Australia rejects Qantas' request for $2.7 B loan

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Associated Press

Posted on March 4, 2014 at 11:02 PM

Updated Wednesday, Mar 5 at 1:34 AM

CANBERRA, Australia (AP) — Australian Prime Minister Tony Abbott says his government has rejected a request from Qantas Airways for a 3 billion Australian dollar ($2.7 billion) unsecured loan to help the national carrier return to profitability.

Cabinet ministers on Monday decided against proving Qantas with a debt facility, and instead agreed to relax foreign ownership restrictions which impede the airline's ability to raise capital.

Abbott told Macquarie Radio on Wednesday that his ministers had acted on expert advice that Qantas did not need the requested line of credit.

The Cabinet meeting followed the former state-owned airline last week posting a first-half loss of AU$235 million amid tougher competition. Qantas and said it would cut 5,000 jobs in a bid to cut costs by AU$2 billion over three years.

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