The announcement doesn’t replace all of the $44 million in support and in cash that Qantas CEO Alan Joyce suspended over a similar period from the start of the next financial year in a failed attempt to dislodge his immediate predecessor as CEO at Qantas, Geoff Dixon, from what Joyce said was a conflicted role as the chair of the Federal Government’s co-operative national tourism promotion body.

However Qantas has not actually reduced its spending on tourism promotion, but redirected it from Tourism Australia to state tourism bodies.

Tourism Australia, which has been somewhat muted over the tourism benefits claimed for the proposed Qantas-Emirates business partnership, subsequently moved its full support behind Dixon, as did the Minister responsible for its activities and his appointment, Martin Ferguson.

What might we make of this? The main thing is that Virgin  Australia has doubled its commitment to an arrangement in which it works with Tourism Australia on promotional activities that they give their mutual support to, and tourism in Australia, as distinct from Tourism Australia, is getting as many dollars from Qantas as before.

For Qantas watchers, it is another sign that shock and awe tactics to grab headlines and bend government policy settings or courts to Qantas’s wishes have lost their currency. Death threats and mass strandings of passengers just don’t cut it anymore.

That fall out between Joyce and Dixon is now all over the general media, following news that he had written to the Federal Government suspending the groups sponsorship of any new tourism promotion activities with the body because Dixon’s position had been conflicted by his pursuit of what Joyce termed APA 2.

This is a reference to the original Air Partners Australia private equity bid for Qantas that failed to gain sufficient shareholder support in 2007 and which was actively promoted to Qantas shareholders by Dixon when he was the group’s CEO.

Joyce said he had no clear evidence as to what the APA 2 group’s detailed objectives or strategies were, other than references to Qantas cash reserves of $3 billion, its Jetstar brand, and the frequent flyer program.

In a Q and A session in which Joyce said he would leave the personal dimensions of the falling out between him and Dixon to the media, he said it was a matter of issues at the heart of the Qantas business and where it currently was, rather than personalities.

“We won’t be distracted from the main game”, Joyce said.

“We will never be wreckers of this amazing company that belongs to Australia. The majority of our shareholders know that the strength of our brand relies upon it being there for Australia and representing the best of Australia to the world,” he said.

Joyce said the premise that the Jetstar and loyalty program assets could be sold off before their full value is realized was destructive of the total Qantas business, and would depress the value of investments in Qantas in a short time measured against the long term prospects of the full Qantas group as it now is.

In relation to the conflicted state of Dixon as Tourism Australia chairman, Joyce repeated that no current commitments to promote Australian tourism, such as the major buyer and seller event  the Australian Tourism Exchange, would be affected.

He said Qantas would however suspend the negotiation of all new programs with Tourism Australia, budgeted at around $44 million over the three years from 1 July, and would direct all of that money into tourism promotion ventures with the state bodies.

Joyce said Queensland Premier Campbell Newman was on the phone early today keen to discuss and negotiate promotional deals as soon as possible.

He also told the room that Qantas was concerned that through a ‘legalism’ Virgin Australia was now about 65% foreign owned, putting Qantas at a disadvantage in terms of capital raisings, and that the airline would continue its efforts to persuade the federal government of the need to ensure there was a level playing field or equal opportunity for all Australian flag carriers.

Not only that, the current ‘sloper’ seats in business class in those A330s that fly longer haul routes for Qantas will also be replaced with flat bed seats.

Speaking after his speech to the National Aviation Press Club in Sydney today Joyce was emphatic that the existence of multiple and outdated configurations in the A330 fleet needed to be replace by ‘leading’ new products for domestic and international.

Joyce said the A330 international fleet would be fitted with full length fully flat parallel to the floor seats. (No more wedgies, my term, not his.)

He said the configuration ‘unveiled’ on Sunday had been locked into sales contracts some time in the past, and added that the problem was made more pressing as the A330-200s in Jetstar service were returned to Qantas mainline.

