20th Nov 2013
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Qantas back in the headlines

The CEO of Qantas, Alan Joyce, claims that the national flag carrier is being subjected to unfair competition by its main domestic rival, Virgin Australia.

Qantas is restricted by two pieces of legislation, the Air Navigation Act limiting foreign ownership to 49% and the Qantas Sale Act dating from 1993 when the airline was privatised. By comparison, John Borghetti, the CEO of Virgin, has exploited the ownership loophole in the Air Navigation Act by, last February, splitting their operation into separate domestic and international airlines.

As a consequence, up to 100% foreign ownership is possible so that today its share register is dominated by three overseas airlines; Etihad Airways, and Singapore Airlines with 20% each, Air New Zealand with 23% plus Richard Branson’s Virgin Group’s 10%. This clearly gives Qantas’ rival a huge advantage when it comes to raising new capital and could also fund a serious fare discount war.

Currently Qantas appears to be holding its market share, at least domestically.

Alan Joyce is lobbying the Federal Government, with the argument that Virgin is no longer an Australia company and should, therefore, no longer be entitled to the benefits, under the Air Navigation Act, of access to overseas destinations. Even the unions, who have long been at odds with the Qantas management, are supporting Alan Joyce.

Read more at The Age website

Find out more by watching ABC News 24's The Drum

Opinion: Keeping Qantas Aussie

I almost dropped my glass of wine. The Qantas CEO, Alan Joyce, has enlisted the support of the airline’s employees, writing to all 35,000 asking them to lobby their local federal MPs. The confrontational head of Australia’s national flag carrier has, reportedly, even turned to the unions for assistance in his message to Canberra.

This is the same CEO who has been aggressively sending jobs overseas and cutting maintenance staff for as long as one can remember. In his blind pursuit of cost-cutting, invariably at the expense of employees, rather than management, he even unilaterally shut down all flights worldwide for 24 hours. To hell with the passengers, sorry, “customers”.

Sadly, it appears on this occasion, Joyce may have a genuine case to put to the new federal government. The two pieces of legislation which limit foreign ownership are a vital safeguard to ensure the flying red roo remains in majority (i.e. 51%) Australian ownership. The brand is estimated to be worth at least 1.3 billion dollars, out of a total 2.5 billion dollars market value. But I still find it somewhat ironic that, when the chips are down, the Qantas head has turned to the very people he’s been antagonising since his appointment as CEO.

What do you think? Should the government act to ensure Qantas is not subjected to unfair competition from Virgin? Should the 49% cap on foreign ownership of Qantas be lifted?





    COMMENTS

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    Aloysius
    20th Nov 2013
    1:12pm
    Does anyone remember when Air New Zealand took over Ansett. A depressing reminder of what happens when overseas ownership is allowed.
    lowflyer
    20th Nov 2013
    2:40pm
    Poor you it is time you accepted that there is another airline in the air and that they are better in some cases.
    Wstaton
    20th Nov 2013
    3:45pm
    I personally find it despicable that a CEO who has been ravaging local employment has the audacity to look towards the same people to lobby for these changes.

    It is also possible if these changes do get through then I suggest then that the employees with get a big thank you by even more jobs being sent overseas.
    Dotty
    20th Nov 2013
    3:59pm
    I agree with you about the CEO looking to those employee,s that he so really took jobs away from and sent their jobs O/S !
    Anyway if we never had competition then the fares would be sky high as the saying goes !
    Wstaton
    20th Nov 2013
    4:30pm
    You may be right here Dotty. I recently commented on another comment stream about buying Aussie goods. Many of the answers I got back was that they were too expensive compared to overseas. I sent a couple of replies.

    one. I bought a packet of water crackers that were advertised as special $1.79. I usually look were things are made but I didn't in this case as I was in a rush. When I got home I did look. Found they were made in China. A week later I shopped in my local IGA and saw water crackers for $1.49 normal price. Guess what! they were Dick Smiths made in Australia. I just think people just don't look.

    One other point I made, Prices are also related to quantities produced. It is cheaper to produce a lot than a few. So if we are not buying then of course some Aussie products are going to cost more.

