For
most ABC correspondents, boarding a Qantas 747 or perhaps more recently a
Qantas A380 is often the first memory of a usually hard fought but ultimately
exciting post overseas.
Packing
up your life in Australia, farewelling families and friends, while feeling the
pressure to hit the ground running to win over critics back home, can fade
temporarily in that unreal world of long haul travel - even better if your seat
allocation is at the pointy end.
Qantas
of course was once an essential part of overseas jaunts for business and government
travellers - and for many Australians, boarding the "flying kangaroo"
was welcome comfort that felt like "home".
But
as aviation has become a globalised business, badly damaged by the terrorist
attacks of September 2001, Qantas like most national carriers has struggled to
maintain its once iconic status.
Greater
competition, cheaper seats, and savvy travellers who expect more for less while
venting their opinions on sites like TripAdvisor - means profit margins have
narrowed.
And
in recent years, Qantas has been making heavy losses on its international
business.
Now
its once lucrative domestic business is under pressure and Qantas is in
a loss making war to maintain its 65 market share over Australian skies.
It's
chief rival, Virgin Australia - which began as a cut price airline in the
wake of the Ansett collapse - is now enticing corporate customers to come on
board.
And
late last year, even the ABC sidelined Qantas to make Virgin its preferred
domestic airline.
The
sad reality is that life is getting tougher by the day for Qantas - and just a
few weeks ago it posted a half year loss of $235 million and announced the
axeing of 5,000 additional jobs as part of a two billion dollar restructuring
program.
Standard
& Poor's downgraded its credit rating to "junk" on the day Nelson
Mandela died, meaning Qantas can no longer claim to be the only
"investment grade" airline left in the world.
So
how did Qantas get into this mess?
The
most obvious answer is that "this the free market" and the forces of
supply and demand are at work.
And
after all, Qantas is listed on the sharemarket as one of Australia's top one
hundred companies by market value - though getting close to the tail end of
that list.
But
the other more complex part of the story is that Qantas remains shackled by
government regulation through the Qantas Sale Act of 1992 which restricts
foreign ownership to 49 percent.
Virgin,
on the other hand, has been able to attract significant foreign investment and
lists three state-owned airlines as its top three investors - Air New
Zealand, Etihad and Singapore Airlines.
Combined,
they own more than 60 percent of Virgin stock and have signalled interest in
maybe buying more.
Qantas
has been furiously lobbying the federal government to have the Qantas Sale Act
repealed or amended so it can compete on a level playing field with Virgin.
But
the messages became mixed - when Qantas also urged the government to provide a
standby debt guarantee - where Qantas would use the government's sovereign
credit rating for borrow at a more attractive rate than "junk".
The
proposal sparked a national debate over whether any flavour of government
should risk potentially owning the debt if Qantas ever defaulted.
Not
surprisingly, Virgin's chief executive John Borghetti said he'd be asking for
the same treatment "within 24 hours" if the Qantas bid was approved.
But
providing that debt facilility was never going to fly with Federal Cabinet once
the Prime Minister ran his "if not one, why not all" argument on the
day Qantas announced fIve thousand job cuts.
While
Tony Abbott did agree to repeal the Qantas Sale Act he did so knowing
there's little or no chance that the Senate will pass it.
So
Qantas knows its campaign is mired in politics more than ever - and that the
government is using the repeal of the Qantas Sale Act as a political wedge
against Labor.
But
even if Labor did agree to back the Sale Act repeal, it would almost
certainly find itself in a war with trade unions especially if any new
legislation saw more Qantas jobs move offshore along with maintenance, the
Qantas head office and maybe even the Qantas board.
And
while the government's move to amend the Qantas Sale Act is significant, it
comes after both the Prime Minister and Treasurer urged Qantas to "get its
house in order".
That's
seen as code for "workplace reform" as the government continues to
question "the age of entitlement" and sections of enterprise
agreements relating to troubled companies such as SPC Ardmona and Toyota.
And
the government's proposal to provide highly qualified support for Qantas comes
as preparations begin for a Royal Commission into trade unions.
Undoubtedly,
the role of unions at Qantas could become part what's expected to be a
wide-ranging inquiry.
And
in the background, calls are growing louder for Alan Joyce to quit as the
airline's long serving chief executive.
The
Irish born Australian citizen - who controversially grounded the entire Qantas
fleet in late 2011 in his fight with unions - is vowing to stay on.
Alan
Joyce once joked in his first ABC interview as Qantas boss back in 2008 that he
took a "hospital pass" from his tough talking predecessor Geoff Dixon.
The
question now is whether any corporate warrior would have the nerve and
stamina to take a hospital pass from Alan Joyce.
No comments:
Post a Comment
What's your view on this?