Australian Airlines (Conversion to Public Company) Act 1988

The statutory architecture rests on a small set of interlocking concepts that determine who is inside the corporate “group”, what transactions are treated as routine parts of the reorganisation, and how legal and tax continuity are preserved.

• Transferring body. Defined as the corporation that existed under section 6 of the Airlines Act by the name “Australian National Airlines Commission” before the commencement of the Interpretation provisions (s 5). The Act operates by reference to that body being converted (s 15(1)-(2)).
• Transition and reorganisation. “Transition” is the commencement of s 15 (the deemed registration). “Reorganisation” is the defined period beginning the day after Royal Assent and ending immediately before the transition (s 5 definitions; s 2 commencement sequencing). The Act distinguishes transactions during the reorganisation from those after the transition for a range of tax and statutory treatments (see Divisions in Part VII).
• Group company and new group company. “Group company” means either the transferring body or a wholly‑owned subsidiary of it (s 5). “New group company” is a narrowly defined category , bodies that became group companies after 31 December 1987 and were not subsidiaries before 1 January 1988 (s 7). The new group company concept controls which transfers can be treated as internal, disregarded, or deemed continuations for tax and CGT purposes (s 39-44; s 49).
• Holding company. The Minister may nominate a Commonwealth‑owned public company incorporated under the Companies Act 1981 to be the holding company during the reorganisation (s 6). Shares may be issued to that holding company under Ministerial direction (s 11(3)), and special tax deemings apply when that holding company is involved (s 38; s 51).
• Deeming and disregards. The Act repeatedly uses statutory deemings to preserve continuity: the transferring body is deemed to have made and been granted an application to register under the Companies Act (s 15(1)-(2)); accounting records and reports under the Airlines Act are treated as Company Act records (s 20-21); transfers to new group companies during reorganisation can be disregarded for specified Tax Act provisions (s 39-44); and shares and liabilities are treated as having particular acquisition dates or cost bases for capital gains purposes (s 48-51).
• Tax exemptions and administrative certificates. “Exempt matter” is defined broadly to include the share issues, transfers and other conversion steps (s 34), and s 35 provides that tax, duty and similar charges under Commonwealth, State or Territory law are not payable in respect of an exempt matter. An authorised person (the Minister or a person declared by the Minister) may sign a certificate that is conclusive evidence that a matter is exempt or connected with an exempt matter (s 5 definition of authorised person; s 36(1)-(2)).

These concepts structure incentives and discretion: the Minister controls who receives shares and can nominate the holding company (s 11(3); s 6), and authorised person certificates under s 36 create administrative finality for tax and duty treatment unless the contrary is later proven.

The Act specifies and therefore confines its primary participants and affected parties:

• The transferring body (the Australian National Airlines Commission). The core subject of the Act is its conversion into Australian Airlines Limited. The Act changes its legal form, its name (s 15; s 16), its share capital (s 10-11), and the legal character that may attach to it for Commonwealth, State or Territory laws (s 15(5)).
• The Commonwealth (the shareholder and obligee). The Commonwealth is the beneficial owner of shares issued under s 11 unless the Minister directs otherwise, and will likely remain the ultimate shareholder unless the Minister's directions transfer shares to nominees or the holding company (s 11(3); s 6). The Commonwealth has decision rights through the Minister (s 6; s 11(3); s 36).
• The Minister. The Minister has several explicit functions: may nominate the holding company (s 6), directs to whom shares are issued (s 11(3)), may sign or declare authorised persons who can certify exempt matters (s 5 definition; s 36), and thus exercises central administrative discretion affecting legal and tax outcomes.
• The holding company and group companies. Bodies that become wholly‑owned subsidiaries or otherwise group companies are within the Act’s ambit (s 5 definitions; s 7). The holding company (if nominated) becomes the repository of shares and is subject to special tax deemings (s 38; s 51).
• Staff members of the transferring body. Staff members are tightly defined: the general manager, officers appointed under s 17(1) of the Airlines Act, and temporary or casual employees appointed under s 18 of the Airlines Act (s 5 definition). Those persons continue to be employed on pre‑transition terms, subject to the Part VI modification and limited variation rules (s 29-32).
• States and their laws. The Act modifies how certain state references operate (s 53-54) and provides that group companies may operate intra‑state air transport where the relevant State Act provides for the Commonwealth to exercise that function (s 54(4)). It also preserves certain continuing provisions of the Airlines Act (s 55-56), which can affect State interactions.
• Tax authorities and Commissioners. The Tax Act (Income Tax Assessment Act 1936) is engaged directly by numerous deemings (s 37-51). The Commissioner of Taxation is implicated by nomination requirements (e.g. s 51(2)(c) , notice to the Commissioner) and by the treatment of disposals and cost bases (s 46-51).
• Third parties with property interests (lessors, creditors, lessees). The Act contains provisions that treat lease terminations, assignments and substitutions as disregarded or deemed continuations for tax purposes where they occur during the reorganisation and involve new group companies (s 43-44). It also preserves access to compensation where the Act would otherwise effect an acquisition otherwise than on just terms (s 62).

