Australian airline brand Qantas has issued a PR statement challenging the Government over a $300 million financial incentive offered to competitor Virgin.
Qantas says the support represents a “potentially damaging” shift in the airline industry, and warns that domestic jobs are being placed at risk.
Virgin Australia Holdings has received a $300 million Government financed capital injection.
“Qantas confirms it has contacted Federal and State governments to express concerns as the national carrier about potentially damaging shifts in Australia’s aviation industry,” the airline said in a statement.
“The recent announcement by Virgin Australia that it would receive more than $300 million in further capital from three government-backed airlines highlights the uneven playing field created by existing policy settings.
“Virgin Australia’s proposed capital raising could see its foreign ownership rise to more than 80 per cent without the need for any further regulatory approval. Despite this, the airline would retain all the traffic rights given to Australian carriers.
“If wholly privatised, Virgin Australia’s ability to receive potentially unlimited capital from its government-backed owners would seriously distort the domestic aviation market for the benefit of foreign interests. The decision of these shareholders to invest in Virgin Australia’s loss-making strategy highlights that these airlines aren’t subject to the same commercial realities as Qantas.”
Qantas said it had asked Federal and State governments to examine the motives behind what it described as a virtual takeover of Virgin Australia by foreign airlines. It said the development could lead to a destabilising of the domestic aviation industry, local tourism and jobs
The Australian Financial Review has reported that Qantas CEO Alan Joyce has demanded that the Federal and State governments stop the deal.