QANTAS partner Emirates has declared it has no interest in rescuing the Australian airline with an equity injection, even if the legislation barring foreign ownership were changed
The fate of Qantas is expected to be debated at a cabinet meeting tomorrow, with the government considering whether short-term palliatives, such as debt guarantees, are warranted.
Tony Abbott yesterday warned Qantas that it needed to take responsibility for its own fate and not look to the government for salvation.
The Prime Minister said the government was prepared to consider any formal proposals presented by the troubled airline, but said Qantas had to take the leadership.
"No government is going to fight harder for Qantas than Qantas will fight for itself. The important thing is that Qantas put its house in order. In the end, it won't survive because the government has brought about a survival plan."
While Mr Abbott suggested Qantas was yet to lodge a formal proposal, a Qantas spokesman said yesterday the company had been engaged in productive discussions with the government.
"We're not in a position to comment on those discussions other than to say we're certainly not looking for a handout from taxpayers," he said.
"We have previously called for a review of the legislative framework that is distorting the Australian aviation market. Access to foreign capital has become a major factor in this market and Qantas is denied the same access as its competitors. But ultimately, the Qantas Sale Act is a matter for parliament," he said.
He added that Qantas was pleased the government had acknowledged that it was not competing on an equal footing with Virgin Airlines, which has unfettered access to foreign capital.
While the government has indicated a readiness to consider changing the Qantas Sale Act, which restricts foreign shareholding in the airline, it would take time to get any such change through parliament in the teeth of opposition from both Labor and the Greens.
Labor infrastructure spokesman Anthony Albanese has said he would wait to see what the government proposed before commenting, but he would not accept the airline being foreign controlled.
Remarks yesterday by the Qantas's partner Emirates airlines, with which it jointly operates key routes through Europe, cast doubt on how readily Qantas would find additional capital, even if the legislative barriers were removed.
Emirates has been touted as a likely partner for Qantas, given the airlines' alliance.
But president Tim Clark told website AirlineRatings.com that Emirates would watch the situation carefully but it didn't have the "bottomless pit of cash" possessed by Virgin Australia partner Etihad Airways.
"So no, equity is not on the table," Mr Clark said.
As a short-term measure, the government may consider some form of guarantee of Qantas debts, although Treasury is known to be opposed to such devices.
As former transport minister, Mr Albanese had given Qantas a "letter of comfort" stating that the government stood behind Qantas, enabling it to raise funds.
Mr Abbott said the government was prepared to listen to any proposals that Qantas put to it, but he flagged that any government commitments would have to be consistent with the Coalition's values.
"We want to work constructively with Qantas to ensure that it has a bright future. We'll do so in keeping with our values and our commitments.
"In the end, we are a government which wants to see private businesses succeed and flourish. But it is not governments which build the prosperity of the nation, it is the individuals and businesses that build the prosperity of nations.
"Our fundamental objective is to liberate the individual and businesses of this country to be their best and most productive selves."
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