...but Clifford will still have made scores of millions for mediocre at best performance. And he is enough of a self-referential narcissist to discount anyone else's opinion of him.

Even M Jackson, poster girl for ineptitude, recently got another aviation board seat.

How is Alan's Jetconnect venture in New Zealand travelling?

As I understand it. QF provide cash to cover Jetconnect's operating expenses plus a few extra percent.

In return Jetconnect provide the trans Tasman services on the B737.

Is it true that Jetconnect are now providing Flight Attendants for Qantas mainline A380 services normally covered by Australian operations out of Australia?

Flight Attendants passenger to Australia from New Zealand and operate A380 services out of and back to Australia before passengering back to NZ.

This sounds a lot like employing Thai flight attendants for Australian domestic flying. Or employing JQ cadets out of NZ with foreign bank accounts to fly services in Australia.

Can anyone confirm?

The threat to Australian employed pilots is the company attempting to do similar with pilots. Foreign employed pilots passengering into Australian to operate white roo or orange star services out of Australia. If it can be done with FA's, what's next?

MC.

Kiwis have been operating international services ex Australia for years.

They can't do domestic services. Domestic legs of international services they can do too.

DA.

So what stops management from sourcing foreign labour for flight crew?

Are their any obstacles for crewing white tail 787's from NZ?

As for the FF spinoff, couple of comments.

1. Very interesting to see Air Canada later relaunch its Top Tier/ now Altitude programs for rewarding frequent flyers, a number of years after spinning off Aeroplan.

2. FYSTI's gleaming light analogy is a good one... But I would add that the gleaming light is the International arm not domestic or Jetstar - and QF has been doing it best to shrink this. The other item that has dimmed that gleaming light has been the continual additional of fuel fines and other taxes to frequent flyer tickets - such that for an economy redemption you can pay almost half a full ticket. Personally I think a large part of the earnings should be allocated to International, as they have a symbiotic relationship

Not to say that I don't believe QF, and indeed the Government, still needs to make some significant changes in International, just that wholistically things aren't quite as bad.

TIMA9X,
Trust me I have been through this scenario personally and at the end of the day accountability will be avoided by many and a whole bunch of people will rewrite history and claim memory loss (aka "I cannot recall") when it counts. ASIC will go for token heads on poles so take the low level fruit first and claim a moral victory and then everyone will get on with their lives, save of course AJ and maybe his chairman. The political pressure will be immense to move on so no-one wants a thorough investigation of what really happened here.

Sad, but it is the reality. The real challenge for all of us is about stopping the coffers being looted by those that leave and that means immense PR pressure on new board to hold the line. I live in hope, but it is probably a pipe dream.

Mstr caution, 100% can confirm jx international crew operate on the 380. Normally a 10 day trip with paxing each way from kiwi-land. They do not operate trans-Tasman but believe they r being trained on the 738 shortly to squeeze more efficiency. Their pay and conditions r below qcca awards

Direct Anywhere, Jetconnect long haul flight attendants have operated many solely domestic SYD/MEL-PER flights over time, as part of patterns involving international sectors. I am not sure of it still happens. I know it was still the case in 2010. That may have stopped around the same time as the fuss over JQ using foreign crew on domestic 'tag' flights.

A Jetconnect long haul flight attendant advised me this week that it was official - they were to be endorsed on the 73H in order to crew flights to position them for A380 services. I am not sure if Jetconnect short haul flight attendants are getting endorsed on the 380 also.

Based on a simulated payment default in 2019 due forecasted deteriorating conditons and unlikely events (only some of which were noted).

A sobering and realistic read.

Heard a rumour not long ago that Jetconnect were asked what the sums would be like for Tech Crew on the A330...

Not sure if there's any rules to prevent that from happening though?

London cabin crew are about to start doing more LHR-DXB-AUS flying from next month as they are going to be capped at 900hrs a year. Just doing back to back LHR-DXB-LHRs burns those hours to quickly.

