Australia's Qantas Airways is in talks to acquire a minority stake in Vietnam's Pacific Airlines as part of its Asian expansion strategy.
Private equity investors still hope to complete their takeover of Qantas Airways, but the political uproar has made the outcome less certain.
The bidders, who call themselves Airline Partners Australia (APA), had hoped that the release of their bidding statement in February would calm public concerns. The note changed little from what was already known about the bid, but public disquiet still prevails.
Unions seek guarantees that jobs will not go offshore. Business and government leaders worry about how much debt Qantas will assume from the buyout. Rural interests worry about loss of regional routes. And the bidders have backtracked from assurances they will not spin off Qantas assets.
When senators began to clamour for a parliamentary inquiry, APA ignored the advice of its own lawyers and submitted an application for approval to Australia's foreign investment review board. APA had structured the deal to avoid such a review, but did not take into account this political turmoil.
By submitting to this review, APA has avoided a more raucous public inquiry, but the government could yet reject the deal. It is more likely to attach conditions to its approval. Treasurer Peter Costello must be satisfied that the takeover is in the national interest.
Former transport minister John Anderson says he is not convinced that it is, but Mark Vaile, current transport minister, seems more interested in attaching conditions than in blocking the sale. Qantas shareholders have until 9 March to accept the takeover offer, but that may slide because of the review.
Politicians warn that they will not protect Qantas from foreign rivals if it goes private. Virgin Blue is worried that it might be hurt in any backlash, for instance, if transpacific routes are opened to Singapore Airlines.
Politicians warn they will not protect Qantas from foreign rivals if it goes private
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Source: Airline Business
