With Qantas operating in a hostile world environment, and with the last few days event in particular, its seems QF and indeed many other airlines will struggle in the future.

It was close to 15 years ago that the government floated Qantas.

How do we think it would look if the government bought a share back? If it was a significant share they may be able to inject some cash into the business, or not....


what do we think?

Quoting dkramer7 (Thread starter): How do we think it would look if the government bought a share back? If it was a significant share they may be able to inject some cash into the business, or not.... what do we think?

Ain't going to happen...

EK413

Labor costs may have some problems at Qantas but the real issue is competition. The Australians should have taken the Canadian view, allowing Emirates only the seats for people flying to Dubal, EK can only fly 3 times weekly to Toronto. IT may be protectionism but Air Canada is no getting killed by 3 Emirates 777 daily to Dubai from YYZ.

Qantas is getting killed by all the huge planes from Qatar and Emirates flying to Aussie, why would the Government let this happen ? QF gets enough competition from the usual Asian airlines, SQ, Cathay and Thai, more is an atrocity. QF is getting it from both sides these days with Delta and Virgin Australia flying the LAX to Sydney route too. Canberra needs to decide if the flying Kangaroo will remain its "national" airline or new airlines will fill that role.

Quoting jfk777 (Reply 2): Canberra needs to decide if the flying Kangaroo will remain its "national" airline or new airlines will fill that role.

There is and its called Virgin Australia...

EK413

Quoting EK413 (Reply 3): There is and its called Virgin Australia...

Please, DJ will never replace QF as the 'national airline'. While recent events of late have turned public opinion of QF a little sour, it will rebound and DJ has a long, long, long, long way to go before being even close to being able to call itself Australia's flag carrier.

Also, QF will not be taken back under government control, it would be dreadfully unpopular and a gigantic money bleeder for the government. Unless there was both party support for it, it wont happen. I agree with the previous post, however, regarding Canada. QF is at a massive disadvantage due to its geographical location (as is Canada) in the sense that so much of QF traffic is O&D and doesnt get the massive through traffic of SQ/EK/EY/MH etc. I think the government should look at these airlines and, in the benefit of keeping jobs in Australia, should restrict their flights to Australia. However, this would not happen as it would be dreadfully unpopular.

[Edited 2011-11-02 05:16:49]

This will not happen. Practically all governments are bancrupt due to low taxation and competition for the lowest taxation - they have to sell participations and will not purchase new ones.

I agree that the open welcome to EK and others damage QF a lot. Question is of course, if other parts of a very lonely situated country benefit from it, to yield a global benefit for the country - I cannot judge.

Quoting TruemanQLD (Reply 4): Please, DJ will never replace QF as the 'national airline'.

At least the spirit is on a high note as upposed to QF...

Plus which QF are we referring to here... QF "The Spirit of New Zealand", QF "The Spirit of Singapore", RedQ We still call Singapore Home, wait JQ The Spirit of Japan...


EK413

[Edited 2011-11-02 05:33:12]

The political costs would be too high, and the Gillard government doesn't have the capital to do it. The Liberals/Nationals would never do it.

Quoting dkramer7 (Thread starter): If it was a significant share they may be able to inject some cash into the business, or not....

A government buyback isn't really injecting cash...it's the government taking the money from Australian taxpayers then shunting it to Qantas. It would be a lot more efficient to just have Australians buy Qantas shares if that's really what's necessary.

Tom.

Quoting dkramer7 (Thread starter): what do we think?

Terrible idea. We've seen what happens when airlines become fiefs of the government: you get Alitalia, Olympic, etc.

Quoting jfk777 (Reply 2): Labor costs may have some problems at Qantas but the real issue is competition. The Australians should have taken the Canadian view, allowing Emirates only the seats for people flying to Dubal, EK can only fly 3 times weekly to Toronto. IT may be protectionism but Air Canada is no getting killed by 3 Emirates 777 daily to Dubai from YYZ. Qantas is getting killed by all the huge planes from Qatar and Emirates flying to Aussie, why would the Government let this happen ? QF gets enough competition from the usual Asian airlines, SQ, Cathay and Thai, more is an atrocity.