Who pays and who decides: tax and duty that would ordinarily fall on transactions that are “exempt matters” are not payable (s 35). The Minister and authorised person decide many administrative outcomes (s 6; s 11(3); s 36), while decisions that require adjudication (e.g. compensation under s 62) are resolved by agreement or court. Businesses and third parties interacting with the transferring body or new group companies must take account of the statutory deemings when assessing tax, reporting and contractual obligations.

The Act creates duties on and rights for several actors. Below are the principal ones and their statutory sources.

Duties imposed on the transferring body and related entities:

• Apply capital to pay up shares. The transferring body must apply the capital it has under s 30 of the Airlines Act to pay up shares as soon as practicable after s 11 commences (s 11(1)). If the capital amount is not a multiple of 50 cents, it is reduced to the nearest multiple (s 11(2)). The share capital structure is specified in s 10 (shares at 50 cents each, subject to exceptions).
• Issue shares as directed by the Minister. Once the shares are paid up the transferring body must issue them to the Commonwealth, nominees of the Commonwealth, or the holding company, as the Minister directs (s 11(3)). The issue discharges the transferring body’s obligations to repay the Commonwealth capital (s 11(4)).
• Lodge memorandum and articles. Before the transition, the transferring body must lodge a proposed memorandum and articles with the Corporate Affairs Commission for the ACT; those become the company’s constitution at transition (s 17(1)-(3)).
• Accounting and reports. The body must treat existing accounts and records kept under the Airlines Act as accounting records for Companies Act purposes (s 20), and reports already furnished to the Minister are treated as profit and loss accounts laid before an AGM (s 21(2)).

Rights and protections conferred:

• Continuity of employment and accrued rights. Staff members continue in employment on pre‑transition terms and conditions (s 29). Contracts and periods of employment are not broken by the Act (s 30(2)); accrued leave rights are preserved (s 30(3)). If a staff member’s period of employment would have been counted for entitlements had they ceased employment before the transition, the transferring body must treat the whole period as employment for those purposes (s 30(4)).
• Variation capability aligned with previous regime. Terms and conditions may be varied after transition to the same extent and by the same means they could be varied immediately before transition under s 17 or s 18 of the Airlines Act (s 32(1)), and more generally by applicable laws, awards or agreements (s 32(2)).
• Tax and duty exemptions. Tax under any Commonwealth, State or Territory law is not payable in respect of an exempt matter or anything done because of, for a purpose connected with, or arising out of, an exempt matter (s 35).
• Certainty from authorised person certificates. An authorised person (the Minister or a person declared by the Minister) can certify that a matter is an exempt matter or that a transaction was done because of an exempt matter; such a certificate is conclusive evidence of the matters certified for all purposes and in all proceedings unless the contrary is established (s 36(1)-(2)).

Ministerial discretions and administrative duties:

• Nominate holding company. During the reorganisation the Minister may nominate a body corporate that meets the Companies Act 1981 public company and Commonwealth ownership criteria to be the holding company (s 6).
• Direct share issuance. The Minister specifies to whom the paid shares are issued (s 11(3)).
• Authorise persons to certify exemptions. The Minister may declare a person to be an authorised person for s 36 purposes (s 5 definition; s 36).

Taxation‑related duties and deemings:

• Deemed share capital and group status for Tax Act purposes. For Tax Act purposes the transferring body is deemed to have had share capital wholly beneficially owned by the Commonwealth until it complies with s 11(3) (s 37). Transfers to new group companies during reorganisation are to be disregarded for certain Tax Act sections (s 39-40), and various CGT treatments and notional liability calculations are prescribed (s 46-51).

