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Australia Airline Ownership Laws?  
User currently offlineSankaps From United States of America, joined Jan 2008, 2255 posts, RR: 2
Posted (5 years 11 months 3 weeks 3 days 22 hours ago) and read 2124 times:

Anyone here familiar with Australian airline ownership regulations? Can't seem to locate anything on the web, but I seem to recall reading somewhere that foreigners can own upto 49% of an Australian airline that flies international routes, and upto 100 % of a purely domestic airline. Is that correct? Is that how Tiger Airways operates domestic services in Australia? They are 100% foreign (mainly Singaporean) owned from what I understand.

Similarly, If Singapore Airlines or Cathay decided to set up an airline domestically in Australia, would they be allowed to? Would there be any restrictions on who they could hire and on the nationality of the management? Could they code-share with the parent SIA or CX, and so forth? I seem to recall Virgin Blue was required to have Australian management when they first started, is that still the case?


Thanks!

Sankaps.

12 replies: All unread, jump to last
 
User currently offlineZeke From Hong Kong, joined Dec 2006, 9154 posts, RR: 76
Reply 1, posted (5 years 11 months 3 weeks 3 days 16 hours ago) and read 2052 times:



Quoting Sankaps (Thread starter):

Sounds like standard corporation law, nothing particular to do with an airline which would be covered by the Australian Securities and Investments Commission. Even in Singapore, a company needs to be 51% Singapore owned, likewise in Australia.

The domestic airline in Australia, is operated by TIGER AIRWAYS AUSTRALIA PTY LIMITED, it is an Australian company, by definition, majority Australian owned.

Quoting Sankaps (Thread starter):

Similarly, If Singapore Airlines or Cathay decided to set up an airline domestically in Australia, would they be allowed to?

Yes, in fact SQ has been offered Australian government incentives to do that a number of times.

Quoting Sankaps (Thread starter):
Would there be any restrictions on who they could hire and on the nationality of the management?

They would just need to show any position could not be filled by Australian first, visas are used for managers, I think the current CEO elect of QF has European origins. I think some airlines in Australia are also employing pilots and cabin crew from overseas as well.

Quoting Sankaps (Thread starter):
Could they code-share with the parent SIA or CX, and so forth?

Do not see why not.



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offlineThe Coachman From Australia, joined Apr 2001, 1429 posts, RR: 0
Reply 2, posted (5 years 11 months 3 weeks 3 days 16 hours ago) and read 2047 times:

Add in complications with the Foreign Investments and Takeovers Act as well, any stake would require approval by FIRB, the Foreign Investments Review Board.

And it's not just standard corporation law Zeke. It's not as simple as 51%.



M88, 722, 732, 733, 734, 73G, 73H, 742, 743, 744, 752, 762, 763, 772, 773, 77W, 320, 332, 333, 345, 388, DH8, SF3 - want
User currently offlineZeke From Hong Kong, joined Dec 2006, 9154 posts, RR: 76
Reply 3, posted (5 years 11 months 3 weeks 3 days 15 hours ago) and read 2034 times:



Quoting The Coachman (Reply 2):
And it's not just standard corporation law Zeke. It's not as simple as 51%.

The Air Navigation Act 1920 section 11A limits foreign ownership to 49%, how is not as simple as 51% Australian ownership being the maximum ?



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offlineSankaps From United States of America, joined Jan 2008, 2255 posts, RR: 2
Reply 4, posted (5 years 11 months 3 weeks 3 days 13 hours ago) and read 2006 times:



Quoting Zeke (Reply 1):
The domestic airline in Australia, is operated by TIGER AIRWAYS AUSTRALIA PTY LIMITED, it is an Australian company, by definition, majority Australian owned.

The company is incorporated in Australia, that is pretty clear. But are you sure it is majority Australian owned? According to Wiki, Tiger Australia is a fully-owned subsidiary of the Tiger Aviation, which is 100% foreign owned, quote:

"Tiger Airways Australia is wholly owned by holding company Tiger Aviation, which itself is owned by:

Singapore Airlines Limited (49%)
Indigo Partners LLC, the investment firm founded by Bill Franke (24%)
Irelandia Investments Limited, the private investment arm of Tony Ryan (of Ryanair) and his family (16%)
Temasek Holdings Pte Ltd (11%)
Shares of Tiger Airways Australia Pty Ltd are not publicly traded."

The reason I ask is that we know that we cannot always take wiki as 100% accurate. Anyone know for sure?


User currently offlineZeke From Hong Kong, joined Dec 2006, 9154 posts, RR: 76
Reply 5, posted (5 years 11 months 3 weeks 3 days 13 hours ago) and read 1997 times:



Quoting Sankaps (Reply 4):
But are you sure it is majority Australian owned?

No I am not sure. The Air Navigation Act covers international flights, they could get around that by using the Singapore registered Tiger Airways Pte Ltd to carry out the international services. It would mean that Tiger Australia is limited to domestic services only.

Quoting Sankaps (Reply 4):
subsidiary of the Tiger Aviation

That would be Tiger Aviation International Pte Ltd



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offlineVV701 From United Kingdom, joined Aug 2005, 7619 posts, RR: 17
Reply 6, posted (5 years 11 months 3 weeks 3 days 12 hours ago) and read 1985 times:

Surely any airline of any nationality that wishes to operate under any bilateral agreement signed by its government and any foreign government needs to be at least 50 per cent plus one share owned by domestic nationals or companies?

In other words British owned BA cannot operate under a bilateral agreement signed by any two governments where one of those governments is not British.

