Prime Minister John Howard initially downplayed the likelihood of such conditions, saying the government would not "interfere". But 10 days later deputy minister Mark Vaile, who is also transport minister, said the government would require "guarantees on a range of issues" from the private equity group that seeks to buy Qantas.
It is unlikely Vaile would have made such remarks without Cabinet support. The takeover is subject to government review on several grounds, and officials expect reports by late February from the foreign investment review board and the competition commission. The transaction also must satisfy a "national interest" test.
Vaile predicts the conditions will be similar to those imposed on Air New Zealand's takeover in 2000 of Ansett Airlines. Those included requirements that Ansett remain based in Australia, that it maintain regional routes and that it not significantly reduce skilled employment. These same concerns and others have been raised about the Qantas takeover.
Vaile says the government does not want to be "too interventionist", but Qantas occupies a "unique position in the Australian economy".
Insiders claim the bid to transform Qantas from a public to private company has already affected policymakers' attitudes about it. Some argue a privately held Qantas does not deserve the degree of protection it has enjoyed from foreign rivals such as Emirates and Singapore Airlines.
Evidence that its political clout already may be waning comes from a government decision in January to launch a study of tourism benefits from open skies. The study is likely to lend further support to calls by foreign rivals for more access to the Australian market. Until now, Qantas had successfully blocked this study.
Source: Airline Business
