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Tuesday, 6 December 1983
Page: 3241

Mr SPENDER —The Minister for Aviation will recall tabling in Parliament last week the annual report of Qantas Airways Ltd. He will recall that that airline over the past several years has suffered very extensive losses on airline operations, including $71m over the last two financial years. He will also recall what the Chairman said in his letter to the Minister about the high debt ratio of Qantas, including:

This debt remains high and it is important to remember that there is clearly an ongoing requirement for the Company to have sufficient funds this decade to ensure that we will maintain our fleet in a modern, efficient and competitive form.

Will the Minister give an undertaking to this House that the proposed purchase by Qantas of new planes for the sum of $860m will be made without recourse to the Australian Government for taxpayers' funds?

Mr BEAZLEY —Mr Speaker, I am indeed grateful that you have finally given the call to the honourable member for North Sydney. Both he and I have awaited that call with a degree of nervousness for some considerable time. I thank him for his question. I realised, once the question was asked, that I had no need for any sense of nervousness or any anticipation about it. The request by Qantas Airways Ltd for approval of its purchase of additional aircraft was presented to the Government on the basis that the purchase could be effected within the framework of Qantas's anticipated earnings over, I think, the next 10 years and also within the framework of funds that would be available to the airline and which would come from sources other than an additional capital injection. They would include the sale of certain Qantas properties and general Qantas trading activities. I anticipate that there will be no requirement for an injection of capital based upon the purchase of those aircraft.

I cannot of course fortell the trading situation Qantas three or four years down the line and what might be necessary in relation to a capital injection then. I do not want to give quite the unqualified statement that the honourable member's question seemed to require of me in relation to a future capital injection into Qantas. But the figures on which the assessments were made were, if you like, not over optimistic. If anything, they were on the pessimistic side when looking at Qantas's trading possibilities. Therefore, in relation to the actual purchase itself one could not foresee, on a reasonable judgment, circumstances arising necessitating a capital injection.

After a period of some losses, the Chairman of Qantas has assured the public and me that Qantas is beginning to trade itself back into a profitable position. It is his belief and mine that the purchase of the new aircraft will materially assist Qantas in that regard in two directions: Firstly, by the provision of more fuel efficient equipment-it is discarding six of its most aged Boeing 747 aircraft and taking on three new stretched upper deck aircraft and half a dozen Boeing 767s; secondly, because of the purchase of Boeing 767s which are a different type of aircraft with a smaller capacity than those which Qantas has been operating for some years now, Qantas will be able to take advantage of operations on less well populated but potentially profitable regional routes in the South West Pacific and South East Asia. I think Qantas and the Australian travelling public will benefit very considerably from this purchase. Qantas will continue to serve the public in the very efficient and effective manner that it has done in the past.

When reference is made, as the honourable gentleman did, to Qantas's losses, we are entitled to look at Qantas's performance on a comparative basis. A large number of airlines are operating internationally; I think up to 200. Very few of them are making a profit. Qantas is closer to making a profit than most of them. If Qantas returns a profit for this year it will make it one of a very small number of international airlines that will be showing a profit on operations. If that is to be the case Qantas is to be congratulated on that. On the basic point that the honourable gentleman made I do not anticipate that a capital injection will be required in relation to Qantas's purchases. The Government decision was taken on the assumption that that would not be ncessary. I do not, however, want to give any unqualified undertakings that, at some time in the next few years, if the situation changes from what has been a fairly pessimistic assessment anyway, that would not have to be considered. But I am not anticipating it.