PoppaJo
23rd Jul 2023, 10:59
Joe Aston’s piece in tomorrow’s AFR.
On the back of a reported block to Turkish and it’s application, after all, as Joyce said, we are in the most competitive market in the world, a market that the two players control 96%.
What wouldn’t Anthony Albanese do for Qantas?
As millions of Australians know and feel acutely, airfares today stand at record highs. Indeed, they are a key input of our rampant consumer price inflation. The national carrier, Qantas, is (happily for them) unable to sustain pre-COVID international capacity until FY25 due to a lack of available aircraft. In the meantime, it’s printing super-profit margins on its international flights (and domestic flights for that matter).
Yet, the Albanese government has just refused the application of Qatar Airways to operate 28 new flights each week between Doha and Sydney/Melbourne.
https://static.ffx.io/images/$zoom_0.204%2C$multiply_3%2C$ratio_1.5%2C$width_756%2C$x_0%2 C$y_21/t_crop_custom/c_scale%2Cw_620%2Cq_88%2Cf_auto/e1fba46d9adc46b25eea1b59d621359c37eda834Prime Minister Anthony Albanese with Qantas CEO Alan Joyce at the airline’s 100th gala dinner in March. Getty
The NSW and Victorian governments supported Qatar’s new flights, as did the federal opposition, Trade Minister Don Farrell (https://www.afr.com/companies/transport/minister-could-let-qatar-bust-up-qantas-fare-gouging-20230601-p5dd2d), the airports (https://www.afr.com/companies/transport/travellers-to-pay-more-after-qatar-rebuffed-airports-20230719-p5dpir), travel agents and tourism bodies. To say nothing of Australian consumers, whose interests are of no interest to government ministers in the thrall of the Qantas influence machine.
In yet another flawless turn of luck for Qantas, the government appears to have quite cynically conflated Qatar Airways’ air rights with an incident three years ago at Doha Airport when five Australian women were forced to undergo grossly invasive searches by Qatari police.
Nobody is minimising that abomination, which is now the subject of a class action, but since when does the misconduct of police have any place in the consideration of market access for an airline? Presumably since it became the only pretence the government could contrive of.
What should have been taken into account by the Australian government is that Qatar Airways was one of only two airlines (the other was US carrier United) to maintain uninterrupted flights to Australia throughout the COVID-19 pandemic, repatriating tens of thousands of Australians through 2020 and 2021, long after Qantas had packed up and gone home. Throughout that period, of course, Qantas ensured the news cameras were always rolling on its occasional “rescue flights”, all paid for by the Department of Foreign Affairs.
Since its invention as a public company, Qantas has been a skilled prosecutor of whispering campaigns against its enemies foreign and domestic. It is the dirtiest player in the game. In Canberra, Qantas was briefing MPs on human rights abuses in the United Arab Emirates right up to the moment it jumped into bed with Emirates and started flying to Dubai itself.Chock-full of human miseryAny person being honest with themselves, incidentally, knows very well that the global aviation supply chain is chock-full of human misery. Do you think any of the South Asian migrant workers conducting heavy maintenance on Qantas A380s in Abu Dhabi are counting down the days until their paid parental leave?
At a Labor Party fundraiser in Brisbane in May, Anthony Albanese told donors that the Qantas-Emirates alliance was one of his proudest achievements as transport minister in the Rudd and Gillard governments. A revealing boast, indeed.
Under that deal, the two largest full-service international carriers are permitted to operate as a single company. Could you imagine ANZ and NAB being allowed to merge their branches? Or Coles and Aldi getting a green light to combine their distribution centres? Never.
Alan Joyce claimed in 2012 that “what the Emirates partnership does for us to be honest is secure jobs in the medium to long term”. Back then, Qantas had 33,600 employees. By the time COVID hit in March 2020, Joyce had reduced headcount by 13 per cent to 29,400.
If Joyce was being honest, he’d have said the Emirates partnership allowed him to outsource his international network to a state-owned Gulf carrier, and maybe they’re not so bad after all.
Frankly, petro-dictators who keep the equity in their airlines in exchange for the sovereign backing they provide are far smarter than successive Australian governments, which get bled by Qantas for $2.7 billion of subsidies and every other kind of regulatory favour but then watch on as private shareholders enjoy the record profits. Qantas gets away with this formidable heist by handing out a few lousy Chairman’s Lounge memberships and upgrades for politicians’ idiot children.
According to the airlines’ own November 2022 application to the Australian Competition and Consumer Commission for a five-year extension of their authorisation to collude, Qantas and Emirates have a 52 per cent market share on flights between Australia and the United Kingdom (the next largest is Singapore Airlines on 16 per cent) and a 37 per cent market share between Australia and Europe, with Qatar next on 21.5 per cent.
