Qantas Airways Limited (Loan Guarantee) Act 1989

Administered by Department of the Treasury

Legislation au C2004A03767 In force Act

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Qantas Airways Limited (Loan Guarantee) Act 1989

 

No. 19 of 1989

 

 

 

 

 

An Act relating to the provision of certain equipment for Qantas Airways Limited

 

 

 

Contents

1  Short title

2  Commencement

3  Interpretation

4  Guarantee of certain loans

5  Conditions of guarantees

6  Delegation

 

 

 

Qantas Airways Limited (Loan Guarantee) Act 1989

No. 19 of 1989

 

 

 

An Act relating to the provision of certain equipment for Qantas Airways Limited

[Assented to 20 April 1989]

The Parliament of Australia enacts:

1  Short title

  This Act may be cited as the Qantas Airways Limited (Loan Guarantee) Act 1989.

2  Commencement

  This Act commences on the day on which it receives the Royal Assent.

3  Interpretation

 (1) In this Act:

borrow includes borrow, or otherwise raise money, by dealing in securities.

 (2) For the purposes of this Act, the obtaining of credit shall be taken to be a borrowing of an amount equal to the value of the credit obtained.

4  Guarantee of certain loans

 (1) The Treasurer may, on behalf of the Commonwealth, and subject to the conditions required by this Act, guarantee:

 (a) the payment by Qantas Airways Limited of amounts that Qantas Airways Limited is liable to pay with respect to so much of the money borrowed by it as does not exceed the total expenditure that, to the satisfaction of the Treasurer:

 (i) will be, or has been, incurred by Qantas Airways Limited in connection with the purchase by it of 3 Boeing 747-400 aircraft and related spare parts and equipment; and

 (ii) will be, or has been, met out of money owned or borrowed by it; and

 (b) the payment of interest (including any interest on that interest) on money so borrowed.

 (2) A guarantee or guarantees shall not be given under subsection (1) in respect of money borrowed in the currency of the United States of America, or in any other currency, exceeding in the aggregate $385,000,000 in the currency of the United States of America.

 (3) The power of the Treasurer to give a guarantee under this section includes:

 (a) a power to agree, on behalf of the Commonwealth, that proceedings under the guarantee may be taken in a court of a  country other than Australia; and

 (b) a power to waive, on behalf of the Commonwealth, the immunity of the Commonwealth from suit in a court of a country other than Australia in relation to any proceedings that may be taken under the guarantee in such a court.

 (4) For the purposes of subsection (2), the amount of a borrowing in a currency other than the currency of the United States of America shall be taken to be the amount in the currency of the United States of America that was equivalent to the first-mentioned amount at the date of the borrowing, as ascertained by the Reserve Bank of Australia.

5  Conditions of guarantees

  For the purpose of the protection of the financial interests of the Commonwealth, the Treasurer shall not give a guarantee under section 4 unless:

 (a) the money is borrowed on terms and conditions that the Treasurer is satisfied are reasonable;

 (b) appropriate security to the satisfaction of the Treasurer is, or is to be, given to the Commonwealth over property of Qantas Airways Limited, being property 85% of the value of the interest of Qantas Airways Limited in which, immediately before the giving of security to the Commonwealth, equals or exceeds the amounts borrowed;

 (c) undertakings to the satisfaction of the Treasurer are given that the property of Qantas Airways Limited over which security is, or is to be, taken in accordance with paragraph (b):

 (i) will be insured and kept insured against all risks against which it is customary to insure and to the full insurable value of that property; and

 (ii) will not be dealt with so as to prejudice the security given to the Commonwealth in respect of the guarantee; and

 (d) such other conditions as the Treasurer thinks necessary are fulfilled.

6  Delegation

 (1) The Treasurer may, by signed instrument, delegate to an officer of the Department of the Treasury all or any of the powers or functions of the Treasurer under this Act.

 (2) A delegate is, in the exercise or performance of a power or function so delegated, subject to the directions of the Treasurer.

 

 

 

 

 

 

Overview

The Qantas Airways Limited (Loan Guarantee) Act 1989, enacted by the Parliament of Australia, was introduced to address the need for financial support to facilitate the acquisition of specific equipment for Qantas Airways Limited. This legislation allows the Treasurer, on behalf of the Commonwealth, to guarantee certain loans up to a specified limit to ensure Qantas can proceed with the purchase of three Boeing 747-400 aircraft along with related spare parts and equipment. The policy objective underpinning this Act is to safeguard the financial interests of the Commonwealth while enabling Qantas to secure necessary assets for its operations. The Act stipulates conditions under which such guarantees can be issued, including the requirement for reasonable borrowing terms, appropriate security over Qantas’s property, and other measures to protect the Commonwealth’s interests.

Scope and Application

The Qantas Airways Limited (Loan Guarantee) Act 1989 applies specifically to the Commonwealth's provision of guarantees for loans made to Qantas Airways Limited for the purchase of three Boeing 747-400 aircraft and related spare parts and equipment. The Treasurer is empowered to guarantee payments for these loans and associated interest, subject to certain conditions, including that the borrowing does not exceed $385,000,000 in United States currency. The Act extends to the Treasurer's ability to agree that proceedings related to the guarantees may be taken in a foreign court and to waive the Commonwealth's immunity from suit in such a court. Additionally, the Act allows the Treasurer to delegate their powers and functions to an officer of the Department of the Treasury. The Act applies to borrowings made in currencies other than US dollars, with the equivalent value in US dollars being used for the purpose of the $385,000,000 limit.

Key Provisions

The Qantas Airways Limited (Loan Guarantee) Act 1989 (sections 4 and 5) allows the Treasurer to guarantee certain loans made to Qantas Airways Limited for the purchase of Boeing 747-400 aircraft and related equipment. This guarantee covers the payment of amounts Qantas is liable to pay and the interest on those amounts, up to a limit of $385,000,000 in US currency. The Act also permits the Treasurer to agree that proceedings related to the guarantee can be taken in a court outside Australia and to waive the Commonwealth’s immunity from suit in such courts. However, these guarantees can only be provided if specific conditions are met. These include the borrowing being on reasonable terms, the provision of appropriate security over Qantas's property, and undertakings to insure the property and maintain the security. The Treasurer must also be satisfied with other conditions deemed necessary (section 5). The Act imposes several obligations on the parties involved. The Treasurer, who is responsible for providing the guarantees, must ensure that the loans are made on reasonable terms, that appropriate security is provided, and that the necessary undertakings regarding insurance and property management are given (section 5). Qantas Airways Limited must meet these conditions to secure the guarantee. Additionally, the Treasurer has the authority to delegate certain powers or functions to an officer of the Department of the Treasury, subject to the Treasurer’s directions (section 6). Breaches of the conditions set out in the Act may result in the guarantee not being provided, thereby leaving Qantas Airways Limited to meet its financial obligations without the backing of the Commonwealth. Although the Act does not explicitly state criminal or civil penalties for non-compliance, failure to meet the specified conditions could have significant financial repercussions for Qantas, as it would lose the protection of the Commonwealth guarantee. The Act’s primary focus appears to be on ensuring that the financial interests of the Commonwealth are safeguarded through stringent conditions before any guarantee is issued.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.