Qantas indicates its carbon price bill could jump from $106 million to $120 million

QANTAS has now become a public ally of the Abbott Government in demanding Labor backs theremoval of carbon price and supports changes to ownership laws.

Qantas’s carbon bill is set to soar.

QANTAS has raised the budget-sapping prospect its carbon price bill will soar to $120 million this financial year as it joins the Government’s campaign against the emissions levy.

This compares to $106 million in the 2013 financial year.

The airline revealed that in the first half of 2014 the bill had reached $59 million and was a "significant challenge".

Earlier this week the national carrier told the Government the carbon bill was not one of the central problems endangering its financial security and concentrated on its demands for relaxation of foreign ownership limits and loan guarantees.

A spokesman at the time said "current issues are not related to carbon pricing”.

“We have been clear that levelling the playing field is the most important policy measure that needs to be fixed and with some urgency."

Qantas last week announced it would cut 5000 jobs.

This did not please the Government which is heavily pressuring the Labor Opposition and the Greens to support the dismantling of carbon pricing by backing the Coalition in the Senate now, and not wait for a showdown in the new Senate in July.

But after Cabinet rejected the loan support this week Qantas today came back to the carbon price issue and highlighted it.

"We have said that the price on carbon is a cost to our business that we have not been able to recover through fare increases, because of the intensely competitive market we operate in," the airline said in a statement.

"Domestically, it cost us $106 million in (financial year 2013) and $59 million in (the first half of 2014). It is among the significant challenges we face, including an uneven playing field, capacity increases in the international market and record high fuel prices."

Asked whether his office had approached Qantas on its carbon statement Treasurer Joe Hockey today said: “Not that I’m aware of."

Mr Hockey said the fast assistance the Government could give the airline was halting the levy. It was "the best thing we could do for the Qantas balance sheet" and likened a loan guarantee to helping it borrow $3 billion with no security.

The Government is certain to use the airline’s concerns to demand Labor and the Greens not only eliminate the carbon price but support the rewriting of laws restricting foreign ownership of Qantas’ domestic operations.

Qantas says the price on carbon is a “cost to our business that we have not been able to recover”.

Labor is set to challenge reported investment bank advice to the Government which figured heavily in cabinet’s decision to reject the loan guarantee request.

In its statement today Qantas said it continued to want changes to the sale act which imposes strict ownership provisions on domestic operations, calling the legislation outdated and the reason the airline was at a unique disadvantage.

"Both sides of politics have fully accepted that the Australian aviation playing field is distorted," it said.

"After discussions with Qantas, the Government announced that it had deliberated carefully on various options, and that its preferred course of action is to ask the Parliament to repeal key provisions of the Qantas Sale Act.

"If the legislation does not pass, then the domestic distortion would remain."