| Keep Qantas Australian!
Tell the politicians now! After months of agitation by Qantas Chief Executive Geoff Dixon, Federal Labor Shadow Transport Minister Martin Ferguson issued a call on the ABC Radio PM program on July 30, 2002, for the limits on foreign ownership of Qantas to be lifted above the present 49%. Unless ordinary Australians speak up now against this, there will be a Lib-lab majority to push it through the Senate. An explanation of the issues involved, and the options for Qantas are set out here, and there is a short suggested message for the politicians at the end. Please take the time to act now - there is no need for Qantas to be sold overseas. The decision on this issue will be made by the Howard Cabinet, on a recommendation by the Deputy Prime Minister and Transport Minister John Anderson. Cabinet is expected to debate the issue at its next meeting, prior to parliament resuming on August 19. Martin Ferguson made his public call without consultation with the Labor Shadow Ministry or the Labor Caucus. The main reason put forward by Martin Ferguson and by Qantas is that Qantas cannot raise new capital as cheaply as its competitors. Unless it could do so, they argue, its $13 billion fleet modernisation and expansion is in jeopardy. And unless more foreign capital is allowed, that is what will happen. Martin Ferguson suggested that Qantas would go the way of Air New Zealsand and Ansett, with an aging fleet not properly maintained - thus putting jobs and services at risk. The Keating Labor government privatised Qantas in 1995, arguing that the government did have the capital to keep on investing in Qantas! Now the claim is that there is not enough private capital! The Keating Labor Qantas Sale Act specifies:
British Airways owns 25% of Qantas and wants more. Martin Ferguson says that Labor would consider removing the ownership limits from the Act, but would at the same time insist on:
Qantas finance situation Qantas is one of the four strongest international airlines. It made an after-tax profit of $415 million dollars in the 2001 financial year, and an after-tax profit of $154 million for the six months to December 2001. In a statement on June 24, 2002, CEO Geoff Dixon predicted a pre-tax yearly profit of $605 million, which should mean a higher after-tax profit than the previous year, despite the impact of September 11 on international passenger numbers. According to the Qantas statement, the company is already committed to spend $2.5 billion in each year from 2001 to 2005 on new aircraft, ugraded lounges and improved product, according to the Qantas statement. That makes a total of $10 billion. What sources of capital does Qantas have? Qantas can raise capital for its fleet upgrade by:
Qantas and Martin Ferguson are arguing that Qantas can’t borrow at a low enough interest rate, or sell shares at a high enough price, unless foreigners can take a majority of the shares. This doesn’t make sense. Since Qantas is one of the few profitable airlines in the world, it is a magnet for Australian investors as well as foreign investors. Qantas pays out 60% of its after-tax profits as dividends to shareholders. That means 40% is available for re-investment. For the 2002 financial year, this means about $180 million. British Airways wants a takeover The more likely motivation for the demand of an end to foreign ownership restrictions is that British Airways wants to take it over, precisely because it is such a good investment. British Airways is saying that they will not contribute to the upgrade program unless they get more ownership. Impacts of foreign control of Qantas
Send a message to the politicians now Here is a short suggested message you could send to the government and opposition parties: Keep Qantas Australian Dear I am strongly opposed to the proposal from Qantas that the limits on foreign ownership in Qantas be eliminated. This is just a takeover grab by British Airways, because Qantas is one of the few profitable and strong international airlines in the world today. Qantas is already committed to a $10 billion upgrade program up to 2005, without any need to allow majority foreign ownership. It can continue to raise debt and share capital with its current Australian majority ownership. If Qantas is fuly integrated into British Airways or some other international airline, there will be major job losses, and nothing will save its Australian identity, and its still-admired safety record will be further jeopardised.
Mr John Anderson, Deputy Prime Minister and Minister for Transport, Email: John.Anderson.MP@aph.gov.au Fax: 02 6742 1840 Address: 342-344 Conadilly Street, GUNNEDAH NSW 2380 Mr Martin Ferguson, MHR, Shadow Minister for Transport Email: M.Ferguson.MP@aph.gov.au Fax: 03 9489 0984 Address: 48 High St, NORTHCOTE VIC 3070 Mr Simon Crean, Leader of the Opposition Email: S.Crean.MP@aph.gov.au Fax: 02 6273 2031 Address: PO Box 5295, CLAYTON VIC 3168 Senator Natasha Stott-Despoja, Leader of the Australian Democrats Email: senator.stottdespoja@aph.gov.au Fax: 08 8232 7601 Address: 212 Grenfell Street, ADELAIDE SA 5000 Senator Bob Brown, Leader of the Australian Greens Email: senator.brown@aph.gov.au Fax: 03 6234 1577 Address: 9th Floor Marine Board Building, 1 Franklin Wharf, HOBART TAS 7000
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