Qantas faces national interest tests: Abbott

Australian PM Tony Abbott said the government was looking forward to an "unshackled'' Qantas and a competitive airline market.
Australian PM Tony Abbott said the government was looking forward to an "unshackled'' Qantas and a competitive airline market.

Qantas would face national interest tests even if the laws relating to majority Australian ownership were repealed, Prime Minister Tony Abbott says.

The airline is cutting 5000 jobs, freezing wages, retiring old planes, slashing capital spending and ceasing some routes in a bid to save $2 billion and return to profit.

Federal cabinet will discuss on Monday the national carrier's request for the repeal of the Qantas Sale Act and a short-term debt guarantee.

The act limits foreign ownership to 49 per cent, stops foreign airlines holding more than a 35 per cent stake and limits the stake to 25 per cent for any single foreign shareholder.

Mr Abbott said on Monday that even if the government secured the repeal of the act, Qantas would still need to get the nod from the Foreign Investment Review Board (FIRB) to increase foreign shareholding.

And there was the further test - in separate air navigation legislation that would not be repealed - that an international airline cannot be designated as an Australian carrier if its foreign shareholding exceeds 49 per cent.

Australian international carriers must also meet other national interest criteria, including at least two-thirds of the board members being Australian citizens, the board chairman being Australian, the head office remaining in Australia and the operational base remaining in Australia.

"If we repeal the Qantas Sale Act, there will still be a number of tests and conditions that would have to be passed," Mr Abbott told reporters in Canberra on Monday.

"First of all, all substantial foreign ownership has to go through the FIRB process and there's a separate requirement for international airlines based in Australia.

"Both of those tests would have to be passed."

Mr Abbott said the government was looking forward to an "unshackled" Qantas and a competitive airline market.

He again appeared to rule out a debt guarantee, saying the government would have to offer it to other airlines as well.

Opposition Leader Bill Shorten said the government had been hit with "policy paralysis" over the future of Qantas.

"Labor is prepared to work with the government on Qantas - the issue is too important for political games," he said.

The Greens and independent senator Nick Xenophon both intend to ask the Senate on Monday to trigger inquiries into Qantas mismanagement.

Meanwhile, the union representing Qantas check-in staff says workers at Sydney Airport have been told 230 jobs are under threat.

The Australian Services Union claims the airline has reneged on a promise to consult with staff before axing any positions, and says it will take the issue before the Fair Work Commission.

Mr Shorten said Labor would consider supporting amendments to the Qantas Sale Act to allow foreign airlines to hold more than a 35 per cent stake and a greater than 25 per cent stake for any single foreign shareholder.

But he said it was in the national interest for Qantas to remain majority Australian-owned.

Opposition transport spokesman Anthony Albanese said allowing a majority foreign stake in Qantas would force the airline to split its operations into separate entities.

In doing so, it would put further jobs at risk and likely lead to regional air services being withdrawn.

"What you would end up with is a very different airline and a very different service," Mr Albanese said.

-AAP

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n4 at 22 Aug 2014 22:04:29 Processing Time: 480ms