Qantas somersaults on carbon tax burden

Qantas has backtracked on its previous statement on the carbon tax. AAP/Barbara Walton

Qantas has done a backflip over the role of the carbon tax in the problems it faces.

After declaring on Monday that “the major issues Qantas faces are not related to carbon pricing”, it now says this cost is among the “significant challenges” the airline confronts.

Monday’s statement - which came as federal cabinet was considering Qantas, including its request for a debt guarantee or a line of credit - infuriated ministers.

The government decided on legislation to remove the barrier to majority foreign ownership of Qantas. This is being strongly opposed by Labor, the Greens and Clive Palmer’s party, stymieing its chances - as things stand - of getting through the current or new senate.

Cabinet flatly rejected the debt guarantee or credit facility, based on multiple advice that such a course would be unwise.

Virgin has highlighted the burden of the carbon tax, something prime minister Tony Abbott has played up in the debate over Qantas.

In today’s statement Qantas said: “We have said that the price on carbon is a cost to our business that we have not been able to recover through fare increases, because of the intensely competitive market we operate in.

"Domestically, it cost us $106 million in [full year] 13 and $59 million in [half year] 14. It is among the significant challenges we face, including an uneven playing field, capacity increases in the international market and record high fuel prices.”

On Monday Qantas’s statement listed several “issues” and “facts”, including one on carbon.

“ISSUE: Claims that the carbon tax is a key issue facing Qantas.

FACTS: The major issues fac[ing] Qantas are not related to carbon pricing.”

Meanwhile the positions of both Labor and Qantas have been undermined by one-time chief of staff for Kevin Rudd and former Qantas executive David Epstein, who wrote in today’s Australian Financial Review that Abbott was right in not offering a guarantee.

“Much of what Qantas has lobbied for is inequitable, short-sighted and irresponsible: commercially, economically and, most likely, fiscally,” the article said.

He also wrote that “the Qantas Sale Act should go, though it’s not crucial to Qantas’s issues, and the ALP should not stand in the way”.

He said that it was “puzzling when a party claiming to be progressive wants to compound out-dated interventionism with a market distorting loan guarantee specific to Qantas. This is a step down the Argentine road”.