(The Jetstar configurations sold as Star Class in the forward cabin were in effect a premium economy sized seat which had originally appeared as business class for Qantas as far back as the A332s  introduction in 2003.)

A report on the key points Joyce made in a Q and A session at the luncheon will appear later.

The object this time is to force Dixon, who is involved in a private equity plan to bring ‘strategic change’ to Qantas, out of this position, rather than stop long haul pilots wearing red ties and making in flight announcements, and force an end to a lawful union campaign against the airline by ground staff and engineers, at the height of the 2011 dispute over delayed enterprise bargain renegotiations.

Joyce says Dixon’s attacks on his management of the airline places him in an ‘untenable’ conflict of interest at the top of the national tourism promotion body.

However the report makes it clear the $44 million worth of support Qantas was giving Tourism Australia is now going to the various state tourism authorities that unite under the national organisation as well as encourage domestic visitations, and if the tactic succeeds, Dixon will be able to devote himself full time to correcting what he, and others, see as disastrously bad management by Joyce, on whose watch the airline’s fortunes have plummeted to new lows.

Joyce is the luncheon speaker at the National Aviation Press Club in Sydney today.

How much better this will make the push by former Qantas CEO Geoff Dixon,his former CFO Peter Gregg,  vulture capitalist Mark Carnegie, pub and ad man John Singleton and perhaps others with similar thoughts sitting on the odd one or two percent of Qantas shares remains to be seen.

But should they suddenly and spontaneously add themselves all together one afternoon in a completely previously never discussed or even recognised yet common cause, a shareholding able to demand a board seat or three, might suddenly materialise.  Right out of thin air, like Qantas CEO Alan Joyce waking up on the last Saturday of October 2011 and deciding to attack its customers with a grounding in order to panic Fair Work Australia and a panic prone government into supporting the cancellation of lawful industrial action, which cost the airline $194 million.

It’s called critical mass in nuclear weapons technology, and it can be applicable to companies struggling with truly deficient managers and boards.

There is a string of dumb things Qantas has done to itself under chairman Leigh Clifford and CEO Alan Joyce, and Sunday’s awesome attack on the quality of its business class product in its domestic A330 fleet is but a process which builds upon replacing two class Boeing 737s with one class Qantaslink Q400s in ‘strategic’ timetable improvements between Melbourne and Hobart and Canberra and Adelaide.

That AusBT photo again of the brilliant plastic lid in the new QF A330s

If the contras get the loot, er, strategic changes they seek, they will also trigger, should Emirates see fit, a clause in its proposed partnership with Qantas that enables it to cancel on the event of key changes in the Qantas ownership or its executive talents.

The proposed partnership is very good for Emirates, in that it gifts to it the current token Qantas branded participation in the UK and Europe market out of Brisbane, Adelaide and Perth and anywhere else where a flight via Sydney or Melbourne is a ridiculous proposition.

However should the partnership not go ahead, then make no mistake, Emirates will continue to go ahead in Australia, doing what it does now, which is to take customers off Qantas, as well as find new ones in Africa, Asia, and eastern and western Europe, in cities and cultures that Qantas never really took seriously anyhow.

Just read today’s AFR, starting with this story, to see why. The content, which talks about small non-ASX-reportable stakes in the airline by disaffected shareholders Geoff Dixon, Peter Gregg, Mark Carnegie and John Singleton, is not of itself going to surprise anyone following Qantas. Who would have thought they might have some shares?

But it signals trouble soon for the struggling Joyce administration, under chairman Leigh Clifford, because the theme that keeps recurring in the stories about the contras is a ‘change in strategy’.  Joyce and Clifford have been strategic calamities for the airline if measured by stock price (stuffed), dividends (none) and successful strategic declarations to date (none).

It is a woeful mess. Although some readers, bless their contented stomp-on-me-harder souls, seem to enjoy what has so far been wrought.