QF are about to pull out of the DXB LHR sector, so I cant imagine how busy LHR cabin crew will be.

Something like this awaits Qantas China ventures......

Special Report - How Caterpillar got bulldozed in China | Reuters

Nothing at all, apart from Union action, Which in turn could see all the A330s for domestic flying becomming ZK-*** with less crew onboard.

The smartest guys in there room, on leading the way….
You Don't Understand Business If You Think We're Giving Up Our Market Share: Qantas CFO | Business Insider

Qantas CFO fights ?myths? | Business Spectator
:}:}:}:}:}:ugh::ugh::ugh:

Yes these guys have their fingers on the pulse.

One question for the illustrious leaders. Where are the results?:ugh::ugh::ugh:

'The reality is that the airline our customers experience is one of the best in the world.'
Courtesy of whom? Which manager does the customer ever meet?

It has been said that for every complex problem there is an answer that is clear, simple and wrong.
There is a never a shortage of armchair experts with theories on how to run Qantas, and the cabin has been crowded recently.

No ******* wonder. Nature abhors a vacuum.

Over the past five years, Qantas has been navigating through a complex and cutthroat environment. Oil prices have reached record levels. The world economy has been subdued. We've seen Asian and Middle Eastern carriers, who can do things a lot cheaper, expand into our markets.

Oil prices are 33% cheaper than their highs. In Australian dollar terms they are very close to their five year average.

The Australian dollar exchange rate, by the way, has been a record highs over the period in question...an advantage the airline has failed to mention.

The Middle Eastern carriers...really? Do you really want to go there?

We've plotted a course through these challenges and we've adjusted it as circumstances shifted. But the reality is that the airline our passengers experience is one of the best in the world and we have a strategy to keep it that way.

Yeah. Its a cunning plan that involves no new aeroplanes! It involves decoupling domestic from its integral international partner. It involves serving fewer and fewer destinations. It involves scrapping planes and adding managers. It is lunacy.

For many on the sidelines, it seems few businesses are easier to run than the national carrier.

Not at all: it seems to have eluded you guys. And we all know that you guys are the smartest in the room.

They include Tony Webber, a former Qantas finance employee, who was retrenched several years ago. His comments on the aviation world come from a one-dimensional view of supply and demand that ignores how a multifaceted market actually works.

That's two dimensions right there. No world view is one dimensional, by definition. Not since the big bang. But I digress: Why is supply and demand theory simplistic? Oh! I Know! Because you guys mess up yield management so much! Or maybe its because you have tried meeting high demand with zero supply! There's yer trouble right there!

One of his recommendations during his time at Qantas was to shrink our regional operations so prices and profits would rise. Apart from ignoring our role in the community such a move would also have rolled out the red carpet for our competitors to fill the space.

You lost many of those routes anyway. And as far as a community role goes:I know Australia Day is just around the corner, but resist the temptation to wrap yourself in the flag. It makes you sound like an idiot in light of your offshoring and foreign based crews.

Commentators are welcome to their views. But their more serious claims cannot go unchallenged, because they are based on a misunderstanding of the aviation market and Qantas itself.

The first claim is that Qantas is a ''lazy'' company seeking a government handout, to be categorised with Holden. This could not be further from the truth. The Qantas Group has reduced unit costs by almost 20 per cent over five years, renewed its fleet with 130 new aircraft, innovated with technology and lifted customer satisfaction to record levels.

WTF? What was Joyce doing then? And which 130 new aircraft are you referring to? How many of them are parked?

Few Australian firms have done more in the post-GFC period to reform in the face of structural economic change. We acknowledge there is more to do. In December, we announced the acceleration of this program to deliver a further $2 billion of savings over three years.

The second myth is that Qantas and Jetstar should stop targeting a combined, profit-maximising 65 per cent share of the domestic market.

