Dixon interview (Alan Kohler)
Thread Starter
Join Date: Mar 2001
Location: Townsville,Nth Queensland
Posts: 2,717
Likes: 0
Received 0 Likes
on
0 Posts
Dixon interview (Alan Kohler)
ABC "Inside Business"
Transcript
Qantas looks towards an Asian future
Date : 12/09/2004
Reporter: Alan Kohler
ALAN KOHLER: When British Airways dumped its 18 per cent stake in Qantas on the market this week, the reaction from investors was a feeding frenzy - the share price went up, not down.
In fact it is smiles all round. Qantas boss Geoff Dixon, on a global investment roadshow at the moment, is a now very happy man. Without BA onboard or in the boardroom, it's chocks away for his vision of a multi-branded, Asia-focussed carrier. I caught up with Geoff Dixon in London.
ALAN KOHLER: Geoff Dixon, does this now free Qantas to do more in Asia?
GEOFF DIXON, CEO QANTAS: Oh, it most certainly it does. And it frees us to do more anywhere we'd like to go in the world, but certainly, it does do that.
ALAN KOHLER: Why is that? Was British Airways actually holding you back in some way, were they?
GEOFF DIXON: No, certainly not holding us back. But, I mean, we've always said that they've been a great partner, but we'd never believed you needed the equity particularly in the last three to four years. And certainly, if you have a partner that has got 18.5 per cent, it's very hard to start talking to other people, particularly when you're so close.
Now they need to talk to other people in their sphere of influence. We believe that our sphere of influence is more in the Asia-Pacific region. That doesn't mean we won't continue to be strong partners, but I do think we're both going to look at other opportunities.
ALAN KOHLER: Yeah, but it must have been a bit annoying perhaps in your position to have another airline sitting on your board, approving your ideas - knowing everything you were doing?
GEOFF DIXON: Oh yes, there's something in that, Alan, there's no doubt. But gee, I have always said it and I mean it, they were just impeccable as shareholders. They're representatives on the board conducted themselves with, you know, really the utmost integrity.
And I've said before and I'll say it again, I don't think there's been a better airline partnership. And I might add, there's no reason why that partnership should not continue. Both Rod Eddington and I believe it will. We're going to continue to try and work together. But obviously, as we grow and BA look at other things, there's inevitably a few tensions come into the relationship but that comes into all relationships.
But, we're pretty confident that it frees us up to look around a bit more. If frees up our share register, obviously, and that's very important, but it doesn't mean we will not be partners.
ALAN KOHLER: Do you see Qantas buying a strategic stake or even possibly making a takeover offer for another airline in the Asian region? I mean - you did mention actually doing things, what does that mean?
GEOFF DIXON: Oh, well, it means a variety of things. Obviously, if there was an opportunity for us to - if there was consolidation in the industry - we'd certainly expect it will happen, we'd like to be part of that.
But we would expect it more being on an equal basis - someone may be investing in us and us investing in them or partnering in some way that may not require an equity relationship. But there's plenty of other opportunities, I mean, we have put our toe in the water so to speak, by being a 49.9 per cent owner of a new low-cost carrier, as you know, out of Singapore. We also have 49 per cent in an air-freight operation that's about to start in Bangkok and there are other opportunities.
What we want to do is work with our local partners to try to give ourselves more of a footprint in that part of the world. And that part of the world now we regard from, right from India through to South-East Asia into China, I mean, there are big opportunities. It's the biggest growth area for aviation.
ALAN KOHLER: The obvious potential partner in the region is Singapore Airlines which you've been enemies with in the past. Now you've been getting closer to recently. What potential is there for you to have an alliance with Singapore Airlines now - either an equity one or a business partnership and do you think that possibly may be even some of Singapore Airlines major shareholders, like Tomasic, will perhaps buy some shares in Qantas now?
GEOFF DIXON: I think the issue of Singapore Airlines and Qantas has been overplayed a little bit. I mean, our biggest interest at the moment obviously is to see whether we can get a partnership with Air New Zealand, very, very close to ourselves. We believe it's a natural partnership. And we're going to pursue that. If the appeals don't work we will sit down with Air New Zealand and find out what other activities we can do together.
Singapore - we certainly have been talking to them about the issue of the A-380, the new aircraft that is coming in, and both of us are launch customers for that. There's opportunities perhaps to work together on that. But we also realise we've just started an airline in Singapore that will be competing against Singapore Airlines' own low-cost carrier. Indeed, I suppose, on some of Singapore's routes. So we're still major competitors. If anything was going to happen there, that would be a fair way out.
