The long post by T Vasis epitomises the problems Qantas faces. It is civil and informative and it contains exactly the same tired excuses that Qantas has been providing us with for Ten years.
With respect T Vasis, that is the problem.
Let me first focus on a few words that jump out of your post; "Acceptable return", "Investment grade".
You state that Qantas must make an "Acceptable return" to retain its "investment grade" status in the share market because that affects its cost of capital when it wants to borrow. This is hogwash.
If the rate of return on Qantas shares is deemed unacceptable by the market, then the share price falls until it is deemed acceptable. As for any airline being "investment grade" this is pure fantasy. An airline is one of the most volatile investments I can possibly think of.
In a sense I can see the argument because if Qantas was ever put under financial stress as a national carrier it can bring very great pressure on any Federal Government to bail it out because of its superb lobbying ability and deep connections with the NSW wings of both Labor and Liberal parties.
My point is that Qantas is using the whole "acceptable return" argument not to argue that certain routes are unprofitable, but to argue that they aren't profitable enough. This is purely and simply lunacy of the highest order.
The reason it is lunacy is because the notion of profit is highly subjective and can be manipulated to serve a wide variety of agendas as it has been by Qantas for years. Those agendas include, but are not limited to; The alleged "profitability" of the Jetstar operations and the entire "hub and spoke" model that has seen Sydney deliberately cream off a huge load of foreign investment by virtue of the fact that every other Australian Capital was at least Two hours further from London and New York thanks to creative Qantas scheduling.
If you really want to compare routes and operations, it is necessary to perform what is called contribution analysis which compares revenues after direct operating costs have been subtracted and before any overheads are allocated. On this basis posters here have long suspected that Jetstar is contributing nothing at all to Qantas and the dreaded "legacy airline" is contributing the lions share. I also suspect that routes abandoned by Qantas were paying their way quite well.
Furthermore, it is lethally stupid not to base business decisions on contribution analysis rather than profits because overheads have a way of staying around long after the allegedly "unprofitable" operations that supported them are wound up. For example, I'll bet that whatever sales network Qantas had in Europe still exists (and costs) long after Qantas abandoned Rome, etc.
The other word that begs a reply is that awful word "Premium", as in the "Premium" business class passenger. Do you folk at Qantas not understand that that market segment can be made to disappear at a few strokes of a pen? All that is required are State and Federal Cabinet minutes that all public service contracts and agreements will henceforth provide for economy travel only. Then where will you be? I always gave my employees a choice when travelling overseas; fly business class and return ASAP or fly economy and have a weeks holiday on the company wherever you like on the way.
Don't you understand that the gap between economy and business class fares is a huge risk to your business?
But what is worse, focussing on the "premium business class customer" necessitates providing a less than stellar experience to your economy class passengers - and by definition and contribution analysis those economy class customers are making the major contribution to the cost of running the aircraft. To put it another way, try making a quid out of business class when the back of the aircraft is empty, yet that is what you seem to be trying to do - turn the average punter who flies economy away!
And we are leaving. We want direct flights, or a stopover in a nice destination like Singapore or Dubai. We want modern, clean aircraft with a reasonable modicum of service and convenience. We do not want the torture of being hubbed and spoked through effing Sydney. Nor do we wish to disembark in Heathrow or Los Angeles unless we are insane.
If Qantas can't provide this experience too bad. We are not interested in your excuses and you shouldn't be making them anyway because your continual stream of excuses is the number one symptom of your problems.