Joyce’s next stunt? Will it be a Qantas receivership?
After being responsible for the latest “we could go under” lobbying that Qantas is making in Canberra to get the government to compromise Australia’s free trade credentials to protect an airline that has been tragically and persistently mismanaged, the next stunt pulled by its CEO Alan Joyce could be filing for receivership for the about to become separately managed loss making international division.
This is not as extreme a prediction as it might at first glance appear.
Joyce’s habit of behaving like he suffers from an attention deficit disorder makes it relevant to highlight the dots, connect them and ask, where do they point?
Such as ambushing his own passengers with a totally unnecessary grounding of the airline, he insists on his own personal whim on the last Saturday morning of last October, or tying up NSW Police resources, but with no result, after alleged death threats earlier in the year, or announcing an Asia initiative that included doing ridiculous things to A320s majority owned by Asia partners, not yet known, in a country not yet determined, in order to set up a premium single aisle carrier to rip customers from the clutches of Singapore Airlines, Cathay Pacific and everyone else, who were supposedly ripe for the picking.
That initiative, which authorities in the relevant target companies said they knew nothing about, was launched over the top of all of the accepted protocols of doing business in Asia, and it came to nothing.
The so called Red Q project pulled the same big zero that applies to dividends for Qantas shareholders. The same broken logic that says that by cutting back Qantas international until it can make money Qantas international can then re-expand, which is absurd.
Every time Qantas retreats on international routes it creates a vacuum that other carriers fill, and which in all probability, it can never reclaim. And it certainly can’t reclaim them by diverting money from an Asia based entity in which it would have minority equity in order to revisit activities on which it failed, three or five or however many years earlier.
The details disclosed for the Asia project were absurb. There is a difference between stating the blinding obvious about growth potential in Asia and coming up with a patient, sensible, well researched project which the intended hosts or partners do not read about first in the English language media of another country that shouts “Make way, coming through.”
The rhetoric in the anti-Etihad lobbying presentation quoted by the Fairfax media report continues a fundamental dishonesty in the long tradition of Qantas management attacks on internal and external competitors, in that his predecessor Geoff Dixon used all the same tired phrases against Singapore Airlines when it was trying to buy 49% of Ansett owner, Air New Zealand, in 2001, only to later crawl to the Singaporeans to do a merger deal with Qantas. That charm offensive failed. But Dixon was unaware as it turned out that the most damaging thing Qantas could have done to Singapore Airlines was stand aside and let it blow torch itself by sinking its fortunes, without recoverable trace, in the Air NZ/Ansett disaster that overtook that group two days after 9/11.
Something similar may have happened recently in relation to Emirates. An immense amount of hype, including polite noises from Emirates about getting closer maybe, accompanied leaks by allegedly well connected Qantas sources, about a deal with the Dubai based carrier ranging from it taking 25% equity in Qantas to ho-hum codesharing.
Like Red Q, and the death threats, this came to nothing, after which Qantas appears to have suddenly remembered it needed to make a very late profit down grade disclosure to the ASX, and the Qantas share price dived over a cliff.
While this situation unravelled for shareholders, Joyce resorting to announcing a capacity and fare war with Virgin Australia, which outgrew every other airline in Australia in domestic traffic in April. Those figures imply that had Tiger not been grounded in 2011 and kept on a short chain this year, Jetstar would not have grown enough to keep Qantas as a group on the dry side of its 65% domestic market share line in the sand. In fact, if the figures for Skywest were included, and that airline is expanding a commercial relationship with Virgin Australia, the line in the sand has been washed away already.
There is no doubt Joyce knows the dot points as to Qantas weaknesses and potential new strategies, but there are abundant and painfully costly reasons to believe that he is incapable of engaging his staff and delivering on opportunities in Asia or further afield.
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