Qantas battles for BA to raise stake

THE future of British Airways' stake in Qantas is again under scrutiny with the Australian carrier mounting a campaign to have its UK partner's 49% foreign ownership cap removed.

Qantas today posted a record full-year profit of A$648.4m (£254m) but warned it faced ballooning costs unless the Australian government removed the 'legislative shackles' surrounding its shareholding structure.

BA has a 17% stake in Qantas, though it has fallen in recent years as Qantas issued shares to fund its expansion when BA was unable to take up the option.

Qantas chairwoman Margaret Jackson said the Australian airline remains fettered by a unique limitation - the Qantas Sale Act.

'This restricts the company's access to global equity capital and so increases its cost of capital,' she said. 'It must be recognised that Qantas needs to be able to participate in the consolidation process if it is to achieve the scale and efficiencies needed to compete at the global level in the years ahead.'

Jackson and chief executive Geoff Dixon are seeking fresh talks with the government in a bid to have the ownership cap lifted, if not completely removed.

Qantas said its net profit almost doubled in the year to 30 June, jumping to A$648.4m from A$343.5m a year ago. But with the oil price pushing through $47.33 a barrel, Qantas is under pressure to lift its fuel surcharge, introduced in May.