Statutory limitations on rights:

• The transferring body, post‑transition, is not to be taken to have been incorporated for a public or Commonwealth purpose, nor to be a public authority or Crown instrumentality, except where a law expressly provides otherwise (s 15(5).) This changes how rights and immunities that attach to public authorities may apply to the company.

Overall, duties mainly fall on the transferring body to implement share issuance and lodging of documents, on the Minister for nominations and directions, and on group companies and the holding company for tax reporting and compliance steps (s 6; s 11(3); s 17; s 36; s 51(2)(c)). The Act creates rights that preserve employment continuity and provide tax reliefs, while also imposing administrative steps (e.g. notices to the Commissioner) that businesses must observe to secure intended tax outcomes (s 30; s 35; s 51).

The Act contains limited express enforcement or penalty clauses. Its compliance and enforcement mechanisms rely primarily on deemings, conclusive certificates, preserved statutory remedies and ordinary judicial processes.

Conclusive administrative certification:

• s 36(1)-(2) permits an authorised person to certify that a matter is an exempt matter or that a transaction arose from an exempt matter. Subsection (2) makes such a certificate "conclusive evidence" of the matters certified "for all purposes and in all proceedings, except so far as the contrary is established." That creates a strong evidentiary shield in favour of the certificate holder and the parties relying on the certificate, subject to the residual opportunity to contradict the certificate on proof to the contrary. The Act therefore shifts enforcement posture from ex ante government clearance to post‑hoc challenge where necessary.

Tax and duty relief and its limits:

• s 35 displaces the liability to pay taxes, duties or charges under Commonwealth, State or Territory law where the liability relates to an exempt matter. This is a statutory bar to collection of those taxes for the specified matters, and enforcement agencies (State revenue, Commonwealth revenue authorities) would be prevented from pursuing such charges in respect of covered transactions. The Act does not on its face create criminal penalties related to making false claims of exemption; instead, the legal protection is via the statutory declaration and prohibitions on payment.

Judicial and administrative remedies:

• Compensation and acquisition. s 62 provides a pathway for persons who would otherwise have had property acquired otherwise than on just terms to obtain compensation from the transferring body, either by agreement or by determination of a court of competent jurisdiction. The provision requires that damages or compensation recovered in other proceedings be taken into account when assessing compensation under s 62(2).
• Limitation of actions and preservation of prior liabilities. s 57 preserves the operation of section 63 of the Airlines Act in relation to actions arising out of things done before the repeals effected under s 52. That means pre‑conversion liabilities remain actionable subject to the preserved limitation rules.

Interaction with Companies Act enforcement regimes:

• The transferring body is deemed to be registered under the Companies Act at transition (s 15). From transition, company law remedies, regulatory enforcement and obligations under the Companies Act 1981 apply subject to the express exceptions the Act creates (s 19(2) exempts certain Companies Act provisions; s 20-21 preserve prior accounts). Thus enforcement of company duties after transition will typically proceed under the Companies Act where relevant.

Tax Act interactions:

• The many deemings in Part VII are framed for purposes of the Tax Act. Enforcement of tax positions will therefore rest in large part on the Tax Act's administration and on the Commissioner's interpretation, but the Act modifies substantive tax positions (for example, deeming transfers to be disregarded , s 39-40). Where disputes arise about tax characterisation, the Commissioner and taxpayers will litigate under the Tax Act framework, but the Act's deemings will be determinative unless successfully challenged.

Absence of express criminal sanctions:

• The Act contains no explicit criminal sanctions for non‑compliance with its provisions. Its enforcement architecture is administrative and civil: conclusive certificates (s 36), prohibitions on tax collection (s 35), deemings for tax and company law purposes (s 37-51), and compensation via the courts (s 62). Non‑statutory remedies under Companies Act or Tax Act (including penalties thereunder) may apply to misconduct outside the Act’s protections.

Implementation and compliance risk:

• The conclusive effect of authorised person certificates is a source of implementation certainty but creates risk where the certificate might be challenged; the Act contemplates that the certificate can be contradicted, but places the burden on the challenger (s 36(2)). Many tax and CGT treatments require elections or notices (for example s 49(g) and s 51(2)(c)), creating timing risks if statutory notice steps are overlooked. Finally, multiple deemings that make transfers “disregarded” or group companies “the same body” for tax purposes (s 39-44) are technical and will generate compliance costs and potential disputes in their application.

