In the latest National Aviation Policy White Paper, the Government has declared that it will relax the ownership restrictions on the national carrier, Qantas.

While maintaining 49% as maximum foreign ownership, the individual caps of 25% for a single foreign investor and 35% in Toto for foreign airlines have been done away with. This decision seems to stem from a need to cushion the blow of a global economic slowdown.

The Qantas Chief Executive Alan Joyce said, "Airlines need policy certainty and financial freedom of movement in order to implement long-term growth plans. This change will increase Qantas' flexibility as it meets the challenges of an uncertain global economy and business environment, opening up opportunities for strategic growth and alliances".

The Government accepts a more liberal approach for airlines other than Qantas. The paper also declared, "Such foreign ownership rights would only be agreed if there were demonstrable benefits to the Australian economy and significant opportunities provided for Australian airlines in the markets of that trading partner".

While the move has the potential to trigger off mergers and acquisitions, it seems a distant possibility as of now going by the unsuccessful talks with British Airways, Singapore Airlines, Malaysian Airlines and V Australia International. These are, however, expected to resume early next year.