Foreign sale move unlikely to pass Senate, says Qantas

PLANS by the Federal Government to repeal parts of the Qantas Sale Act are unlikely to pass the Senate, the company at the centre of the debate says.

The repeal would open the company up to potential further foreign ownership.

In a statement released on its website, Qantas has demanded "alternative measures" to assist it if the planned changes announced last night are blocked in the Senate.

Prime Minister Tony Abbott last night announced Qantas  would be opened up for more foreign investment after Cabinet  decided not to pursue a debt guarantee for the struggling national carrier.

Mr Abbott confirmed the government would move to amend the Qantas Sale Act, to remove the current 51% Australian majority ownership rule.

While Qantas had previously asked for a government debt guarantee, Cabinet decided against that option, likely in an effort not to favour one airline over others in the market.

However, the Abbott Government now faces a likely uphill battle to get the changes through parliament, with a majority of non-government senators vocally opposed to the change.

Labor, The Greens, and the minority bloc of senators connected to Palmer's United Party are all expected to oppose any move to dilute Australian ownership of the national carrier when it hits the Upper House.

A statement on the Qantas website this morning, expressed doubt over the likely success of the plan.

"Qantas notes the Government's announcement that it intends to attempt the repeal of Section Three of the Qantas Sale Act," the statement says.

"We have consistently said that removal of foreign ownership provisions that apply uniquely to Qantas is an important longer term objective to create a fair and free aviation market in Australia. However, it is clear that such a move would have limited chance of passing through the Senate.

"We need immediate action to address the imbalance that has been allowed to persist for almost two years - namely Virgin's unlimited ability to access foreign capital from government-owned airlines to fund a loss-making strategy against Qantas.

"If this proposal by the government to change the Qantas Sale Act is not passed, we would expect the Government and the Parliament to consider alternative measures to balance the unlevel playing field in Australian aviation."

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