Qantas will be given freer reign to raise capital following plans by Australia’s government to ease foreign ownership rules. This would allow the airline to play a greater roll in the consolidation of the global airline industry in the downturn.
Transport Minister Anthony Albanese said the new national aviation policy would remove a 25 percent restriction on individual foreign investors in Qantas, and drop a 35 percent cap for total foreign airline holdings, but keep an overall cap of 49 percent foreign ownership.
“This will increase Qantas’ ability to compete for capital and to take opportunities to form strategic partnerships in an increasingly globalised industry,” said Transport Minister Anthony Albanese.
Qantas is one of few Australian firms subject to foreign control limits, as it is regarded as a strategic national asset.
Qantas CEO Alan Joyce welcomed the new policy.
“This change will increase Qantas’ flexibility as it meets the challenges of an uncertain global economy and business environment, opening up opportunities for strategic growth and alliances,” he said in a statement.
“It gives Qantas parity with Australian carriers governed by the Air Navigation Act when it comes to attracting capital.”
A year ago, Qantas and BA called off talks for a $6.4 billion merger over a disagreement on valuation, but ownership restrictions also presented hurdles to a successful deal.
The airline is keen to explore partners, especially in Asia. It is also looking to capitalise upon an open skies agreement with the U.S. made last year and is in negotiations with the European Union.