Margaret Jackson crosses fingers for Qantas survival as she backs $1 Tiger deal
Richard Gluyas
Business Correspondent
Melbourne
Margaret Jackson. Picture: David Geraghty
Source: News Corp Australia
FORMER Qantas chairwoman Margaret Jackson has given the thumbs-up to yesterday’s Virgin Australia peppercorn acquisition of the remaining 40 per cent of Tiger Airways, and said she would like to see Qantas survive in the long term in an era of rapid change.
Ms Jackson, who chaired Qantas from 2000 to 2007, recalled the time when collapsed airline Ansett was offered to Qantas for the same $1 price as Tiger.
“We turned it down, so there’s a precedent for activity at those kind of (prices),” Ms Jackson told
The Australian and Deutsche Bank’s Business Leaders Forum.
“I think the transaction makes sense for Virgin.”
Ms Jackson was chair of Qantas in 2007, when the Airline Partners Australia consortium, including David Coe’s now failed Allco, private equity group TPG and Macquarie Group, made a failed $11 billion takeover bid for the carrier.
The bid was famously endorsed by the Qantas board and Geoff Dixon as chief executive.
However, it collapsed after it was blocked by two key shareholders. Since then, Qantas has been hit by heavy turbulence, reporting a $2.8bn loss this year.
The airline blamed writedowns, weak demand in Australia, subdued consumer and business confidence and higher fuel prices.
“I’d like to think Qantas will survive, but the forces of the global world are intense,” Ms Jackson said. “You’ve got to be globally competitive, which means you have to have capital bases that are competitive, labour rates that are competitive, and you have to have product that’s competitive.
“So just because you exist doesn’t mean you will always exist.”
In her time at Qantas, Ms Jackson said, 120 per cent of the airline’s profit was made from the Japan route, which was now making a loss.
Not only that, it was the European airlines that constituted the main competitive threat, but now it was the Middle East carriers.
“And there’s changes in the currency, and suddenly domestic tourists become more important, holidaying at home instead of overseas,” she said.
“Those things happen quite quickly, and every year the price of flights goes down and the industry tries to be more cost effective.”