Qantas trading halt - PM hints at foreign buyer OK

It's tough times for Australia's national carrier Qantas, which is complaining of an 'uneven playing field'. Photo / NZ Herald
It's tough times for Australia's national carrier Qantas, which is complaining of an 'uneven playing field'. Photo / NZ Herald

Qantas shares have been put in a trading halt, just hours after Prime Minister Tony Abbott this morning said he might consider allowing a greater foreign stake in the Australian carrier, suggesting he would prefer that to the "bottomless pit'' of taxpayer support.

The national carrier has forecast a six-month loss of up to $300 million, which it blames on the strong Australian dollar, high fuel costs and Virgin Australia "distorting'' the market.

It says "government action'' will be key in enabling it to keep competing effectively.

The Australian Stock Exchange has just announced that Qantas shares have been put into a trading halt "pending the release of an announcement by the Company."

It says trading in the shares will stay halted until the start of trading on Tuesday - or until the announcement is made.

Qantas shares plunged almost 15 per cent in trading on the ASX yesterday as investors responded to the latest profit warning by dumping the stock.

Qantas said that it will slash 1000 jobs and issued a grim profit warning following a "marked deterioration" in trading conditions in November.

Prime Minister Abbott said this morning he had no time for the idea of taxpayer subsidies.

"Qantas has to get its house in order, that's what has to happen,'' he told Fairfax Radio today.

"If we subsidise Qantas, why not subsidise everyone?

"And if we subsidise everyone, that's just a bottomless pit into which we will descend.''

He says Qantas may be an iconic company but it's also a private company that must run itself competently and profitably.

"I am sure Qantas management are doing their best and let's hope they can get the business in a position where it can continue to operate profitably,'' he said.

But Abbott suggested he may be open to changes to the Qantas Sale Act to allow greater foreign ownership.

He says while he would prefer to see the company kept in majority Australian hands he would be ``happy to look at it'' if Qantas proposed changes to the Act with no cost to taxpayers.

"If it's a choice between a greater foreign stake in Qantas and taxpayer subsidy I ask the people of Australia - what do you prefer?''

Qantas has attacked the roles of Air New Zealand and the other airline stakeholders in Virgin Australia saying there had been an unprecedented distortion of the Australian domestic market.

Air New Zealand, Etihad and Singapore Airlines now have a 73 per cent in Virgin - a fierce competitor for Qantas on its domestic routes in particular - and this stake will increase following a recent A$350 million capital raising.

- AAP / NZ Herald

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