Prime Minister Tony Abbott says Qantas needs help in its fight against domestic competitor Virgin, amid increasing signals that the government is prepared to offer support to the airline.
“Qantas have been shackled by legislative restrictions that were put in place by the Labor Party back in the 1990s,” Mr Abbott says.
The legal restraints stop larger foreign investment in the national airline.
“Let’s have a level playing field for Qantas,” Mr Abbott told Radio 3AW in Melbourne.
“Let’s not have Qantas competing with Virgin and others with one hand tied behind its back.”
The prime minister says there’s no free ride on the taxpayer for private companies, however. The government has found itself caught in a rolling series of skirmishes over taxpayer support to save struggling companies. With unemployment rising, the opposition is accusing the Coalition of presiding over a period of escalating job losses, amid decisions by Holden and Toyota to stop making cars in Australia, and a stand-off with SPC Ardmona which was refused federal funding but saved with help from the Victorian government.
Qantas is seeking government-backed debt guarantees as the airline heads to a half-year loss of $300 million.
Yesterday, Treasurer Joe Hockey threw Qantas a lifeline saying Australian airline now faced a “2000 pound gorilla” in the form of Virgin, which is largely foreign-owned.
Hockey says Qantas is an essential national service with legislation restricting foreign ownership to 49 per cent.
And the airline was competing with other carriers essentially back by other countries.