The 65 per cent strategy is about giving our customers a market-leading choice of destinations, frequencies and seats at the times they want to travel. That scale is part of the premium service we offer and the fares we sell, and it reflects the investment we have made over many years in our regional operations and in building a national low-fares network with Jetstar. It is prized by our customers and it is a real competitive advantage that allows us to maximise earnings in even the toughest market conditions.

How's that earnings maximisation workin' out for ya? Which of your customers has actually drawn a 65% line in the sand? Which market leading choice of destinations? You are abandoning them internationally, marginalising them domestically.

Stepping back from the 65 per cent would effectively be waving the white flag, not to mention abandoning our role in regional Australia and betraying the loyalty of our frequent flyers. Anyone who advocates this kind of approach does not understand the way business works. We plan to keep strengthening our competitive advantages, not walking away from them.

Bull****. Read any business texts lately? Get your MBA in the 1980’s? Market share is the petard upon which you will be hoist. Well, not you. You'll be alright, Jack. Its all those armchair experts that'll be hurt. Thanks for that.

The third myth is that Jetstar has somehow ''hurt'' Qantas. Jetstar is a business that has been profitable in every year of its existence, opening up low-cost air travel and creating a new market alongside Qantas as part of a successful two-brand strategy. We co-ordinate which brand flies which route to best serve our customers and to maximise the return for the Qantas Group. If Qantas had not created Jetstar, someone else would have - and Qantas would have been the loser.

False dichotomy. Where would you be without logical fallacies to confuse and bewilder? The two-brand strategy was always going to cannibalise the parent company, just like every airline CEO said it would back in Dixon's time. Jetstar could still be a valuable entity along with Qantas, but you have to decide in advance that you are going to nurture Qantas Classic or it will die from self-inflicted wounds. Jetstar will then follow. Run the argument in reverse: if Jetstar does not invent a premium division then someone else will, and Jetstar will lose.

Many Australian firms would love to have Jetstar's profile in Asia. Our equity investment in these firms has been less than the outlay on a single A380. That's far less than the inflated figures tossed around by those who would rather scapegoat Jetstar - the same people who seize on any setback experienced by these start-up ventures as the ''real issue'' facing Qantas.

Since when is the price of an A380 the index of value? Is it a mere bagatelle, especially when you have starved mainline of additional hulls? Hell, you could fix mainline, by that reasoning, for much less than the Asian JQ investment. The deposit on a dozen 777s for example.

In truth, the value of these airlines is already more than their foundation capital, and it will increase as the Asian middle class drives nearly half the world's air traffic growth over the next 20 years. It takes breathtaking small-mindedness to dismiss this growth as an ''Asian distraction''.

In reverse: it takes breathtaking arrogance to assume that any of that growth will be captured by any Jetstar franchise. no one has called the growth a distraction, rather the enterprise, and the bleeding of funds to prop them up.

Who has valued the Japan, Vietnamese ventures as being worth more now? You? By what measure do you lose most of your start-up funds, make an operating loss, increase costs by under-utilising aeroplanes and yet magically be worth more? Tiger Airways, anyone? Hello? And how's that Hong Kong masterstroke sound to you now?

The final myth is about Qantas employees being disengaged. No one is more passionate about Qantas than its people. Engagement levels are up across the business and at record levels in some areas. The transformation of Qantas is being led by employees, and they are the reason for the record customer satisfaction scores we're earning and the awards we're winning.

The big lie theory. Engagement. You are self-delusional at best, a craven liar at worst. Oh! While we are at it, can your staff quote that last line at contract time?

Aviation is a difficult business and the challenges are anything but straightforward. Some of them have been around for decades. We have a strategy to build a stronger Qantas Group for the long term - but the reality is more complex than the armchair experts will let on.

Gareth Evans is the chief financial officer of Qantas.

...and like his namesake from the 1990's ALP, a ****.


Read more: Armchair critics take flight of fancy on future of the air

Good points Australopithecus you should submit that to SMH.