So the only time where an airline can operate internationally without a minimum of 50 per cent plus one share control by national shareholders is where allowable flights between two countries are controlled under a supra-national agreement such as the Open Skies agreement reached by the EU with the USA. And even then at least 50 per cent plus one share ownership will have to be by nationals and organisations domiciled in the EU or the American DoT will rightfully reject any request to commence services.


User currently offlineThe Coachman From Australia, joined Apr 2001, 1429 posts, RR: 0
Reply 7, posted (5 years 11 months 3 weeks 3 days 2 hours ago) and read 1932 times:

Obviously Zeke you've failed the grasp the nuances of my writing.

To simply state sections of the Air Navigation Act and say "s11A says this" fails to understand the complexities around such arrangements.

There is more to it than that which meets the eye when referencing the OP's question because of various ownership structures and the poor drafting of the legislation.



M88, 722, 732, 733, 734, 73G, 73H, 742, 743, 744, 752, 762, 763, 772, 773, 77W, 320, 332, 333, 345, 388, DH8, SF3 - want
User currently offlineZeke From Hong Kong, joined Dec 2006, 9154 posts, RR: 76
Reply 8, posted (5 years 11 months 3 weeks 3 days ago) and read 1874 times:



Quoting The Coachman (Reply 7):
Obviously Zeke you've failed the grasp the nuances of my writing.

I think we have all grasped that all you have demonstrated is that you have no idea yourself, all you can do is to be critical others. Both of your posts do not address the questions asked.



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offline6thfreedom From Bermuda, joined Sep 2004, 3333 posts, RR: 20
Reply 9, posted (5 years 11 months 3 weeks 2 days 22 hours ago) and read 1849 times:



Quoting The Coachman (Reply 7):
To simply state sections of the Air Navigation Act and say "s11A says this" fails to understand the complexities around such arrangements.

There is more to it than that which meets the eye when referencing the OP's question because of various ownership structures and the poor drafting of the legislation.



Quoting Zeke (Reply 8):
I think we have all grasped that all you have demonstrated is that you have no idea yourself, all you can do is to be critical others. Both of your posts do not address the questions asked.

Zeke, i don't think coachman intended to insult you.
I think that what he was intending to say is that, although there's a policy/legislation etc that says one thing, it's often things that go on behind the scenes in terms of lobbying etc, which makes it hard for a foreign airline to operate internationally etc.

I would have to agree. The Australian aviation laws are very complex, with a range of legislation, policy settings and acts which often contradict each other.

In general terms, the following applies:

* Domestic carriers in Australia can be 100% foreign owned.
* Even if 100% foreign owned, Australian government prefers Australian national as CEO, and significant australian board presence.
* even if the shareholding changes to 51% australian, still need to apply for capacity via IASC (often stumbling block for start ups)


User currently offlineZeke From Hong Kong, joined Dec 2006, 9154 posts, RR: 76
Reply 10, posted (5 years 11 months 3 weeks 2 days 22 hours ago) and read 1829 times:



Quoting 6thfreedom (Reply 9):
Zeke, i don't think coachman intended to insult you.

Thought the same after the first post, but after the second post ....

Quoting 6thfreedom (Reply 9):
I would have to agree. The Australian aviation laws are very complex, with a range of legislation, policy settings and acts which often contradict each other.

It is not just Australia, the way ICAO conventions have been enacted across the globe differs from Country to Country.

Quoting 6thfreedom (Reply 9):
Even if 100% foreign owned, Australian government prefers Australian national as CEO, and significant australian board presence.

I thought ASIC required at least one director to be a resident of Australia for a Pty Ltd, and that no board was required, it could be a single person being the director/secretary.

Quoting 6thfreedom (Reply 9):
even if the shareholding changes to 51% australian, still need to apply for capacity via IASC (often stumbling block for start ups)

Even to NZL and SIN ?



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offlineThe Coachman From Australia, joined Apr 2001, 1429 posts, RR: 0
Reply 11, posted (5 years 11 months 3 weeks 2 days 13 hours ago) and read 1752 times:

I can't say much, could be construed as legal advice which cannot be given outside the confines of the firm I work for.

Suffice to say that my posts did address the questions raised particularly regarding regulatory approvals and other applicable legislation that would need to be looked at.

Legislation may say one thing but until you practise here and understand the subtle nuances of the Australian legal system, the politics of CASA, Fed Govt politics and policies and various regulatory bodies, then merely saying the Act says blah is over-simplifying things for the original poster.

You've decided to read far more into my 2nd post than was intended. I do not know whether it is because I challenged your simple assertion that it is a mere 51% and opined that in reality it was not that simple or whether you have decided to take an ad hominem approach (I will give you the benefit of the doubt) but to claim that I know nothing and then decide that I'm only critical of others is really just being hypocritical is it not particularly when you do not know who I am?



M88, 722, 732, 733, 734, 73G, 73H, 742, 743, 744, 752, 762, 763, 772, 773, 77W, 320, 332, 333, 345, 388, DH8, SF3 - want
User currently offlineZeke From Hong Kong, joined Dec 2006, 9154 posts, RR: 76
Reply 12, posted (5 years 11 months 3 weeks 2 days 12 hours ago) and read 1724 times:



Quoting The Coachman (Reply 11):
I can't say much, could be construed as legal advice which cannot be given outside the confines of the firm I work for.

If that were your predicament there is a number of was you could have made a positive contribution to the thread without providing legal advice, for example listing/linking the relevant information that is already public domain such as the current regulations/organizations.

The tone/attitude you have taken in this thread seems to be somewhat different to what you have done in some of the 1000+ other posts you have made before.



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
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