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Australia lower house hurdle unlikely to aid ailing Qantas

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(GlobalPost/GlobalPost)

A bill to repeal foreign ownership restrictions on Australian carrier Qantas passed the lower house of parliament Thursday, but it faces defeat in the Senate with the Labor opposition fearing jobs will go offshore.

Qantas has been lobbying for government help after a Aus$235 million (US$210 million) loss in the six months to December 31 and a decision to slash 5,000 jobs, but its plea for a debt guarantee or Aus$3 billion unsecured loan have been turned down.

The conservative government of Tony Abbott instead favours watering down the Qantas Sale Act to help the carrier raise much-needed capital and put it on a more even footing with domestic competitors.

Qantas complains that it is battling not only high fuel prices but fierce competition from subsidised rivals such as Virgin Australia, which is majority-owned by state-run Singapore Airlines, Etihad and Air New Zealand.

The act currently caps total foreign ownership at 49 percent and limits a single investor to a 25 percent holding. Foreign airlines are limited to a combined total holding of 35 percent.

But the Labor opposition and the Greens, which currently hold the balance of power in the upper house, have vowed to block the changes, leaving Qantas at a stalemate.

"It's taken 94 years to build Qantas, it's taken the Abbott government 94 minutes to tear Qantas down. Shame," Labor leader Bill Shorten told parliament after the vote, as the Senate initiated two separate inquiries to examine Qantas's financial position and operations.

Labor believes Qantas must remain a majority Australian-owned airline to protect Australian jobs.

"These people opposite are the cheese eating surrender monkeys of Australian jobs," Shorten added.

In a drastic restructuring, the airline last month announced the job cuts and deferral of new aircraft delivery as part of a plan to save Aus$2 billion over the next three years.

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http://www.globalpost.com/dispatch/news/afp/140306/australia-lower-house-hurdle-unlikely-aid-ailing-qantas