Nationalisation of QF ??

[Yarra]

From the "Age" in MEL. An interesting story. Would it work for QF if nationalised??? The lingerie marketing may not be PC for the Australian market though...

In just three years, Bolivia's state airline has pushed aside private carriers, bucking an international trend toward privatisation while becoming the leader in domestic flights for a poor Andean country where flying remains a luxury.
Boliviana de Aviacion (BoA) has abolished first class and sells all seats for the same low prices, marketing the flights with a socialist stamp in keeping with President Evo Morales' insistence that "all are equal".
The story of how BoA has managed to fly high while governments elsewhere have been privatising or bailing out their state-run carriers reflects shrewd timing in filling a void in the market, as well as cut-rate fares that have attracted a growing clientele.

BoA now controls about half of Bolivia's domestic air travel market. As its routes and earnings have grown, it has announced plans to expand its fleet by buying as many as six new Embraer 190 planes from Brazil.

"BoA has been an interesting bet on the government's part," said Armando Mendez, an analyst and former president of Bolivia's Central Bank. "Little by little, it has captured more acceptance and it competes with the private company AeroSur."

Mendez said BoA seems to be bringing healthy competition to Bolivia, where five airlines battle in a market of about 1.5 million passengers a year. The airline has successfully filled a gap left by the 2007 failure of Lloyd Aereo Boliviano, a former state-run company that went bankrupt after failed attempts to privatise it.

The airline has also tried some creative marketing, including teaming up with a lingerie store last month to offer an in-flight fashion show featuring Colombian and Bolivian models parading down the aisles of a Boeing 737 in revealing underwear.

"Let yourself get carried away," BoA urges potential customers.
BoA won over clients by offering two-for-one deals during its first year in 2009. Since then, it has kept fares low, and its main competitor AeroSur has accused BoA of unfair pricing tactics and subsidies.

While AeroSur charges about $US245 ($A236) for a round-trip adult ticket between the cities of La Paz and Santa Cruz this month, BoA charges about $US190 ($A183). It also offers discounts for the elderly and children.


Read more: One price for all: state-owned airline shows how it's done (http://www.theage.com.au/travel/travel-news/one-price-for-all-stateowned-airline-shows-how-its-done-20120123-1qdgp.html#ixzz1kTQjvfSC)

[m.r.a.z.23]

"...all are equal"

"It also offers discounts for the elderly and children."

...Socialism theory vs. reality :ok:

[chimbu warrior]

Australia is not Bolivia.

If any company (airline or otherwise) was to be nationalised in Australia it would send a severe shiver through the business community (particularly the mining industry I suspect). Foreign investors would abandon us, the stock market would plunge, and unemployment soar. The dollar would end up back near 60 cents US as well.

In this time of global uncertainty no government is going to commit what amounts to political suicide.

It seems to be that the "theories" and "solutions" being suggested for Qantas in these pages grow wilder by the day.

[Al E. Vator]

Really?

The UK Banks were effectively nationalized recently and now they have turned around.

Air NZ had to be saved by the Government after the stupidity of Selwyn Cushing and co. With Fyfe in charge, it's now the darling of the aviation world.

It's not such a stupid idea.

Regain control (of what was after all a public asset in the first place) at an amazingly/disgustingly low share price. Replace the management who caused the share price to tumble with non-adversarial yet innovative types (a la ANZ) and re-privatise later with gradual share bloc sell-offs.

It's actually the only GOOD idea yet...

[Ultralights]

could be profitable, sell off at $2 a share, buy back at $1 a share, rebuild it, repeat.. just like Packer and Alan bond sale and buyback of the 9 network.

[73to91]

The other guy with bad teeth, the Minister for Marrickville & anti Sydney airport could be appointed Chairman ;)

[NewPiper]

Ultralights,

$1 per share?? For a transaction to happen at that price would require two substantial shareholders (Franklin & Capital Group) to take probably a combined $400 million dollar loss (at least) on their investment not to mention every other shareholder. Stop dreaming, aint never gonna happen, its worth a lot more than that!

NP

[Metro man]

Most nationalised industries end up losing money, effectively they are subsidised with tax payer funds. Therefore in fairness Virgin and Tiger should receive subsidies as well.

International airlines operating to Australia would complain about unfair competition.