The usual way Joyce has sought respite from failure has been to bring out the big guns in terms of media. Minority owned non Qantas airlines to cross subsidize long haul Qantas to be based in Malaysia, Singapore, Mongolia or Micronesia or anywhere. Or union death threats that didn’t go anywhere chargeable. Or the ultimate Pyongyang style media event, with a declaration of war against recalcitrant workers, which involved shelling the customers, which was a huge success, costing $194 million in the 2012 financial accounts.

All while the market share was pillaged at home and abroad by smarter, even not so smarter carriers, who stuck to the incredibly passé formula of flying where there was demand in well equipped modern jets that were cheaper to run, despite the advantages Qantas should have enjoyed from the fuel purchasing and capital funding benefits of a strong Australian dollar.

But hold on. What do the contras want, and how exactly would they benefit Qantas customers and shareholders?

What they want, in their own words so far, is the under valued assets held by Qantas, such as $3 billion in cash, and the liquidated value of Jetstar’s Asian franchises and the Qantas loyalty frequent flyer grocery and petrol buyer scheme.

It is not about making Qantas play catch up with the Virgins, who have been stealing the lollies from the pantry for some time, but about looting it.  It can be argued that is also what the current management has been about too, except that it couldn’t even organise an inside job. But that might be too cynical.

The point is, neither the current management and board nor the contras have articulated a vision that will make Qantas better.  The former have a proposal that will make Emirates better, and the latter want to get their hands on what would be fairly priced at around $2.50 a share rather than $1.275 on Friday’s market close.

Dixon et al are correct about the value of the Qantas frequent flyer scheme, but its sale would, duh, mean that it was no longer of continuing benefit to post-pillaging shareholders, and no one in their right mind could imagine for a second that any new owners of the FFP wouldn’t immediately set out to squeeze every last drop of loyal blood out of its members and those enterprises which buy points for halo marketing purposes.

There are I think, a few tragics out there would think the loyalty program is about rewarding them for choosing Qantas. It isn’t. It is about turning the data base into a selling opportunity. This is true of all such programs. The current Qantas program is the best and most generous in the world. It won’t stay that way if Qantas sells it. And most likely, not stay that way if it keeps it, although the process might take more time.

The contras are not there to improve Qantas for you, or me. They are there to make money, as fast as possible. That is, do what Qantas under Joyce and Clifford has failed to do.

What headlines might the immediate future offer for Qantas? Well, new jets for Qantaslink, and a further extinguishment of the extravagent legacy terms and condition for Qantas pilots, engineers, cabin attendants, support staff and anyone who dares to draw a salary would be a start.

And the Hong Kong authorities approving the Jetstar Hong Kong venture could be compared to a 21st century Australian gold rush in China, sort of like a reverse of the history of the Australian gold rushes of the 19th century if the publicists go totally over the top, but then again, both the decision, and the ultimate consequences of whatever decision is made, are beyond the control of Qantas, and might never repay such enthusiasm.

Joyce and Clifford need good headlines, and they need them now.

Supplied image Turkish Airlines Airbus A330-200

The morning after Qantas CEO Alan Joyce raised hopes of a role for its much delayed Boeing 787s in its long haul operations new sales for the ‘old tech’ Airbus A330 dealt another blow to the fortunes of the Boeing Dreamliners.

This time it was the sale of another 15 A330s to Turkish Airlines. A few days earlier it was another 10 A330s to Philippine Airlines.

The figures for the year to 30 September are telling in this contest. In the year to the end of September Airbus sold 71 A330s, while Boeing had a negative -22 sales for the ‘plastic fantastic’ Dreamliners as cancellations exceeded orders.

The Qantas cancellation of 35 firm orders for the 787-9 model announced late in August didn’t help, with the A330 continuing on its roll with those additional 25 orders to the Turkish and Philippines carriers this month.

As Joyce made clear yesterday, the conversion of Qantas options for the -9 version of the Dreamliner for purposes such as starting international services from Canberra, among other possible initiatives, depends on Qantas long haul satisfying the management rules for returning to viability by 2015.