ALAN KOHLER: Can you see a time in the future when Qantas becomes, in effect, an Asian airline that happens to be based in Australia?
GEOFF DIXON: I don't see it exactly like that. I see that its major operations will and must be in the Asia-Pacific region. But obviously as a global carrier - and we are hugely important to Australia - we need to have very viable reach out to the UK, Europe, the US, Africa, places like that.
But I think the real area for Qantas, and I think that's the big job that we have - the management and the board over the next three to four years, is to work out how we can grow and prosper in a profitable way in all parts of Asia. That won't be easy because it - although there's a lot of traffic there and you can carry a lot of passengers, the yield is not good sometimes, we've got to work it out.
ALAN KOHLER: Do you think China represents a big opportunity for you?
GEOFF DIXON: I do, but you know, we're been into China a few times before my time and since my time as well, and retreated. But I do think things have changed quite dramatically for Qantas as well. We have a stronger balance sheet. I also think we have much better aircraft now that would suit the China market - the A-330, the A-300 aircraft, we're going to have sky beds on them and a new economy class - and that's the one we're going to fly to Shanghai.
I would hope that we would be going back into Beijing within around about 12 months because as things start to develop before the Olympics. So we must, if we're going to be successful, be successful in China. I also believe that's the same for India. We went back into India last week. We will then be looking very carefully at how we can grow the Indian market as well.
ALAN KOHLER: You mentioned your cut-price airline in Singapore with Singapore partners you've got 49.9 per cent of it, have your partners in that enterprise got the stomach for a big expansion of that business through Asia, perhaps to China, making it a major airline?
GEOFF DIXON: I suppose you should ask whether Qantas has got the stomach for it.
ALAN KOHLER: That too, I guess?
GEOFF DIXON: Yes, I think all of us have got the stomach for it, if we believe we can do it successfully. We obviously believe we can launch it in the capacity we're doing now with around about eight aircraft into next year, starting from December, provided it goes the way we believe it will go. And we don't believe this will be a walk in the park.
Obviously, you have to earn your stripes in a pretty tough market. But I think we're confident that Qantas knows how to run a low-cost operation. I think we know how to run a full-service airline as well. Our partners are very substantial people, very supportive.
So I would hope that the airline in Asia, along with Jetstar in Australia, will enable us to grow in that part of the world in the low-cost market while Qantas, coming out of Australia, can establish what I would call a medium- to long-haul operations into the key centres as well.
ALAN KOHLER: Everyone used to say that a full-service airline couldn't run a discounted airline. Do you think that with Jetstar you have proved them wrong?
GEOFF DIXON: I personally do. We take a little bit of pride in that. I don't want to sound arrogant about it, but we were very confident we could do it because we knew there were some issues that you could not comprise on. We didn't comprise on it, and I believe Jetstar is going to be, I mean - an outstanding success for the Qantas group.
And that's the major point - this is going to be for the Qantas group, not just for Jetstar or for Qantas or for Australian airlines - we're running these airlines for the benefit of the group and that is working out very well.
ALAN KOHLER: As you look to Asia do you think the discount model is more exportable by Qantas than the full-service model?
GEOFF DIXON: Well, I think it's more exportable if you're going to have an Asian base, but I think the full-service model is very exportable provided we're doing that from Australia. That's where our strength is, I mean, we have a tremendous brand. We have tremendous people, so I'm quite sure that we can grow and be successful out of Australia into the Asian markets with Qantas as a full-service operator. But we would probably want our footprint for the low-cost model to be domiciled in parts of Asia.
ALAN KOHLER: I wanted to ask you about this week's bomb in Jakarta. I just wondering to what extent does an airline like yours rely on intelligence warnings about terrorist attacks? And in which case were you worried and concerned that there seems to be an intelligence failure over that bombing?
GEOFF DIXON: I haven't heard that, obviously, I have just been told before I came in here, that there was some issue on that. I don't really know enough about it, Alan. But what I do know... about that particular issue, and I'll find out after the interview... but what I do know is we work very, very closely with the Australian authorities particularly, and the information we get from the Australian authorities has been quite outstanding in recent years.
It's a very cooperative relationship. Obviously, there will be slip-ups occasionally. We hope it doesn't end up like this situation that's ended up in Jakarta obviously. But Qantas is very diligent about this. We have a lot of sources and obviously I'm concerned of any slip up. But I'm pretty confident that we know where we are.
ALAN KOHLER: We'll leave it there. Thanks very much, Geoff Dixon.
GEOFF DIXON: Thanks, Alan.
