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Qantas Welcomes Government Decision

Sydney, 21 February 2006

Qantas today welcomed the Federal Government's decision not to grant trans-Pacific access to Singapore Airlines following a comprehensive review of Australia's aviation policy.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the decision recognised the many factors that distorted the regulatory environment in international aviation.

"Liberalisation of market access is essential and must continue. However, this requires equal opportunity for Australian carriers which is not now available in many instances," Mr Dixon said.

Mr Dixon said the Government's decision had not been taken at the expense of competition and consumer interests.

"The trans-Pacific route is currently well serviced by a number of major carriers, with a range of other prospective entrants, such as Virgin Blue and Air Canada, likely to increase competition further," Mr Dixon said.

Mr Dixon said Qantas, while noting the Government's reasons for deciding against requests on foreign ownership limits at this time, would continue to discuss this issue with the Government.

"The removal of foreign ownership limits would have helped Qantas lower its cost of capital, as well as provided parity with other Australian international carriers, allowing us to operate competitively while not in any way endangering our role as a major Australian company.

"We also note there has been no decision made with regard to depreciation rates, and will continue to talk to the Government about the impact of the current schedules on our competitiveness, given the relatively advantageous position enjoyed by our competitors."

Mr Dixon said overall, the Government's review had clarified the medium-term policy framework and would assist in making important decisions in growth and the restructuring of the business.

"The situation regarding heavy maintenance, which has been the subject of recent discussions, is a major decision that must be actioned. The result of our review of these operations should be announced within the next few weeks."

The Chairman of Qantas, Ms Margaret Jackson, said she had noted the Government's comments suggesting that the Boards of Qantas and Singapore Airlines should consider the advantages to be gained by a strategic alliance between the two airlines.

"The Minister has rightly acknowledged that this is a commercial matter. However, while Qantas is looking at many major issues at the moment, this is not one of them," she said.

Issued by Qantas Corporate Communication (Q3395)
Email: qantasmedia@qantas.com.au