A newspaper article last week asked the question, “Is Qantas losing its gloss”. Using statistics published by the government on International Airline activity over the past ten years, it argued that Qantas was in significant decline. While some may ask what rock the author had been hiding under, as such news is hardly new given the well publicised wows of Qantas, it certainly got our members talking.

Sad indictment of the move by pax to the low cost carriers and of course this is hurting Qantas. From an economic viewpoint, doesn’t look like the turn around is anytime soon, so the red numbers from International will continue. Feel for Simon Hickey…

There is no doubt the low cost carrier has been a major factor in contributing to where Qantas is today, in both a positive and negative sense. By creating Jetstar a decade ago, its clear that management were aware of the threat and made moves to counter it. While not all Jetstar airlines have been a success, (the airline is losing money on planes parked at the factory unable to fly), overall it turned out to be a good move.

However, low cost carriers are not the only threat Qantas faces. Over that same decade, traditional competition increased with larger planes being flown to Australia, from the likes of Singapore and Emirates. New airlines also entered the fray, with Etihad, Gulf Air and Hawaiian adding or increasing capacity on popular routes over time. This forced Qantas to withdraw from some cities and cut services, a move many feel accounts significantly for the poorer performance.

This is what happens when you effectively only serve three Australian cities. Singapore, Cathay, Emirates etc all serve more Australian cities than Qantas International (our home airline) does.

Late last week once again it was time for Qantas to update its shareholders on its performance, this time during the annual general meeting. At the previous results announcement, it had indicated that the tide of losses was turning. Confirmation of this came at the AGM, with the news coming as a shock to some.

Yes, my wife rang me this morning saying that she had just listened to AJ being interviewed about the QF profit…I almost fell off my chair

With the domestic capacity war over, and competitor activity mostly limited by international traffic agreements, perhaps the tide has turned. For the first time in a long time, Qantas has announced new flights with the resumption of seasonal travel to Vancouver. Aircraft utilisation has also increased dramatically, along with staff reductions lowering the cost base of Qantas.

Do you think the future is rosy for Qantas, or has there not been enough change, and its fate is sealed? Have your say HERE.


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