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Govt approves Qantas Sale Act changes, but unlikely to pass Senate

written by australianaviation.com.au | March 4, 2014

Prime Minister Tony Abbott has indicted the government will approve changes to the Qantas Sale Act which would encourage greater levels of foreign investment.

Govt plans to repeal the QSA are likely to be blocked by Labor and the Greens in the Senate. (Rob Finlayson)
Govt plans to repeal the QSA are likely to be blocked by Labor and the Greens in the Senate. (Rob Finlayson)

Speaking to media on March 3, Mr Abbott said he would introduce legislation so that the QSA which restricts the levels of foreign ownership and other terms of the airline’s trade can be repealed. He added that the government was not looking to provide a debt guarantee or a line of credit to Qantas, seemingly contradicting earlier comments by Treasurer Joe Hockey.

“We will seek to repeal part three of the Qantas Sale Act in its entirety and I will be writing to Qantas as soon as this press conference is over in those terms,” Mr Abbott said. “The best way to maximise Australian jobs is to maximise Qantas’s ability to compete.”

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“Removing the shackles on Qantas and allowing it to compete on a level playing field is the best guarantee for the workers [and] it is the best guarantee for the sustainability of Qantas as both a domestic and an international airline,” added Mr Hockey.

But the government’s changes are unlikely to proceed, with Opposition Leader Bill Shorten saying Labor will block the legislation in the Senate, a sentiment that was echoed by the Greens. “Tonight, Tony Abbott has created a new export industry: Australian jobs,” Mr Shorten claimed. “Tonight, Tony Abbott has decided to sell the flying kangaroo overseas.”

Greens deputy leader, Adam Bandt added, “The Greens do not support changing the Qantas Sale Act so that the jobs in our national carrier go offshore. That’s the only plan that this Government has at the moment, is to flog everything off to the highest bidder.”

In a late evening statement, Qantas seemed accepting that the repeal of the QSA had little chance of passing the Senate, and again appealed for “immediate action” in its efforts to Match rival Virgin Australia’s “unlimited ability to access foreign capital from government-owned airlines to fund a loss-making strategy against Qantas,” adding that “If this proposal by the government to change the Qantas Sale Act is not passed, we would expect the Government and the Parliament to consider alternative measures to balance the un-level playing field in Australian aviation.”

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In perhaps the biggest indication that Qantas hasn’t got everything it wanted, Virgin itself welcomed the government’s proposal, saying it “has no issue with the amendment or repeal of the Qantas Sale Act.”

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12 Comments

  • Rumsey

    says:

    It is Joyce and the board who are responsible for fixing Qantas

  • Patma

    says:

    I concur Rumsey, in a manner of speaking.
    The CEO and board are the ones that need to take responsibility for where QANTAS stands. I hope beyond hope that it’s not left to Joyce and Clifford to fix it though. The sooner they are given the shove, the sooner someone with ability and vision can step in, fill the void and get the Flying Kangaroo back on it’s feet. What’s Rob Fyfe up to these days? We’ve let an Irishman drive QANTAS into the ground, surely we can swallow our pride and let a kiwi help fix things? There aren’t many of Fyfe’s ilk around, but I’m a big fan and honestly believe his outlook and style may well approach panacea level.
    But while we wait for a saviour, how can any Australian honestly believe that opening up QANTAS to higher foreign ownership be the answer? Putting sentimentality aside, and I believe there is a place for that. What about the possibility of so many support elements being farmed out offshore? Especially the engineering arm.
    There has to be strategic weight to maintaining, not only, a flag carrier, but also the support elements that make it up. And if that weight exists, then the government needs to shoulder some of the load. Unions aside, Australian wages / costs make cost comparative maintenance facilities (compared to Lufthansa Technik et al) out of reach. The government, in my opinion, should maintain the QSA as is and step in to help with the defecit inherent in keeping these elements Australian. Bill Shorten nailed it when he described Abbott as a trailblazer in the new export market of Australian jobs. Why is the government so unwilling to back Australian industry?
    I wish the timing had not aligned with the auto manufacturers and SPC. I think the climate has set Abbott up against the idea from the outset. I wish the QANTAS leadership didn’t moan and whinge at the drop of a hat. I wish Dixon had been given the shove years ago. I wish Borghetti had been given the nod instead of Joyce. I wish I could do something meaningful to help QANTAS myself. I wish our government had the best interests of our nation at heart.
    I hope and pray that we are not watching the death throws of yet another Australian icon. The Flying Panda / Peregrine falcon (UAE, look it up) would be an epic tragedy.

