BA/Qantas merger announcement meets with Australian resistance

Proposed merger of British Airways and Qantas announced Tuesday already is generating controversy in Australia, some 19 months after similar sentiments helped derail a leveraged buyout of QF by a multinational consortium.

The Australian government issued a new aviation policy proposal this week raising the amount a single overseas interest could take in Qantas to 49% from 25% (ATWOnline, Dec. 3), but the governing Labor party remained concerned that BA's tie-up with QF could be a de-facto takeover (ATWOnline, Dec. 3).

"Were that to be the case, the government would certainly not support it," Minister for Infrastructure, Transport, Regional Development and Local Government Anthony Albanese told ABC Radio. "Whilst Qantas and BA have put out a statement confirming these talks, they're far from reaching a conclusion and the outcome [is] far from certain," he added, stressing that it has been "made clear" to Qantas that its arrangement with BA must adhere to national law. Treasurer of Australia Wayne Swan said, "Our bottom line is the 'Flying Kangaroo' remains majority Australian-owned and based," Reuters reported.

Warren Truss, leader of the opposition National Party, told ABC's The World Today that "if one company owns up to 49% of Qantas then they would have effective control. Indeed, they would achieve effective control at a level much lower than that and Australians would want to be certain that they still had an airline that would put the interests of this country first and that their capacity to serve Australia was not compromised." Local editorials and public opinion polls also suggested opposition to the merger.