The Australian government said yesterday it wanted to put Qantas on a “level playing field” with its rival airlines but indicated it would not remove a cap on foreign ownership.
Australian Transport Minister Anthony Albanese said the government wanted to maintain the legal requirement that the country’s international airlines, including Qantas, were at least 51 percent Australian owned.
But he said that it may be timely to consider whether additional ownership restrictions imposed on Qantas were appropriate.
Under the Qantas Sale Act individual foreign airlines can hold a maximum stake of 25 percent in the company and aggregate foreign airline interests must not exceed 35 percent.
“By removing that, but maintaining the 51 percent Australian ownership of Qantas, I think you would achieve an outcome that is balanced,” Albanese told the National Press Club in Canberra.
The foreign ownership limit could potentially frustrate any attempt by Qantas to merge with a rival carrier, a move former Qantas chief executive Geoff Dixon last week said was desirable given the challenges facing the industry.
Albanese said while the government wanted to move towards greater liberalization of the sector, Australia’s interests were paramount.
“It is not in the national interest for that cap to go,” he said.
“That doesn’t mean that there can’t be consolidation or alliances. It is a constraint on the form of them but I think that we have got the balance right.” Albanese said.
He said because of Australia’s location as a distant island continent, the aviation industry was important not only for economic but security reasons.
“At each step we need to make sure that the Australian national interest is also looked after,” he said. “Because we, unlike the mid-hemisphere airlines, aren’t on the way to anywhere.”
Qantas said while it was unlikely the 49 percent limit on foreign investment in Australian international airlines would change, the government’s preparedness to look at other ownership restrictions was welcome.
“This is a step in the right direction which will set us on an equal footing with other Australian international carriers,” Alan Joyce said in a statement.