Qantas and the Asiafication of Australia

 
Members of the newly named 30-man squad for next month's rugby World Cup stand on the stairs of a Qantas jet in Sydney Qantas sponsors national sports teams, like the Wallabies, the Socceroos and Australia's Olympians

Few private companies engender quite the same sense of public ownership as Australia's national flag carrier, Qantas.

The airline has encouraged this, of course, with its sentimental advertisements featuring the Peter Allen hit, I Still Call Australia Home, and its sponsorship of national sports teams, like the Wallabies, the Socceroos and Australia's Olympians.

When Cadel Evans recently made his homecoming to Melbourne after winning the Tour de France, Qantas mounted a sham photo opportunity timed to coincide with the breakfast news shows that showed him coming down the steps of a parked Airbus A380, even though he had actually touched down on another plane earlier in the morning.

Now Qantas stands accused of a much more egregious pretence: of planning to use Australia not so much as a home but as a lay-over. It follows the announcement of a corporate-restructuring that will see the expansion of the airline's operations in Asia, big changes to its struggling international operations and the loss of 1,000 jobs from its 35,000-strong workforce.

Qantas plans to launch two Asia-based airlines, including a budget airline operating out of Japan. It has not decided where to base its other so far nameless joint-venture, though Singapore and Kuala Lumpur are potential hubs.

Qantas low-cost subsidiary Jetstar will launch Japanese budget carrier Jetstar Japan (Jetstar Group Chief Executive Bruce Buchanan pictured) Qantas plans to launch two Asia-based airlines, including a budget airline operating out of Japan

The airline, which made a healthy pre-tax profit on the back of its domestic routes, says it has no other choice because its international operations are set to lose $A200m ($208m, £126m). It has been hit by short-term factors like high fuel costs and natural disasters, including volcanic ash clouds.

But it faces long-term structural challenges. Australia's open skies policy has seen the expansion of Middle Eastern and Asian carriers, like Emirates and Singapore Airlines, which has eaten into its market share.

The announcement has inflamed parliamentarians. "I think it's official, Qantas can no longer call Australia home," said Senator Nick Xenophon.

Queensland MP Bob Katter - he of the 10-gallon hat - went further, sounding like a furious passenger who had just arrived at the end of a 23-hour flight to London only to discover that his luggage was in Sao Paulo.

"The people that make these decisions in Sydney are the slithering suits, as I call them, but for a bunch of brainless bastards there'd be few people in the world that would compare with them."

Like I say, the very word Qantas - which started life as the Queensland and Northern Territory Services Limited - unleashes strong passions.

The Spirit of Asia?

Lawmakers are now combing through the Qantas Sales Act, the legislation that brought about the airline's privatisation in the 1990s, to see if the restructuring violates the clause ruling that the airline needs to maintain Australia as its operational base.

Start Quote

There are many, many millions of premium travellers in waiting”

End Quote Alan Joyce Qantas chief executive

Meanwhile, the unions are bemoaning what they are calling the offshoring of Australian jobs, even though the airline says that the 1,000 posts are disappearing rather than being relocated elsewhere.

For our purposes, the restructuring of the airline is interesting for what it says about the globalisation of the domestic economy and the continuing Asiafication of Australia. Others have written that Qantas's famous motto The Spirit of Australia should now read The Spirit of Australasia. But perhaps the airline should even go further and paint The Spirit of Asia on its planes.

For Qantas chief executive Alan Joyce this is simply a case of chasing an emerging market. Over the next 20 years, 16% of the world's middle-class will be in East Asia.

"China may already have the world's fourth-largest population of millionaires, and India the 12th," he said. "There are many, many millions of premium travellers in waiting."

By 2014, the Asia-Pacific region will account for a third of global air traffic - up 26% from now.

Tellingly and symbolically, Qantas has cut two unprofitable routes to London, operating out of Bangkok and Hong Kong - another indication of Australia's reorientation.

