REPORT: The Government Will Guarantee Qantas Debt

Alan JoyceA Fairfax Media report says the government will guarantee Qantas debt. (Getty Images/Sean Gallup)

Fairfax Media is reporting the Federal Government will guarantee Qantas debt, meaning taxpayers would be liable if the airline defaulted.

It also says Government is willing to relax clauses of the Qantas Sales Act that ensures most maintenance work is carried out in Australia.

From the report:

The Commonwealth debt guarantee would remain for as long as the national carrier remains restricted from being majority foreign-owned by the terms of its previous privatisation.

Fairfax Media understands the government is also willing to consider relaxing stipulations in the act which require the airline to carry out the majority of repairs and maintenance in Australia.

Qantas is expected to announce big half-year losses tomorrow morning, as well as a slew of job cuts as it struggles to compete with Virgin Australia.

Last year the company was downgraded to junk status by several credit ratings agencies, after it admitted it would need to make billions in savings to remain competitive.

There’s more here.

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