Dubai’s Emirates Airline has reportedly ruled out
any financial bailout of its Australian alliance partner Qantas, which is
appealing for its foreign ownership limit to be raised after recording huge
The airlines joined forces in an historical
aviation deal in March but despite Emirates being one of the strongest airlines
in the world, the alliance has failed to boost Qantas’ performance.
The Australian carrier, which moved its overseas
base to Dubai as part of the alliance, has forecast a half-year loss of $300m
and earlier this month announced 1000 jobs would be axed, leading Standard
& Poor's to downgrade its credit status to "junk".
Qantas CEO Alan Joyce has partially blamed unfair
competition from domestic rival Virgin Australia, which unlike Qantas does not
have any foreign ownership restrictions.
Virgin Australia is two-thirds owned by Abu Dhabi’s
Etihad Airways, Singapore Airlines and Air New Zealand, while US-based Virgin
founder Richard Branson has a 9 percent stake.
Joyce is lobbying the Australian government to
relax his airline’s foreign ownership limit of 49 percent, claiming it is
In November, Joyce accused foreign airlines, including
Etihad, of a “virtual takeover” of Virgin Australia in what he feared would
destabilise the country’s domestic aviation industry, local tourism and jobs.
Australian Prime Minister Tony Abbott has suggested
he supported lifting the limit.
But even if Qantas’ plea is successful, Emirates
president Tim Clark told the Australian newspaper West Australian, he would not
buy into the airline.
Clark said he "would watch [the situation]
carefully" but Emirates did not have the "bottomless pit of
cash" Virgin Australia's partner Etihad Airways had.
"So no, equity is not on the table,'' Clark
Last month Clark said Emirates’ business model did
not involve equity stakes in other airlines, unlike Etihad.
“If you then get involved in management of other
entities, it does take your eye off the ball,” he said.
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