Their application did not meaningfully address the impact of their price collusion on airfares, because how could it? Instead, they emphasised consumer benefits that are poorly understood. For instance, “Qantas was inspired to offer a special mezze plate to its customers on flights to Dubai and London as a result of collaborating with Emirates on appropriate menu choices”. Amazing! I mean, will Gina Cass-Gottlieb ever make an easier decision in her life?
Of course, the Qatar decision is only Transport Minister Catherine King’s latest whose principal beneficiary is Qantas.
In June 2020, former treasurer Josh Frydenberg directed the ACCC to monitor and report on the domestic airline industry for three years.
This year, Cass-Gottlieb requested funding from the government to continue that reporting, given “a lack of effective competition... has resulted in higher airfares and poorer service”. King refused that funding and the ACCC was forced to cease its monitoring in June.Veteran of smoky back roomsMinister King is an embarrassment, but that’s not news. Her decisions have all the hallmarks of Albanese himself. The prime minister who was going to change the way politics operates in this country is really the ultimate insider, a 30-year veteran of smoky back rooms.
If there’s an enduring convention in the Canberra bubble, it’s that what Qantas wants, Qantas gets (https://www.afr.com/rear-window/alan-joyce-passes-around-the-exploding-cigar-20230302-p5cp0j). You’ll never see Alan Joyce properly held to account by a hostile Senate committee no matter how poor the airline’s treatment of customers, and heaven knows it’s been egregious (https://www.afr.com/companies/transport/we-were-paying-fair-share-of-company-tax-says-qantas-20230301-p5cogu).
Upon her appointment, Qantas CEO designate Vanessa Hudson insisted that the customer experience is “back to where it needs to be”.
In the Qantas lounge at Heathrow earlier this month, there were sadly no special mezze plates. The provenance of the wines on offer there cannot be pinpointed to a single growing region or even state, described imprecisely as products of “South Eastern Australia”. The Berri Estates unoaked chardonnay, produced in vats the size of Olympic Dam, was one, which I found available online at $5.90 per bottle. Just imagine the wholesale price. This lounge is overrun with bewildered souls who’ve paid anywhere from $13,000 to $18,000 for the dissatisfaction, and Qantas serves them cooking wine.
Seventeen-thousand kilometres away, Joyce is knocking up a spag bol with half a cup of Château Lafite to give it that je ne sais quoi.
On the back of a reported block to Turkish and it’s application, after all, as Joyce said, we are in the most competitive market in the world, a market that the two players control 96%.
What wouldn’t Anthony Albanese do for Qantas?
As millions of Australians know and feel acutely, airfares today stand at record highs. Indeed, they are a key input of our rampant consumer price inflation. The national carrier, Qantas, is (happily for them) unable to sustain pre-COVID international capacity until FY25 due to a lack of available aircraft. In the meantime, it’s printing super-profit margins on its international flights (and domestic flights for that matter).
Yet, the Albanese government has just refused the application of Qatar Airways to operate 28 new flights each week between Doha and Sydney/Melbourne.
https://static.ffx.io/images/$zoom_0.204%2C$multiply_3%2C$ratio_1.5%2C$width_756%2C$x_0%2 C$y_21/t_crop_custom/c_scale%2Cw_620%2Cq_88%2Cf_auto/e1fba46d9adc46b25eea1b59d621359c37eda834Prime Minister Anthony Albanese with Qantas CEO Alan Joyce at the airline’s 100th gala dinner in March. Getty
The NSW and Victorian governments supported Qatar’s new flights, as did the federal opposition, Trade Minister Don Farrell (https://www.afr.com/companies/transport/minister-could-let-qatar-bust-up-qantas-fare-gouging-20230601-p5dd2d), the airports (https://www.afr.com/companies/transport/travellers-to-pay-more-after-qatar-rebuffed-airports-20230719-p5dpir), travel agents and tourism bodies. To say nothing of Australian consumers, whose interests are of no interest to government ministers in the thrall of the Qantas influence machine.
In yet another flawless turn of luck for Qantas, the government appears to have quite cynically conflated Qatar Airways’ air rights with an incident three years ago at Doha Airport when five Australian women were forced to undergo grossly invasive searches by Qatari police.
Nobody is minimising that abomination, which is now the subject of a class action, but since when does the misconduct of police have any place in the consideration of market access for an airline? Presumably since it became the only pretence the government could contrive of.
What should have been taken into account by the Australian government is that Qatar Airways was one of only two airlines (the other was US carrier United) to maintain uninterrupted flights to Australia throughout the COVID-19 pandemic, repatriating tens of thousands of Australians through 2020 and 2021, long after Qantas had packed up and gone home. Throughout that period, of course, Qantas ensured the news cameras were always rolling on its occasional “rescue flights”, all paid for by the Department of Foreign Affairs.
