I caught Toomey in a lie on 774 talk radio with John Fain regarding the grounding of the Ansett B767 fleet. He said it was "absolutely not a serious problem" when I challenged him by suggesting it could only be symptomatic of deep seated engineering planning problems - and it was. Sure, send him to Qantas to complete the disaster.
Furthermore, I am getting a little tired of myself and others not getting some cred from the lazy journalists who pick up and regurgitate what we said many months ago.
For the record, 1 Oct 2004, I commented that Jetstar Asia was a waste of time and money and I maintain that view:
There is a very old business principle that says "stick to your knitting". Qantas knows SFA about Asian business customs, markets, or business practices.
My guess is it will follow the long line of Australian businesses that have been royally screwed in Asia, the last of course being Telstra (how many billion did itwrite off?).
Asian businessmen feed them the standard bait - which is the purported "huge" size of the Asian market. However the market never eventuates and the Australians finally realised that they have over invested. Soon there is not enough working capital. My Dad says he has seen five such Asain "booms" since 1935, all of them hollow.
The Australians baulk at having to fork out more to keep a loss making business going. Then their local business partner makes them an offer they cannot refuse and aquires the assets and infrastructure for a song - and guess what? Suddenly the business starts to make money!
The dream of international expansion is very seductive for management, international business trips (as if QF execs don't get enough?), opportunities to expand the number of management positions and direct reports, to "train" yourself to be CEO (or whatever) by taking a similar appointment in the little subsidiary.
However the hard reality is that you should never EVER expand internationally unless you have a COMPETITIVE ADVANTAGE.
To put it in simple terms which all can understand: IS THERE SOMETHING THAT QANTAS CAN DO IN ASIAN MARKETS THAT NO ONE ELSE IN THE WORLD CAN DO?
I think the obvious answer is no. Asian markets do very nicely on their own thank you. Please come and build us a new airline Qantas. When it doesn't make any money, we will buy your share of it for a song, then we will use our business contacts to fill the seats and make money, but not before we have got rid of you.
Wait for the exuberance over the launch of jetstar Asia to peak, then sell your share. Give it a year or two and you will get them back for half price.
In my haste I forgot to read this post, but when I did I started laughing. How many times have I heard slight variations on this rubbish?
"Jetstar Asia will prove to be a masterstroke by Team Dixon. Wake up and smell the strategy people!! Jetstar Asia will be Qantas\' foothold in the region, and for those of you predicting its demise, remember this is the fastest growing region on earth in terms of population growth as well as financially. The presence of the Jetstar brand in Asia will serve to promote the growth of Jetstar Australia from Asian visitors and vice versa. Team Dixon is 100% committed to making this a success and has publicly stated that he will not allow it to fail. Dixon has planted a seed and this combined with an unwavering strategic vision will see it grow to a monolith in the coming years...........the bells are a ringing folks!!"
Lets deconstruct this:
"Jetstar Asia will be Qantas\' foothold in the region":
- Precisely why is J*Asia going to take market share from the other multitude of carriers? Please explain? Also please explain how they are going to cope with competitor response? Do they know what that is? Qantas fights tooth and nail for market share, why wouldn\'t they expect their competitors to do the same?
"remember this is the fastest growing region on earth in terms of population growth as well as financially":-
This may be true, for today. However the logical fallacy is that somehow this growth will translate into increased air travel. It may not do that, especially if interest rates increase or oil prices skyrocket.
To put it another way the lure of huge Asian markets is always used to attract western investment. To put it simplistically "There are 900 million Chinese, if I can sell even ten percent a tooth brush, I can sell 90 million toothbrushes, therefore I will build a toothbrush plant in China". This conveniently ignores the fact that there are already Chinese toothbrush manufacturers, that most of the 900 million can\'t afford toothbrushes, and that those that do prefer to keep supporting local institutions.
"presence of the Jetstar brand in Asia will serve to promote the growth of Jetstar Australia ":-
Please explain how this is going to translate into bums on seats. Does it mean that it is OK if Jetstar Asia is losing money if Jetstar Australia is getting extra revenue from Asian passengers?
" Team Dixon is 100% committed to making this a success and has publicly stated that he will not allow it to fail. "
Don\'t make me laugh! Dixon is CHAIRMAN of J* Asia! He is finally a CHAIRMAN!!! Whoopee out from under! Next stop CEO of BA! However if you are a shareholder, I wonder how much of your money he is prepared to squander to make this a success? One billion? Two billion?
This is just total madness. Hasn\'t the Qantas Board heard of Risk Managment! What passes for corporate governance these days at Qantas? Obviously there isn\'t any, other wise how did Trevor Kennedy and later James Packer get on the Board? One was a media type and the other has already lost billions with Onetel.