The Act operates through explicit cross‑references and substantive deemings to the Airlines Act, the Companies Act 1981, the Income Tax Assessment Act 1936 (the Tax Act) and Superannuation legislation, and it also affects State laws via references and by preserving certain continuing provisions.

Interaction with the Airlines Act:

• The Act says it "has effect despite anything in the Airlines Act" except where expressly provided (s 4). It then repeals almost the entire Airlines Act (s 52): subsection 52(2) repeals the Airlines Act other than limited sections (1, 5-18 inclusive, 19A, 30 and 30A), and subsection 52(3) repeals sections 5-18 inclusive. Despite these repeals, certain provisions continue as "continuing provisions" (s 5 definition) and section 55 ensures section 4 of the Airlines Act continues to have effect for continuing provisions and that references to the Commission in those provisions are to be read as references to the transferring body (s 55(1)-(2)). Section 56 preserves the evidential operation of the Commission’s seal for documents sealed before transition (s 56). Section 57 preserves the effect of section 63 of the Airlines Act in relation to actions arising from pre‑repeal acts (s 57).

Interaction with the Companies Act 1981:

• The transferring body is deemed to have applied for and to have been granted registration under the Companies Act at the transition (s 15(1)-(3)). From the transition, the Companies Act applies to the company and to its memorandum and articles (s 17(2)-(3); s 20-21), but the Act also carves out exceptions: paragraph 86(6)(b) and subsections 87(4) and 90(5) of the Companies Act 1981 do not apply in relation to the transferring body (s 19(2)). Section 15(5) denies that the post‑transition transferring body is to be taken as incorporated for a public purpose or as an instrumentality of the Crown unless a law expressly provides otherwise. The Act therefore uses the Companies Act as the default regulatory regime post‑transition, but with express transitional and substantive modifications.

Interaction with the Tax Act:

• A substantial part of the Act (Part VII) is dedicated to adjusting Tax Act consequences of the reorganisation. It exempts specified matters from a range of taxes and duties (s 34-35), allows authorised persons to certify exempt matters (s 36), deems the transferring body’s share capital and group relationships for Tax Act purposes (s 37-38), disregards transfers to new group companies for sections such as s 25A and s 26AAA (s 39-40), preserves investment allowances by excluding application of paragraph 82AG(1)(a) in certain disposals to new group companies (s 42-44), and implements detailed capital gains tax treatments for share and asset disposals (s 45-51). Many of these provisions directly modify how the Tax Act applies to the reorganisation and thereby preclude normal tax consequences unless the specific conditions and notice/election requirements are met (for example, the notice requirements in s 49(g) and s 51(2)(c)).

Interaction with State powers and laws:

• The Act amends how references of powers by States apply in relation to group companies. Section 53 inserts an additional subsection into s 19A of the Airlines Act so that the reference‑of‑powers effect applies as if references to the Commission were references to a group company. Section 54 expressly provides that where a State has referred air transport matters or has an Act adopting s 19A, subsection 54(4) allows group companies to transport passengers and goods by air intra‑state subject to State law. The Act thus preserves and extends the mechanism by which State delegations and reference arrangements can operate in relation to the new corporate form and its subsidiaries.

Interaction with Superannuation and other statutes:

• Section 60 excludes certain Superannuation Act provisions from applying to the transferring body (s 60(1)-(3)). The transferring body is not an "approved authority" under the Superannuation Act 1976 unless specified in regulations (s 60(2)). Subsection 60(3) limits the application of subsection 159(1) or (1A) of the Superannuation Act 1976 to the transferring body for payments made from the Consolidated Revenue Fund on or after 1 July 1987, by prescribing a formula for liability. These adjustments alter how superannuation obligations and liabilities attach to the transferring body post‑conversion.

Transitional and continuing effects:

• The Act carefully preserves prior legal relationships and evidential bases to avoid disruption: accounts and records under the Airlines Act will be treated as accounting records under the Companies Act (s 20), reports prepared under the Airlines Act count as profit and loss accounts laid before an AGM (s 21(2)), and the Commission’s seal retains judicial notice (s 56). At the same time the Act removes the Commission’s statutory status for many purposes (s 15(5)) and repeals most of the Airlines Act (s 52), reshaping the governance and regulatory context moving forward.