It's just free trade, not an atrocity.

Protectionism sounds good it but doesn't work in the long term. Right now AC is being propped up by all the extra $$$ that travelers to and from Canada have to pay because AC can't/won't re-organize itself to be more competitive.

Just a week ago I wanted to fly BOS-YVR but it was several hundred dollars cheaper to drive BOS-SEA, more than enough to pay for a rental car to drive the 2 hours to YVR. JetBlue got my fare instead of AC. I'm sure others wanting to fly to Canada consider first flying to the closest US airport or decide to ski in the US Rockies instead of the Canadian Rockies. It's just one example of where protectionism hurts AC in the long term.

In the big picture view, globalization has happened yet no one in the "developed" countries have figured out what to do about it. The "developed" countries have a higher standard of living but that's being undermined by people willing to for for a lot less money. Protectionism does not work in the long term, all it does is makes the eventual fall that much harder. The best defense is to make products that the rest of the world is willing to pay a premium for. As noted before, EK is not a low cost carrier, it's fares are pretty average. It excels by providing better connections and higher levels of service than its competitors do.

Quoting Revelation (Reply 9): I'm sure others wanting to fly to Canada consider first flying to the closest US airport or decide to ski in the US Rockies instead of the Canadian Rockies

And that's why WS and PD are stealing market share from AC by the day.   

But Tom hit the nail on the head. There would be little new cash. The transaction would be based purely on regulatory reasons, and then as soon as things got a little brighter, Qantas would be privatized again.   

[Edited 2011-11-02 10:32:39]

Quoting dkramer7 (Thread starter): what do we think?

Governments have no business running airlines, period.

Buy it back and subsidizing it?

Quoting Revelation (Reply 9): Quoting jfk777 (Reply 2): Labor costs may have some problems at Qantas but the real issue is competition. The Australians should have taken the Canadian view, allowing Emirates only the seats for people flying to Dubal, EK can only fly 3 times weekly to Toronto. IT may be protectionism but Air Canada is no getting killed by 3 Emirates 777 daily to Dubai from YYZ. Qantas is getting killed by all the huge planes from Qatar and Emirates flying to Aussie, why would the Government let this happen ? QF gets enough competition from the usual Asian airlines, SQ, Cathay and Thai, more is an atrocity. It's just free trade, not an atrocity.

Yes, letting Emirates in so much is free trade. But maybe its "too free". Qantas is not dying because of the "Free Trade" Cathay and Singapore Airlines do in Australia, they carry plenty of F and J passengers via their hubs to far off destinations. Emirates and Qatar have taken "free Trade" to a level that kills the natives. Killing Qantas help no one. It kills good paying Australian jobs for Australians.

I wish Emirates would "kill jobs" in other countries via its "free trade". Let Emirates kill the airline industries in Brazil and Mexico and see how those countries react, they WILL not let it get to that point. Those two countries will limit Emirates "free Trade" to a certain level. That level will be equal or less then the European or USA airlines. I am aware EK now flies to Brazil and Buenos Aires.

Its time Australia put teh cabash on expansionist Emirates and its cousins, why does EK have to fly from Sydney to ALK ? It doesn't. IF EK needs to fly to New Zealand let them fly a 777LR nonstop from Dubai to AKL, if its too far too bad. Australia protects so many industries, why should it airline industry be sacrificed for wealthy petro states ?

Quoting 7673mech (Reply 12): Buy it back and subsidizing it?

That's what would have to happen.

Australia has to decide if it wants Qantas to be what it is - a commercial company competing in a (fairly) free market.

Or if it is to be what the unions and some politicians want - a national icon/jobs program.

I don't mind which they choose, but I don't see that it can be both, and as long as it is an independent company, I think the government - and the unions - should stop trying to run the airline.

