Australian Prime Minister Tony Abbott is willing to lift foreign-ownership limits to help Qantas Airways fend off competition from low-cost rivals that can tap their foreign principals for cheap capital.
Abbott, who has ruled out a partial re-nationalisation of the troubled flag carrier, told the Australian Financial Review on Saturday that it was not an “unreasonable” request by Qantas to raise the limit above the current 49 per cent.
“Where we can be helpful we’ll certainly try to be helpful but as I understand it, what Qantas wants is to be unshackled,” he told the paper. “They want to be able to compete with Virgin on a level playing field.”
Last week, Qantas shares reached their lowest level since the 1992 privatisation on a warning to the market the company was headed for a 300 million Australian dollar ($ 270 million) half-year loss.
Chief executive Alan Joyce said chief rival Virgin Australia had just had a cash injection of 350 million Australian dollars from shareholders Air New Zealand, Singapore Airlines and Abu Dhabi-based Etihad.
Joyce said Virgin Australia was benefiting from "uncommercial behaviour" that was not open to his airline because of the 1992 Qantas Sale Act limiting foreign ownership.
"We’re putting all options on the table in a review of our structure," Joyce told analysts in a briefing.
Qantas has announced it will shed 1,000 jobs over the next 12 months.