The Deputy Prime Minister Has Pushed Back Against Supporting Qantas

Alan JoyceGetty Images/Sean Gallup

Deputy Prime Minister Warren Truss has expressed his reluctance to support Qantas, after the airline said it would cut jobs and was expecting a half-year loss of up to $300 million.

According to media reports Truss, as well as the treasurer, both think Qantas should take more steps to improve its situation.

Yesterday Qantas said it would cut up to 1000 jobs within a year as part of an accelerated cost-cutting program, which will also see Joyce and the board take a pay cut.

A report in the Australian Financial Review said Truss repeatedly pointed out Qantas’ 65% domestic market share, its $2 billion cash reserves and high levels of customer loyalty after the national carrier made the announcement.

Joyce has been lobbying the government for help, which has at times seemed likely. Options touted have included a partial buy-out, securing the airline’s debt or a loan with favourable terms.

The Fin’s report says the government is also considering a direct guarantee, by recognising Qantas as a government-related entity, alongside the four major banks.

Reportedly Qantas management wants this option to go ahead.

This would help the airline as credit ratings agencies such as Moody’s place it under review. Qantas is already only one notch above junk status.

There is more here.

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