There is a belief out there that Virgin Australia can do it better, but that airline last reported a loss of $50 million and only made it's international arm profitable by cutting routes, such as JNB and domestic NZ.

Qantas wants to cut routes to make it's international arm profitable again and everyone cries foul.

Weird.

mariner

Quoting dkramer7 (Thread starter): what do we think?

What, because they're hitting a bump in the road? I think this situation, although kinda surprising, isn't as drastic as many think

QF got into this situation largely through its own errors. It drove pax into the hands of competitors because it chose to serve a limited number of ports in continents such as Europe. Had it made better network and fleet decisions it could have served a number of European ports on a one-stop basis.

Likewise its Sydney-centricity made EK, SQ etc huge favorites in cities such as MEL, BNE etc. QF were criticised for years for its Sydney-centricity and did nothing. They deserve to suffer because of these mistakes particularly as they still refuse to address them.

QF, for years, made huge profits on Aust-LAX largely because it was protected from competition apart from a weakened UA. When DL and VA arrived with great product and more efficient aircraft, the profits evaporated and QF were caught short. It will get worse with QF now facing the prospect that SQ will enter Aust-USA as a quid-pro-quo for QF being able to set up an Asian subsidiary in SIN.

Quoting tullamarine (Reply 16): were caught short. It will get worse with QF now facing the prospect that SQ will enter Aust-USA as a quid-pro-quo for QF being able to set up an Asian subsidiary in SIN.

I don't think Qantas is the only one that will feel the pressure if Singapore is allowed to fly SYD-LAX.

mariner

Quoting WestJet747 (Reply 10): Quoting Revelation (Reply 9): I'm sure others wanting to fly to Canada consider first flying to the closest US airport or decide to ski in the US Rockies instead of the Canadian Rockies And that's why WS and PD are stealing market share from AC by the day.

I don't see any connection between your WS and PD comment and the post you quote which refers to passengers flying to/from US airports near the border and driving across the border. How does that relate to WS and PD?

Quoting tullamarine (Reply 16): Sydney-centricity made EK, SQ etc huge favorites in cities such as MEL, BNE etc. QF were criticised for years for its Sydney-centricity and did nothing. They deserve to suffer because of these mistakes particularly as they still refuse to address them.

All I here on this board is how Sydney centric Qantas is. IF you are crossing the Pacific to the USA Brisbane, Melbourne and Sydney have flights to LAX.

From most Australian "Capitol"hts from cities QF has nonstops to Singapore with "one-Stop" flights to LHR. QF also has (had ) flights from Perth to Tokyo. Its makes sense some destinations are only reached via SYD but the big ones are available one stop in most cases.

Quoting jfk777 (Reply 2): Qantas is getting killed by all the huge planes from Qatar and Emirates flying to Aussie, why would the Government let this happen ?

Perhaps because they believe that the interests of the Australian Consumer and wider Australian economy are more important than the narrow interests of Qantas staff and Unions??

Quoting jfk777 (Reply 19): From most Australian "Capitol"hts from cities QF has nonstops to Singapore with "one-Stop" flights to LHR. QF also has (had ) flights from Perth to Tokyo. Its makes sense some destinations are only reached via SYD but the big ones are available one stop in most cases.

Yes, they do have one stop to LHR but what if you want to go to somewhere else in Europe? QF will typically direct you onto an LHR bound flight which means you overfly your ultimate destination, you spend 4+ hours more travelling, you have to negotiate terminals at LHR to get a BA flight(Ugh!!!) and you pay more for the privilege. In contrast airlines such as EK, SQ etc can get you to about 16 cities in Europe with one stop. Some of this is as a result of geography of the Asian and ME airlines but some is a result of QF's lack of network and fleet planning that has meant they have nothing smaller than a 744 that can do 1 stop to Europe.