Since its invention as a public company, Qantas has been a skilled prosecutor of whispering campaigns against its enemies foreign and domestic. It is the dirtiest player in the game. In Canberra, Qantas was briefing MPs on human rights abuses in the United Arab Emirates right up to the moment it jumped into bed with Emirates and started flying to Dubai itself.Chock-full of human miseryAny person being honest with themselves, incidentally, knows very well that the global aviation supply chain is chock-full of human misery. Do you think any of the South Asian migrant workers conducting heavy maintenance on Qantas A380s in Abu Dhabi are counting down the days until their paid parental leave?
At a Labor Party fundraiser in Brisbane in May, Anthony Albanese told donors that the Qantas-Emirates alliance was one of his proudest achievements as transport minister in the Rudd and Gillard governments. A revealing boast, indeed.
Under that deal, the two largest full-service international carriers are permitted to operate as a single company. Could you imagine ANZ and NAB being allowed to merge their branches? Or Coles and Aldi getting a green light to combine their distribution centres? Never.
Alan Joyce claimed in 2012 that “what the Emirates partnership does for us to be honest is secure jobs in the medium to long term”. Back then, Qantas had 33,600 employees. By the time COVID hit in March 2020, Joyce had reduced headcount by 13 per cent to 29,400.
If Joyce was being honest, he’d have said the Emirates partnership allowed him to outsource his international network to a state-owned Gulf carrier, and maybe they’re not so bad after all.
Frankly, petro-dictators who keep the equity in their airlines in exchange for the sovereign backing they provide are far smarter than successive Australian governments, which get bled by Qantas for $2.7 billion of subsidies and every other kind of regulatory favour but then watch on as private shareholders enjoy the record profits. Qantas gets away with this formidable heist by handing out a few lousy Chairman’s Lounge memberships and upgrades for politicians’ idiot children.
According to the airlines’ own November 2022 application to the Australian Competition and Consumer Commission for a five-year extension of their authorisation to collude, Qantas and Emirates have a 52 per cent market share on flights between Australia and the United Kingdom (the next largest is Singapore Airlines on 16 per cent) and a 37 per cent market share between Australia and Europe, with Qatar next on 21.5 per cent.
Their application did not meaningfully address the impact of their price collusion on airfares, because how could it? Instead, they emphasised consumer benefits that are poorly understood. For instance, “Qantas was inspired to offer a special mezze plate to its customers on flights to Dubai and London as a result of collaborating with Emirates on appropriate menu choices”. Amazing! I mean, will Gina Cass-Gottlieb ever make an easier decision in her life?
Of course, the Qatar decision is only Transport Minister Catherine King’s latest whose principal beneficiary is Qantas.
In June 2020, former treasurer Josh Frydenberg directed the ACCC to monitor and report on the domestic airline industry for three years.
This year, Cass-Gottlieb requested funding from the government to continue that reporting, given “a lack of effective competition... has resulted in higher airfares and poorer service”. King refused that funding and the ACCC was forced to cease its monitoring in June.Veteran of smoky back roomsMinister King is an embarrassment, but that’s not news. Her decisions have all the hallmarks of Albanese himself. The prime minister who was going to change the way politics operates in this country is really the ultimate insider, a 30-year veteran of smoky back rooms.
If there’s an enduring convention in the Canberra bubble, it’s that what Qantas wants, Qantas gets (https://www.afr.com/rear-window/alan-joyce-passes-around-the-exploding-cigar-20230302-p5cp0j). You’ll never see Alan Joyce properly held to account by a hostile Senate committee no matter how poor the airline’s treatment of customers, and heaven knows it’s been egregious (https://www.afr.com/companies/transport/we-were-paying-fair-share-of-company-tax-says-qantas-20230301-p5cogu).
Upon her appointment, Qantas CEO designate Vanessa Hudson insisted that the customer experience is “back to where it needs to be”.
In the Qantas lounge at Heathrow earlier this month, there were sadly no special mezze plates. The provenance of the wines on offer there cannot be pinpointed to a single growing region or even state, described imprecisely as products of “South Eastern Australia”. The Berri Estates unoaked chardonnay, produced in vats the size of Olympic Dam, was one, which I found available online at $5.90 per bottle. Just imagine the wholesale price. This lounge is overrun with bewildered souls who’ve paid anywhere from $13,000 to $18,000 for the dissatisfaction, and Qantas serves them cooking wine.
Seventeen-thousand kilometres away, Joyce is knocking up a spag bol with half a cup of Château Lafite to give it that je ne sais quoi.