I would love to see the accounting behind his claim 'Jetstar is a business that has been profitable in every year of its existence'.
Really?:rolleyes:

Aviation is only a difficult business if you don't have a clue what you are doing, or you are playing some other game and your excuse is aviation is hard.

If you run an airline as an airline it is actually not that difficult.

If engagement levels are at record highs......why is it every sub-management-pig-trough-attending employee you talk to has the sh*ts and hates our current management?

I'd hate to see what disengagement looks like.........

These guys are so detached from reality it's surely only a matter of time before we hear..
"let them eat cake".......

The reason that I don't submit this elsewhere is that I would like to still have a job. Also, if I was going to spend more than ten minutes in rebuttal my comments would be different, and better researched. A waste of time all around.

I think that airlines actually are not the easiest thing to manage. Certainly the recieved wisdom from the investment community is that they are bad investments as a class.

Some airlines do well year after year. They are the ones that eschew foreign adventures, have a homogenous fleet for domestic markets and the correct aircraft for i ternational. They also tend to nurture their market, growing routes and frequency.

They do not confuse derivative activities like FF programs for the main game. They do not dilute their core earnings. They let the market decide which share of traffic they will win, not draw lines in some imaginary sand.

They all have an articulate CEO with a vision for the future that usually resembles the current airline, only larger.

They never abandon profitable routes. You cannot go broke making a profit, unless you really try.

Oh...they also take care of their employees, let them take care of the customers who n turn will reward the shareholders. That part is easy. For some.

Australopithecus

:D

QANTAS' finance chief has taken a swipe at the airline's "armchair expert" critics and defended its profit-draining strategy of maintaining a 65 per cent market share.
In a blog post on Qantas' website, chief financial officer Gareth Evans said criticism of the airline's strategy and its financial troubles were based on a "fundamental misunderstanding of the aviation market and Qantas itself".
"There is never a shortage of armchair experts with theories on how to run Qantas, and the cabin has been especially crowded recently," he said.
"For many on the sidelines, it seems few businesses are easier to run than the national carrier."
He said the airline had faced a tough global economic environment, high oil prices, and competition from Asian carriers with lower costs.
And he defended the airline's much-criticised strategy of maintaining its 65 per cent market share against rival Virgin, which has has been working to expand its capacity.
"Stepping back from the 65 per cent would effectively be waving the white flag, not to mention abandoning our role in regional Australia and betraying the loyalty of our frequent flyers," he said.
"Imagine someone saying Woolworths should start closing stores in response to the threat from Coles.
"We plan to keep improving and strengthening our competitive advantages, not walking away from them."
In December, Qantas flagged a $300 million underlying loss for the six months to the end of 2013 which prompted ratings agencies Standard and Poor's and Moody's to downgrade its credit rating to junk status.
The airline is cutting costs in response to the loss and has been lobbying the federal government for assistance.
But Mr Evans said Qantas wasn't a "lazy company seeking a government handout" and simply wanted the government to level the playing field with Virgin.
Mr Evans also rejected criticism of its move to expand budget carrier Jetstar into Asia, which some have argued is distracting Qantas management and losing money.
"In truth, the value of these airlines is already significantly more than their foundation capital, and it will increase as the Asian middle class drives nearly half the world's air traffic growth over the next 20 years," he said.
"It takes breathtaking small-mindedness to dismiss this growth as an Asian distraction."

You see we are all wrong, the wheels are coming off , Rome is burning but luckily we have management like Evans to make it work.FFS

Australopithicus,
The last line is where it all begins, for even though you have a vision about the future of the company, you MUST engage your employees to carry it out.
You must listen to their ideas to help you do this and when you are wrong, ADMIT it and then fix it. This can only work when you have their respect. Lose that and you will fail.

So it would seem that admitting a mistake, re-evaluating and developing different strategies is not on the table for the Q exec. Blindly persisting with a failed strategy because admitting a mistake is not the Qantas way?

Who are these people?

