UK Sunday Times report.
Qantas flies free of Aussie control
John Collingridge
Last updated December 15 2013 12:01AM
AUSTRALIA has cleared the runway for the next big deal in the airline industry by pledging to scrap laws that prevent its national carrier Qantas from falling into foreign control.
Tony Abbott, the Australian prime minister, has backed calls for the airline to be “unshackled” from laws that limit foreign ownership to 49%.
Qantas’s credit rating was recently downgraded to junk status by ratings agency Standard & Poor’s after a shock profit warning, triggered by rising fuel costs and falling passenger numbers.
The airline warned investors to expect a half-year loss of up to A$300m (£165m) and said it is slashing 1,000 jobs.
A merger for Qantas — part of the Oneworld Alliance, which includes British Airways — would mark the latest phase of consolidation for legacy carriers as they battle the booming Gulf airlines. American Airlines and US Airways last week joined forces to create the world’s biggest carrier.
Qantas formed an alliance with Gulf carrier Emirates this year to share networks and customer lounges. Emirates and some Chinese carriers are seen as possible merger partners.
Allowing Qantas, dubbed the flying kangaroo, to team up with a foreign partner would free it to compete on a “level playing field”, Abbott said. Rival Virgin Australia is backed by carriers including Singapore Airlines and Etihad Airways.
Qantas said: “Access to foreign capital has become a big factor in this market and Qantas is denied the same access as its competitors.”