Qantas retains firm orders for 15 of the initial version of the Dreamliner the 787-8, intended for Jetstar from sometime in the second half of next year. Plane Talking has already made an early call, in May, that those orders are likely to be switched back to Qantas, which is another topic which calls into question the on-going viability of basing Jetstar widebodies of any type in Singapore.

If any of the marketing hype surrounding the ultra light, ultra strong, ultra efficient high composite or plastic Dreamliners had been true, it would have buried the A330 the same way the A330 buried the Boeing 767 family.

But the 787 was, for a while, a triumph of brochure writing over engineering, and while the Dreamliners continue to hold out promises of better things, what was promised for deliveries from mid 2008, including to Qantas, struggles to be delivered in the present, with only 26 of them handed over to customers in just over a year.

It is late 2012! What this reporter, and many airlines believed in 2008 was that the Dreamliners would have transformed aviation by now, and the A330 would be on the way out, not in, with enough of a backlog to keep production going until at least 2018, as the larger sized Airbus answer to the 787, the similarly high composite A350 series, struggles to meet its revised and delayed targets.

Instead, the old tech A330s continue to look like outperforming the 787s for many airline purposes for some time to come, giving airlines weary of marketing hype the certainty of a known and effective design.

He also spoke favourably about using 787-9s to inaugurate Qantas international flights from Canberra (provided the long haul operation returned to viability), said that everyone knew the NSW Premier, Barry O’Farrell was wrong about Sydney not needing a second airport, and looking across the hall at the Federal Transport Minister, Anthony Albanese, who wants it built at Wilton, said Qantas preferred the existing site at Badgerys Creek.

Joyce also warned that there was no turning back on the proposed Emirates partnership which is before the ACCC for approval, and said that it had in effect burned all its bridges in terms of slots and previous code sharing deals, and would quit the London route if the deal could not proceed.

These are in order, the issues touched on after the set speech had been delivered.

Emirates services Australia-Asia

Qantas would work with Emirates in the approval pending partnership with Emirates to use its Australia-Asia sectors [which variously go to Singapore, Kuala Lumpur and Bangkok depending on Australian city] to offer its flights as extra Singapore-Melbourne and Singapore-Brisbane flights.

It was also going to change its Hong Kong schedule to move from connections to London to connections to China including with Dragonair [the full service subsidiary of Cathay Pacific].

Competitive response to proposed Qantas-Emirates partnership

Joyce said he personally counted 31 airlines offering flights between Australia and Europe and that the competitive response Qantas anticipated in its application for approval to the ACCC had already been made real by other carriers dropping fares and adding capacity on the related routes.

Qantas wasn’t taking approval for granted but believed it had a sound case, and was not just seeking ACCC approval but as necessary regulatory approvals in New Zealand and Singapore.
The second Sydney Airport should be at Badgerys Creek

Asked if he thought the NSW Premier Barry O’Farrell was the captive of the owners of Sydney Airport in his opposition to a second new airport, and his support for Canberra fulfilling that role in conjunction with a high speed rail link, Joyce said:

“He’s the premier, and he’s wrong on this. We all know he’s wrong on this.” Joyce said O’Farrell’s rejection of a second Sydney airport would harm the NSW and national economies.

“We don’t need another NSW airport, we need another Sydney airport”, he said. “Not even Michael O’Leary [CEO of Ryanair] would claim Canberra as Sydney’s 2nd airport.

“We believe it should be in Sydney and it should be at Badgerys Creek.”

Qantas possible return to Europe in its own right, and new Qantas jobs

Joyce said “I could never see us returning to Europe in the circumstances (that now apply).

“I can see us returning to Europe (in our own right) because of Emirates. Tim Clark [president of Emirates] said he could see us returning to Europe in our own right.”

