Government Support For Qantas Is Still On The Cards

File photo: Getty / Don Arnold

The AFR reports this morning that Treasurer Joe Hockey has said that support for Qantas might still be on the table because there is a difference between companies seeking corporate welfare and those operating in markets that don’t operate on a level playing field or free-market environment.

The difference between Holden, SPC-Ardmona and Qantas – according to the Treasurer – is that Qantas itself is constrained by Government policy under the Qantas Sale Act and as such, is due special consideration by the community which must pay the price.

There is a legitimate argument that in the case of Qantas there is specific ­legislation that restricts the entity, as there is legislation that restricts Telstra and others and there is a price to be paid by the community for the right to restrict the free operation of that ­business.

Also weighing on Hockey is the fact that Qantas is squaring off in the domestic market with Virgin Australia, a rival backed by three state-backed airlines in Air New Zealand, Singapore Airlines and Etihad. Hockey said that this made it “a distorted market”.

The AFR says that Qantas wants both a Government guarantee and the repeal of the Qantas sale act, but given the above comments from the Treasurer, it might be difficult to get both.

An announcement by the Government is expected after Qantas half-year results on February 27.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.