Qantas, the little airline that couldn’t.
When I was young I wanted to be a Qantas pilot. Growing up I was granted the privileged opportunity of being invited into the cockpit for landing in various Qantas aircraft at various airports around Australia. The dedication and enthusiasm with which staff undertook their jobs was an inspiration to me.
20 years later, and I don’t know how I feel about Qantas. Today’s Qantas just goes through the motions. The timid annual result announcement is a reflection of the diminishing presence Qantas is playing in the lives of Australians. It is also a reinforcement of the distinct strategy which Qantas has chosen to follow.
The annual results also show a distinct change in Qantas rhetoric. Gone are the battle cries of a “65% line in the sand”, replaced by “The Group aims to maintain a profit-maximising 65 per cent domestic market share”. Brave faced Qantas executives are worried.
Where once an airline was highly respected and always the object of choice, Qantas today is increasingly the bane of our lives, unable to provide the services Australians want. Its big foray into social media attracted 60,000 responses, yet the airline has 7 million frequent flyers. An airline shouldn’t need to give 91 reasons to passengers to board a Qantas plane, they should only need one ‘we are the best’ or a variation thereof.
Yes, Qantas International has suffered from some serious structural issues and needs reform. Virgin Australia does with 6,500 people what Qantas needs 30,000 to do, and Australia’s operational environment is fiercely competitive. But, Qantas’ adoption of American style bankruptcy strategy to cut deep, shrink and grow later in an Australia with extensive open skies agreements and an economy increasingly intertwined with Asia seems inappropriate and uncompetitive.
In the 2000s, Air New Zealand suffered from similar structural problems and undertook major structural reform but continued to grow and expand as it cut. ANZ realised new opportunities and became a leader in industry innovation. Since the 1980s Qantas has avoided innovation like the plague. Qantas has had the money, but why has it been so scared?
Qantas today cancelled its firm commitments for Boeing 787-9s, pushing its firm options to 2016. It’s worrying that Qantas can’t afford its Boeing 787 capital expenditure even with the heavy discounts offered during purchase, and the substantial delay compensation the airline received from Boeing. Qantas A380s are substantially cheaper to operate and return yields up to 3% better than its 747 aircraft yet they have also been deferred until 2016, indicating Qantas no longer believes efficient aircraft are a viable short-term fix for its operations.
Tomorrow is a long time in aviation. Yet with these moves Qantas has hand delivered the impetus, opportunity, and four years, for Virgin and premium international carriers with arguably better product to fill the Qantas void and reinforcing their market positions with once loyal Qantas passengers. What does Qantas International do in the meantime?
As Qantas shrinks Jetstar continues to be given growth priority. But why is a low-cost brand being given brand new 787s and the premium parent being returned close to eleven year Airbus A330s? Alan Joyce sings efficiency, but isn’t really trying hard to achieve it with aircraft. Qantas management seems unwilling to realise the flying public doesn’t want to be forcibly reduced to flying Jetstar, but increasingly have little option. Perhaps Qantas’ return to Coolangatta this month was a wake-up call to this.
Qantas management isn’t only to blame. Unions that represent the airline need to realise, the airline industry has fundamentally changed and we no longer live in the 1960′s when people had a ‘job for life’. They play an important role, but having union officials standing in-front of the media bellowing that passengers shouldn’t fly the carrier only hurts Qantas potential and members’ jobs further.
I hope that in 20 years time Qantas is still there for the aspiring pilots of today who stand with their noses pressed against the airport windows watching planes, as I was 20 years ago. Unfortunately, if current trends are anything to go by I doubt there will be anything left to watch. Qantas needs to become the little airline that can.