Canberra keeps Qantas in Aussie hands

[SYDNEY] The Australian government yesterday abandoned plans to allow struggling national carrier Qantas to be majority overseas-owned but agreed to a compromise that will see foreign investment restrictions eased.

Qantas has been lobbying for help after a A$235 million (S$273 million) loss in the six months to Dec 31 and a decision to slash 5,000 jobs as it battles high fuel prices and fierce competition from subsidised rivals.

It wanted Canberra to relax the 1992 Qantas Sales Act which caps foreign ownership at 49 per cent, which it said restricted its access to capital.