Qantas Airways has removed four directors from Air Pacific's board and is looking at options for the potential sale of its 46% stake in the carrier.
The removal of the directors - Simon Hickey, Narendra Kumar, Charles Harvey and Brett Johnson, is in response to intervention in the management of Air Pacific by the Fiji government, Qantas said in a statement.
These include the issue of the Civil Aviation Decree 2012, where at least two-thirds of the carrier's board must be Fijian citizens - meaning only three directors can be foreigners.
Qantas has held a 46% stake in Air Pacific since 1998 and throughout this time, the airline has been "substantially owned and effectively controlled" by Fijians, says Qantas.
It adds that Qantas' only right was to appoint four directors to the carrier's board and never had any veto rights over the carrier's management.
"Despite these parameters, the government has made clear its intentions to unilaterally take absolute control of Air Pacific under the new decree. In the circumstances, Qantas believes it is appropriate to remove its four directors," says Qantas.
The Australian carrier, however, remains a shareholder and will continue to look for options to sell its stake.