Qantas: Impact of Legislations and Business Performance Analysis

This report analyzes the impact of the Qantas Sales Act of 1992 and the Air Navigation Act of 1920 on Qantas, Australia's national airline. It explores the restrictions imposed by the Qantas Sales Act on foreign ownership and the implications of the Air Navigation Act regarding domestic ownership requirements. The report examines how these legislations affect Qantas's market position, particularly in the context of domestic versus international operations, and the airline's financial performance. It discusses the CEO's perspective on market advantages and losses, along with the challenges posed by outdated regulations and the potential need for government intervention, including debt guarantees. The conclusion advocates for deregulation of the Australian international air service market while cautioning against government financial support to Qantas that could distort market competition. The report uses several sources to support its findings and analysis.

Running Head: Qantas
QANTAS
Impact of Legislations
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Qantas
Table of Contents
About the Company...................................................................................................................2
Impact of Legislations................................................................................................................2
Conclusion..................................................................................................................................3
Bibliography...............................................................................................................................4
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Qantas
About the Company
Qantas was founded in Queensland, Australia in 1920. In the initial years, its headquarter was
in Winton, Queensland but later it was moved to Longreach, Queensland (Anon., 2019). It
was first operating in taxi services and pleasure flights and later came into airline sector.
Qantas compromises of 130 aircraft and its route contains more than 40 domestic and global
places. Qantas has variety of subsidiaries like QantasLink, Jetstar, Jetconnect, Australian Air
Express and others, which are divided into 5 sectors: Qantas International, Qantas Domestic,
Qantas Freight, Qantas Loyalty and Jetstar Group. Qantas business counts 65% of domestic
aviation market in Austarlia (Seufert, 2014).
Impact of Legislations
Qantas Sales Act was commenced in 1992 (Anon., n.d.) when Qantas was taken out from the
ownership of the government and got the status of fully private owned company. There were
some of the restrictions, which were imposed on foreign ownership of the company. These
restrictions are-
 If there is an investor from abroad than he is limited to 25% of shares
 Limit is set to 35% to acquire Qantas’ shares by foreign airlines.
 Foreign ownership of Qantas cannot be more than 49% (Fylnn, 2014).
A large portion of the limitations in Qantas Sales Act applies to Qantas Airways Ltd and its
planned global traveller administrations. Australian Department and Qantas Freights of
Transport have dependably said before the Senate to demand that the Qantas Sales Act does
not make any difference to Qantas Airways Limited. Presently, regardless this is correct or
not, it involves some guess but rather it has never been tried and is probably not going to be.
Present government’s strategy from December 2009 is to evacuate the middle of the road tops
on remote financial specialists and carriers.
Air Navigation Act, 1920 is applicable on Qantas and it have to follow the rules and
regulations of the act (Anon., 1920) and Qantas Sale Act, 1992. Qantas and other airlines of
Australia will have 51% of domestic ownership to fly inside and outside the domain of
Australia according to the Air Navigation Act. The Qantas Sale Act mostly relies on
confinements on outside proprietorship (Anon., 2014).
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As per the CEO of Qantas, Alan Joyce, Qantas is making profits in the Australian market as
compare to other airlines like Virgin Australia. This advantage is due to its network and it has
large market share in the domestic market. The loss that the company is incurring is in
international market. To prevent incurring of losses in the international market, the
government of Australia should remove the limitations on it under Qantas Sale Act because
the act is prohibiting the company from restructuring and accessing the international market.
As a result, the company cannot understand the international market and its requirements.
Australia keeps on having obsolete limitations on universal air rivalry in Air Navigation Act.
This spots possession limitations on Australian universal aircraft and confines rivalry to
Australia by worldwide bearers. The limitations which return in 1920s, ought to supplanted
by an international strategy for global transportation through air that will permit every
genuine universal transporters that need to support Australia .The possession limitations on
each and every Australian universal aircrafts ought to be expelled.
The main issue arises that should the government interfere and pay the debt of Qantas? A
debt ensures that Qantas gets an uneven wager, guaranteed by citizens of Australia. It will
give fewer amounts when it acquires cash and it will help benefits and advantage to its
investors. In any case, the hazard will be borne by Australian citizens. On the off chance that
Qantas keeps on draining cash on its ineffectively performing worldwide administrations, at
that point it might confront indebtedness. Furthermore, under an administration credit
assurance that implies that Australian citizens should safeguard Qantas out. Obviously, if
Qantas changes, the credit assurance may not work out. Qantas will have to pick up the
additional benefits by getting economically, because of the certification, however these will
go to investors, not came back to the citizens. The central government ought not to be
ensuring the obligation of any privately owned business.
Conclusion
Therefore, the administration should act to free Qantas. Without a doubt, the administration
ought to give freedom to Australia’s global air service advertise from old guidelines.
However, it ought not provide help to Qantas to limit residential challenge so as Qantas can
utilize the benefits coming from household Air explorers to subsidize its misfortune
developing abroad activities. What’s more, the national government ought not go into a
single direction wager at citizens cost by ensuring Qantas’ obligation.
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Bibliography
Anon., 1920. Air Navigation Act. [Online] Available at:
https://www.legislation.gov.au/Details/C2009C00136 [Accessed 1 May 2019].
Anon., 2014. Qantas: still ‘Australian’ but struggling in a competitive market. [Online]
Available at: https://theconversation.com/qantas-still-australian-but-struggling-in-a-
competitive-market-29283 [Accessed 1 May 2019].
Anon., 2019. Qantas Through the Years. [Online] Available at:
https://www.qantas.com/travel/airlines/history-through-the-years/global/en [Accessed 1 May
2019].
Anon., n.d. Qantas Sale Act 1992. [Online] Available at:
https://www.legislation.gov.au/Details/C2017C00080 [Accessed 1 May 2019].
Fylnn, D., 2014. The Qantas Sale Act explained. [Online] Available at:
https://www.ausbt.com.au/the-qantas-sale-act-explained [Accessed 1 May 2019].
Seufert, J., 2014. Qantas and its marginal abatement cost curve in the context of late
capitalism and climate change. [Online] Available at:
https://ro.uow.edu.au/cgi/viewcontent.cgi?referer=https://www.google.com/
&httpsredir=1&article=5519&context=theses [Accessed 1 May 2019].
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