Qantas must remain Australian-owned for reasons of national security, even if a potential merger with British Airways goes ahead, Australian Transport Minister Anthony Albanese said yesterday.
The two airlines announced last week they were in talks to create a global carrier worth an estimated A$8 billion (US$5.2 billion) to help cope with the global financial crisis.
Albanese acknowledged that consolidation was inevitable for the industry, which has been buffeted by previously high oil prices and now declining passenger numbers.
But he said that needed to be “balanced” with the national interest.
“There are national security issues, particularly for an island continent located on the globe where Australia is, for having a national airline,” he told the Australian Broadcasting Corp (ABC).
Under Australian law, the carrier popularly known here as the “Flying Kangaroo” must remain at least 51 percent Australian-owned, with its headquarters in the country.
Albanese said the recent political protests in Thailand, which shut down Bangkok’s main airport for a week, illustrated the importance of having Qantas remain majority Australian owned.
“When Australians were having difficulty departing from Thailand I was able to pick up the phone to the chief executive of Qantas, Alan Joyce, and make the request that extra flights be put on,” he told ABC television.
The minister also said that given international air service agreements, which are negotiated between countries rather than airlines, it was necessary for Qantas to remain in Australian hands.
“For example, only a 51 percent Australian-based airline is eligible to fly from Australia to Japan,” he said.
Albanese said while the foreign ownership rule will stay, the government was open to changing other restrictions which limit individual foreign holdings to 25 percent and aggregate foreign airline interests to a 35 percent stake.
He said this would help Qantas stay on a “level playing field” with its competitors amid unfavorable market conditions.
Qantas and British Airways have said they are exploring a potential merger “via a dual-listed company structure” and Albanese said that he was confident any deal would not breach the Australian regulations contained in the Qantas Sale Act.
“The aviation industry is going through turbulent times. We have seen more than 30 airlines disappear this year alone,” he said.
“In terms of growing alliances and consolidation, we will see what the future brings, but Qantas certainly have put no proposals to the government which would lift the provisions [of the Qantas Sale Act].”