Australia to push Qantas stake sale in talks with Dubai’s Emirates
Australia plans to raise the issue of foreign investment in Qantas as it looks to rescue its struggling national carrier
Australia plans to raise the issue of foreign investment in Qantas with Dubai’s Emirates Airline, as it looks to rescue its struggling national carrier amid mounting losses.
Andrew Robb, the Australian Minister for Trade and Investment, said he will personally raise the possibility of an investment in Qantas during a planned high-level meeting with Sheikh Ahmed Bin Saeed al-Maktoum, chairman of Emirates.
The Dubai airline struck an alliance with Qantas in March 2013, but has ruled out an equity stake in the troubled Australian carrier.
But the possibility will be raised in talks between the Australian government and Emirates planned for later this week, Robb said.
The minister said he plans to specifically raise the issue with Sheikh Ahmad. “I’m sure he’ll raise it if I don’t. But I will explicitly mention it,” he said in response to questions by Al Arabiya News.
Current ownership rules would rule out an investment in Qantas by Emirates.
But Robb said the Australian government is pushing for changes to allow for foreign ownership in Qantas.
“We have said that we want to open up the opportunities for foreign investors... I think Qantas would very much welcome other foreign investors, and that would give them a much more level playing field with Virgin Australia,” he told reporters at a trade event in Dubai.
“In time, it’s the only solution to make sure that the Qantas brand and its viability remains very strong.
“I am meeting with the head of Emirates. And I will give him the same answer, that the new government [wants] to see viable airlines... In the case of Qantas I think it requires a change in the ownership act and the potential for other entries into the ownership. We want to create the right environment that allows that to happen.”
Emirates did not provide a comment when contacted by Al Arabiya News. However, a spokesman pointed to previous comments the airline has made in which it stated there “are no plans to acquire a stake in Qantas or any other airline.”
The airline’s president Tim Clark reportedly told website AirlineRatings.com last year that “equity is not on the table” with regard to a possible investment in Qantas.
The Australian carrier in February reported a half-year loss of A$235 million ($221 million), having turned a profit the year before. The company plans to cut about 5,000 jobs and sell or defer purchase of several aircraft.
Aviation analyst Saj Ahmad of StrategicAeroResearch.com cast doubt over whether Emirates would choose to invest in Qantas. He added that the airline’s strategy has differed to that of Abu Dhabi-based Etihad, which is a major shareholder in Qantas rival Virgin Australia.
“Emirates has been quite categoric that it has no interest in investing in airlines akin to the strategy that is employed by Etihad,” he said.
“Emirates has bypassed equity investments in bigger and more successful airlines than Qantas, so what makes Qantas think they are so special that Emirates will invest in their loss-making business?”
Ahmad said that management changes at Qantas would be more beneficial than foreign investment.
“Even if the Qantas Sale Act is changed, where exactly are the cash-rich investors that want to buy into Qantas? Qantas’ credit rating is at an all-time low and represents atrocious value,” he said. “I don't think investment is the issue… If Qantas wants to survive, it needs to change – and that change has to start at the very top.”
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Australia to push Qantas stake sale in talks with Dubai’s EmiratesAustralia plans to raise the issue of foreign investment in Qantas as it looks to rescue its struggling national carrier Aviation & Transport