I'm told that Joyce regularly gets nominated as 'employee of the month' at virgin. he causes a lot of mirth at virgin.

Now that's funny!

When are the Journo's gong to take the likes of Gareth Evans on?

130 new aircraft. Yes. But not to the Qantas Mainline International operation.

There has been a serious over in investment in the likes of Jetstar and its foreign franchises to the detriment of Qantas mainline.

The likes of Gareth and Alan are quoting a group wide fleet age of 7.9 years.

It distorts the truth about mainline fleet age. Whilst the likes of Jetstar Asia are renewing their fleet whilst already maintaining an average fleet age of 3.3 years.

In publically available data on the Internet. You can look at the Qantas mainline fleet registrations, then from their Manufacturer serial number (MSN) get the manufacture date.

The result as of late last year is Qantas International fleet has an average age of 12.7 years with no new aircraft on order.

Here are some of Qantas International competitors fleet ages for comparison.

Jetstar Asia 3.3
Etihad 5.1
Qatar 5.3
Emirates 6.4
China Eastern 6.6
China Southern 6.7
Singapore Airlines 7.5
Ethiopian Airlines 8.1
Virgin Atlantic 9.0
Cathay Pacific 9.5
Air NZ 10.1
Qantas (Intl AOC) 12.7
British Airlines 13.4
United Airlines 13.6
Delta 16.8

Alan. I totally agree its an uneven playing field. Your lack of investment in Qantas International has left you with no fuel efficient new aircraft to match your competitors.

MC

You don't make a profit by siloing and duplication of managerial, supervisory and support roles.

You don't make a profit with 1 manager or supervisor for every 2.1 employees.

You don't make a profit by operating a 4-engine aircraft that burns 30% more fuel and requires more maintenance and spares than a big twin that can do a similar job.

You don't make a profit if you continually erode your core strengths such as engineering training, component maintenance, overhaul, etc etc and don't try to chase work or sell yourself as the best or most experienced in the world.

You don't make a profit by stooping to the lowest common denominator "world's best practice". In so many things we did, WE WERE WORLDS BEST PRACTICE.

You don't make a profit by shutting down the worlds longest constantly operating airline. Over to you, Aeroflot.

You don't make a profit if you alienate those customers with long memories and zero forgiveness (Asians) in the very market you are trying to penetrate and relying on for your future growth. Asians are as parochial as us. We, Qantas, won a toehold in Asia with decades of effort, undone by an overly emotional and needless act - when just the threat of action would have achieved the same result - that to this day will NEVER be forgiven or forgotten by a large proportion of the well-heeled of Asia, our target market. You won't fool them by painting your planes orange and silver instead of red and white. Never treat an Asian like a fool. We are managing to treat them like fools twice. And they will relish the opportunity to pay us back with interest.

You don't make a profit by hanging your hat on securing a chunk of that much vaunted growth in Asia over the next 20 years with a huge fleet of narrow bodies - when Asians' preference is to fly wide bodies; and the airport infrastructure will not cope with the vast new fleet; and airport management do not want you wasting slots in their capacity-restricted airports.

You don't make a profit by alienating, disengaging and fighting your workforce. You make a profit by leading from the front, not managing from the rear.

You don't make a profit when you fail to innovate. We led the world with business class and engine maintenance, but dragged our feet on premium economy, decent IFE, lie-flat beds, internet...

You don't make a profit when you let an accountant/mathematician run the business. Accountants know the cost of everything but the value of nothing.

You don't make a profit when you let HR types build a parasitic empire that insulates the company against its staff.

You don't make a profit when people in offices with no idea about operations dictate practices and procedures upon operational staff that decrease their productivity rather than increase it.

You don't make a profit by spending $600 million on an IT system that results in a 20% loss of productivity, and does little to increase compliance, when a $50 million IT solution would have provided a better result.

You don't make a profit by hiding the true cost of the LCC with highly favourable contract terms, subsidised maintenance and support, gifted routes, etc etc.

