Qantas pulls directors from Fiji airline
Australia's Qantas has withdrawn its four directors from the board of Air Pacific, saying it is clear that Fiji's military regime wants to take complete control of the carrier.
Qantas, which has held a 46 percent stake in the airline since 1998, says the withdrawal will have immediate effect in the Pacific nation controlled by military leader Frank Bainimarama who took power in a 2006 coup.
"The action is a response to intervention in the management of Air Pacific by the Fiji government, including the issue of a decree designed to reduce Qantas's role on the board," it said in a statement.
"The government has made clear its intentions to unilaterally take absolute control of Air Pacific under the new decree. In the circumstances Qantas believes it is appropriate to remove its four directors."
Two-third Fijian board
Under Fiji's Civil Aviation (Ownership and Control of National Airlines) Decree issued in March, at least two-thirds of Air Pacific's board of nine must be Fijian citizens, meaning only three directors can be foreigners.
The Australian airline says as a result, Qantas's four directors will step down to ensure Air Pacific remains compliant with the decree.
Qantas says since its involvement in Air Pacific, the carrier has been effectively controlled by Fijians and its only right under law had been to have four directors on a board where a two-thirds majority must endorse major decisions.
It says Qantas retains its rights as a shareholder and will continue to consider options for the potential sale of its stake.
The Fiji government said this month it was in talks to buy the Australian flag carrier's holding.
Commodore Bainimarama seized power in a bloodless coup, pledging to root out corruption and introduce a one-person, one-vote system intended to end entrenched racial inequalities in the nation of 840,000.
But he reneged on a promise to hold elections in 2009, tore up the constitution and introduced emergency measures that muzzled the media and banned public meetings.
He repealed the emergency laws earlier this year, but also strengthened decrees giving the police and military sweeping powers.
The government has already announced that Air Pacific, which posted a loss of $US2 million in the 12 months to March 2011, will change its name to Fiji Airways next year.