From the Plane Talking article:
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However the deeper concern about the Qantas infatuation with Jetstar is that it deluding itself if it thinks its full service customers will transfer their loyalties to Jetstar.
There is nothing about the Jetstar experience that will engender loyalty from Qantas customers, since it is a cheap price driven product offering, and itself prone to being too expensive if compared to Scoot or AirAsiaX or within Australia, the less available and even less reliable Virgin Australia controlled Tigerair low cost carrier.
No wonder, perhaps, that Qantas isn’t rushing into selling part of the Qantas loyalty scheme, since it is supposed to be about Qantas rewards, not something offered by a partner brand to whom the loyalty of Qantas customers cannot be taken for granted.
What has happened to Qantas is that it became the plaything of unscrupulous and ignorant people. It is now incapable of surviving as any form of investment grade company because it has failed to pursue the aim of all businesses: "Maximise shareholder value in the long term".
There are a number of competing themes that will be identified in the Qantas epitaph:
The first is that Qantas attracts Directors and Managers to its ranks for all the wrong reasons and failed to screen them. This is partially due to the presence of hedge funds on its shareholder register.
As Gough Whitlam said "Being made a Director of Qantas is the Australian equivalent of being elevated to the House of Lords". A Qantas Directorship opens up a treasure trove of largesse in the form of access to limitless first class International travel and the ability to bestow the same on others. Furthermore, the criticality of air service provision to regional economic development and Qantas Australian dominant position hands huge power over the Australian economy to management and the Board.
So what has Qantas been dealt? A Chairman, CEO and CFO who presided over a failed private equity takeover, neglecting supervision of their core business in the process?
They followed that by starting a low cost model airline that was bound to cannibalise their core business.
They followed that by falling for the "Asian Trap" - taking the bait that investing in "huge Asian markets" would deliver them superior profits, a game as my Father said was played by the Chinese at least Five times to his knowledge since 1935. Nobody makes money off Chinese except other Chinese.
They followed that by destroying what little trust was left between management and employees.
They followed that by deliberately subsidising the bastard child Jetstar at the expense of its parent, destroying profitability and customer loyalty in the process.
They followed that by entering into a business relationship with Emirates that is one sided and toxic to any growth of international services.
So here we are today; A Board with a morbid hatred of its employees and a focus on costs, not value for money; A CEO who only knows low cost airlines and who will defend his creation - Jetstar, to his dying breath; A variety of Asian investments that cannot and will not ever make money for the parent; A customer base that is no longer loyal because they are forced to taste the putrid product that is Jetstar; A bag of hungry competitors that can easily force their way through the gaps Qantas leaves in its business strategy.
I've tasted the Qantas domestic products twice in the last month. Qantas business class domestic was good I thought, Jetstar was simply toxic. What Board in their right mind supports Jetstar???? Jetstar International as well? Are you kidding?
And of course I'm not even mentioning the technical and fleet selection decisions this mob have made over the last Fifteen years.