May 24, 2012

Financial Review: Qantas within its rights on Air Pacific

OLIVIA WIRTH

I would like to provide the facts on Tansy Harcourt’s “Fiji hits out at Qantas over Air Pacific sale”.
Qantas acquired its 46 per cent interest in Air Pacific in 1998. We have always been aware that Air Pacific needed to be “substantially owned and effectively controlled” by Fiji nationals and there is no doubt that it has been substantially owned and controlled by the Fiji government.
The only “right” granted to Qantas was the right to appoint four directors to the nine member Air Pacific board (where a two-thirds majority is required to endorse major decisions). Qantas has no other “veto rights” and no ability to unilaterally control the operations of Air Pacific.
We expect our appointed directors to comply with their legal obligation and make all decisions in the best interest of Air Pacific – even if that conflicts with the interest of the Qantas Group.
Despite this, the Fiji government has made clear its intention to unilaterally take absolute control of the airline under a new decree.
In the Air Pacific articles of association, there are clear provisions for a potential sale of Qantas’ shares. We have simply said to the Fiji government that we expect it to abide by these provisions and requested that an independent international arbitrator be appointed if a purchase price cannot be agreed.
It is unfortunate that the government has seen fit to publicly attack Qantas for upholding the agreement between us.
Olivia Wirth Group executive Qantas Airways Ltd Sydney NSW
The Australian Financial Review


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