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Truss, Abbott hose down expectations of government action on Qantas

written by australianaviation.com.au | December 6, 2013
Warren Truss speaks at a recent industry conference.
Warren Truss speaks at a recent industry conference.

Warren Truss, the minister responsible for the transport portfolio, and Prime Minister Tony Abbott have both used separate media engagements to hose down expectations that the federal government will provide financial support to Qantas.

“The government isn’t a banker and there are no doubt lots of companies or private individuals that would like government to provide them with money. But in reality, that’s not the sort of business space that we’re in and we don’t propose to open a bank,” Truss, the Deputy Prime Minister and Infrastructure Minister, said on Thursday on the issue of the government guaranteeing Qantas’s debt.

As for any government shareholding in Qantas, “Qantas have put forward quite a number of ideas, and they’ve written a number of letters which include some of these ideas. But in reality, there’s no firm proposal before the government and nothing actually considering in that regard.”

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He also reiterated more than once Qantas’s strengths and the options it has to raise cash, such as asset sales or partial sales of subsidiaries such as Jetstar and the frequent flyer scheme.

“Well, there are a number of options that have been suggested. But firstly it’s important to note, again, that Qantas is a strong company. It’s got substantial assets, it’s got substantial cash,” he observed.

Truss also said any changes to the Qantas Sale Act would take time and require bipartisan support, which currently is not in place. “And as far as I understand it, there is not majority support in the Senate at least, for such an action. If the Labor Party is interested in looking at changes to the Qantas Sale Act well then they should talk to us.”

Truss also pointed to the importance of foreign investment in Australian airlines. “We wouldn’t have a … a Virgin airline in Australia at all if it wasn’t possible for airlines to operate in Australia with 100 per cent foreign ownership,” he said. “Virgin was 100 per cent foreign-owned when it started. Nor would we have a Rex airline today if it wasn’t possible to have substantial foreign ownership. So we’re not going to retrospectively change the law to make it impossible for new airlines to begin in this country with foreign capital.”

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Then on Friday morning, Prime Minister Abbott spoke about Qantas on Melbourne radio station 3AW.

“The point I make is that if we subsidise Qantas, why not subsidise everyone? If we subsidise everyone, that’s just a bottomless pit into which we will descend. If we offer a guarantee to Qantas why not offer a guarantee to everyone and again that’s a bottomless pit into which we will descend,” he said.

“In the end businesses have to operate profitably, and in the end they have to operate profitably because of their own decisions and from their own resources. They can’t expect government to do anything other than create the best possible market conditions for them to operate.”

 

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3 Comments

  • Lorenzo

    says:

    I agree, the Government should not help Qantas. Ever since they went public its only been a matter of time before this would happen. Their international business is terrible, their domestic business is uncompetitive. The only thing holding them up is the Jetstar gold mine. Time for new management and new foreign investors so that they can start to make some profits. Cutting staff is only the beginning, they need new more fuel efficient planes to cut fuel costs in the long run, they need to cut down on the unprofitable routes they currently service and possibly code share more routes, they need to cut management salaries and change the pay structures of all employees as Qantas staff’s salaries are a lot higher than any of the low cost carriers. Just my thoughts.

  • Rumsey

    says:

    Get a management team which can run Qantas profitably and get rid of Jetstar and its Asian offshoots, all subsidised from Qantas. Stop pretending Qantas international is unprofitable just because you would prefer to run a “virtual” international airline. Stop gifting Qantas to foreigners such a Emirates and stop howling about foreign ownership when the current level of same is nowhere near the 49% already permitted. And stop asking for public subsidies. TIme for the leprechaun to find his own pot of gold and stop asking to dip into everyone else’s.

  • Raymond

    says:

    Putting the emotional part of the equation aside (which is unfortunately necessary), well said, Abbott and Truss.

    You’re right, it just hurts, that’s all. I think Joyce really needs to go before the situation will improve.

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