is heavily involved in marketing Australia. It’s the sponsor of G’day USA, for instance – a relationship which has survived tensions between Qantas and Tourism Australia. Qantas is involved in all sorts of Australian activities. It buys large amounts of Australian wine and flies domestic routes which are vital to smaller Australian communities.

The questions remain: should the Government drop ownership restrictions on Qantas? Should public money be used to prop up the airline – which in the end could amount to partial re-nationalisation.

One good question is this: if more than 51% of Qantas were available for sale, who would buy it?

A former top economist with Qantas, Tony Webber, believes few buyers would be interested.

Webber, now at the Sydney University Business School, says few carriers are looking to expand and the obvious suitor, Emirates, stays well away from owning chunks of other airlines.

Substantial shareholders in Qantas now are:

Capital Group: 11.44%

Franklin Resources: 10.91

Commonwealth Bank: 9.46%

Westpac Bank: 5.18%

As for the future, who knows?

Who do you think should own Qantas?

Written by : Peter Needham

Currently there are "4 comments" on this Article:

  1. Andrew says:

    QF is a business like any other. So it needs the same rules as others. I cannot think of any good reason why the Australian taxpayer, very few of whom ever fly on QF, should finically support the business.

  2. gnits says:

    …this national carrier sentiment is one of the biggest bs of all time…… truth is, if australians really want to maintain qantas majority ownership australian then every australian should only fly qantas wherever they wish to go….the spirit of australia is not about ownership nor employment exclusively australian…. it is about maintaining the iconic brand and it’s excellent service known to the world…. let’s face it whoever owns qantas will not change the fact that the airline is an australian carrier original….

  3. Cam Brett says:

    The smell of death surrounding Qantas is not an issue of capital raising – it is one of lack of direction and taking the business forward. Alan Joyce has made some poor decisions which has cost QF.

    Agree or not at least John Borghetti’s move at VA is clear and concise. VA is now more QF than QF! Overheard at the latest VA marketing meeting…”It is not a red kangaroo it is a red wallaby…”

  4. Meg Thornton says:

    A typical situation with the ailing banks and private conglomerates fighting for the tax payers of Australia taxes.
    The Carrier built by Australians was sold off for peanuts, the money squandered . The CEO is paid huge sums of money they do not deserve and they want to get rid of Australian jobs like in everything else Australian.

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