Practical implication:

• Practitioners must read the Act alongside the Companies Act 1981 and the Tax Act because the Act is largely a transitional instrument that uses those Acts as the substantive regulatory frameworks for corporate form, tax consequences and employee rights, but with important carve‑outs, notice requirements and ministerial discretions that can alter outcomes (see s 6; s 11(3); s 36; s 49-51).

The provided text does not include an external amendment table or later enactments beyond the provisions printed. Within the Act itself, it prescribes staged commencement of core provisions and conditions under which particular sections come into force:

• Commencement sequencing. Section 2 establishes that, subject to the section, the Act comes into operation on Royal Assent. It further stages commencement: sections 15 and 16, subsection 52(2), sections 55, 57 and 60 and subsection 69(2) are to come into operation on a day to be fixed by proclamation (s 2(2)). Subsection 52(1) comes into operation on the day after subsection 11(3) is complied with (s 2(3)), and subsection 52(3) comes into operation immediately after the commencement of section 15 (s 2(4)). These timings mean that the main conversion provisions (including the deemed registration at transition in s 15 and the change of name in s 16) are to be activated by proclamation rather than automatically at Royal Assent for certain parts.
• Internal repeals and transitional preservation. Section 52 effectuates significant repeals of the Airlines Act (s 52(2) repeals the Airlines Act other than specified sections), while the Act simultaneously preserves certain continuing provisions (s 55 contemplates continuing operation of s 4 of the Airlines Act for those continuing provisions). Section 56 ensures judicial notice of the Commission’s seal continues to have effect for pre‑transition documents. Section 57 preserves limitation provisions for actions arising from pre‑repeal acts under the Airlines Act. These internal changes are part of the Act’s own amendment logic and transitional architecture.

No external amendment notes or later legislative changes beyond the text provided are recorded here. The Act itself includes many internal changes to pre‑existing laws (Airlines Act, Companies Act 1981, Tax Act, Superannuation Acts), but the source material does not list subsequent parliamentary amendments, renumberings or repeals post‑1988. Users should therefore treat the Act as containing its own staged commencement and transitional amendment steps (s 2; s 52-58), but must consult updated legislative databases or government sources for any post‑enactment amendments or repeals beyond what is printed here.

Elements of the Act that function as internal amendments include:

• Repeals to the Airlines Act (s 52) and repeal of the Australian National Airlines Regulations (s 58(1)), coupled with savings for liabilities under those regulations (s 58(2));
• Insertions into the Airlines Act (s 53) to extend state reference effects to group companies; and
• Preservation and conversion mechanisms for company registration under the Companies Act (s 15-17), together with carve‑outs in the Companies Act that are disapplied in relation to the transferring body (s 19(2)).

For legal practice, the Act’s internal commencement and repeal sequencing is critical: s 2(3) ties the operation of s 52(1) to the issuance of shares under s 11(3), and s 2(4) ties s 52(3) to the commencement of s 15 , these dependencies mean the timing of share issues, Ministerial directions and the proclaimed transition date determine when key repeals and company law consequences activate.

The text provided contains no judicial decisions, cases, or reported litigation arising under or interpreting this Act. It names no cases and records no proceedings. Because the source includes no litigation history, the following is a source‑grounded outline of the principal issues that, by their statutory design, would be likely focal points for litigation if disputes arose:

• Challenging the conclusive character of authorised‑person certificates (s 36). Subsection 36(2) makes certificates conclusive unless the contrary is established. Litigation could arise where a party challenges the factual basis of a certificate or contends that the authorised person exceeded statutory authority in certifying a matter as an "exempt matter" under s 34. Any such challenge would require proof to establish the contrary as permitted by s 36(2).
• Disputes over tax treatment and compliance with Tax Act elections and notices. Several Tax Act modifications in Part VII require notices or elections (for example, s 49(1)(g) , transferring body must elect and specify shares by notice accompanying the 160ZZO notice; s 51(2)(c) , holding company must give the Commissioner written notice nominating pre‑CGT shares by a specified time). Litigation could centre on whether requisite notices were validly given, the accuracy of notional assumed liability calculations (s 48), or the proper attribution of liabilities (s 48(4); s 51(6) deeming formulas).
• Compensation claims under s 62. Section 62 creates a statutory remedy where the operation of the Act would otherwise result in acquisition of property on terms other than just terms; claimants may litigate the appropriate quantum of compensation or whether an acquisition has occurred for constitutional purposes. The section requires courts assessing compensation to take into account any damages or compensation recovered in other proceedings (s 62(2)).
• Interpretation of deemings as to corporate status and continuity. The Act deems transfers to be "disregarded" and treats group companies as the same body for specified tax purposes (s 39-44). Disputes may arise about whether the conditions for those deemings are met , for example, whether a body is a "new group company" under s 7 at the relevant time, and whether a particular transfer occurred during the reorganisation (s 5 reorganisation definition). Such factual disputes could produce litigation under the Tax Act or in company law contexts.
• Claims and disputes preserved under prior Airlines Act liabilities. Section 57 preserves the application of s 63 of the Airlines Act in relation to pre‑repeal acts, which could lead to litigation over whether particular pre‑transition acts or purported acts fall within preserved liabilities.
• Company law disputes around membership and share rights at transition. Section 18(2)-(3) makes shareholding at transition determinative of membership and prescribes equal rights and liabilities as if membership had been attained in accordance with the memorandum and articles. Disagreements about entitlements, call notices or share issuance timing could produce company law litigation.

Because no cases are named in the text, practitioners must consult court databases and later legislative histories externally to identify any judicial treatment of these provisions. The Act’s text anticipates some of these dispute points by prescribing evidential and procedural rules (conclusive certificates under s 36; nomination and notice requirements in s 49 and s 51; deemings in s 39-40 and s 51) that will frame litigated issues.

The Act contains several technical features and timing traps that can produce unintended consequences if not followed precisely. The following items are grounded in the statutory text and highlight procedural, substantive and evidential pitfalls for practitioners and advisers.

Shareholding and membership timing:

• Shares issued before transition do not immediately create membership rights until the transition. Section 11(6) states that a person is not a member of the transferring body at any time before the transition merely because the person holds shares. Membership rights are conferred at transition by s 18(2)-(3). Practitioners must therefore note that holding issued shares prior to transition does not create company‑law membership status until the deemed registration and transition occur.
• The Act requires the transferring body to apply its capital to pay up shares "as soon as practicable" after s 11 commences (s 11(1)). Delays or failure to apply capital may mean the dependent timing triggers in s 2(3) for the commencement of related repeals do not fall into place.

Ministerial direction and discretion:

• The Minister directs to whom shares are issued (s 11(3)). Because the Minister may direct issuance to the Commonwealth, nominees or the holding company, decisions on share allocation are centrally controlled and can materially affect ownership and tax outcomes (s 6; s 11(3)). Parties expecting a particular share allocation should ensure the Minister’s directions are obtained and documented.

Authorised person certificates:

• s 36(2) makes certificates conclusive evidence except where the contrary is established. That shifts the evidential burden onto challengers and can frustrate later attempts to recharacterise transactions as taxable or non‑exempt. Reliance on a certificate without verifying the factual basis can become problematic if the certificate is later contested.

Tax notices, elections and timing:

• Several Tax Act related provisions require precise notice or election steps. For example, s 49(1)(g) requires the transferring body to give a written election accompanying the notice under paragraph 160ZZO(1)(d) of the Tax Act to apply s 49 to shares, and s 51(2)(c) requires holding company nomination of pre‑CGT shares to the Commissioner on or before the date it lodges its return or within any extended period allowed. Failure to comply with these timing rules can forfeit beneficial CGT treatments or pre‑CGT designation.
• Special deemings in s 48 allocate general liabilities across disposed assets using a formula (s 48(4)). The formula requires computation of relevant market values and attribution of general liabilities. Incorrect calculation can alter notional assumed liabilities and therefore the market value calculations used under s 49, producing unexpected capital gains outcomes.

"New group company" technicality:

• The favourable Tax Act treatments for transfers rely on the recipient being a "new group company" as strictly defined in s 7. That definition requires the body to have become a group company after 31 December 1987 and never to have been a subsidiary of the transferring body before 1 January 1988. Small corporate history differences can therefore change tax characterisation; due diligence on each recipient’s corporate history is essential.