You don't make a profit by dithering over the hard decisions. Communicate the need. Make the decision. Act. Support those affected..

You don't make a profit if you don't give your staff the tools to do better, to do more with less: IT, training, logistics, policies, procedures, systems.

You don't make a profit by giving away all your contract work. If nothing else it subsidises your own operations and steals the oxygen from your competitors, preventing them reaching a more competitive critical mass.

You don't make a profit by failing to recognise the inherent weaknesses in your own business model and adjusting accordingly, rapidly and decisively. You don't make a profit by pushing a bad position.

You don't make a profit by drawing a line in the sand. When the tide turns your line in the sand will be wiped clean. You do your best or better with what you have and let your competitors pauper themselves by fruitlessly adding capacity. You run your own race. You act instead of reacting.

You don't make a profit by being a hypocrite. As a business leader you build your foundations on bedrock. You carve your principles, standards, morals and ethics in stone. You live and die judging yourself against what you have carved in stone. You expect the same of your staff. And more than likely you will receive it.

You don't make a profit by lying to yourself or professing to know everything about your business. Disengagement is real and damaging this company. Get real. Get out of the office. Listen. And hear what is said. More importantly act on what you hear.

You don't make a profit with layers of bureaucracy, red tape and bull$h!t. Cut it back, let it go, encourage your staff to participate in fine-tuning your business so that it can sing.

N.M...well said.

Delta profit for 2013 US$3.2Bn on US$34.0Bn turnover....:D

Back in the 1980's Delta EMPLOYEES decided to buy the airline a surprise present: they all chipped in and bought a brand new 767, everyone signed it and handed it over to a respected management team.

Engagement, anyone?

I'm sure ALL QF employees would be more than happy to chip in and buy Joyce and the board a one way ticket home.:ok:

He may have to settle for PEY on Air Asia though...:}

Standard & Poor's Ratings Services has maintained Qantas Airways Ltd's debt rating of BB+, which is considered below investment grade, but removed it from negative watch.
Business Spectator

It's amazing what happens when Alan keeps his mouth shut. Imagine how good the company would be if he DID NOTHING.

One of the most interesting things for me about that article is who it comes from. Are all the CEO's too busy rearranging deck chairs to respond to the criticism? Where are the usual mouthpieces? Big changes ahead.

I now wonder if Gazza Evans is simply trying to keep the CFO spot? None of the other executives are hitching their wagons to Joyce's failed plans. I cannot think of a rational reason for Evans' self-righteous justifications if he is angling to be CEO and still retain any credibility. And for him to include Webber as his sole named target reveals something about both of them.

Maybe Gareth is acting CEO right now until a replacement can be found?

While NZ's fleet is currently 10.1 currently, that will drop with the last 2x 744 leaving the fleet. Come October NZ's fleet will be around the following.

789 - 2014
77W - 2008-2014
772- 2004-2006
763 - 1991-2000 (Being phased out)
A320 Int 2003-2006
A320 Dom 2010-2014
733 1998-1999 (being phased out)
72-500 1999-2008
72-600 2012-2014
Q300 2005-2009?
1900 1999-2002

And how much of the above can be put down to relative aircraft depreciation rates and expansion rates.

Any airline that has been expanding rapidly (the Middle East ones and Jetstar) will automatically have a lower aircraft age.

I suspect that over the last few years and the next few years with the aged 734s, 747s and 767s leaving the fleet that Mainlines average age will drop

TBM,
As for Delta.
How many $s in loans, employee super plans and contracts did Delta write off during its Chapter 11 process.
It would be the same as Qantas making all employees reduntant with no payouts, and then rehiring them on half their previous wages, as well as cancelling the bulk of debt, and walking away from a bunch of plane leases. And effectively sending the share price to zero.
Not something anyone wants I suspect.

