Australia to ease foreign-ownership curbs on Qantas Airways

At present, foreign carriers have been restricted from holding more than 35% of Qantas Airways. Also, individual shareholdings by foreigners should not go beyond 25%.

The Australian government’s decision follows the release of a National Aviation Policy White Paper, which urged that some of the caps pertaining to ownership by foreign airlines and foreign individuals be removed. These restrictions are a part of the Qantas Sale Act of 1992.

However, the National Aviation Policy White Paper called for maintaining the rules that stipulates a 49% ceiling of the total foreign investment in Qantas Airways as well as other Australia-based international carriers.

At the same time, the paper suggested allowing Australia-based international airlines, except the national airline Qantas Airways, to seek a “foreign suitor” – but only subject to government approval.

According to the White Paper, while there has been an increasing tendency towards consolidation or equity tie-ups among international carriers, Australia’s rules regarding national ownership and controls have limited the scope for cross-border alliances.

The National Aviation Policy White Paper stressed that the lifting of the 35% ceiling on foreign airlines and the 25% ceiling on foreign individuals will not adversely affect the operations of Australia’s national airline. Nor will the new policy on foreign holdings prompt Qantas to change its percentage vis-à-vis non-Australian employees or non-Australian operations.

Welcoming the move to lift some of the restrictions on foreign ownership, Alan Joyce, chief executive of Qantas Airways, said in a statement that the reforms will help the carrier continue to pass on benefits not only to its customers and employees but also to the tourism, commerce and business in Australia.

Qantas Airways and other airlines, he added, do need a certain amount of freedom regarding policies and financial matters in order to carry out their long-term plans for growth.

According to Alan Joyce, Qantas Airways has “ambitious targets” in terms of expansion of fleet and products as well as development of infrastructure. To achieve these objectives, access to capital is crucial.

Joyce also stresses that the management of Qantas Airways always will remain “Australian.”

It may be noted that, in recent years, many foreign airlines had sought to take over Qantas Airways.

According to some aviation analysts, Australia’s easing of curbs on the ceiling for foreign holding could possibly be “too late” for aspiring suitors. The analysts are of the opinion that Qantas is more likely to seek commercial partnerships rather than equity alliances in order to obtain the savings and other benefits that it badly needs.

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Australia’s federal government has decided to relax some of the foreign-ownership curbs clamped on Qantas Airways, the national airline of Australia.

At present, foreign carriers have been restricted from holding more than 35% of Qantas Airways. Also, individual shareholdings by foreigners should not go beyond 25%.

The Australian government’s decision follows the release of a National Aviation Policy White Paper, which urged that some of the caps pertaining to ownership by foreign airlines and foreign individuals be removed. These restrictions are a part of the Qantas Sale Act of 1992.

However, the National Aviation Policy White Paper called for maintaining the rules that stipulates a 49% ceiling of the total foreign investment in Qantas Airways as well as other Australia-based international carriers.

At the same time, the paper suggested allowing Australia-based international airlines, except the national airline Qantas Airways, to seek a “foreign suitor” – but only subject to government approval.

According to the White Paper, while there has been an increasing tendency towards consolidation or equity tie-ups among international carriers, Australia’s rules regarding national ownership and controls have limited the scope for cross-border alliances.

The National Aviation Policy White Paper stressed that the lifting of the 35% ceiling on foreign airlines and the 25% ceiling on foreign individuals will not adversely affect the operations of Australia’s national airline. Nor will the new policy on foreign holdings prompt Qantas to change its percentage vis-à-vis non-Australian employees or non-Australian operations.

Welcoming the move to lift some of the restrictions on foreign ownership, Alan Joyce, chief executive of Qantas Airways, said in a statement that the reforms will help the carrier continue to pass on benefits not only to its customers and employees but also to the tourism, commerce and business in Australia.

Qantas Airways and other airlines, he added, do need a certain amount of freedom regarding policies and financial matters in order to carry out their long-term plans for growth.

According to Alan Joyce, Qantas Airways has “ambitious targets” in terms of expansion of fleet and products as well as development of infrastructure. To achieve these objectives, access to capital is crucial.

Joyce also stresses that the management of Qantas Airways always will remain “Australian.”

It may be noted that, in recent years, many foreign airlines had sought to take over Qantas Airways.

According to some aviation analysts, Australia’s easing of curbs on the ceiling for foreign holding could possibly be “too late” for aspiring suitors. The analysts are of the opinion that Qantas is more likely to seek commercial partnerships rather than equity alliances in order to obtain the savings and other benefits that it badly needs.