Airline Partners Australia (APA) notified an application in respect of Qantas Airways Ltd under the Foreign Acquisition and Takeovers Act 1975 (FATA) on 5 February 2007 and subsequently clarified its proposal on 7 February 2007. The Foreign Investment Review Board undertook a detailed examination and wide consultation prior to advising me of its findings.
If the proposal as notified is implemented in the manner described, Qantas Airways will retain its majority Australian ownership and control. The Government intends to monitor the ongoing implementation of the proposal for continued compliance with regulatory requirements.
The Minister for Transport and Regional Services and I have negotiated and received a legally enforceable Deed from APA. The Deed has been provided voluntarily by APA and does not involve any commitments from the Commonwealth. In the event of a possible breach, the Commonwealth will be able to have the Deed enforced. The Deed will apply until APA no longer has a controlling interest in Qantas under the Corporations Act 2001 or has sold all, or substantially all, of its airline business.
Primarily the Deed:
- restates in a legally enforceable document APA’s public commitments, including undertakings that:
- Qantas and Jetstar Airways will expand internationally and within Australia to provide a sustainable mix of full service and value based offerings in line with market needs;
- the Qantas Group will offer an integrated network of international, domestic and regional air transport services;
- the Qantas Group will support regional capacity growth and regional network improvement in line with market needs; and
- Qantas customers will continue to have access to a competitive loyalty program and the Transaction will not result in any loss of frequent flyer points for members of the Qantas Frequent Flyer Program.
- supports the Qantas Sale Act 1992 (QSA) and Airports Act 1996 (AA);
- facilitates monitoring of Qantas ownership and its compliance with the QSA and AA,and Australia’s foreign investment policy through the inclusion of information provision obligations on APA; and
- acknowledges the Commonwealth’s right to seek remedy in the event of a possible breach, including through an injunction or specific performance.
In these circumstances I have decided to raise no objection to the application under FATA or the Government’s foreign investment policy.