Joyce said no jobs would be lost because of the propose partnership if it went ahead. He made it clear that job loses arising from its withdrawal from the Frankfurt route in just over a year’s time had nothing to do with the Emirates deal.

He said that establishing the viability of Qantas long haul would be the basis for adding to the number of jobs at Qantas.

International services for Canberra

Joyce said that if this international viability was established by 2015 Qantas would be looking at planning for the introduction of Boeing 787-9s it had an option for delivery in 2016. He said the airline had looked at international flights from Canberra in the past, it was continuing to look at them for a future for which the 787-9 would be the right fit, but that this required the platform for growth in long haul activities to be established at the outset.

“I have no doubt we will be back here [meaning at the National Press Club] looking at what Qantas long haul can do in Canberra.”

What if the ACCC says no, or places too may conditions on approval?

Joyce said the counter factual in the ACCC submission said that without the Emirates partnership Qantas would not have viable European operations. (He didn’t specifically say ‘London’, but may have meant to.)

The code shares that Qantas has with British Airways, Air France and Cathay Pacific had already been served with notice of cancellation from the end of the northern hemisphere timetabling season from 31 March.  The slots that Qantas held between Singapore and London from beyond that date had been handed back.

“There is no going back,” Joyce said.

TICKY FULLERTON: How do you think Virgin’s gonna go in the Middle East, because originally Etihad asked you to do this sort of deal, didn’t they?

ALAN JOYCE: We did. I mean, we had the option. We had a co-sharing agreement with Etihad. Etihad approached us about flying into Abu Dhabi, doing a joint venture with them and getting closer. When we looked at the numbers, we couldn’t make it work.

And we – you have to pick your partners to various destinations and we’ve got a great partnership with British Airways, which has stood the test of time, and we’ve got a great partnership with Air France into Paris.

So as a consequence, we looked at the numbers into the Middle East, felt that you were flying into a very competitive market with Emirates and Qatar. You were going to also have those carriers losing a lot of money, so they don’t absolutely operate commercially.

  And we felt our best alternatives were sticking with the partnerships that work,  that’s why we are staying with British Airways and Air France.

At the time, Joyce was wrong, and this writer said so.

Now he is right, unless he stuffs it up, like the share price, the simultaneous domestic capacity and fare war, the Red Q project, the global grounding, fleet choices, and inflicting two hour Q400 turbo-prop flights on the Canberra-Adelaide route.

This could be a turning point. Google us again in a year or so.

That statement by Australian industry veteran Barry Brown also gently reminds its target audience, which is Qantas management and the significant travel retailers, that Emirates in Melbourne also means daily 777s to Dubai via Singapore and Kuala Lumpur.

It isn’t clear whether there will be an announcement concerning a commercial deal between Emirates and Qantas today, tomorrow, or ever.  What is clear is that Qantas needs one, and Emirates doesn’t.

PS Looks more like a very late afternoon tea, if not a late dinner date, as the Emirates flight Clark was most likely going to take is delayed.

It was a peculiarly rambling speech, at least as seen via patchy broadband on ABC News 24.

However in summary Joyce said everything in Qantas was going really well, particularly in Qantas domestic, but also described customer support for the Dallas Fort Worth service as performing “fantastically well.”

He said that Qantas was the largest carrier on the Australia-US routes, and the only airline to fly from Australia to the US west coast and beyond.

This will come as a surprise to both Delta and United. If Joyce meant to say it was the only Australian airline to do this, why would he bother with such a statement of the obvious? Alternatively did he think an AmCham audience is so ill informed as to which airline flies where in America that it would overlook such a glaring inaccuracy?

There wasn’t anything new in the speech other than a recital as to the merits of Qantas service, its iPads in every seat in its 767s, and its award winning wine list.

In what might be especially apposite, Joyce told the audience that Hooroo [the name it has given an accommodation booking service] was “An Australian term for hullo.”

It is in fact Australian for “good bye” and it fell out of common usage when Chips Rafferty was still a boy. It’s “Good bye”, Alan, “good bye”.

