Originally Posted by The The
It is the old Hyundai v Mercedes argument. Offer a quality product, highly regarded and prestigious with the latest innovations and efficient production; and you can charge a substantial premium with high profitability (do you think if Hyundai slashed prices 20% that it would have any effect on Mercedes sales? It would not even boost Hyundai's sales enough to cover the loss). There is an alternative to volume based sales, QF management just can't see it. Borghetti sees it loud and clear.
Nothing of the sort. The premium product in this case is available only to a few, the rest of us travel down the back. Unless of course you are suggesting that economy travellers would pay a "substantial premium" for economy travel. Which actual behaviour suggests many won't.
Whereas a Merc or Hyundai is a choice for a maximum of a few people comprising a regular unit (the family) the aircraft has to cater for a much wider audience. If you believe otherwise then consider why everyone isn't flying in private jets.
Qantas leverages the preference to fly with them by providing a higher end product. But there is a much harder marketplace to contend with than the old Qantas-Ansett duopoly. QF has to get much smarter in everyday business practices in order to get their cost base to a point where people are prepared to pay the premium to cover the additional costs. And bear in mind that also means competing with Singapore Airlines and Emirates.
The answer does not lie in the wages of individual staff. It lies in the total number of staff and equivalents.