alan joyce, page-14

Cruze - I don't think anyone is suggesting that the only change to the Qantas Sale Act that is needed is to remove the restriction on foreign ownership, but that change alone would help give QAN access to more capital from foreign owners. That is preferable to taking on more debt at the moment. Debt finance would be relatively expensive compared to equity while the company is losing money. Virgin was able to raise $300m in fresh equity from its foreign part owners in order to compete against QAN, so its fares on domestic routes are effectively subsidised by foreign owners (good luck to them) - so why shouldn't Qantas have access to the same facility to level the playing field. Better that domestic fares are subsidised by foreign investors than by Australian taxpayers if that's what they want to do.

The other element which desperately needs change is the restriction on employment and aircraft servicing. If its main domestic competitor is able to fly aircraft oversees for heavy maintenance, then why not Qantas. QAN's management is being forced to compete on a tilted playing field with both hands tied behind its back. That is not the fault of the CEO or the BoD but the fault of the regulatory environment that applies only to QAN and to no other domestic competitor. This is what the ACTU, the ALP, the Greens and Nick Xenophon fail to comprehend.

Until that changes I don't intend to be a shareholder, and I certainly hope my super fund stays well clear of it as well. I want a positive return on my investments that is at least 5% better than term deposit rates considering the risk involved, and wouldn't want to see my retirement funds being absorbed by ongoing losses in a company hamstrung by unfair capital and labour regulations.