Australia's federal cabinet has rejected a request by Qantas Airways to relax its foreign ownership caps. Qantas has been lobbying almost since its privatisation a decade ago to allow foreigners to own more than 49% of its shares. In recent months, it has intensified this campaign because it faces a potential capital outlay of A$13 billion ($7 billion) over the next decade, mostly for new aircraft.

Its problem is aggravated by the 21.5% stake, held by British Airways, which it wants to keep. That only leaves a free float of 27.5% for other foreign investors. The federal cabinet agreed to review this request, but decided not to change the cap. Cynics claim its decision was driven by politics, but transport minister John Anderson says the cabinet was unconvinced by the Qantas claim that Australia's share market is too small to meet its capital needs.

Source: Airline Business