While the audience seemed to titter politely, Joyce said the price of fuel was so badly affected by the strong Australian dollar that a flight to London now raised $1 million in revenues but costs of $500,000 in kerosene.

(This is an odd point in that Qantas supposedly benefits from a strong dollar in relation to fuel compared to airline like Emirates, with a fixed exchange rate, or Singapore Airlines, for whom the Singapore dollar has not appreciated to the extent of the Australian dollar.)

Joyce recited geography and fuel as the reasons “Why we are moving at speed to execute a dramatic five year plan.”

He said the audience might conclude from headlines that the Qantas response to tough times was to retreat or cut back. He assured them that “this was just not the case.”

He said that it had a gateway strategy in its approach to alliances that were “all about extending our reach while lowering our costs.”

The consolidated number of full time positions to be cut at Qantas in the current period were 2800, but he also said some of those who lost their jobs may find them elsewhere in the group. There were 26,000 full time positions in the Qantas group excluding Jetstar at the end of June.

He confirmed previous guidance that the airline would report a statutory loss for the year to 30 June but an ‘underlying profit before tax’.

There were several moments that seemed like an appropriate place for Joyce to use the E-word, or even resuscitate an Asia based premium carrier in narrow body aircraft with seats wider than a first class suite in an A380, but he did neither.

Joyce said Qantas was getting fantastic responses to customer surveys that people filled in at the end of their flights, and said that its refurbished 747s were getting an even better reaction from fliers than its A380s [the standard to which the 747s were raised during the renovations].

He reaffirmed that Qantas was fully on track to return Qantas international to profitability within three years (or by now, about two years) and return its costs of capital within five years (which would be about four years, as the timetable was first announced a year ago).

This report is compiled from what was broadcast by ABC News 24 and not a full hearing of the speech.

Qantas reclaimed the some of the headlines today with TV and radio bulletins saying that it was ‘close to forging an agreement with Emirates Airways …’

An unfortunate choice of word, forging.  The outing of a possible or potential closer commercial relationship between Qantas and the giant Middle East carrier on which it has heaped years of insults and invective had better be real otherwise the departure of the current group CEO Alan Joyce, and pressure on the entire board of directors, will be rapidly escalated by the investment community.

A deal, as discussed in sober terms by the AFR,  has been in and out of focus in recent months.

It is badly needed from the perspective of Qantas shareholders, and could prove pivotal for changing the current trajectory of the carrier, which is steeply downwards internationally, and of questionable strength in a domestic market where Joyce had admitted to ‘yield weakness’ yet embraced a capacity and fare war with Virgin Australia, a formula which overseas has always ended in disaster for large legacy carriers like Qantas.

However whether or not a deal is done, and done with an Emirates which doesn’t need any help from Qantas for anything, not even domestic connections in Australia, the sudden media focus on the talks creates a new credibility challenge for the flying kangaroo.

It has recently done the rounds in Canberra lobbying parliamentarians as to the evils of letting an Arab owned airline Etihad Airways, expand its equity and influence in Virgin Australia.

But at the same time Qantas was literally begging an even bigger Arab airline, Emirates, to enter into a similarly beneficial relationship to that which now exists between Virgin Australia and Etihad!

It was only after it initially failed to persuade Emirates to enter such a relationship that Qantas suddenly remembered to inform the ASX, on June 5, that its so called underlying net profits would be up to 91% less than previous guidance, in the financial year to June 30.

This abuse of  governance in terms of continuous disclosure didn’t raise an eyebrow in the ASX, but it did cause a collapse in the Qantas share price from which it hasn’t really made any significant recovery.

Qantas cannot afford another debacle like the so called Red Q project to set up an Asia based premium product single aisle carrier, which for all the bombastic language from Joyce,  came to nothing,  which was in itself unsurprising given the complete lack of tact and cultural sensitivity with which the man News Corporation anointed as a gutsy little Irishman went about boasting that the carrier it was going to launch by December last year would take over established markets controlled by established carriers in SE Asia and cross subsidise Qantas long haul.