Deemed non‑existence of holding company for tax purposes:

• Where the holding company is dormant from incorporation until the issue of shares, s 38(2) deems it not to have existed for the Tax Act in determining whether it is a group company in relation to another body for a given period. That has the potential to affect controlled group tests and associated tax positions if dormancy criteria are not carefully reviewed.

Superannuation exclusions and limits:

• s 60(1) precludes s 145 of the Superannuation Act 1922 applying to the transferring body, and s 60(2) prevents the body from being an "approved authority" under the Superannuation Act 1976 unless specified by regulation. Subsection 60(3) limits the Superannuation Act liability calculations for payments out of the Consolidated Revenue Fund on or after 1 July 1987. Advisers should ensure superannuation liabilities and approvals are explicitly considered.

Repeals and continuing provisions:

• s 52 repeals much of the Airlines Act while s 55 and s 56 preserve certain continuing provisions and evidence. It is a common gotcha to assume that repeal removes all prior obligations; the Act expressly preserves particular provisions and references (s 55-56). Practitioners should check which provisions are continuing provisions (see s 5 definition) and how references to the Commission are to be read post‑repeal (s 55(2)).

Employment terminology scope:

• The staff member definition in s 5 is tightly drawn and excludes many employees. Only the general manager, officers appointed under s 17(1) of the Airlines Act, and temporary or casual employees appointed under s 18 of the Airlines Act are included. Employees who do not fall within that definition do not automatically obtain the employment protections in Part VI. That narrow scope can produce unexpected gaps in employment continuity if advisers assume broader coverage.

Dispute and compensation mechanics:

• s 62 provides compensation where the Act would otherwise acquire property on other than just terms. However, the section requires agreement or court determination, and requires that damages recovered in other proceedings be taken into account (s 62(2)). Parties should be aware that compensation outcomes may be reduced by prior recoveries.

In short, the main operational risks arise from precise timing and notice rules (s 2; s 11(1)-(3); s 49; s 51), Ministerial directions (s 6; s 11(3)), narrow statutory definitions (staff member, new group company), and the conclusive evidentiary effect of administrative certificates (s 36). Each of these can materially change tax, employment and ownership outcomes if not managed in strict compliance with the statutory text.

Compliance under this Act requires careful sequencing of corporate, administrative and tax steps, strict observance of timing provisions, and documentation of Ministerial directions and authorised‑person certifications. The following compliance checklist is grounded in the Act’s provisions and addresses immediate operational tasks, tax filings, staff administration and potential State interactions.

1. Establish timeline and confirm commencement triggers

   • Determine the reorganisation period: it runs from the day after Royal Assent to immediately before the transition (s 5 definition of reorganisation).
   • Note the commencement rules in s 2: most provisions commence on Royal Assent, but s 15, s 16 and specified repeal and savings provisions commence by proclamation or once other statutory triggers are satisfied (s 2(2)-(4)). Ensure the transition date (commencement of s 15) is proclaimed or otherwise fixed as required.

2. Ministerial actions and documentation

   • If the Minister intends to use a holding company, the Minister must nominate a Commonwealth‑owned public company under s 6. The nomination must be in writing during the reorganisation (s 6).
   • Obtain and record the Minister’s written direction as to whether paid‑up shares are to be issued to the Commonwealth, to nominees of the Commonwealth, or to the holding company under s 11(3). Keep the direction on file because issuance is conditioned on it (s 11(3)).

3. Capital application and share issuance

   • Apply the capital referred to in s 30 of the Airlines Act to pay up shares without delay once s 11 commences (s 11(1)).
   • If the capital amount is not a multiple of 50 cents, reduce it to the nearest multiple as required by s 11(2).
   • Issue the paid shares as soon as practicable after payment in accordance with the Minister’s directions (s 11(3)).
   • Record that the issue discharges the transferring body’s repayment obligations to the Commonwealth (s 11(4)), and document the non‑cash consideration basis (s 11(5)).

4. Prepare and lodge corporate instruments

   • Lodge the proposed memorandum and articles for Australian Airlines Limited with the Corporate Affairs Commission for the ACT before the transition (s 17(1)). These become the company’s memorandum and articles at transition (s 17(2)).
   • Ensure that accounting records kept under the Airlines Act are maintained and available because they are deemed to be accounting records for Companies Act purposes (s 20).