    Another fact I found out as I was looking to buy a ride on lawn mower. I found two Aussie makers whose prices were comparable to overseas ones. So how can some Aussie manufacturers produce things at competitive prices and other not. Sounds to me not because Aussie workers cost more sounds more like management to me.
    lynmottrom
    20th Nov 2013
    3:54pm
    Like Wstaton I also think that Qantas should look at the Aussie jobs that they have sent off shore and start thinking more like Aussies and employ Aussies on Aussie soil, Allan Joyce lives in a glass house and should not be throwing stones. Virgin treat their Aussie staff 100% better than Qantas and are far more pleasant to fly with. Reality check Mr. Joyce
    Wstaton
    20th Nov 2013
    4:46pm
    You are right lynbottron, To many managers, CEO's etc concentrate to much on reducing costs and nothing on how to improve the business. They see the reduction of revenue due to increased costs. The immediately see that the cost of people as being the culprit, not the way they are running the company and their people.

    Once you start bashing people then motivation goes down. CEO's take the easy path get rid of people and/or move to a cheaper country. They are incapable of doing anything else to improve things. Why do these people get such huge salaries when all they have is one track minds.
    KSS
    20th Nov 2013
    4:55pm
    As others have said, it is difficult to have sympathy with Qantas when they have stripped jobs in Australia, sent servicing overseas, employed overseas staff at cheaper rates and yet the Qantas fares are higher than many. I note that once they joined with Etihad prices increased.Competition is good provided there is enough competition (think Coles & Woolworths as a duopoly). Qantas cannot have everything their own way. That's called protectionism. If they want to play in the big wide world, they need to accept there are other players who may be doing things better and cheaper.
    Wstaton
    20th Nov 2013
    6:21pm
    here, here
    Ozetwo
    20th Nov 2013
    10:27pm
    Quietly ANoTher Aussie icon dieS

    When I see a silver airplane as above it flies
    I remember back when Qantas was the ruler of the skies
    It had a perfect record as far as safety it did go
    I knew this for a fact 'cause the Rainman told me so

    No shortfall on inspections or cheaper labor cuts
    When it came to safety first they always said No Buts
    Then came the new tomorrow and little men were there
    focussed on their wallets and the incentive profit share

    By cutting up and shuffling the pieces all around
    The profits once quite visible were nowhere to be found
    Furthermore by coercion and veiled threats of force
    The set out to strip Australian jobs and overseas outsource

    Its funny how the CEO in all these situations
    still gets his pay the Aussie way in our denominations
    The workers loyal all their lives are now out on the dole
    As Qantas the Aussie icon sacrificed its soul

    No matter how far or how wide do you roam
    No longer do you call Australia home
    Wstaton
    20th Nov 2013
    10:49pm
    Thats a fantastic poem Ozetwo and so true.
    Wstaton
    20th Nov 2013
    10:51pm
    PS. can I copy it and spread it around?
    Ozetwo
    20th Nov 2013
    11:24pm
    Thanks Wstaton, I wrote it some time back when I was appalled with the way this Aussie Icon was being dismantled. Feel free to spread it around. Sadly I think QANTAS is destined to go the way of all the other Aussie Institutions we grew up with.
    Wstaton
    20th Nov 2013
    11:37pm
    Thanks ozetwo.
    NeilC
    21st Nov 2013
    1:16am
    Love the poem, how true. The problem arises when foreigners come on board as CEOs, CFOs etc and it's all about the stakeholder and the bottom line. They don't have the slightest interest or comprehension of Aussie pride. Everyone knows Branson is a go-getter and a very astute businessman, so what can Mr. Qantas expect!! I suspect he thinks like politicians . . . we're supposed to have short memories.
    unicorn
    21st Nov 2013
    8:10am
    About time somebody e.g. CEO's concentrated on the flying public if the airline gives the customer more they will stand up for them & no amount of cheap fares will ecourage you to fly via Virgin or anyone else. The main thing with the difference is lack of room between seats etc lack of service by flight staff, get real & make the trip more comfortable.
    unicorn
    21st Nov 2013
    8:11am
    About time somebody e.g. CEO's concentrated on the flying public if the airline gives the customer more they will stand up for them & no amount of cheap fares will ecourage you to fly via Virgin or anyone else. The main thing with the difference is lack of room between seats etc lack of service by flight staff, get real & make the trip more comfortable.
    unicorn
    21st Nov 2013
    8:11am
    About time somebody e.g. CEO's concentrated on the flying public if the airline gives the customer more they will stand up for them & no amount of cheap fares will ecourage you to fly via Virgin or anyone else. The main thing with the difference is lack of room between seats etc lack of service by flight staff, get real & make the trip more comfortable.
    LENYJAC
    21st Nov 2013
    9:10am
    BOUT TIME QANTAS WORKERS VOTED THIS TRUMPED UP OVER PAID LITTLE IRISH UPSTART OUT OF HIS JOB WITH NO PAY LURKS SO AS THEY CAN GET ON WITH THE JOB OF RUNNING AN AIRLINE?????


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