The Gruen Planet - Balance Finally.

[600ft-lb]

Episode 3 - Gruen Planet - ABC TV (http://www.abc.net.au/tv/gruenplanet/pages/s3337111.htm)

Video is up. I hope many Australians watch this.

[Xcel]

I wouldn't call it balance. Even one of the advertising gurus said "you have a choice, you could go to Jetstar or virgin or tiger." of course tiger got a laugh but not one person said "oh btw Jetstar is Qantas."

[Phalanger]

Legally Jetstar is not Qantas. This applies for the veil of incorporation, its operating certificate and control (Qantas can not take a dividend out of Jetstar unless Jetstar approves it). It is for all intents and purposes its own legal person.

The fact that Qantas owns it is no different from the fact that Qantas itself is owned by a group of people all over the world. Jetstar is no more Qantas than Qantas is any of its shareholders. As such business dealing between the company should be operated at arms length, and that is why they are not fully integrated from the customers view point.

This is the same with Tiger not being Singapore airways (and I think they are happy it is not). Just think of your day to day living, many companies you enjoy products from are owned by other companies. But this does not make it the owner that you are dealing with.

When you buy Penfolds you are not dealing with Fosters. When you buy a packet of Tim Tams you're not dealing with Campbell soup.

There are a few rare cases when this corporate veil can be pierced but Qantas and Jetstar have done a lot to stay away from this. This is all irrelivant of wether I like Jetstar or Qantas or not.

[breakfastburrito]

Phalanger, this paper may be of interest to you:
Abstract: The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic "super-entity" that raises new important issues both for researchers and policy makers.
The network of global corporate control (http://arxiv.org/abs/1107.5728v2). Direct download [.pdf] (http://arxiv.org/pdf/1107.5728v2)

[Phalanger]

A fully owned subsidiary is allowed to act in the corporate group's best interest, but it does not mean the corporate group's management structure act in such a way from the top down. It goes beyond all recognised management studies to micromanage and remove automity from lower levels. Additionally the lower company would have to choose to act in such a fashion (but controlling parties can always be changed).

However that is from a investors point of view, not a consumers. For an outside party they are dealing purely with the respective company (eg. how it was said on the show). There is only a very few recognised moments when the parent company could become liable (eg. responsible to the third party) in some way. Nor could the consumer reasonable relay on any display or assurance of quality from another company in the group in its dealings.

And on a side note the number of parties in Australian aviation has increased not decreased. Qantas' share price is a reflection on the investors view of its future potential (include IR). Qantas' profits may seem large but from an investors points of view they are tiny compared to the capital/assets in the company.

[Xcel]

My comment (re: jetstar is qantas) was more along the lines of the fact that you don't have a choice. If you don't like qantas' tactics or managements ethics, then by flying jetstar you are still feeding the animals. Nothing to do withcontrol, just where your dollar ends up... In the treasure chest of the persons your trying to boycott.

[UPPERLOBE]

I agree Xcel, I visit the Gold Coast several times a year. QF itself does not fly to OOL, so guess who is a DJ Frequent flyer.

Apart from SQ maintaining Tiger what other legacy carrier has not divested itself of or incorporated it's LCC?

The savings must be minimal and the loss of credibility must be great if you are to keep the LCC going, otherwise they would all be into it, not forgetting the fear of the LCC actually eating it's parent!!!

I reckon the smartest guy's in the room need to jump off their wallets and take the blinkers off.

You can fool some of the people some of the time, but you can't fool all of the people all of the time.

[jibba_jabba]

Agree, and Boston Consulting Group(BCG) started Jetstar on behalf of Qantas, and those guys became board members in Jetstar and would have their overpaid tenticles in Qantas no doubt!

BCG are a group that will plan everything from accounting to PR and is no doubt behind all tactics regarding Qantas and Jetstar.