5. Staff management and HR steps

   • Identify staff members within the statutory definition (general manager; officers under s 17(1) of the Airlines Act; temporary/casual employees under s 18 of the Airlines Act) (s 5).
   • Preserve existing terms and conditions for those staff members at and after transition (s 29), ensure accrued leave and other entitlements are preserved (s 30(3)), and document any contractual variations in accordance with the permitted mechanisms (s 32).
   • If any variation of terms after transition is necessary, ensure the variation process follows the mechanisms allowed immediately before transition under s 17 or s 18 of the Airlines Act, or applicable laws and agreements thereafter (s 32(1)-(2)).

6. Tax and Commissioner notices

   • For exempt matters, obtain an authorised person certificate if appropriate. The authorised person is the Minister or a person declared by the Minister (s 5 definition; s 36(1)). Keep original signed certificates on file because they are conclusive evidence of exemption except where the contrary is established (s 36(2)).
   • If transfers to new group companies occur during the reorganisation and you intend to rely on s 39, s 40, s 42-44 or s 49, ensure the recipient satisfies the “new group company” definition (s 7).
   • Where s 49 is to apply to shares issued as consideration, the transferring body must, by notice accompanying the s 160ZZO(1)(d) Tax Act notice, elect that s 49 applies and specify the shares (s 49(1)(g)). Prepare the necessary election documentation and ensure it accompanies the 160ZZO notice.
   • For s 51 pre‑CGT share nominations, the holding company must give written notice to the Commissioner on or before the day it lodges its income tax return for the year of income in which the transition occurs (or within any further period the Commissioner allows) nominating the pre‑CGT shares (s 51(2)(c)). Calculate the permissible number of shares under the formula in s 51(2)(d) and maintain records to support the calculation.

7. Lease and asset transfer recordkeeping

   • For any lease terminations, assignments or substitutions during the reorganisation involving new group companies, document the sequence and ensure the two conditions in s 43(1) and s 44(1) are met to treat new leases or assignments as continuations for tax purposes. Preserve contracts and contemporaneous correspondence to evidence timing and parties (s 43-44).
   • Where assets are transferred and liabilities are assumed, apply the notional assumed liability formula in s 48 to attribute general liabilities to specific assets. Keep market valuations and calculations for audit or dispute (s 48(4)).

8. Interaction with States and regulatory compliance

   • If the group company intends to operate intra‑state air transport, verify whether the relevant State Act has referred air transport matters to the Commonwealth or adopts s 19A; if so, s 54(4) permits group companies to carry passengers and goods within that State subject to applicable State law. Secure any State‑level licences or compliance approvals required by State law (s 54).
   • Record any references and adoptive legislative instruments; ensure compliance with State laws applicable to intra‑State transport.

9. Superannuation and legacy liabilities

   • Recognise that s 60 alters the transferring body’s status under Superannuation Acts. Confirm whether the transferring body is specified by regulations as an "approved authority" under the Superannuation Act 1976 if superannuation approval is relevant to operations (s 60(2)).
   • For payments from the Consolidated Revenue Fund on or after 1 July 1987 that might give rise to Superannuation Act liabilities, calculate liability using the formula in s 60(3) where applicable and retain documentation supporting the calculation.

10. Contingent liabilities and compensation

    • Identify any property interests that could be viewed as "acquisition of property otherwise than on just terms" because of the Act; where exposure exists, implement a process to negotiate compensation with affected parties or prepare to litigate under s 62. Track any damages recovered in other proceedings because those must be taken into account in assessing compensation under s 62(2).

11. Retain legal and tax advisers and preserve documentation

    • Because many of the Act’s advantages depend on precise factual circumstances, maintain robust contemporaneous files: Ministerial directions, authorised person certificates, notices and elections to the Commissioner, valuations and liability attributions, copies of lodged memorandum and articles, employee records demonstrating staff member status, and evidence of timing for share issuances and transfer events (s 11; s 17; s 36; s 49; s 51).

In summary, compliance requires coordination across ministerial administrative steps (s 6; s 11(3); s 36), corporate filings (s 17), employee protections (s 29-32), tax elections and notices (s 49; s 51), and careful valuation and recordkeeping for asset and liability allocations (s 48). The Act provides powerful protections (exemptions s 35; conclusive certificates s 36) but those protections often depend on meeting formal notice and timing conditions; failure to observe those conditions will risk losing the statutory tax and CGT treatments.