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Qantas Sale Amendment (Still Call Australia Home) Bill 2011

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Qantas Sale Amendment (Still Call Australia Home) Bill 2011

 

Supplementary Explanatory Memorandum for Amendments to be moved by Senator Xenophon in committee of the whole

Senator Nick Xenophon

 

Background

 

These amendments are in response to issues raised during the Senate Rural Affairs and Transport Legislation Committee inquiry into the Qantas Sale Amendment (Still Call Australia Home) Bill 2011. These amendments narrow the focus of the bill to ensure it applies only to Qantas, and Australian international airlines in which Qantas has a controlling share. The amendments also address any issues of extra-territorial application of Australian law.

 

Amendments

 

Amendment (1) removes the existing definition of ‘associated entity’ in the bill, and replaces it with a requirement to satisfy subsection 50AAA(2) or (3) of the Corporations Act 2001. This clarifies that the bill will apply only to associated entities controlled by Qantas, rather than any entities in which Qantas owns a share.

Amendment (2) inserts a new definition for ‘exercising Australian rights’ into subsection 3(1) of the Qantas Sale Act. This definition further clarifies that the bill will apply only to airlines designated as Australian international airlines in accordance with the Air Navigation Act 1920 .  The definition excludes code-share arrangements where the Australian international airline is not the operating carrier.

Amendment (3) replaces the existing paragraph 7(1)(ha) in the bill to require that Qantas ensure that its subsidiaries or associated entities exercising Australian rights have their principal operational centre in Australia. This is determined by comparing the facilities used by the subsidiary or associated entity in Australia with the aggregate of all other facilities used by the subsidiary or associated entity in all other countries. This amendment clarifies that the principal operation centre must be determined through a comparison to all facilities in other countries, rather than a comparison with the facilities in one country, which the wording of this paragraph in the original bill may have allowed.

Amendment (4) amends the existing paragraph 7(1)(hb) to clarify that it applies to flight operations management, rather than to flight operations as a whole. This addresses the issue raised during the committee inquiry, in relation to restricting Qantas’ overseas flight operations, which could have the unintended consequence of requiring Qantas to become a primarily domestic airline. Instead, this paragraph now requires that the majority of flight operations management conducted by, or on behalf of, Qantas is conducted in Australia.

Amendment (5) replaces the existing paragraph 7(1)(hc) in the bill to require that the majority of heavy maintenance of aircraft and the majority of flight operations management and training conducted by, or on behalf of, Qantas subsidiaries and associated entities exercising Australian rights must be conducted in Australia. This amendment amends the paragraph in the original bill to ensure that this paragraph applies only to Qantas subsidiaries and associated entities exercising Australian rights, as defined above.