Qantas Business Strategy What Gives?
Trying to look at Qantas and its strategy with some sort of balanced view because as most of you know I have a love hate relationship with the flying rat.
I love it for what it was until perhaps the late 70's or early 80's - a delight to fly internationally and a credit to Australia's reputation.
I hate it because of its closeness to Government and the fact that its the plaything of the NSW push from both sides of politics, to the detriment of every other state.
I think the most important question at the moment is "Whats behind Qantas's business strategy?
I take the point about cost cutting, archaic work practices and so on. I'm sure that there is plenty of room for improvement. However why would Qantas management risk a full blown barney with its FA's?
Obviously the FA's are the weakest group. Make an example of them and then do over the LAME's and finally the pilots.
Qantas is producing good profits in an era where other airlines are going to the wall. It has an effective monopoly of Australian markets. I do not understand why it is "going for growth" in Asia. Profitless Growth is a well known phenomenon. No one can tell me how Asian growth is going to be profitable.
My guess is that management is afraid of something a lot worse than angry shareholders. My guess is that Qantas is afraid of ONE angry shareholder.
Someone, I forget who, has posted that Qantas's largest shareholder is now J.P. Morgan Nominees with about 20 percent of shares (please correct me). In anyone's language, that is a swag. The Identity of the shareholder is unknown.
However there is one pointer to who it might possibly be. Let me ask the metaphorical question; what major shareholder in their right mind, would sanction the appointment of James Packer to the Board of Qantas?
To my mind, the behaviour of Dixon and the Board is consistent with the existence of a major shareholder who knows how to create shareholder value by cutting costs, who does not care who is hurt in the process and is quite prepared to directly intervene to ensure his wishes are carried out.
I have put J* Asia down as a Dixon aberration. However it might also be a source of trained and expereinced staff for a reborn low cost Qantas. I suspect that Qantas has a major shareholder who is determined to makeover Qantas as a low cost ultra modern highly efficient operation, most probably based on their own experience in running existing non aviation businesses.
Translation: Guys, I don't think Qantas's major hidden shareholder is another airline. I think its one or more household names in australian business who are out to make a killing.
Whether this is good for Australia, I simply don't know. However I don't think it is going to be much fun for you.
Please feel free to tell me why I am a moron for suggesting such things. However also please explain the current Qantas Board composition, the sale of the BA shareholding, and this dumb J* Asia thing.