  • Matthew

    says:

    I’ve got a great idea. What about we call the domestic operation TAA or Australian Airlines, and leave QANTAS to be the international carrier?

  • Glen

    says:

    I can’t think why anyone would want to invest in Qantas. The airline is a tail spin and no one is pressing on rudder pedal the idea of cutting back on new airliners that won’t fix the problems . British airways proved this years ago a full service airline shouldn’t try to run a cut price one like jetstar all they end up doing is competing against it self for the same passengers.

  • Rob B

    says:

    But, like in the other industries, doesn’t it come down to our unrealistic labour costs making it impossible to compete internationally? There needs to be a re-alignment sometime. Would you rather take a pay cut, or lose your job?

  • B G Price

    says:

    I have it on reasonable authority form NZ sources that Rob Fyfe is taking time off and riding his motor bike round New Zealand.
    This guy certainly put NZ back on the tracks they should get rid of Joyce and Clifford but. I can’t think of an immediate chair and I doubt if Tim Clarke or James Hogan from the Gulf would be interested

    I can’t see why they can’t speed up retirements of 744s and 763s. and lease in 777s. where’s Kingfishers 777s they are nil ops and the aircraft must be parked somewhere and I am sure there are other options for acquisition.

    Training would take time of course but I am sure they could have a 777 fleet operational by Christmas.

    but then again the comment made by Management some time ago “the B777 doesn’t fit our Business plan” still prevails

  • Brendan

    says:

    I have another idea. Why don’t the government make Virgin comply with the Air Navigation Act which limits foreign investment, instead letting the split the company through a back door deal. Everybody has forgotten that the government let Virgin bend the rules to get where it is today.

  • Transtasman

    says:

    I don’t pretend to know the whole answer but surely leased B777’s and B787’s both 8’s and 9’s would be the aircraft for the job! The B 747-400’s and B767’s should go and as soon as possible.
    Jetstar should have the A330’s and maybe in time A350’s.
    As to Alan Joyce he may have been great at low cost operations but for whatever reason he and the board seem to be failing with the full service airline which is Qantas.
    It’s not good luck but good management that’s needed!

  • Dee

    says:

    Ah, yes; ‘The B777 doesn’t fit our business plan !!’ Dixon was the instigator of that rather ignorant statement, having obviously neglected to do his homework, or listened to other misinformed Management, in regards to the B777;s ability and suitability to fit the QANTAS business plan.
    Joyce has just kept this myth alive through ignorance, as his overall plan is to push Jetstar into all of regional Asia, to the determent of QF and the Company finances.
    I won;t even bother to comment on the Dinosauric attitude of the Unions, they lost the plot years ago when Kev07 first came to power. We need someone with strength in Labor like Hawke and Keating who took it to the Unions in 1990;s and kick started Australia as a result.
    Good luck to the Red Roo.

  • Phil Baker

    says:

    It should be a condition of any relaxation of foreign ownership rules or government assistance that Joyce stands down. I like Qantas but he really needs to go

  • Darren

    says:

    No doubt wages are a factor, but this is this no the same for other airlines that fly internationally? Sure Qantas and the Unions need to be realistic. People can’t work for nothing, nor should they get paid more than their peers. Government should bang their heads together. Changing the sale act achieves little, changing management achieves much. After all foreign investment is not going to change wages unless it is outsourced or sent overseas. Given most airlines love the 777 I can’t understand the Qantas point. Finally can we get some reporting on comparable airlines facing similar challenges to benchmark Qantas? A small country at the end of the world with (presumably) similar operating costs (aka Air New Zealand) seems to have a profitable airline. Are other airlines like Qantas staring at collapse, or are they able to overcome?

  • Rodney Marinkovic

    says:

    Most likely Qantas future intercontinental fleet belong to B787, B777xx, A350xwb. Airbuses A388 maybe to leasing. Tween engines aircrafts will be much more reasonable and more natural way to flying passengers toward USA, UK, SA,… Toward 100th anniversary of year 2020. Maybe this is unortodox way. I am love to celebrating with all, this most celebrated icon of Australian commercial aviation. QANTAS must recover from present mess.
    Rodney Marinkovic AME.(ret.) Kraljevo, Serbia

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