Qantas Accepts $8.64B Takeover Offer

Bob Mansfield, the director Airline Partners Australia, said the consortium supported Qantas' existing management and its plans for large capital expenditure, including plans to invest more than A$10 billion ($7.87 billion) over the next five years and buy more than 70 new aircraft.

"Qantas would retain the current Australian management and their growth strategy, a strategy that does not involve a break up of the airline, cuts to regional services or the movement of maintenance operations offshore," Mansfield said.

Some analysts have predicted Howard's populist conservative government may try to use Qantas' iconic status to block the takeover. But the fact that Qantas will remain majority-Australian owned diminishes Treasurer Peter Costello's ability to use his "national interest" powers to block the sale, as he did with Royal Dutch Shell's A$10 billion bid for Australian energy giant Woodside Petroleum Ltd. in 2001.

"The government is likely to be a bit nervous, but they will be reluctant to stop it given the message that sends to offshore investors," said Jason Bloom, an analyst at Deutsche Bank. "With the federal election coming up, there will be some pretty strong comments coming out of union groups, from consumer groups, so I am sure they will take it pretty seriously."

The Australian Council of Trade Unions has already warned that the consortium may slash jobs and reduce wages if it wins control of Qantas, one of Australia's biggest employers with a 37,000-strong work force.

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