The Government Is Discussing A Plan To Buy 10% Of Qantas: Report

Alan JoyceGetty / Greg Wood

The government has been discussing a plan to buy back up to 10% of Qantas, according to a report.

Other options to save the airline include lifting the Qantas Sales Act, or guaranteeing its loans.

But Alan Joyce said yesterday that changing foreign ownership rules would not help the airline in time.

And according to the Australian Financial Review there is little political support for taking on its loans.

The AFR’s report says senior government sources have confirmed Treasurer Joe Hockey has discussed a plan to buy between 5% and 10% of the airline with Labor, for around $260 million.

This plan has not been agreed on, though, according to the AFR, it is the most likely outcome.

This would send a message to the market that as the national carrier, Qantas was not just another company, protecting its credit rating.

Qantas has $2.8 billion in cash on-hand but a downgrade would see it reach junk status, increasing its interest rates.

It is already at the lowest possible investment grade rating, and if it was downgraded, credit card companies could also restrict some of its funds, according to the report.

There’s more here.

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