Qantas says jobs at risk because of foreign cap
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Qantas says jobs at risk because of foreign cap
Wed "Australian Financial Review" 28/8/02
Qantas says jobs at risk because of foreign cap
Aug 28
Stewart Oldfield
Qantas Airways has renewed its attack on the government's decision not to lift its foreign shareholder limit, saying it could cost future jobs.
Qantas chairman Margaret Jackson said the carrier had to accept the federal government's decision, but the higher cost of capital it implied undermined the purchase of new aircraft, which fed job growth.
"It means that we may not grow as quickly as we would have because we have got to get over that cost of capital," she said after a Melbourne Press Club lunch yesterday.
Earlier this month, the Federal Government rejected Qantas's bid to lift the 49 per cent foreign ownership and other limits on airline ownership under the Qantas Sale Act.
Some analysts have queried the company's claim that it would result in a higher cost of capital for the airline, saying it implied imperfections in capital markets.
"I don't buy that story," John Stuckey, a senior partner with McKinsey & Company, said recently.
Ms Jackson said discussions on Qantas forming an equity alliance with Air New Zealand were at an early stage and were likely to take months not weeks.
Sources said the company was confident of a positive outcome within the next six months.
Analysts have also suggested that Singapore Airlines could be encouraged to take a stake in the airline as it looks to diversify its shareholder base away from cornerstone investor British Airways.
Qantas is negotiating with unions on a new wages agreement, and Ms Jackson said a wage increase of less than 5 per cent was reasonable.
Qantas is understood to have offered a 3 per cent wage increase.
Ms Jackson said the debate on corporate governance in Australia had become overheated, highlighting the difference in Australian corporate practices with the excesses in the United States.
She noted that the sizes of Australian executive option packages were a fraction of those in the US and included performance hurdles.
She defended the salaries of chief executives, saying attractive salaries were needed to attract international-standard talent.
Qantas shares yesterday closed steady at $4.35, well above their year's low of $3.67.
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Qantas says jobs at risk because of foreign cap
Aug 28
Stewart Oldfield
Qantas Airways has renewed its attack on the government's decision not to lift its foreign shareholder limit, saying it could cost future jobs.
Qantas chairman Margaret Jackson said the carrier had to accept the federal government's decision, but the higher cost of capital it implied undermined the purchase of new aircraft, which fed job growth.
"It means that we may not grow as quickly as we would have because we have got to get over that cost of capital," she said after a Melbourne Press Club lunch yesterday.
Earlier this month, the Federal Government rejected Qantas's bid to lift the 49 per cent foreign ownership and other limits on airline ownership under the Qantas Sale Act.
Some analysts have queried the company's claim that it would result in a higher cost of capital for the airline, saying it implied imperfections in capital markets.
"I don't buy that story," John Stuckey, a senior partner with McKinsey & Company, said recently.
Ms Jackson said discussions on Qantas forming an equity alliance with Air New Zealand were at an early stage and were likely to take months not weeks.
Sources said the company was confident of a positive outcome within the next six months.
Analysts have also suggested that Singapore Airlines could be encouraged to take a stake in the airline as it looks to diversify its shareholder base away from cornerstone investor British Airways.
Qantas is negotiating with unions on a new wages agreement, and Ms Jackson said a wage increase of less than 5 per cent was reasonable.
Qantas is understood to have offered a 3 per cent wage increase.
Ms Jackson said the debate on corporate governance in Australia had become overheated, highlighting the difference in Australian corporate practices with the excesses in the United States.
She noted that the sizes of Australian executive option packages were a fraction of those in the US and included performance hurdles.
She defended the salaries of chief executives, saying attractive salaries were needed to attract international-standard talent.
Qantas shares yesterday closed steady at $4.35, well above their year's low of $3.67.
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