QF's Dixon: 'New aviation world order' ahead
Thursday July 24, 2008 Qantas Airways CEO Geoff Dixon said he believes the airline industry is on the verge of a period of consolidation into a few very large carriers that will be able to cope better with higher fuel costs.
Speaking this week at a lunch in Sydney, Dixon claimed that a "new aviation world order" is coming, according to the Australian Associated Press. "Right now the global aviation industry faces not just a shock or indeed a blip or indeed a crisis really but a permanent transformation," he said. A critical step toward that future may come thanks to second-stage open skies negotiations between the US and EU.
"The EU's push for the abolition of foreign investment restrictions has so far, believe it or not, been resisted by the US, which limits foreign ownership of its airlines to 25% of total voting stock,'' Dixon said. But there are signs, he claimed, that the Americans may be prepared to accept airlines from Europe and potentially other countries based on their principal place of business rather than strict ownership criteria.
"For us this would be a groundbreaking development,'' he said. "It would open the way for airlines to engage in meaningful cross-border investments, and sooner or later it will happen. And we believe strongly at Qantas that over time, consolidation will transform aviation. . .It will produce a few very large and extremely efficient global airlines with a portfolio of interests and a portfolio of brands."
AAP reported that Dixon was asked specifically about Air New Zealand, which Qantas attempted to acquire in 2003. He disagreed with ANZ CEO Rob Fyfe, who claimed his carrier is "small enough to stay underneath the radar," although he avoided saying that QF still is interested in acquiring the Auckland-based carrier. "Although I'm not going to say that Qantas and Air New Zealand are going to get together--we tried that once and we've moved on--I do believe very strongly, and always have, that consolidation will happen," Dixon said. He said it will be "very erratic" at the start but that "no airline, particularly in this part of the world, will be able to avoid consolidation."
He claimed that QF has positioned itself to avoid the "dark destiny" of being acquired through cost-cutting
(ATWOnline, July 21), investing in the business and ordering a significant number of 787s (65) and A380s (20).
by Geoffrey Thomas