#Business#Australia#Fairfax Media#Qantas#Virgin Group#Alan Joyce#airlines#Virgin Australia#shares#review#UAE#etihad#go under#qantas sale act

'Qantas Could Go Under,' says CEO Joyce

|Jun 22|magazine5 min read

The Flying Kangaroo may disappear from Australia’s skies if the state-owned Etihad invests in Virgin Australia to the point where Qantas’ profitable domestic routes are disrupted.

According to the Sydney Morning Herald, Etihad is understood to be considering a 10 per cent ownership share of Virgin after purchasing nearly 5 per cent last week. Virgin Group owns 26 per cent of the airline, and Air New Zealand has 19.9 per cent, said SkyNews Australia.

Qantas CEO Alan Joyce is in Canberra this week, reportedly lobbying for limitations to be implemented on UAE-backed Etihad’s purchase of Virgin shares.

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''Virgin/Etihad will be able to flood the market with capacity until its competition is forced to significantly reduce its own operations or worse,” Qantas said, according to documents obtained by Fairfax Media.

As an alternative option, he is pushing for the restraints of the 1992 Qantas Sale Act to be lifted in order to help level the competition between the two airlines. Under the Act, foreign investment is capped at 49 per cent, total ownership by foreign airlines is capped at 35 per cent, and no more than a 25 per cent stake may be purchased by a single foreign investor, the SMH said.

If action is not taken, Qantas warned, “we could go under.”

Etihad has also recently invested in Air Berlin, Air Seychelles and Aer Lingus, SkyNews Australia reported.