Sydney-centricity is an issue if your competitors don't make you go via it. SYD is a hassle to transfer through so most will actively avoid it where they can. EK, SQ etc offer this. QF could too but they offer poor services out of PER, ADL etc (bad timing, old 763s)so the competition with their 2 or 3 services a day and shiny new 777s and A330s become the airlines of choice.

Quoting Revelation (Reply 9): Just a week ago I wanted to fly BOS-YVR but it was several hundred dollars cheaper to drive BOS-SEA, more than enough to pay for a rental car to drive the 2 hours to YVR. JetBlue got my fare instead of AC. I'm sure others wanting to fly to Canada consider first flying to the closest US airport or decide to ski in the US Rockies instead of the Canadian Rockies. It's just one example of where protectionism hurts AC in the long term.

Low yield pax do that which is of little concern to the revenues of AC. They make a good portion of their money on the transborder routes with business travellers whom are high yield whom pay the premium fares.

Also there is nothing stopping any US or EU from competing with AC on any route they run as much as they want to, as Canada has open-skies agreements with both places. I would say bring on the likes of WN or B6 in the Canadian market and lets see the competition war begin.

My guess is though is that those airlines know they will be subject to the same taxes and fees that AC and WS pay that they probably won't be that much cheaper if cheaper at all.

Also if you want to talk about free trade issues why can't a route like BOS-YYZ-LAX on AC be allowed. Often that would be cheaper a lot of the time.

Quoting jfk777 (Reply 2): Labor costs may have some problems at Qantas but the real issue is competition. The Australians should have taken the Canadian view, allowing Emirates only the seats for people flying to Dubal, EK can only fly 3 times weekly to Toronto. IT may be protectionism but Air Canada is no getting killed by 3 Emirates 777 daily to Dubai from YYZ.

I don't know how many times I can say it, the restriction of EK in Canada is not about the protection of AC!! If the federal government really cared about AC they would drop a lot of regulations that AC is subject to.

It is about maintaining an international network through O&D and all of the international carriers serving Canada built up their networks over time. EK thought that they were special and deserved unlimited access right of the bat and the Canadian government said no.

In fact in negotiations the Canadian government has been a lot more generous to EK than other carriers actually offering them services to YVR and YYC calling EK's bluff when they asked for that. EK wants unlimited access to YYZ and nothing more.

Quoting Revelation (Reply 9): Protectionism sounds good it but doesn't work in the long term. Right now AC is being propped up by all the extra $$$ that travelers to and from Canada have to pay because AC can't/won't re-organize itself to be more competitive.

AC has plenty of competition on many of its routes and often has the best fare on a lot of them.

Quoting dkramer7 (Thread starter): With Qantas operating in a hostile world environment, and with the last few days event in particular, its seems QF and indeed many other airlines will struggle in the future.

With a mess like that, they are already operating like a nationalized airline.

Quoting jfk777 (Reply 2): IT may be protectionism but Air Canada is no getting killed by 3 Emirates 777 daily to Dubai from YYZ.

Protectionism is like giving crack to the junkie. Setting up laws like that will only allow Qantas to get away with being screwed up, it won't fix them. The goal is for QF to be an efficient, competitive carrier and protectionist policies will not do a thing to further that aim, and won't do consumers any favors either.

Socialism never works. There is demand within and to Australia. If a private Qantas cannot do it well and efficiently other airlines will and customers will patronize those carriers. Everyone wins even if Qantas loses. That is why people have such are hard time grasping why free markets work better than the alternatives over the long term.

Quoting tullamarine (Reply 16): Likewise its Sydney-centricity made EK, SQ etc huge favorites in cities such as MEL, BNE etc. QF were criticised for years for its Sydney-centricity and did nothing. They deserve to suffer because of these mistakes particularly as they still refuse to address them.

What you call "Sydney-centricity" is a perfectly sound business strategy used by airlines all over the world. When an airline has dominance over a region, it concentrates flights in the biggest market to create a multiplying effect in the number of services it offers. Qantas is not the best airline to offer longhaul nonstops out of Perth and other cities. They are better served as spokes of foreign hubs. Qantas knows that. You don't.

