Monday, December 09, 2013

The Qantas nonsense continues

The Qantas nonsense just goes on and on, as it has for a decade or more. It's a private sector company claiming to be the national carrier, consistently badly mismanaged, treated as a cash cow by its staff, unable to stomach competition and demanding taxpayer money to keep it going.

That was the situation under previous CEO Geoff Dixon and it's continued under Alan Joyce.

While it was a virtual monopoly it was complacent, the unions demanding and getting ridiculous staffing levels with ridiculous conditions and salaries. And demanding job security.

That continued with the rolling strikes of a couple of years back, when CEO Alan Joyce's reaction was to  gave the finger to Qantas customers by suddenly grounding the entire fleet.

Management has been substandard for years, getting into costly investments in Asia which have produced only losses, building the wrong fleet of aircraft, giving in to union demands.

It's laughable that so many people wanted a state owned company to be privatised - the old catch-cry of  'government should not be in the business of owning an (in this case) airline' - but for years since privatisation there's been support for its endless calls for government money.

They used their unique position, financial and particularly political muscle to successfully beat off the domestic competition of Ansett and others, such as Compass, which tried to compete.

But they can't stand true competition. They're waging a huge campaign against Virgin, desperate to stop it raising capital so that it can compete more effectively. Joyce clings to the belief that Qantas'  market share must not fall below 65%, so every time Virgin increases capacity Qantas trumps it, resulting inevitably in falling yields.

Management continues to be hysterical about competition, spending so much time and effort worrying about it that the management of their own company must be suffering.

It's also laughable that an airline which was state owned but is now privatised complains bitterly that state owned competitors have an unfair advantage. If there's so much advantage in being state owned, then Qantas should still be. It must have been a huge mistake to privatise it.

The simple fact is that the airlines in question not only have a much lower cost base but, critically, are so much better managed.

Independent Senator Nick Xenophon made the right call when he said a few days ago that Alan Joyce and the entire Board should be sacked.

The rating agencies have Qantas at junk status and shares are at an all-time low.

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