It is thus really important for Joyce, as well as long suffering Qantas shareholders, for him to deliver something real in relation to Emirates before the ignominious release of its annual results on August 23.

A straightforward code share won’t cut it either. If the deal is just to fly Qantas metal to Dubai to hand passengers over to Emirates, including a closure of its last continental European service to Frankfurt,  the adverse reaction from carriers with whom it currently code shares, including British Airways,  and Air France, Lufthansa and Finnair over Singapore,  could be significantly damaging.

This displeasure could spill over into other major oneworld alliance partners, American Airlines, and Cathay Pacific, although the Hong Kong carrier hasn’t been in a harmonious relationship with Qantas for a long time, and is openly hostile to Qantas plans to set up a Jetstar franchise in Hong Kong.

Qantas is in trouble in its international operations. It is the only airline standing still or in retreat in the market between Australia and the rest of the world in what is a period of unprecedented expansion.

There is more than Joyce’s head at stake in this situation.

Qantas shares closed at 99 cents yesterday, unthinkably low levels for the stock that was supposed to be the world’s only investment grade airline right up until 5 June when it apparently suddenly remembered to advise the ASX that its underlying profit before tax could be down up to 91% in the year that ended on 30 June.

That disastrously late insight into the true state of affairs at Qantas, which has since admitted to weakening trading conditions in its domestic activities as well as its self maligned international operations, led to the current share price rout.

Qantas has been widely reported, here and elsewhere, as having been in discussions with Emirates, and this was also confirmed by the Dubai based giant global carrier which was at pains to spell out that it doesn’t invest in other airlines (anymore) but saw some merit in a closer relationship if that proved possible, meaning on its terms.

The attractions and potential problems in a comprehensive commercial arrangement between Emirates and Qantas are obvious.

It would counter, on a massive scale, Virgin Australia’s close equity bolstered relationship with its up to 10% owner, Etihad Airways, the Abu Dhabi based smaller but rapidly growing rival to Emirates.

Virgin Australia also has close relations with Air New Zealand, a 20% stakeholder, and the largest US and world carrier, Delta, and Singapore Airlines, all of them thorns in the side of Qantas when it comes to the trans Tasman, Asia hemisphere and America markets.

But the downside is that Emirates doesn’t actually need Qantas for anything it can’t do in its own right, including set up its own domestic entity in Australia if it ever felt so inclined, and any tie up between Qantas and Emirates would render continuation of its long established joint services agreement with British Airways problematical.

Disengaging from British Airways could impact the Qantas participation in the oneworld alliance, and in turn harm its joint venture with American Airlines over Dallas Fort Worth and Los Angeles, and pose issues for the Qantas relationship with European carriers such as Air France and Finnair, which link with Qantas in Singapore, and conduct ferocious anti-Emirates tirades of their own at a political and public level in Europe.

For Joyce, and Qantas shareholders, the clock is ticking loudly as the count down to the release of the Qantas financial result to 30 June on 23 August bears down.

Joyce needs another attention grabber, like the offshore Asia based single aisle premium carrier that came to nothing, or the sudden grounding of the airline last October, which backfired badly, or the death threats theatrics, for which the NSW Police special task force discontinued its investigation without explanation.

The airline is in strife at all levels, especially among those parliamentarians it lobbied recently about the evils of allowing an Arab owned airline like Etihad increased access to its competitor Virgin Australia, even though it is now clear to all that it was desperately trying to divert attention from its own failings by getting close to the biggest Arab owned airline of all, Emirates.

It is in crisis in terms of profitability, credibility and image.

The much anticipated dropping of Qantas flights to Frankfurt, and the possibility of being a conduit for Emirates on Emirate’s terms, may not prevent an even harsher spotlight falling on Joyce’s management failures in coming weeks.

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.