Quoting incitatus (Reply 25): Quoting tullamarine (Reply 16): Likewise its Sydney-centricity made EK, SQ etc huge favorites in cities such as MEL, BNE etc. QF were criticised for years for its Sydney-centricity and did nothing. They deserve to suffer because of these mistakes particularly as they still refuse to address them. What you call "Sydney-centricity" is a perfectly sound business strategy used by airlines all over the world. When an airline has dominance over a region, it concentrates flights in the biggest market to create a multiplying effect in the number of services it offers. Qantas is not the best airline to offer longhaul nonstops out of Perth and other cities. They are better served as spokes of foreign hubs. Qantas knows that. You don't.

Thank you for this comment, you said it perfectly.

It is not as if the other cities don't have choices, but the majority of comments about air services to these cities is that QF is lacking, well if they are, suck it up and fly with another carrier, they offer plenty of services and no doubt the local consumers take advantage of them. If you really want/need to fly with QF and they don't provide a direct service, then it is a matter of connecting over SYD for some destinations, or at SIN or LAX or LHR....

There are so many choices now, from most major Australian cities, so to whinge that QF doesn't offer a service from say ADL to FCO is just to bad and actually totally unrealistic. If you really need to do that route, I'm sure SQ could help you and good luck to them.

Quoting jupiter2 (Reply 26): It is not as if the other cities don't have choices, but the majority of comments about air services to these cities is that QF is lacking, well if they are, suck it up and fly with another carrier

Agree 100% On this basis I don't think QF can ever complain about competitors such as SQ, EK etc crowding them out of markets because, as even you admitted, these competitors serve the market better so deserve to succeed where QF can't...

See, we all agree. QF don't need protection. They either serve their markets better or expect their competitors to continue to take market share.

Quoting Viscount724 (Reply 18): I don't see any connection between your WS and PD comment and the post you quote which refers to passengers flying to/from US airports near the border and driving across the border. How does that relate to WS and PD?

The poster that I quoted suggested that flying to U.S. airports near the border and driving across to those destinations is cheaper than flying AC. Whereas WS and PD are offering similar services at a much more attractive price, which is contributing to my point about them gaining market share.

Quoting WestJet747 (Reply 28): The poster that I quoted suggested that flying to U.S. airports near the border and driving across to those destinations is cheaper than flying AC. Whereas WS and PD are offering similar services at a much more attractive price, which is contributing to my point about them gaining market share.

There was a time when WS was cheaper than AC but for most competing routes the fares are usually very similar to AC. WS has struggled in several ways to gain hi-yield business traffic not being able to capitalize on the YYZ-YUL-YOW triangle or transborder flights with a lot of business traffic such as YYZ-LGA, YYZ-LAX, and YYZ-ORD. A lot of that has to do with WS's lack of a good frequent flyer program that business travellers want.

Quoting lows (Reply 7): The Liberals/Nationals would never do it.

Just like they will never build the 2nd 'Over due' Sydney International Airport...

EK413

Quoting EK413 (Reply 30): Just like they will never build the 2nd 'Over due' Sydney International Airport...

Here is the thing. Why would they need to wear the political flak? Let's say Qantas fails (and that means the group as a whole, they can always just reduce the roo to profitable routes). What happens? Virgin Australia is busy soaring high, with its much learner and meaner conditions. Politicians go into crisis mode. They naturally talk to Virgin. Virgin will see brand value in the QF name. It then says to the receivers "we will pay that much for the band". It then talks to the government about international route authorities where there are no open skies agreements, and then talks to the aircraft owners. If they get favorable terms, DJ goes into some lease agreements. It then hires back SOME but not ALL qantas staff, but on Virgins terms and conditions which will mean pay cuts for most of them, and others will be not needed at all, as the work will be done by existing virgin staff or sent offshore. Case in point. Alitalia going bust and Air One taking over and rebranding itself Alitalia.

