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Qantas warns Canberra it could “go under”

written by WOFA | June 22, 2012

Qantas has warned that it may "go under" if a Etihad Airways took over Virgin Australia and launched an attack on the domestic market.

Qantas has warned the federal government and opposition that it could “go under” if Etihad Airways was given the green light to take over Virgin Australia’s domestic operations.

According to a report by Fairfax media, CEO Alan Joyce and a small delegation have been in Canberra this week lobbying politicans to  place controls on how much Etihad can buy of Virgin, or to modify the Qantas Sale Act to allow it to access more foreign investment and possibly to split ownership of the Qantas Domesitc and Qantas International operations.

The reports also cites a briefing paper in which Qantas predicts that an Etihad influenced Virgin could flood the market with capacity and attack the most profitable domestic routes, forcing competitors to reduce their own operations.

The comments come a week after similar comments by the Australian Workers Union secretary Paul Howes, who warned of an “aviation crisis” if Etihad were to take over Virgin Australia after the Abu Dhabi carrier announced that it had taken a 4.99 per cent stake in its Australian partner.

Under the Qantas Sale Act, foreign investors may only own up to 49 per cent of Qantas, with no foreign investor able to hold more than a 25 per cent stake. By contrast, Virgin Australia does not have any limits to foreign ownership of its domestic operations.


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