Originally Posted by
haughtney1
Sorry Deano but your argument is flawed and simplistic
Back in the 70's and 80's there was also no internet, no social media, the tourism industry was a mere pup compared to what it is today and the average standard of living when comparing most metrics was inferior.
Economy's of the time were more centrally controlled Which led to the rise of incredibly wasteful policy making. It also meant there was very little choice, very little in the way of travel for ordinary people and perhaps worst of all a great lack of opportunity in comparison to today.
Wrong for half a hundred different reasons, put simply if QF was re-nationalised there would be no incentive to make a profit, the Govt of NZ when it bailed out Air NZ did so as a majority shareholder with the key difference to what you are suggesting being it compelled Air NZ to operate on a profitable commercial basis to return the sum invested in it..e.g like any other investor.
Making the assumption that profits would return to the airline also shows a considerable amount of naivety, politics would invariably get in the way of good business, and as the political winds ebb and flow so does the prevailing will of a government that might decide that it's better to invest any profit in a new school in Karatha or a computer system for ministerial expenses etc etc.
Quite simply Govt has shown it can't be trusted nor can it be genuinely held to account when it comes to running organisations for profit..except of course at the ballot box, where in all likelihood the running of the airline might be viewed as small potatos compared to other issues of the day....and you are essentially now back where you started with no money for anything, sound familiar?
Apart from being completely wrong and ignoring history, your post says at first if Qantas were re-nationalize there would be no incentive to make a profit, then you claim that Air NZ was re-nationalized but makes a profit... make up your mind would be the first point. Secondly, you ignore history. All of the shares in Qantas Ltd. were purchased by the Commonwealth in 1947. The company continued to operate as an unlisted public company. I suggest you look through actual FACTS and you will find that in all those years of government ownership the total capital injected into Qantas was $164m - the company grew to be worth $2bn in that time - AND $80m of that was within the previous decade prior to the public float to provide capital base to raise loans to purchase the 747-300 and 767s. That means the government only contributed $84m in 37 years of ownership, then the $80m then nothing until it was fully floated. During that time Qantas managed to retain $967m in 'retained profits', ALWAYS paid the Commonwealth a dividend and the only assistance it received (we'll leave Bi-Laterals aside because that was the system at the time a quid-pro-quo exchange of rights) was that it was able to have it's loans for aircraft guaranteed by the government in exchange for making a substantial amount of the fleet available to operate on behalf of the Commonwealth at cost only in times of national need... which was often... cyclone Tracey, ferrying troops to/from SE Asia, etc.
During the 45 or so years of government 'ownership' as the single shareholder, the company I don't think EVER made a loss... maybe one or two years when the entire industry was in downturn but still made some sort of profit as it coincided with asset sales.
There is some evidence to suggest it's financial performance was more stable and better managed over the long term during those years than it ever has been during the second period of being a public company, from 1995 onward... profits increased after that float ONLY because the Keating Government put $1.1bn of the sale proceeds back into Qantas as a capital injection following the float (part of the deal with BA to pay a higher share price and have the company properly capitalized).
There is ample evidence to suggest that as a majority Commonwealth owned asset, Qantas would possibly do better than it is now - yes, it didn't make profits in the billions back in those days but it also didn't have a fleet of nearly 300 aircraft - and it's KPIs could be part based on serving the national interest. The UAE doesn't gauge EK's performance entirely on profit but also on it's contribution to the national economy and to tourism and foreign exchange.
There may not have been an internet and social media 'back in those days' but in the 20s, there were no aeroplanes that could carry more than one passenger and in the 40s there were no jet aircraft and in the 60s there were no widebodies and during the 60s mostly, there were no computerized reservations systems either... point is things change and you can't use social media and the internet as examples of paradigm shifts because there were equally significant shifts back then as well driven by technology... such as it taking 30+ hours to get to London from Sydney and not 3 days.