Government Rejects Qantas Loan Request

(Photo: Qantas)

QANTAS 747-400The Australian Government has rejected a AUS$3bn (US2.7bn) loan request from Qantas. Last week, Qantas reported a first-half loss of A$252m ($225m; £135m) and said it would cut 5,000 jobs.  The move is a further blow to the struggling flag carrier which had announced a first half loss of AUS252m (US$225m) on February 27 and said it would cut 5,000 staff.   In a local radio interview, the Australian Prime Minister, Tony Abbot, said: “We sent in various experts to have a look at Qantas, and the conclusion that we came to based on their advice was that Qantas does not need an unsecured facility from the government.”

Qantas also wants a change in Government rules on foreign ownership which, it claims, has restricted its growth.  Currently overall foreign ownership stakes are limited to 49%, though that figure is reduced to 35% for foreign airlines. 

PM Abbot says his government wants to relax these rules but his political opponents say that could simply transfer jobs out of the country.