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Sir Richard Branson says helping Qantas will deter investors in Australia Sir Richard Branson says helping Qantas will deter investors in Australia
(7 months later)
Sir Sir Richard Branson has taken aim at both Qantas and the government, claiming that any taxpayer assistance for the beleaguered airline will deter businesses from investing in Australia.
Richard Branson has taken aim at both Qantas and the government, In a full-page advert published in News Corporation newspapers on Sunday, Branson said if the government provided financial help for Qantas, it would “severely damage competition in Australia, encourage others to ask for handouts and companies worldwide would think twice before investing in Australia.”
claiming that any taxpayer assistance for the beleaguered airline will Branson wrote that his Virgin Australia airline has challenged the “virtual monopoly” held by Qantas, resulting in his competitor “spending endless amounts of money to stop Virgin Australia offering more competition on more routes.”
deter businesses from investing in Australia. The British entrepreneur added that Qantas receives the majority of government spending on travel and that it should not be granted “further special privileges over all of its competitors”. He labelled treasurer Joe Hockey’s description of Virgin Australia as a “2,000-pound gorilla” as “laughable”.
In “Qantas has gone to its shareholders on numerous occasions over the last few years to wage its capacity war against us,” he wrote. “Now that the shareholders have turned that tap off, the company is turning to the Australian taxpayer to try to bail it out.”
a full-page advert published in News Corporation newspapers on Sunday, Branson said Virgin Australia did not mind whether the government amended foreign ownership restrictions on Qantas, but that any financial assistance would be detrimental to the Australian public and the economy.
Branson said if the government provided financial help for Qantas, it Tony Abbott has indicated he is amenable to lifting regulations that prohibit overseas interests owning more than 49% of Qantas, saying it would “unshackle” the struggling company. Another option open to the government is to guarantee Qantas’ debt.
would “severely damage competition in Australia, encourage others to ask
for handouts and companies worldwide would think twice before investing
in Australia.”
Branson
wrote that his Virgin Australia airline has challenged the “virtual
monopoly” held by Qantas, resulting in his competitor “spending endless
amounts of money to stop Virgin Australia offering more competition on
more routes.”
The
British entrepreneur added that Qantas receives the majority of
government spending on travel and that it should not be granted “further
special privileges over all of its competitors”. He labelled treasurer
Joe Hockey’s description of Virgin Australia as a “2,000-pound gorilla”
as “laughable”.
“Qantas
has gone to its shareholders on numerous occasions over the last few
years to wage its capacity war against us,” he wrote. “Now that the
shareholders have turned that tap off, the company is turning to the
Australian taxpayer to try to bail it out.”
Branson
said Virgin Australia did not mind whether the government amended
foreign ownership restrictions on Qantas, but that any financial
assistance would be detrimental to the Australian public and the
economy.
Tony
Abbott has indicated he is amenable to lifting regulations that
prohibit overseas interests owning more than 49% of Qantas, saying it
would “unshackle” the struggling company. Another option open to the
government is to guarantee Qantas’ debt.
Labor and the Greens have said they are in favour of Qantas remaining in Australian hands.Labor and the Greens have said they are in favour of Qantas remaining in Australian hands.
Mining magnate MP Clive Palmer dealt a further blow to Abbott’s plan, saying on Saturday: “Qantas Mining magnate MP Clive Palmer dealt a further blow to Abbott’s plan, saying on Saturday: “Qantas is a part of Australia’s heritage as a vital service to rural Queensland and the Northern Territory. Sales like these are nothing but quick fixes and are simply the palming away of responsibility.”
is a part of Australia’s heritage as a vital service to rural Qantas is set to cut 1,000 jobs after suffering a $300m loss in the first half of the financial year, a position that has seen its credit rating downgraded.
Queensland and the Northern Territory. Sales like these are nothing but
quick fixes and are simply the palming away of responsibility.”
Qantas
is set to cut 1,000 jobs after suffering a $300m loss in the first half
of the financial year, a position that has seen its credit rating downgraded.
Alan Joyce, the airline’s chief executive, spent last week lobbying the government to lift the ownership restriction.Alan Joyce, the airline’s chief executive, spent last week lobbying the government to lift the ownership restriction.
“Over the past five years, we have done everything in our control to “Over the past five years, we have done everything in our control to reform Qantas for the changing global economy,” he said in a speech on Friday.
reform Qantas for the changing global economy,” he said in a speech on
Friday.
“But when one set of rules applies to Qantas, and another to our competitors, then a clear distortion exists.”“But when one set of rules applies to Qantas, and another to our competitors, then a clear distortion exists.”
It’s It’s understood that Qantas disputes Branson’s assertion that it gets preferable treatment from the government, or that shareholders have been asked for funding in recent years.
understood that Qantas disputes Branson’s assertion that it gets In an official response to Branson’s letter, a Qantas spokesman told Guardian Australia: “There’s widespread agreement that Qantas is at a disadvantage because of current policy settings.
preferable treatment from the government, or that shareholders have been “We’ve said many times we don’t want a handout – what we want is fair fight, which is very much in the best interests of the travelling public.”
asked for funding in recent years. Virgin Australia said in a statement: “Qantas has significant advantages, including being the dominant player in the market and receiving the majority of federal government travel spend.
In “They are an airline that has multiple times our assets and cash reserves, a superior credit rating and a substantially larger fleet of aircraft. “Qantas are in their current financial position because of their loss-making strategy of maintaining 65% of the domestic aviation market at all costs. We believe this is at the detriment of the entire industry.
an official response to Branson’s letter, a Qantas spokesman told
Guardian Australia: “There’s widespread agreement that Qantas is at a
disadvantage because of current policy settings.
“We’ve
said many times we don’t want a handout – what we want is fair fight,
which is very much in the best interests of the travelling public.”
Virgin Australia said in a statement: “Qantas has significant
advantages, including being the dominant player in the market and
receiving the majority of federal government travel spend.
“They
are an airline that has multiple times our assets and cash reserves, a
superior credit rating and a substantially larger fleet of aircraft.“Qantas are in their current financial position because of their
loss-making strategy of maintaining 65% of the domestic aviation market
at all costs. We believe this is at the detriment of the entire
industry.
“Any form of government assistance to Qantas is a means to enabling them to reinstate their monopoly.”“Any form of government assistance to Qantas is a means to enabling them to reinstate their monopoly.”