End of story. If the receivers don't agree to the use of the QF name for a reasonable price, virgin simply does all of this without using the QF name. Case in Point. Varig Failing and TAM taking over. TAM was even flying VARIG MD-11s for a while until it could get new aircraft delivered.

Simple as that. No need for a single tax payer dollar to be spent or any politicians to risk the political fallout, of what the public would largely see as protecting 'union mates' jobs. The public keeps their icon. Essential routes remain. Unprofitable routes cut and inappropriate aircraft for routes simply not included in the new deal. The irony would be Qantas staff would be essentially on the less than the deals they would have been rejecting. But at that point they would have no choice. Just ask the former Ansett A320 boys who are now flying Jetstar A320s.

Canada deals its aviation cards differently than Australia. American fantasy has it that Air Canada is subsidised, rubbish.
I waited for this situation to unfold down under and its interesting to read Australian comments on it.
I first thought Australia was crazy to get in bed with the Arabs, allowing the access and seats that they did. O&D to Dubai this isn't.
It would also appear now, that Qantas narrow thinking and lack of foresight and inability to act on routes and aircraft choice made this policy necessary.
How did an upstart Arab see something that a historical Qantas didn't? Australia was Qantas's to give away, and they did.
Would it have been possible for Qantas to hub itself somewhere in the middle east?

Quoting YYCowboy (Reply 32): Would it have been possible for Qantas to hub itself somewhere in the middle east?

Now that's a tricky one... DXB make a great song about being all open skies.. but for QF (or any other non-local carrier) to hub there ( or indeed from anywhere) they would not only need rights from the local government ( and of course the Australian one) but also from all the places which they were planning to serve from that hub, I suspect that would be more easily said than done. I think that when talking about offshore hubbing people often forget how complicated the traffic rights can be.

Quoting YYCowboy (Reply 32): I first thought Australia was crazy to get in bed with the Arabs, allowing the access and seats that they did. O&D to Dubai this isn't.

It is actually about Asia - not "the Arabs."

Asia used to be the place that Australians flew over to get to Europe. Not any more. China is now Australia's largest trading partner - with Japan as the second largest, followed by the US and then Singapore.

http://www.china.embassy.gov.au/bjng/relations2.html

"In 2009 China surpassed Japan to become Australia's largest export market, with total merchandise exports to China valued at A$42.4 billion, an increase of 31.2 per cent over the previous year.

The PM has recently commissioned and effective White Paper on how Australia engages and is involved with what she calls "the Asian century."

Qantas is way ahead of her - it wants to involve with Asia - but that is what Australia's unions fear.

mariner

Quoting mariner (Reply 34): Qantas is way ahead of her - it wants to involve with Asia - but that is what Australia's unions fear.

Very true. Asia is still the best place for any Australian carrier to hub simply because of the other possibilities in the worlds fastest growing and expanding region.

China southern is very aggressively pushing into Australia. Even around brisbane you can see CS air billboards with 787s on them (they're not even waiting till they get one!) and this morning I see a CS A330 at BNE, and signs around the place saying fly asias largest airline... to the home of Cantonese food. QF is serving this market...and this will be were the large demand for business travel goes to and comes from... poorly. Unfortunately QF's unions don't seem to understand the only way to effectively do this is to have a hub in the middle of it. You can't, for example, run QF flights from BNE/MEL to 7 cities in china, 5 in india, 2 in thailand etc and expect to even come close to making a profit. You'd simply be killed.

Couple that with what will always be a strong cultural link to Europe and there is a strong case for QF to have a hub in Asia... with 787s linking Aussie capitals several times a day, and then continuing onto europe and A320s going deep into asia and doing asian connecting traffic plus Asia-Europe in it's own right. The Current QF long haul mindset came about at at time when there really wasn't much in the way of strong asian carriers in their own right. It was more the likes of BOAC/QF/KLM running endless tag-ons throughout the region providing the links.

