Qantas Bail Out Australia Case Study

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In 2014 Qantas, Australia’s beloved flying kangaroo became a topic of political interest and controversy. Qantas was asking the Australian government and in turn the Australian public for a debt guarantee as they were looking at a company loss of over $1 billion. The Australian government and public saw this ask as a bail out and from here the Qantas bail out debt grew. In the below passages Qantas’s history will be explored along with the legislation imposed on it. From here the discussion will focus on the pros and cons of the potential bail out along with the governments decision and why. It will also look at what has happen to Qantas following the decline to be provided a bail out. The question is simple but the answer is not, was the government’s…show more content…
Unfortunately, for Qantas, the Qantas Sales Act created an uneven playing field, as other Australian Airlines, mainly Virgin airlines, did not have to adhere to the restriction leaving them unconstrained with the foreign ownership issues. With this in mind, it is easy to see why Qantas would believe they should have the full support from the current Government in regards to a bail out. Restrictions with the Act left Qantas at an unfair disadvantage with their business not functioning on a level playing field. The question can be asked by Qantas, ‘If the Australian public and the Australian Government are so reliant, dependent and invested in Qantas as the “national carrier” would it be unreasonable that the same Australian public and government should help the business that they obviously adore enough to control and enforce that it stays nationally…show more content…
As was proven in the stand taken regarding the car industry and SPC Ardmona; the government made the decision to allow the free market to regulate as it should and in following in the free market policy the government ceased all handouts and protection to industries. While Qantas has special circumstances, the government had no choice but to follow the party line and refuse the bail out. This position is made clear by Allan Lang, research fellow from the Institute of public affairs who stated “millions of taxpayer dollars should not be spent propping up one company, particularly when government debt is at record levels. The treasurer can’t complain of a budget emergency in one breath, and hint at subsidies for Qantas in the next”. As a result of not providing financial assistance, the Australian government offered to make changes to the Qantas Sale Act, by taking away some of the restrictions such as, removing barriers to foreign ownership, but still keeping in place the Air Navigation Act 1920 of 51% Australian

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