That law restricts foreign ownership of Qantas to 49 per cent. Qantas lifeline: Joe Hockey. Mr Hockey said the Australian airline now faced a “2000 pound gorilla” in the form of Virgin, which is largely foreign-owned. “Number one is existing restrictions on the business imposed by the Parliament. Number two is if it’s an essential national service, and number three is if it is in an environment where other sovereigns are engaging in direct competition to the massive disadvantage of an Australian business, then you need to take that into account,’’ he said. “And the fourth thing is the business has to do its own heavy lifting on its own reform. We are not going to run the business or tell them how to reform.”

Qantas announced last December that it was headed to a half-year loss of $300 million. It has signalled another 1000 jobs could go, with chief executive Alan Joyce promising more hard decisions as it looks to carve out $2 billion from its cost base. While most senior Coalition MPs would prefer to change or scrap the Qantas Sale Act - to "unshackle" Qantas from its foreign ownership and other restrictions - there is a growing acceptance that this change will not pass through Parliament. Labor and the Greens are staunchly against changing the act, which is a hangover from Qantas' history as a state-owned airline. Unlike its competitors, Qantas is restricted to 49 per cent foreign ownership, 35 per cent ownership by foreign airlines and no single foreign person can own more than 25 per cent of the airline. All this makes it more difficult for Qantas to bolster its balance sheet. Some Liberal economic dries told Fairfax Media they were grudgingly "coming around" to the idea of giving Qantas a government-backed debt guarantee.

Liberal MP Dan Tehan, who has been leading the charge to unshackle Qantas from the act, said it was clear from his conversations with Mr Joyce that something needed to be done urgently. In a speech to Coalition MPs on Wednesday night, Mr Joyce "clearly demonstrated" that he was serious about making the tough decisions necessary to turn the airline into a sustainable and profitable business, Mr Tehan said. Mr Joyce's willingness to make $2 billion in cuts showed "he's not going to shirk his responsibility". "[But] they are going to have to clearly demonstrate that they have a path forward that's credible," he added, "and that isn't going to rely on government having to be there for their long-term viability." Some Coalition MPs are increasingly worried that, if the government does not act soon to amend or scrap the act, the Coalition will be left exposed, and the public will be presented with another Holden or SPC Ardmona scenario.

''The Qantas Sale Act needs to go,'' said Liberal senator Sean Edwards, who called on Labor to ''get on board''. ''This is a restriction on the management of Qantas, the likes of which no other airline in the world has to suffer.'' Labor's transport spokesman Anthony Albanese appeared to rule out supporting any changes to Qantas' foreign ownership laws, saying it was "something Labor regards as not negotiable". "Once you remove the Qantas Sale Act, what you would do is open up Qantas to the sort of corporate raiders ... [and] a breaking up of the company," Mr Albanese told ABC radio on Thursday. Loading

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