Limitations on ownership of Qantas shares will be dramatically lifted to allow foreign investors to own up to 49% of the airline, according to a report in The Age.
James Massola reports the Coalition party room signed off on the deal today, which lifts the cap on foreign airline holdings from 35% and that on ownership by a foreign individual from the current limit of 25%.
A Qantas spokesman said this morning: “It’s positive that there’s general agreement that Qantas is disadvantaged by the sale act and that change is needed. While removing all restrictions that apply only to Qantas remains our preference for levelling the playing field, changing the 25 and 35 percent limits would represent an improvement on the status quo.”
So, an improvement, but not what the airline thinks is needed.
However, this does pave the way for significant increases in foreign investment in the airline, while stopping short of allowing control of the company by foreign interests.
The Age report says the deal was proposed by Labor’s transport spokesman, Anthony Albanese, and agreed to by the Coalition. Labor had been opposed to a complete removal of foreign ownership limits, fearing it would send more jobs offshore.
In March this year Prime Minister Tony Abbott said the government would look at a complete repeal of Part 3 of the Qantas Sale Act, which imposes the restrictions on foreign ownership, after rejecting the idea of a form of debt guarantee for the company.
Qantas shares have been steadily rising from lows of just over $1 each in February, when it announced a $235 million loss and a plan to slash 5,000 jobs, to highs of just over $1.40 last month. Yesterday the shares closed down 1c at $1.27.
There’s more at The Age.
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