sirjfp
28th May 2003, 14:56
I found this yesterday on the ninemsn website. It has been penned by business journalist Ross Greenwood.
25 May 2003,
AUSTRALIAN AIRLINE INDUSTRY CRISIS
The popular picture of Australia's airline industry is that it is in crisis: SARS and the Iraq war have combined to decimate profits and to create significant job losses. For this reason it is important that airlines such as Qantas can cut costs by moving closer to Air New Zealand and by cutting staff . Right?
Or part right- part snow job?
Well the snow-job might be that Qantas had already decided to lower staff numbers by 3700 . Iraq , then SARS, gave it the perfect justification to swing the axe more quickly .
Then there's the long simmering move to an Open Skies policy ;having forced it onto the backburner in the free trade agreement with Singapore , Qantas is facing an uphill battle to do the same in the Free Trade talks with the U.S , now underway.
And should agreement with the U.S be struck, then one with Singapore will quickly follow: thereby bringing Qantas and it's arch rival, Singapore Airlines , face to face .
Not helping Qantas's case is the " tightness" of the trans-Pacific routes - ask any businessman or holiday maker about the ease in which you can grab a flight to the U.S. It's not impossible but there's not much spare capacity .
United wont be flying for a few more weeks , Air Canada's in administration and Qantas has the capacity and is making an awful amount of money- but not talking about it .
The Americans wont allow Qantas to delay an Open Skies policy in the free trade talks with the Howard Government.
The absence of an agreement with Singapore is already something of an embarrassment for Prime Minister Howard.... after all, Singapore is helping in the war on terror - and this government owes them plenty after treating Singapore Air badly in the collapse of Ansett.
Qantas boss Geoff Dixon is milking every drop out of the current economic climate to defer any changes . Taking 767's out of international service because of SARS will create a large write-down this year - and a headline loss. But Dixon knows the operating bottom line will be a lot worse when competition increases .
Oh , and by the way, don't think it will be easy for Virgin Blue to move into the international air travel business , or take up some of the capacity that Qantas and Air New Zealand are offering as part of the sweetening of their link up .
We hear that a third party has to approve the use of the Virgin name on international routes ..... No , it's not Chris Corrigan's good mate ....Dickie Branson. No, through it's 49 per cent stake in Branson's Virgin Atlantic , Singapore Airlines . It controls just who can use the Virgin name in International Aviation .
Now, suddenly Singapore Air , after losing a billion dollars in the collapse of Ansett and all those problems with Air New Zealand becomes central to the future of Qantas - Air New Zealand , Trans Tasman travel, plus a whole lot of other possibilities in Australasia .
- Ross Greenwood.
A very interesting article that should stimulate some debate. I can now see why Branson is keen to float Virgin Blue by the end of the year. He is astute enough to know that in the middle term it is going to be a lot tougher to make a buck in Australia .
25 May 2003,
AUSTRALIAN AIRLINE INDUSTRY CRISIS
The popular picture of Australia's airline industry is that it is in crisis: SARS and the Iraq war have combined to decimate profits and to create significant job losses. For this reason it is important that airlines such as Qantas can cut costs by moving closer to Air New Zealand and by cutting staff . Right?
Or part right- part snow job?
Well the snow-job might be that Qantas had already decided to lower staff numbers by 3700 . Iraq , then SARS, gave it the perfect justification to swing the axe more quickly .
Then there's the long simmering move to an Open Skies policy ;having forced it onto the backburner in the free trade agreement with Singapore , Qantas is facing an uphill battle to do the same in the Free Trade talks with the U.S , now underway.
And should agreement with the U.S be struck, then one with Singapore will quickly follow: thereby bringing Qantas and it's arch rival, Singapore Airlines , face to face .
Not helping Qantas's case is the " tightness" of the trans-Pacific routes - ask any businessman or holiday maker about the ease in which you can grab a flight to the U.S. It's not impossible but there's not much spare capacity .
United wont be flying for a few more weeks , Air Canada's in administration and Qantas has the capacity and is making an awful amount of money- but not talking about it .
The Americans wont allow Qantas to delay an Open Skies policy in the free trade talks with the Howard Government.
The absence of an agreement with Singapore is already something of an embarrassment for Prime Minister Howard.... after all, Singapore is helping in the war on terror - and this government owes them plenty after treating Singapore Air badly in the collapse of Ansett.
Qantas boss Geoff Dixon is milking every drop out of the current economic climate to defer any changes . Taking 767's out of international service because of SARS will create a large write-down this year - and a headline loss. But Dixon knows the operating bottom line will be a lot worse when competition increases .
Oh , and by the way, don't think it will be easy for Virgin Blue to move into the international air travel business , or take up some of the capacity that Qantas and Air New Zealand are offering as part of the sweetening of their link up .
We hear that a third party has to approve the use of the Virgin name on international routes ..... No , it's not Chris Corrigan's good mate ....Dickie Branson. No, through it's 49 per cent stake in Branson's Virgin Atlantic , Singapore Airlines . It controls just who can use the Virgin name in International Aviation .
Now, suddenly Singapore Air , after losing a billion dollars in the collapse of Ansett and all those problems with Air New Zealand becomes central to the future of Qantas - Air New Zealand , Trans Tasman travel, plus a whole lot of other possibilities in Australasia .
- Ross Greenwood.
A very interesting article that should stimulate some debate. I can now see why Branson is keen to float Virgin Blue by the end of the year. He is astute enough to know that in the middle term it is going to be a lot tougher to make a buck in Australia .