Stephen Bartholomeusz in the Business Spectator:
 

When Qantas chief financial officer Gareth Evans penned his opinion piece for Fairfax Media newspapers this week, was his message directed at their readers, politicians, the airline’s critics or, perhaps, Qantas’ competitor?

It is, of course, possible that he was trying to reach all of those audiences with his rebuttal of criticisms of the group’s approach to the Federal Government for help, its Jetstar brand and its Asian strategy.

He pointed to Qantas’ substantial cost reduction program, the profitability of Jetstar and the value of its equity positions in Asia in response to accusations the group was looking for handouts rather than taking hard decisions, that Jetstar has been cannibalising the parent brand and that Qantas has been pouring capital into loss-making Asian ventures.

The more fundamental issue he addressed, however, was the view that Qantas and Jetstar should stop targeting and defending the group’s 65 per cent “line-in-the-sand’’ market share threshold.

“The 65 per cent strategy is about giving our customers a market-leading choice of destinations, frequencies and seats at the times they want to travel,” he said.

“That scale is part of the premium service we offer and the fares we sell and it reflects the investment we have made over many years in our regional operations and in building a national low-fares network with Jetstar.

“It is prized by our customers and it is a real competitive advantage that allows us to maximise earnings in even the toughest market conditions.

“Stepping back from the 54 per cent would effectively be waving the white flag, not to mention abandoning our role in regional Australia and betraying the loyalty of our frequent flyers. Anyone who advocates this kind of approach does not understand the way the business works. We plan to keep strengthening our competitive advantages, not walking away from them,” he wrote.

As discussed on several occasions recently, Qantas can’t afford not to defend that line-in-the-sand. With a higher cost base than Virgin Australia it has to have the frequency advantage and a network coverage advantage that delivers it dominance of higher-yielding fares.

If it were to lose that dominance, given the cost disadvantages of a legacy airline relative to one that started with a clean sheet of paper, it would be heading down a one-way route to oblivion.

Evans wasn’t going to say that, of course, although Standard & Poor’s “hypothetical” default scenario for Qantas that was issued this week as it confirmed the group’s BB+ credit rating was predicated on intensifying competition through to 2019, as well as weak economic conditions, higher fuel prices and external shocks.

The key to Qantas returning to profitability and stability is to convince Virgin Australia and its three foreign strategic shareholders – Singapore Airlines, Air New Zealand and Etihad Airways – that maintaining a capacity and price war in a duopoly market is pointless and destructive for both groups.

It also needs to show it can withstand indefinitely whatever Virgin throws at it, which is where its strategic review, where nothing has been ruled out, could be critical. If it raises a big lump of cash from selling some of its equity in its frequent flyer program, or some parts of Jetstar, or selling its terminals, it would have an enhanced ability to stare down Virgin.

There are already signs that Virgin’s capacity growth has slowed considerably. John Borghetti has, with the acquisitions of Skywest and control of Tiger Australia and the investment in upgrading Virgin’s product – as well as the capital infusion from his key shareholders – transformed his group.

It is, however, also losing money and the broader economy is facing some challenges this year that could bring their own pressures to bear on the industry.

If there is no near-term strategic gain from competing too aggressively with Qantas – if it is clear that Qantas, as Evans’ commentary indicates – isn’t going to surrender its dominant market share almost regardless of the cost – Virgin might be convinced to take a longer term, incremental approach to chipping away at Qantas’ position while seeking to generate profitability for its own shareholders.

More from Stephen Bartholomeusz


He doesn't say how exactly QF and Virgin would conspire to end the capacity war without incuring the wrath of the ACCC, but I guess all it wouldn't take much to signal such an intent.

In fact, as aviation analyisis goes, the above seems pretty much like padding a word count while saying not much.

And it doesn't explain why if the Qantas management is so good why their share price is where it is and why they have to go cap in hand, begging on their knees for government to take care of their competition....
That little red light blinking in the coroner of their eyes...it isn't a strobe light.

I was going to correct coroner for corner....but I think it works too.