CANBERRA, Australia (AP) — The Australian government decided on Monday to relax foreign ownership restrictions on Qantas Airways after the national carrier posted a record half-year loss.
Prime Minister Tony Abbott said his Cabinet ministers had agreed to repeal legislation that prevents foreign airlines from holding more than 35 percent of the airline and any single foreign investor from holding more than a 25 percent stake.
The Qantas Sale Act, which became law in 1992 as the state-owned airline was about to be privatized, also mandates 51 percent Australian ownership.
The government could struggle to pass the changes through a hostile Senate, where opposition parties have voiced objections to any reforms that could send Qantas jobs overseas.
Qantas last week posted a first-half loss of 235 million Australian dollars ($211 million) amid tougher competition and said it would cut 5,000 jobs.
Abbott said the Cabinet on Monday ruled out guaranteeing a loan for Qantas. The government had earlier discussed the possibility with the airline.
"I have enormous faith in the ability of Qantas to compete and to flourish, but I think it is best placed to compete and to flourish if it is unshackled and un-propped up by government," Abbott told reporters.
While part of the Qantas Sales Act would be repealed, foreign ownership of the airline could still be curbed by other legislation.
The Air Aviation Act states Australian-based international carriers have to be 51 percent Australian-owned with headquarters in Australia. Abbott suggested Qantas could avoid this restriction by splitting its international and domestic businesses.
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