The spinning of the claimed benefits of a QF+BA merger seems to be approaching ‘warp’ speed, with the merger Trekkies in full chant.
It is said that the combined entity will have better buying power. That it will save money on maintenance, cabin fit outs and on marketing!
Let’s start with maintenance. How can Qantas save even more on this when it is spending so little it can’t keep its fleet reliably airborne. (Source: The special CASA audit of Qantas and privileged parliamentary testimonies and disclosures.) And it seems singularly unlucky in its experience of offshore maintenance.
The notion of saving money on maintenance done professionally abroad and overseen by the Qantas managers who were supposed to have been paying sufficient attention to ensure it wasn’t ripped off with shoddy work has its limits. For the 100 or more aircraft that mainly fly domestic routes, no overseas maintenance is cheap enough to save money if the jets in question have to be out of service for extra days just to be ferried to and from a remote base. The loss of revenue versus savings in maintenance equations look sick. A 250 seat Cityflyer jet that does eight flights a day on the east coast routes is a $100,000 an hour of flightime revenue opportunity or around $0.8 million a day. Take it away to China or India or the Middle East for a week and it really doesn’t matter how cheap it is to use the foreign base. And Qantas has hung onto some very shabby equipment for so long that the jets fall outside the normal range of maintenance tasks in some parts of Asia. Maintenance excellence used to be a core Qantas competency. It has wasted it. The consequences of this thuggish petty minded approach to standards is coming back to bite the carrier hard.
So won’t it save on buying power? It won’t. Qantas got a deal on up to 115 Dreamliners from Boeing that sources insist has not and cannot be bettered by any other airline. It secured incredibly good prices from Boeing and Airbus for all the purchases made since late 2001 when both it and Virgin Blue mercilessly screwed Boeing for cheap deals on NG series 737s.
Marketing? Hello. Two different brands, based poles apart, competing against different competitors, using different advertising media addressing significantly different consumer cultures.
Cabin fittings? The Qantas and BA cabins are different. The British ones are meaner. How being a tighter fit in competition with Singapore Airlines or V Australia or Air New Zealand is supposed to save Qantas money is the real question. This is a very competitive market, and screwing the customers is not an option when there are attractive alternatives.
The big negative in the pursuit of a mega merger is that Qantas needs the undivided attention and commitment of its management to be applied to fixing the shambles it is in.