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Virgin Australia's efforts to raise foreign funds to give it the firepower to take on Qantas four months ago sparked a flurry of activity on the same day between Joe Hockey's most senior advisers and top Treasury mandarins.
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Abbott blunts Qantas attack
Labor again pursues the government over Qantas in Wednesday's question time, but Tony Abbott has new material to support his position.
A freedom-of-information request from Fairfax Media has uncovered a long paper trail, although Treasury has kept secret almost all of the documents between the department and Mr Hockey's office from September 12 to December 3 relating to Qantas.
The email trail reveals high-level internal discussions in the lead-up to Mr Hockey's apparently off-the-cuff comments in late November about the need for a public debate about the future of Qantas.
It also reveals the Treasurer - who has been the most receptive minister to Qantas' pleas for financial assistance - and his office have closely monitored Qantas' situation for months.
In contrast, correspondence obtained under information laws between Transport Minister Warren Truss' office and bureaucrats over the same period shows no mention of Qantas beyond whether its planes arrived on time or statistics such as fluctuations in fares.
Mr Truss has maintained a hard line on a bailout for Qantas.
The new details emerged as Mr Hockey confirmed the government had examined either a debt guarantee or an unsecured loan for $3 billion to the airline.
Qantas also changed its position on the carbon tax's impact on its operations, describing it is as ''among the significant challenges we face'' and revealing that the levy cost the company $59 million in the first half of the year and $106 million in 2012-13. Earlier this week, the airline said its problems ''were not related to the carbon tax''.
Mr Hockey and Prime Minister Tony Abbott dismissed suggestions the government had pressured Qantas to backtrack. On October 21, a departmental liaison officer in Mr Hockey's office was emailing a Treasury manager about Qantas. Two days later, a departmental analyst issued a long response to Mr Hockey's office.
On November 14 - the day of Virgin's $350 million capital raising - there was a spate of emails between Mr Hockey's chief of staff, Grant Lovett, and Treasury's executive director and general manager. The following week, Qantas launched a campaign attacking Virgin, which included the leak of a letter from Qantas chief Alan Joyce to Mr Abbott and Mr Truss.
Over the following week, in the lead-up to Mr Hockey calling for a national debate about Qantas, there was another flurry of emails including a 19-page document from Treasury's general manager to Mr Lovett.
The emails demonstrate the Treasurer was keeping an unusually close watch on Qantas and carefully monitoring media reporting.
Qantas unions said the airline was planning to issue at least 4000 staff with expressions of interest for redundancy on Thursday.
with Anna Patty