Transport Airlines

Qantas Cites Un-Level Aviation Playing Field While Asking for Government Help

Feb 12, 2014 1:00 pm

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Qantas may not be operated as well as it could be, but it is correct in that not all players are playing by the same rules.

— Jason Clampet

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David Gray  / Reuters

A Qantas Airways Boeing 737-800 plane (top) and a Dash 8 aircraft move down the runway at Sydney Airport in this picture taken April 29, 2013. David Gray / Reuters


Qantas CEO Alan Joyce had a clear message for Coalition MPs at a private address on Wednesday night: “Qantas is not Holden.”

Betraying clear concerns by the national carrier that its plea for government assistance will be seen as inconsistent with the government’s new “line in the sand” on industry handouts, Joyce was at pains to make the distinction in a speech to the Coalition’s “friends of tourism” group on Wednesday night.

“We are pleased that all sides of politics have recognised the uneven playing field in Australian aviation – led by the treasurer, Joe Hockey. And we were especially pleased last week to see the treasurer make the distinction between Qantas and companies like Holden and SPC,” Joyce said. “Quite obviously, Qantas is not Holden.”

Joyce was referring to recent statements by Hockey that Qantas could still qualify for some kind of government assistance, despite the government’s new hardline stance, for two reasons – it was constrained from operating freely by government-imposed law (the Qantas Sales Act) and it was not operating on a level playing field because its major competitor, Virgin, was backed by three state-owned airlines, Air New Zealand, Singapore Airlines and Etihad.

The government is considering offering Qantas a “standby” or emergency debt guarantee after two ratings agencies downgraded its credit rating to “junk” status. The move would not require legislation.

The company, and some Coalition backbenchers, have been lobbying for changes to the Qantas Sales Act to remove the requirement for majority Australian ownership and allow foreign investors to hold more than 49%.

But the Labor party and the Greens have ruled out support for the amendment in the Senate, meaning it could not pass parliament before the new Senate sits in July.

In his speech, Joyce acknowledged that neither a direct cash injection nor legislative change was possible.

“We have never asked for a handout. And we are not asking for one now … The Qantas Sale Act limits our financial options, it adds cost to our business and it influences our actions as a publicly listed company. Over the long term, repealing it is essential to remove the distortions in our aviation system. However, we recognise there is little political and community appetite for changing the act in the short term.”

And he played up the contribution of the carrier to Australian life and specifically to the electorates of some of those in his audience.

“Qantas is a resource for Australians in times of crisis. A partner for charities and good causes. And a bridge between regional Australia, our major cities and global markets. With more than 30,000 employees, Qantas supports jobs and generates economic activity across the country,” he said.

“Let me give you a few examples. [Nationals MP] Bruce Scott’s electorate is home to the Qantas Founders Museum in Longreach. The museum is a tourism attraction that gets 40,000 visitors and earns $9m for the local economy every year. [Assistant minister] Sussan Ley’s electorate provides much of the Merino wool for the new Qantas uniforms. [Agriculture minister] Barnaby Joyce’s electorate is home to the QantasLink heavy maintenance facility in Tamworth.”

Qantas releases its half-year results on 27 February.

This article originally appeared on guardian.co.uk

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