Qantas has issued a strident call for “action” after the federal government announced on Monday night it would not offer the airline a debt guarantee, and instead would move to make changes to the Qantas Sale Act.
“We have consistently said that removal of foreign ownership provisions that apply uniquely to Qantas is an important longer term objective to create a fair and free aviation market in Australia. However, it is clear that such a move would have limited chance of passing through the Senate,” Qantas said in a statement released on Monday night.
“We need immediate action to address the imbalance that has been allowed to persist for almost two years – namely Virgin’s unlimited ability to access foreign capital from government-owned airlines to fund a loss-making strategy against Qantas.”
Continues the statement: “If this proposal to change the Qantas Sale Act is not passed, we would expect the Government and the Parliament to consider alternative measures to balance the unlevel playing field in Australian aviation.”
The statement does not specify what those “alternative measures” would look like, but the Australian Financial Review reported on Wednesday that Qantas had asked for a guarantee for all its debt, or a $3 billion unsecured loan facility.
According to the Financial Review the government rejected that request, and instead decided to push ahead with changes to the Qantas Sale Act, after receiving advice from Treasury, the Department of Infrastructure and accounting company PwC.
“You would never in a fit lend anyone $3 billion on an unsecured basis without doing due diligence on that person,” Prime Minister Tony Abbott later told radio station 2GB on Wednesday.
“The conclusion that we came to based on their advice was that Qantas does not need an unsecured facility from the government.”
Any action government action over Qantas remains gridlocked with the Labor Opposition, the Greens and the Palmer United Party saying they would block changes to the Qantas Sale Act in the Senate. Instead, according to reports, Labor, the Greens and independent Senator Nick Xenophon are in discussions over a possible Senate inquiry into Qantas.
CORRECTION – The Qantas statement was issued Monday night, and not Wednesday as an earlier version of this story reported. Apologies.