--------------------------------------------------------------------------------
Please note: Transcripts on this website are created by an independent transcription service. The ABC does not warrant the accuracy of the transcripts.
Transcript
Qantas looks towards an Asian future
Date : 12/09/2004
Reporter: Alan Kohler
ALAN KOHLER: When British Airways dumped its 18 per cent stake in Qantas on the market this week, the reaction from investors was a feeding frenzy - the share price went up, not down.
In fact it is smiles all round. Qantas boss Geoff Dixon, on a global investment roadshow at the moment, is a now very happy man. Without BA onboard or in the boardroom, it's chocks away for his vision of a multi-branded, Asia-focussed carrier. I caught up with Geoff Dixon in London.
ALAN KOHLER: Geoff Dixon, does this now free Qantas to do more in Asia?
GEOFF DIXON, CEO QANTAS: Oh, it most certainly it does. And it frees us to do more anywhere we'd like to go in the world, but certainly, it does do that.
ALAN KOHLER: Why is that? Was British Airways actually holding you back in some way, were they?
GEOFF DIXON: No, certainly not holding us back. But, I mean, we've always said that they've been a great partner, but we'd never believed you needed the equity particularly in the last three to four years. And certainly, if you have a partner that has got 18.5 per cent, it's very hard to start talking to other people, particularly when you're so close.
Now they need to talk to other people in their sphere of influence. We believe that our sphere of influence is more in the Asia-Pacific region. That doesn't mean we won't continue to be strong partners, but I do think we're both going to look at other opportunities.
ALAN KOHLER: Yeah, but it must have been a bit annoying perhaps in your position to have another airline sitting on your board, approving your ideas - knowing everything you were doing?
GEOFF DIXON: Oh yes, there's something in that, Alan, there's no doubt. But gee, I have always said it and I mean it, they were just impeccable as shareholders. They're representatives on the board conducted themselves with, you know, really the utmost integrity.
And I've said before and I'll say it again, I don't think there's been a better airline partnership. And I might add, there's no reason why that partnership should not continue. Both Rod Eddington and I believe it will. We're going to continue to try and work together. But obviously, as we grow and BA look at other things, there's inevitably a few tensions come into the relationship but that comes into all relationships.
But, we're pretty confident that it frees us up to look around a bit more. If frees up our share register, obviously, and that's very important, but it doesn't mean we will not be partners.
ALAN KOHLER: Do you see Qantas buying a strategic stake or even possibly making a takeover offer for another airline in the Asian region? I mean - you did mention actually doing things, what does that mean?
GEOFF DIXON: Oh, well, it means a variety of things. Obviously, if there was an opportunity for us to - if there was consolidation in the industry - we'd certainly expect it will happen, we'd like to be part of that.
But we would expect it more being on an equal basis - someone may be investing in us and us investing in them or partnering in some way that may not require an equity relationship. But there's plenty of other opportunities, I mean, we have put our toe in the water so to speak, by being a 49.9 per cent owner of a new low-cost carrier, as you know, out of Singapore. We also have 49 per cent in an air-freight operation that's about to start in Bangkok and there are other opportunities.
What we want to do is work with our local partners to try to give ourselves more of a footprint in that part of the world. And that part of the world now we regard from, right from India through to South-East Asia into China, I mean, there are big opportunities. It's the biggest growth area for aviation.
ALAN KOHLER: The obvious potential partner in the region is Singapore Airlines which you've been enemies with in the past. Now you've been getting closer to recently. What potential is there for you to have an alliance with Singapore Airlines now - either an equity one or a business partnership and do you think that possibly may be even some of Singapore Airlines major shareholders, like Tomasic, will perhaps buy some shares in Qantas now?
GEOFF DIXON: I think the issue of Singapore Airlines and Qantas has been overplayed a little bit. I mean, our biggest interest at the moment obviously is to see whether we can get a partnership with Air New Zealand, very, very close to ourselves. We believe it's a natural partnership. And we're going to pursue that. If the appeals don't work we will sit down with Air New Zealand and find out what other activities we can do together.
Singapore - we certainly have been talking to them about the issue of the A-380, the new aircraft that is coming in, and both of us are launch customers for that. There's opportunities perhaps to work together on that. But we also realise we've just started an airline in Singapore that will be competing against Singapore Airlines' own low-cost carrier. Indeed, I suppose, on some of Singapore's routes. So we're still major competitors. If anything was going to happen there, that would be a fair way out.
ALAN KOHLER: Can you see a time in the future when Qantas becomes, in effect, an Asian airline that happens to be based in Australia?
