Wednesday, June 27, 2012

Basket case

What to do about, with, Qantas?

We have regular stories about the troubles - international division losing hundreds of millions, services being cut, flights being cut, thousands of staff being laid off, share price at record lows, no dividend to shareholders for years, new aircraft deliveries postponed, safety issues with a number of 'incidents'...the list goes on and on.

Usually 'national carrier' appears before Qantas but that's misleading. It's far from our national carrier when a) it's no longer state owned and b) its share of international travel to and from Australia is small and shrinking.

It's not the 'national carrier', it's just another airline competing for business.

More people are travelling to and from Oz but Qantas' share of it is dropping steadily; over 80% of travellers decide not to fly Qantas to get to or leave here.

When the stories talk about the competition the words 'state owned' appear before the Middle East airline names, claiming this makes it unfair competiton.

If being state owned is such an advantage, why did we privatise what was then our national carrier?

And if it was to be privatised why were restrictions put on ownership?

Reflecting the way Qantas itself has been managed for decades,  bad decisions.

The domestic division is making money, but with budget airlines increasing their activity (as is happening world wide) I can see that changing.

While Qantas was fully protected by the government it did well. But the result of the protection was that Qantas got fat and lazy, got away with bad management decisions, got away with overstaffing, with low productivity, with poor service and attitude.

As the blanket of protection was lifted the problems began to bite.

When it had to face competition it floundered.  It's been left for dead by many of its competitors which offer better service, better destinations, better fleets, better fares.

But the problems are so well entrenched that it's too late in my opinion to repair the damage.

The only possible light at the end of the tunnel I can see is a change to the Qantas Sale Act so that another airline can take a large stake and keep it going as a feeder for its own network.

Failing that, Qantas will continue to lose market share, international and domestic, and will continue to shrink. It may well end up as a purely domestic airline with a minority share of even that market.

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