The competition that Qantas now faces from airlines like Emirates also speaks of the opening up, deregulation and globalisation of the Australian economy.

Why, Etihad, the Gulf-based airline, even has naming rights on Melbourne's indoor Docklands stadium. Also gone are the days when Qantas had a near stranglehold on the lucrative trans-Pacific route. It was a duopoly shared with the American carrier United. Signed in 2008, the open skies agreement between Washington and Canberra ended all that.

As people will have noticed during Alan Joyce's media blitz this week, Qantas is also run by an Irishman, just as Telstra, the telecommunications giant, was run up until recently by an American. Again, it speaks of the internationalisation of Australian corporate life. ANZ, one of the main banks, is run by a Brit. Westpac is run by Gail Kelly, an Australian of South African descent.

Many aviation specialists believe that Qantas has brought many of its problems on itself, through bad decision-making.

Geoffrey Thomas of Air Transport Journal told the ABC's The World Today: "One of the reasons they've lost so much market share into this country is because they were the last major airline to put seat-back videos into economy, they didn't choose the right aeroplanes, and they were one of the last airlines to put premium economy into their aircraft despite the fact that Australians are the second-tallest people in the world flying the longest distances."

But many aviation specialists believe that the airline has no other option but to expand into Asia if it is to remain viable as an international operator.

Paul Keating once said that if Australia could not succeed in Asia it could not succeed anywhere. Evidently, the same now is true of Qantas.

 
Nick Bryant Article written by Nick Bryant Nick Bryant New York correspondent

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  • rate this
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    Comment number 9.

    I only flew with Qantas twice, on both occasions back in 2000, when visiting Australia for the first time. The first flight was from Singapore via Darwin to Cairns, and the second from Sydney to Hong Kong on my way back to the UK. I couldn't fault the service, in fact I positively enjoyed the Sydney - HK leg, something I rarely if ever experienced on a long-haul flight in economy class. It seems sad that things must have degenerated over 11 short years.

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  • rate this
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    Comment number 7.

    i was flying from australia to the uk on qantas, i'd had 2 beers over the period of about 3 hours. i asked for another drink and they told me i was drunk. i wasn't i said. they didn't believe me and they made me do that stuff cops in the US do to people they suspect of being drunk drivers. i did it all in the aisle, all the walking in a straight line, touching my nose with eyes closed etc, i passed with flying colours. they gave me another drink. all the staff on qantas are old and jaded and hate the job. branson gets all the happy young staff.

  • rate this
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    Comment number 6.

    On my first of many trips to Australia I flew in on Qantas. Big mistake! Most future flights were on BA or Singapore Airlines. Far superior to Qantas was one trip from LA to Sydney on Pan American, and they are no longer. How does Qantas survive?

  • rate this
    +1

    Comment number 5.

    I hate flying Qantas now, but can't avoid them just yet. I have accumulated over 540,000 Award Points over the last years, and I need to use them up before they expire. However, Qantas make this extremely difficult. They make only few economy seats available for outbound flights, even if one books months ahead, and then force passengers onto the budged carrier ‘Jet Star’ for their return journey. They do that by not making any seats available on regular economy flights for return journeys. ‘Jet Star’ type long haul flights lasting 9hrs plus without food, blanket, pillow, earphones, video screen etc are the ‘reward’ for the loyalty of frequent flyers. Of course, one can buy a plastic looking rice dish, which has made three or more return journeys from Australia, before being consumed, for $14 (made in Asia for $ 0.90). I did not bother to ask, how much hiring earphones would cost.
    I have complained to Qantas four times and each time received the same, identical PR dribble “We are committed to creating the world’s best flying experience......”. Yeah, right. Frequent flyers have earned their Award Points through flying on Qantas, British Airways or any other code share airline. They have the right not to be fobbed-off onto a crap value budget carrier like ‘Jet Star’.

 

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