GEOFF DIXON: I don't see it exactly like that. I see that its major operations will and must be in the Asia-Pacific region. But obviously as a global carrier - and we are hugely important to Australia - we need to have very viable reach out to the UK, Europe, the US, Africa, places like that.
But I think the real area for Qantas, and I think that's the big job that we have - the management and the board over the next three to four years, is to work out how we can grow and prosper in a profitable way in all parts of Asia. That won't be easy because it - although there's a lot of traffic there and you can carry a lot of passengers, the yield is not good sometimes, we've got to work it out.
ALAN KOHLER: Do you think China represents a big opportunity for you?
GEOFF DIXON: I do, but you know, we're been into China a few times before my time and since my time as well, and retreated. But I do think things have changed quite dramatically for Qantas as well. We have a stronger balance sheet. I also think we have much better aircraft now that would suit the China market - the A-330, the A-300 aircraft, we're going to have sky beds on them and a new economy class - and that's the one we're going to fly to Shanghai.
I would hope that we would be going back into Beijing within around about 12 months because as things start to develop before the Olympics. So we must, if we're going to be successful, be successful in China. I also believe that's the same for India. We went back into India last week. We will then be looking very carefully at how we can grow the Indian market as well.
ALAN KOHLER: You mentioned your cut-price airline in Singapore with Singapore partners you've got 49.9 per cent of it, have your partners in that enterprise got the stomach for a big expansion of that business through Asia, perhaps to China, making it a major airline?
GEOFF DIXON: I suppose you should ask whether Qantas has got the stomach for it.
ALAN KOHLER: That too, I guess?
GEOFF DIXON: Yes, I think all of us have got the stomach for it, if we believe we can do it successfully. We obviously believe we can launch it in the capacity we're doing now with around about eight aircraft into next year, starting from December, provided it goes the way we believe it will go. And we don't believe this will be a walk in the park.
Obviously, you have to earn your stripes in a pretty tough market. But I think we're confident that Qantas knows how to run a low-cost operation. I think we know how to run a full-service airline as well. Our partners are very substantial people, very supportive.
So I would hope that the airline in Asia, along with Jetstar in Australia, will enable us to grow in that part of the world in the low-cost market while Qantas, coming out of Australia, can establish what I would call a medium- to long-haul operations into the key centres as well.
ALAN KOHLER: Everyone used to say that a full-service airline couldn't run a discounted airline. Do you think that with Jetstar you have proved them wrong?
GEOFF DIXON: I personally do. We take a little bit of pride in that. I don't want to sound arrogant about it, but we were very confident we could do it because we knew there were some issues that you could not comprise on. We didn't comprise on it, and I believe Jetstar is going to be, I mean - an outstanding success for the Qantas group.
And that's the major point - this is going to be for the Qantas group, not just for Jetstar or for Qantas or for Australian airlines - we're running these airlines for the benefit of the group and that is working out very well.
ALAN KOHLER: As you look to Asia do you think the discount model is more exportable by Qantas than the full-service model?
GEOFF DIXON: Well, I think it's more exportable if you're going to have an Asian base, but I think the full-service model is very exportable provided we're doing that from Australia. That's where our strength is, I mean, we have a tremendous brand. We have tremendous people, so I'm quite sure that we can grow and be successful out of Australia into the Asian markets with Qantas as a full-service operator. But we would probably want our footprint for the low-cost model to be domiciled in parts of Asia.
ALAN KOHLER: I wanted to ask you about this week's bomb in Jakarta. I just wondering to what extent does an airline like yours rely on intelligence warnings about terrorist attacks? And in which case were you worried and concerned that there seems to be an intelligence failure over that bombing?
GEOFF DIXON: I haven't heard that, obviously, I have just been told before I came in here, that there was some issue on that. I don't really know enough about it, Alan. But what I do know... about that particular issue, and I'll find out after the interview... but what I do know is we work very, very closely with the Australian authorities particularly, and the information we get from the Australian authorities has been quite outstanding in recent years.
It's a very cooperative relationship. Obviously, there will be slip-ups occasionally. We hope it doesn't end up like this situation that's ended up in Jakarta obviously. But Qantas is very diligent about this. We have a lot of sources and obviously I'm concerned of any slip up. But I'm pretty confident that we know where we are.
ALAN KOHLER: We'll leave it there. Thanks very much, Geoff Dixon.
GEOFF DIXON: Thanks, Alan.
--------------------------------------------------------------------------------
Please note: Transcripts on this website are created by an independent transcription service. The ABC does not warrant the accuracy of the transcripts.
