Australia's Trade Minister Will Ask The Emirates Chairman How He Feels About Making A Direct Investment In Qantas

UAE Foreign Minister Abdullah bin Zayed al-Nahyan (R) and Sheikh Ahmed Bin Saeed al-Maktoum, chairman of the Dubai Economic Sector Committee attend the presentation of the candidacies for the 2020 World Expo, at the OECD headquarters on November 27, 2013 in Paris, France. (Photo by Antoine Antoniol/Getty Images)

Emirates chairman Sheikh Ahmed Bin Saeed al-Maktoum will be asked to consider a direct investment in Qantas by Australian Trade Minister Andrew Robb, according to an Al Arabiya News report.

Qantas and Emirates signed a partnership deal last year, though the gulf airline has previously said it was not interested in taking an equity stake in Australia’s national carrier.

Robb told Al Arabiya News: “I’m sure he’ll raise it if I don’t. But I will explicitly mention it.”

A Qantas spokesperson told Business Insider the two airlines never planned on an equity investment when their partnership deal was struck in March 2013.

“Both Qantas and Emirates have been clear that our partnership doesn’t extend to equity,” the spokesperson said.

“Generally speaking, removing restrictions imposed by the Qantas Sale Act would level the playing field and allow Qantas to access foreign investment on the same terms as our domestic competitors.

“We welcome the government’s efforts to remove the legislative barriers that reduce our ability to attract investment,” said the spokesperson.

The trade minister had earlier told reporters at an event in Dubai that changes to the Sale Act, which restricts foreign ownership in Qantas, were the only long-term solution to the airline’s problems.

Qantas recently announced a $252 million first-half loss. The company has initiated a strategic review, which includes shedding 5000 jobs, after facing intense competition in the domestic market from Virgin Australia.

The government has moved allow increased foreign ownership with new legislation, though the changes have yet to pass the Upper House, and are not supported by The Opposition.

“We have said that we want to open up the opportunities for foreign investors… I think Qantas would very much welcome other foreign investors, and that would give them a much more level playing field with Virgin Australia,” Robb said.

“In time, it’s the only solution to make sure that the Qantas brand and its viability remains very strong.

“I am meeting with the head of Emirates. And I will give him the same answer, that the new government [wants] to see viable airlines… In the case of Qantas I think it requires a change in the ownership act and the potential for other entries into the ownership. We want to create the right environment that allows that to happen.”

Qantas had petitioned the government for assistance, after Virgin announced a $350 million capital raising, with the bulk of the cash kicked in by its overseas shareholders. Virgin Australia is majority owned by three foreign carriers, Air New Zealand, Singapore Airlines and Etihad Airways.

More than half of the Australian domestic market is controlled by Qantas, and the airline relies on this dominance to maintain its international arm. Qantas believes it is unfair Virgin can raise cash through overseas airlines which compete with it in the international market.

There was speculation in the past that the Australian government would provide some direct assistance, in the form of a public investment or a debt guarantee, after Qantas CEO Alan Joyce wrote to Prime Minister Tony Abbott, as well as other senior government ministers, asking for help.

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