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Australia May Ease Qantas Foreign Ownership Curbs

Posted in Airline News, QantasNo comments

Australia will not allow an outright foreign takeover of national airline Qantas (QAN.AX: Quote, Profile, Research, Stock Buzz) but would consider raising foreign ownership limits amid merger talks with British Airways (BAY.L: Quote, Profile, Research, Stock Buzz), a minister said.

Last week, Qantas, the world’s 10th largest airline by market value, said it was exploring a potential merger with British Airways plc via a dual listed company structure.

Responding to the news, Transport Minister Anthony Albanese said in a television interview current legal provisions that require Qantas to be 51-percent Australian owned would not be revised.

The 1992 Qantas Sale Act also contains other provisions, he said, which the Labor government would not revise. These include that Qantas must continue to be the international name of the airline and that it should continue to be based in Australia, as well as some citizenship requirements for senior management.

“Those provisions of the Qantas Sale Act we don’t plan to make any changes to,” Albanese told Australian Broadcasting Corporation (ABC) television.

But current limits on the level of foreign ownership, of a maximum of 25 percent for a foreign individual and a maximum of 35 percent for a foreign airline, could be raised to help improve Qantas’s position, Albanese said.

“We think that consideration should be given to putting Qantas on a level playing field with other Australian-based international carriers,” he added.

There were strong strategic reasons for an island continent, such as Australia, to retain a locally-owned national airline, he said, citing the recent need to put on extra flights to get Australian citizens out of Thailand amid mass political protests there.

Albanese said he called Qantas Chief Executive Alan Joyce to request this move.

Some bilateral air services agreements also required 51 percent control, Albanese said, citing Australia’s pact with Japan.

“For example, only a 51 percent Australian-based airline is eligible to fly from Australia to Japan,” he said.

“That’s part of that bilateral agreement. So there are implications there that are significant.”

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