“The Flying Kangaroo argues it is boxed in to a corner by limitations on foreign owners”

Potential foreign ownership of companies perceived to be national treasures is quite often a sore point for patriotic and proud customers and Governments. Qantas, Australia’s national flag-carrying airline, has called for foreign ownership rules implemented in the 1992 Qantas Sale Act to be relaxed. In 1995, when the then State-owned carrier originally IPO’d, the Sale Act ensured that no foreign entity could hold more than 35.0 per cent of the company. However, this 21-year-old law was put in place when global M&A and the global airline industry were very different places.

Qantas argues that by restricting foreign investment it is hampering the company’s ability to compete with the likes of Virgin Australia, and their chief executive, Alan Joyce, is quite vociferous in his complaints that Qantas really aren’t operating on a “level playing field”.  Virgin Australia has shareholders that include Air New Zealand, Singapore Airlines and Etihad Airways and as a result, have gone from two planes serving a single route to a fleet of 94 aircraft flying to 29 different destinations in just 13 years.

This open call for foreign investment by Qantas’s chief executive has led to the Treasurer of the Australian Government, Mr Joe Hockey, stating that he “doesn’t like the idea of putting Australian tax payers’ money behind Qantas, but if it is the view of the Australian people that we should have a national flag carrier, then that does come at a cost”. This cost has been reported as an acquisition of up to 10.0 per cent of the company by the Australian Government.