Qantas need to sort out their business or go under. Why should tax payers have to fund non performing companies ? The public service is a big enough drain on peoples pockets as it is.

[Worrals in the wilds]

You would have to assume that the government are good at running stuff, and that's a big assumption. Airservices (for example) is hardly a shining beacon of great management practice, and they've got a monopoly. Ask federal public servants about how well the government manages its existing departments, and check how much you pay in tax to see how efficient they are. :hmm:

I'd be all for tax breaks, handouts a la the car manufacturing industry and other help to any Australian airline that is up against Sheikh funded competition and protected overseas airlines, but not nationalisation. The tourist industry is struggling at the moment and suffers from the same competition issues (and often, similarly cruddy management), should all those businesses be nationalised too?

[DEFCON4]

Nationalize Qantas
Put John Borghetti, Roger Lindeman and Barry Jackson in charge.
The government must be hands off and kept at a distance.

[Ngineer]

Quite frankly I wouldn't trust Juliar to buy a carton of milk.

[Angle of Attack]

If there is any talk of nationalising anything get the damn airports back before any other stuff!

[mightyauster]

^^^^^^^^^^^^^^^^^^^^^^
Hear hear! I am sick of being continually robbed by the thieves that run the major and secondary airports.:mad:

[Arnold E]

International airlines operating to Australia would complain about unfair competition.


My heart bleeds for them.:yuk:

[Sunfish]

Let it die.

Qantas has proven over the years to be a political plaything.

If you want to nationalise it, you need to enshrine its marketing in law.

As in:

- International Direct flights to all state capitals in proportion to population.

- Maintenance workload divided among states in proportion to population.

- No intra state preferences.

- similar curtailments to domestic flights.

- In other words, a universal service obligation - an end to "Sydney centric" scheduling.

It wont happen because Qantas is owned lock stock and barrel by the Sydney Harbor Boyze - which is why I'd like to see it wither on the vine unless it changes.

[teresa green]

And how long before we become like the car industry and line up for the handouts? Where does it all stop? If Joyce fails in Asia, and costs the airline a motza, that is simply cannot recover from, what then? Its handouts or 36,000 Australians suddenly do not have a job. The only thing I ask, if you are going to renationalise it, please at least wait until the Libs get back in, to be managed by Gillard/Swan could only be marginally worse than being managed by Joyce.

[Al E. Vator]

Where's the fantasy? Air NZ had it happen and has benefitted hugely.

Buy a big block of shares at say $1.80, restore some faith and value in the brand and sell them off at say $2.50 This was in fact the strategy that Dixon etc were personally looking at recently. Specifically the pure asset value is more than the share price, thus it's a no-brainer.

Why invest in VA? They're not undervalued and don't comprise such a massive chunk of the aviation industry in Australia.

The theory over the last 20 years is that governments shouldn't delve into private industry as invariably they don't have the expertise etc. However could anybody have done a worse job than the self-proclaimed corporate wizards?

At privatization, QF had basically 747's, 767's and 737's, with a few other minor types. It was this sensible approach that allowed it to survive when AN couldn't. The corporate wizards had already gutted AN and run it so inefficiently that it was doomed.

Whilst government ownership and the two-airline domestic policy had its drawbacks (silly schedules, expensive airfares compared to now) to dismiss that scenario as yesterdays business strategy hasn't been massively successful. Yeah the public have cheaper prices but at what cost and how long is this sustainable? The main beneficiaries have been the corporate masters of the universe with their sickening bonuses and bloated egos.

So now these wizards have taken over QF (some of whom were also with AN) and what a godawful mess. A380's, 747's, A330's, 767's, 787's shortly, 737's etc. What an overcomplicated recipe for disaster. And the share price reflects their ineptitude.

Boot the lot out, get people running he airline for whom aviation is their first passion (not climbing any corporations' ladder), simplify the whole damn operation and stop farming everything off to foreign carriers and overseas bases.

Get back to basics, like ANZ has, and do it properly.

[Normasars]

Al E Vator

Well said Sir.

[teresa green]

We have to get a govt. that functions first.

[unionist1974]

please tell me what Gov't in this Country bwould be so stuipd as to spend $1,000000000 on buying an airline , where are the votes in that?