Sky's the limit as Qantas takes off

[JohnK]

And the transformation becomes clearer! Everything from QF to Jetstar to Qantaslink. There is some interesting challenges handed out to Virgin as well.

VISION 2010
Chief executive Geoff Dixon plans a massive reorganisation and expansion of the Flying Kangaroo writes Robert Gottliebsen

August 26, 2006

"You won't recognise Qantas in four years time," says chief executive Geoff Dixon. And then he details his incredible plan for the airline up to 2010 - one of the biggest reorganisations to be attempted in recent years by a prosperous Australian company.

And what makes it even more remarkable is that it is being undertaken by a 66-year-old chief executive in his sixth year in office.

Probably the nearest match to the Qantas revolution was the dramatic change that took place at BHP under chairman Don Argus and chief executive Paul Anderson. It is no coincidence that Paul Anderson is now on the Qantas board, along with another BHP director, John Schubert.

More...

I apologise if this story has already been posted.

 

[jpk]

Two or three years ago the base Qantas international airline business was globally competitive but three dramatic changes have left the Australian airline with a cost base that is now too high.

First, a series of international airline mergers and/or realignments, including KLM and Air France and Cathay and Dragon Air, have lowered the costs of several major players.

Second, in the US most of the airlines have gone into Chapter 11 bankruptcy, which has enabled them to substantially cut their costs.

Third, governments are pouring money into airlines, where they have a substantial equity, often promoting the continuation of sub-economic activities. These moves have left Qantas in a position of having higher costs than many of its global competitors.

Interesting statements. My reaction was:
1) AF/KLM is very profitable, but not really a player against QF. CX/Dragon perhaps more so, although the benefits of that merger havent been realised as yet. In general all the Asian airlines have always had lower costs than QF though, nothing new there.

2) The only US airline to actively compete against QF is UA, on the trans-pacific route where QF clean up anyway due to govt protection. US airlines are still focused on their domestic market, not really looking international much at this stage (as anyone who has done AA trans-atlantic will testify to). I see this as false reasoning.

3) Governments have owned asian airlines forever (SG/EK etc) and used it to promote tourism, so nothing new here either. Those airlines also face the same costs (pilots/fuel/maintenance) as QF and do ok, making profits. I'll concede that it is probably easier for those airlines to access cheap finance, but its not like QF has never received govt help - they used to be owned by the govt, got floated so received all their infrastructure effectively for free, and are route protected on the pacific.

Now i am not saying dixon is doing the wrong thing. QF flights are always full so its not a load problem. They never seem to manage to expand and make new routes work, they dont have the planes to expand anyway, so what else to do in order to make money but cut costs. i just wish he was a little more open about it rather than using spurious excuses and whinging. maybe he should look at how other carriers are innovating and expanding and try and keep up a little better - eg: OLCI, seats, AVOD, service etc rather than carrying on about things outside his control and looking to cut costs at all times.