Opinion

There is much to think about in the agitated letter Qantas Group CEO Alan Joyce has written to government urging action to stop foreign carriers supporting Virgin Australia with a $350 million lift in capital.

That ‘stop the Virgins’ plea is reported in detail in today’s Financial Review, and it is a very good read, from any perspective.

But there are problems. Virgin Australia already has most of the money.

And in a material sense, it is setting out to do to Qantas what Qantas is trying to do to itself, and its Asia based competitors, with a so far struggling set up of puppet Jetstar franchises in Singapore, Vietnam and Japan, and a Hong Kong venture based on the hilarious proposition that it would get between the interests of the Ho family and control of the entity in the event that the SAR actually approves a business plan that makes a virtue of circumventing the corporate provisions of its Basic Law.

Qantas has been making a case for the repeal of the Qantas Sale Act of 1992 since within months of being listed on the ASX in 1995. The case has widespread support in the business community, but has never really been able to overcome the emotional rhetoric of the ‘keep Qantas Australian’ arguments that discourage politicians of all beliefs from engaging in serious discussions of issues which do not really fit into the slogan mentality of public debate.

Joyce’s biggest problem is that Qantas is badly managed. He has championed failed ventures like an Asia based single aisle premium carrier minority owned yet controlled by Qantas, and started domestic fare and capacity wars with Virgin Australia that have proven deeply harmful to Qantas never mind its competitor.

It is also difficult to make a case for curbing the growth of international competitors in Australia when the Emirates-Qantas business partnership consisted of giving away the Qantas presence on the routes to Europe to the Dubai based giant for free in every city except Sydney and Melbourne.

Qantas has attempted to direct its loyal customers on the kangaroo routes to Emirates, which it reviled in strident terms all the way up to the give-away which was finally agreed with Emirates in June 2012, which makes its credentials and position look hollow, even if the underlying logic of its actions were accepted.

If the Qantas Sale Act is repealed, Qantas could be what Virgin Australia is becoming. A strong Australia based airline brand, managed and operating in Australia, with no artificial restrictions on where it gets its capital from.

Its somewhat shrill objections to what Virgin Australia is doing would vanish. It would do the same.  And Australia would still have a Qantas, and a Virgin Australia. Provided they were well managed.

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