Mr. Harbison has published his views on Qantas at the link below:
I only wish to comment on one matter he has raised. If it is true, then Qantas is in a deeper mess than I thought.
Harbison has reported that Mr. Joyce said :
“In Asia we have a plan with the launch of our new full-service airline to really turnaround the economics of the existing operation and to add more destinations and frequencies to the existing operation, which we think creates a rising tide,” Mr Joyce said. “That plan gets us to a sustainable position within Asia to have a very valuable network we need for our corporate accounts in the biggest, fastest-growing and most profitable aviation market in the world.”
..........As for the carrier’s product, it is promised to be a “very exclusive, executive jet-type style operation that we believe very much will have a strong capability of working in this market,” Mr Joyce said. “There are a lot of airlines around the world getting into this space.”
1. At least the article and Mr. Joyce appear to acknowledge that Qantas is losing money in Asia.
2. The idea of targeting the high net worth leisure traveler and the corporate market as Lesley Grant apparently referred to in the briefing is "interesting".
It's interesting to me because I recall the same sentiments being advanced by the then owners of Crown Casino - they were going to target the "High Rollers", and invested hundreds of millions of dollars in golf courses, Rolls Royces, lavish apartments and God knows what else to lure these whales to their gambling tables.
...There was only one problem with that; the whales knew they were whales. They were very picky because they knew every other casino in the world was after their custom. They played one Casino off against the other. Crown went broke and Kerry Packer bought it for a song.
So what has this got to do with Qantas?
Simple really, why do you think that mega rich Chinese are going to favor Qantas over the other offerings in this market? Where are you going to get the sensual young blonde, Mandarin speaking, Europeans to do the cabin service? You did say you were going to launch a premium product in China right?
Furthermore, guess where groceries and petrol are cheapest in Australian Capital cities? Here is a hint, its not in the poorest parts of town. The rich are picky and they are good at sniffing for bargains.
But wait there is more; how is the Board and Senior Management of Qantas going to get its head around reconciling the contradictions and circumlocutions inherent in running one airline for the rich and another for Australians, who they will no doubt shortly regard as the poor white trash of Asia?
This "premium" airline gambit in my opinion, is clutching at straws and pinning the company's fortunes on a desperate gamble to grab at the same market segment that everyone else will want.
The question for me know is whether the big shareholders or the company financiers nerves will break first. I note that National Bank has now become a substantial shareholder in Qantas. This is not a good sign. Merv Lincoln, God bless him, has been proved right time and again.
Qantas profit doubling and strategic developments overshadowed by change resistance | Centre for Asia Pacific Aviation - CAPA