From The Australian:
The fate of Qantas is expected to be debated at a cabinet meeting tomorrow, with the government considering whether short-term palliatives, such as debt guarantees, are warranted.
Tony Abbott yesterday warned Qantas that it needed to take responsibility for its own fate and not look to the government for salvation.
…While the government has indicated a readiness to consider changing the Qantas Sale Act, which restricts foreign shareholding in the airline, it would take time to get any such change through parliament in the teeth of opposition from both Labor and the Greens.
Remarks yesterday by the Qantas’s partner Emirates airlines, with which it jointly operates key routes through Europe, cast doubt on how readily Qantas would find additional capital, even if the legislative barriers were removed.
Err, no, they cast doubt on whether Emirates would buy in. Or, they are driving hard bargain. Lift the foreign ownership restrictions, scrap protections and let’s see.
Tony may be talking tough but behind closed doors the boys club appears to be in control. From BS:
The Australian Financial Review has reported that a government guarantee is under serious consideration, which would involve a fee of around 1.5 per cent for the provision of a standby debt facility.
…But independent Senator Nick Xenophon said it was not the Qantas legislation which needed to be changed but the management and board.
Senator Xenophon challenged Mr Joyce to show one dollar of profit since setting up Jetstar Asia and other offshoots.
“If the CEO Alan Joyce and the chairman Lee Clifford go, that will transform the airline because they have presided over monumental strategic mistakes including the failed Jetstar experiment in Asia where they have burned hundreds of millions,” he told AAP.
“The airline is now vulnerable to a private equity takeover because the share price is so low. The private equity buccaneers are now circling the airline.”
Senator Nick is right. Charging a paltry fee for a bailout is a red rag to the rentier bull. If you want a guarantee then give the tax-payer equity, board seats and sack the chairman and CEO.
A management buyout is also under consideration, apparently.
