It looks as if some form of government intervention in the Australian aviation industry is now almost certain.
Federal Treasurer Joe Hockey has flagged the government is open to regulatory changes and even using taxpayer money to prop up Qantas as it fights an aggressive investment of foreign capital into Virgin Australia.
While changing the Qantas Sale Act would clear a path for more foreign investment in the national carrier, the airline’s chief executive Alan Joyce has told staff this morning in a company-wide email the option would take too much time and that and the threat to the airline was more imminent.
“From our point of view the urgent and immediate matters at hand will not be fixed by changes to the Qantas Sale Act,” Joyce said. “It’s unclear if the Australian public would support these changes. We don’t think it is realistically achievable in the current Parliament. And the process would be prolonged, during which time Virgin Australia would be free to continue its anti-competitive strategy aimed at crippling Qantas. We simply do not have the time.”
Virgin Australia is receiving $350 million in a 38c-a-share capital raising from its overseas partners, which allow it to continue undercutting Qantas prices in the domestic market.
Here is Joyce’s full email.
All of us at Qantas have been calling for a level playing field in Australian aviation, and a fair go for Australia’s Qantas.
Yesterday the Federal Government acknowledged that the aviation market in Australia is no longer a fair playing field. It recognised that, with the foreign-government airline ownership of Virgin Australia, and the flood of funds that come with it, the market has fundamentally changed.
I want to thank each and every one of you for standing up for Qantas on this important matter. A debate has now begun about how best to level the playing field, including whether changing or removing the Qantas Sale Act is desirable, and how important the national carrier is to Australia.
From our point of view the urgent and immediate matters at hand will not be fixed by changes to the Qantas Sale Act. It’s unclear if the Australian public would support these changes. We don’t think it is realistically achievable in the current Parliament. And the process would be prolonged, during which time Virgin Australia would be free to continue its anti-competitive strategy aimed at crippling Qantas. We simply do not have the time.
I also want to make this perfectly clear. Australia needs its national carrier. As the world’s only island continent, Australia confronts massive distances within our shores and across the globe. A strong aviation capability is a national asset, important for our national security and our global identity. Most countries recognise the importance of their national carriers and provide support for them. Qantas gets no government subsidies, no tax benefits or concessions, no preferred access to Australian airports, no preferential access to Government business.
Qantas gives Australia the benefit of a large modern fleet of aircraft and thousands of aviation professionals who stand ready to serve this country in times of need. We’ve done this many times in the past and this is the airline we want to be in the future.
Qantas is the only airline in the world that is of Australia and for Australia. This unique Australian identity is the source of Qantas’s brand strength, our pride and our national role. We will always be champions for the best of Australia.
There are a range of policy measures that the Government could consider in order to provide a more level playing field for the aviation sector in Australia. Qantas looks forward to discussions with the Government about potential steps to level the playing field and support the national carrier.
If you believe Australia needs Qantas, our national carrier, keep making your voice heard. Speak up on social media. Sign the Fairgo4Qantas petition if you haven’t already, and ask your friends and family to do the same. Use the links on the petition website to send an email to your local MP.
We’re fighting for our future.