Asking the political parties to rescue Qantas from its own errors, at significant cost to Australia’s national economic interests, is a more than a bit rich.

The last time calls for direct government invention to save an airline were voiced in Australia was after the collapse of Ansett on 14 September 2001.

Now it’s the turn of Qantas, the airline that massively benefited from Ansett’s demise, and had fiercely opposed it’s getting any government bail out.

But with its share price under severe pressure, and many of its smaller investors and employees angry and baffled by last week’s late and shocking guidance that it was headed for a real money full year loss,  Qantas is being supported by calls around the fringes of political discussion for intervention ranging from hand outs to full renationalization of an airline that was privatized and listed on the ASX in 1995.

In 2001 the push to save the Ansett jobs and preserve its services at public expense, but short of outright nationalization, were made by the then leader of the Nationals, John Anderson.

He was promptly sat on by the PM John Howard and prominent Liberals, urged on publicly and privately by a Qantas led by CEO Geoff Dixon, which was the major beneficiary of Ansett’s demise, as Virgin Blue had only seven jets in service and the 9/11 terrorist attacks had collapsed the demand for Qantas international flights, just as they found a new role helping Qantas domestic handle millions of displaced Ansett customers.

No-one should mistakenly conclude that Qantas today is going to collapse Ansett style tomorrow, but despite recovering above $1 in early trading today, the airline is at acute risk of a stock market raid, the pointers to which were abundantly apparent in the large volumes attributed to hedge fund trades last Friday in particular, and for whom the poster boy in terms of likely suspects for a hostile bid is the same Geoff Dixon who ‘saved’ it from any risk of an Ansett resuscitation.

A Dixon led bid is a real chance, provided the opportunity is matched by his getting the necessary finance. The multiple scenarios for what both Dixon or Joyce, his successor at Qantas might do, include break ups or spin offs, full or partial. They range through a Jetstar sold off to a Singapore based entity, or a Qantas international division consigned to receivership to effectively evade the Qantas Sale Act by killing the overseas carrier, and so on, ad infinitum.

While these concepts get thrown about amid much uncertainty as to the future, the calls for hand outs or the fanciful extreme of renationalisation are certain to fail.

Since Ansett,  lobbying by Qantas against ‘unfair’ air treaty liberalization allowing foreign carriers open access to what then perforce became the fastest growing international routes between Australia and the rest of the world has been resolutely crushed by the Howard government and its Rudd and Gillard successors on the basis that ‘protecting’ Qantas would compromise the country’s free trade credentials and put in jeopardy far more by way of access to its mineral, agricultural and manufacturing exports than Qantas and any other Australian flag carrier such as Virgin Australia were worth.

It is inconceivable that any Australian government would re-invent a government owned Telstra, and kill the private telco investments running into billions.

It is just as unimaginable that Canberra would subsidise Qantas/Jetstar just so it could enrich those who engineer a sell off, and kill off Virgin Australia in the process, plunging the country into a one airline policy setting that would collapse the growth in air travel driven by cheaper fares, making flying the province of the rich and privileged like it was in the protectionist 50s, 60s and 70s, and decimating pilot and airline support jobs.

But the populist calls for renationalisation don’t grasp the functionality that cheaper, mass air travel has brought to business or leisure. They are about confusion and concern as to how Qantas could get itself into such a shambles, and these are the questions that a compromised media, an inattentive polity,  and mislead shareholders need to keep asking.

Qantas under the Leigh Clifford/ Alan Joyce led management has a culture of not delivering on bold statements of intent like the Asian premium single aisle carrier, and resorting to attention grabbing shocks like unnecessarily stranding 100,000 passengers world wide without warning or wasting NSW police resources on bogus death threat stunts in place of engaging its staff Virgin Australia style in dealing with the realties of the cruel, cruel world of aviation.

PR lead shock tactics have done nothing to address these realities, and they could destroy Qantas with a terrible finality that no government is ever going to be able to prevent.