Australian Government Voices Support for Possible Qantas-Singapore Airlines Merger

SYDNEY, Australia (AP) -- Australia should not rule out the possibility of Qantas merging with rival Singapore Airlines, Australia's trade minister said.

''My view is if (a merger) could occur then the government should not rule that out,'' Mark Vaile told The Australian newspaper for its Monday edition.

''Quite frankly, that is the direction that international aviation is moving in.''

No more than 49 percent of the former state-run carrier is allowed to be foreign owned, but its managers have long lobbied Canberra for that restriction to be dropped.

Vaile said Qantas is facing serious commercial challenges and the government ''needed to ensure Qantas isn't exposed to unfair competition.''

Qantas chief financial officer Peter Gregg said Vaile's comments were very encouraging for the carrier.

''We are very supportive of a regime in which more consolidation can occur,'' he said. ''It's happening in Europe, it's happening in America.''

The Australian government currently is undertaking a broad review of the Australian aviation industry.

Last week Canberra announced it would not allow Singapore Airlines to fly the lucrative routes between Australia and the United States.