Aid For Airline And Its Impact On The Tourism Industry

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Aid for Airline?
Qantas airlines are an iconic Australian business, which has heavily shaped the tourism industry. However in the 2013-14 financial year, (Qantas, 2014, pg.1) due to falls in revenue, growing competition and high expenses the airline reported a 2.8 billion dollar loss. (Mccrann, 2014) It was then that the company felt it required government support to assist them in getting back on their feet. Commonly referred to as a “bailout” and in this case more specifically a “debt guarantee”, this would involve the Australian Government covering Qantas’ debts, should the company collapse. (Mcllroy, 2014, p9) There were mixed views on this particular issue between different MP’s, different political parties and against Qantas itself. After much debate on the issue however it was declared that the Government would not grant a debt guarantee to Qantas. (Coorey, 2014) This essay takes into account both sides of this debate and explains why the ultimate decision by the Government not to financially support Qantas was justified.
From July 2013 to July2014, Qantas reported a statutory loss of 2.84 billion dollars (Qantas, 2014, p1) and job cuts of approximately 5,000. (Boyle, 2014, p3) According to some commentators continued decline of this scale would bankrupt the airline. (Mccrann, 2014)
There are several explanations as to why Qantas was struggling so much to remain profitable. One being an increase in fuel costs of 6 per cent ($253 million). (Qantas, 2014, p1)This

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