Regional Round-Up
Qantas calls foul over rival’s capital raising
December 1st 2013
At press time, Qantas Group CEO, Alan Joyce, had elevated his public campaign to block Virgin Australia’s A$350 million (US$329 million) capital raising with the assertion the Australian government will ensure Virgin Australia will operate under the same rules as the airline group he heads. Read More »
Despite reluctance from the newly elected government and the country’s opposition leadership to become embroiled in the dispute, Joyce said: “there is a lot at stake, but I have absolutely no doubt the politicians will see sense and reframe the policy network to ensure this is a level playing field again.”
Under the terms of Virgin Australia’s capital raising, its equity partners Air New Zealand, Etihad Airways and Singapore Airlines, could hold up to 68% of Virgin Australia, with Britain’s Virgin Atlantic group retaining 10% of the carrier. Joyce said Qantas will operate at a disadvantage if the fund-raising proceeds because the Qantas Sales Act limits foreign investment in “The Flying Kangaroo” to 49%. Joyce alleges the fund-raising is a back door way for Abu Dhabi, Singapore and New Zealand to access what should be rights that are available to Australian carriers. He added that under the Air Navigation Act, an airline has to be 51%-owned to gain access to these routes, under current bilateral air rights agreements.
That element of the argument raised eyebrows in Hong Kong where the Qantas Group and its partners, China Eastern Airlines and a subsidiary of the gaming and property group, Shun Tak, are planning to start a low-cost carrier, Jetstar Hong Kong. Its application for an Air Operator’s Certificate is pending - and has been for months. Hong Kong-based carriers argue the LCC will be managed at its top tier by parent company, Jetstar in Australia, which means Hong Kong would not be its principle place of business; a requirement of the Special Administrative Region’s Basic Law.