And I might add I think what some of these unions just did was really stupid.
If they hadn't been so militant, but perhaps embraced the idea that expansion into asia
should be looked at, then they could have negotiated to have things like to have maybe 30% of flight
and cabin crew come from australia or the ability for them to transfer across and back and do a stint there.
There would be some advantages, like a very low taxed income.

But I think the current situation now, will have them squarely locked out of it.

FWIW I don't think that GoA should buy back into Qantas but it is rather amusing that all the cries for free market purity are going on while GM - that pillar of private enterprise - is trying to get another $250 million or so out of the very same organization.
http://www.abc.net.au/worldtoday/content/2011/s3354927.htm
the union for the engineers at the country's biggest car manufacturer claims that it hasn't breached any confidentiality in its negotiations with Holden. The Association of Professional Engineers, Scientists and Managers is tipping that jobs will be lost next year unless the company commits to keeping its design operations in Australia.

But the Federal Opposition says the union's comments are negligent and the company's managing director says the union is slandering a "proud Australian brand”.

Stock standard so far. So what does a scion of private enterprise have to say?
http://www.abc.net.au/worldtoday/content/2011/s3355113.htm
What I can tell you is that we are in constant conversations with Minister Carr from the Gillard Government and I also speak with the shadow ministry about having intelligently crafted, aggressive policies for Australia to compete for the right to have a broad-based, high-tech industry.

It has become, Eleanor, more difficult, both with the rising dollar and with certain cuts to what were I think pretty good programs to continue to do that stuff in this country. But we have to aggressively fight for Australia's need and desire to become a continued part of the manufacturing world.

And not just become a hole in the ground for South East Asia, with resources, so it's something that we fight for every day. I spend more than half of my time negotiating the bright future that Holden will have in this country and it's delicate stuff, it's long-term stuff and I want everybody listening to this show to understand how proud we are to do what we do in this country.

We need smart policies that encourage investment in Australia, to compete with Germany, to compete with the UK, to compete frankly Eleanor with countries like Brazil who doubled their import tariffs from 25 to 55 per cent to protect their local auto industry.

I do not suggest Australia takes a protectionist path. Those days are long gone in this country. What I do suggest is smart co-investment policies so that we can do what you're asking me about today - secure design, engineering and manufacturing for many, many years to come.

ELEANOR HALL: Well the Federal Government did give $6 billion to your industry, for industry assistance three years ago. Are you asking for more now from the Federal Government?

MIKE DEVEREAUX: Well what happened in February Eleanor, was an $800 million cut was made to a co-investment program called the Green Car Innovation Fund and during that fund's closure, many of the local OEMs (original equipment manufacturers) here now have to figure out how is it that we can compete as an Australian manufacturer with countries for example this year like Great Britain who have very aggressive co-investment programs.

So for example, we invest $300 million in a next gen Commodore - the Government of Australia co-invests $100 (million). That is the way the game is played everywhere on the planet that has an auto industry and frankly, I think Australia should aggressively play to win on the global stage.

Not through raising huge tariff walls but by playing the game the way every other developed economy does. You have to have a base of manufacturing in a country, you cannot just become a service industry.

ELEANOR HALL: So how much money are you asking for from the Federal Government?

MIKE DEVEREAUX: Yeah that's conversations between Minister Carr and myself. Frankly the plan that we had back in February when Cyclone Yasi unfortunately hit the coast of Queensland, the Green Car Innovation Fund very intelligently crafted government policy in the wake of Cyclone Yasi - that $800 million co-investment program, which frankly Ford, General Motors, Toyota and a raft of supplier companies would have been able to tap into on a three to one basis.

So again, I invest $300 million, the Government invests $100 million along with me just like Nissan got from the UK government, just like BMW got from the UK government. This is the way the game is played.

I know it might be distasteful to some of the people listening to us on the radio today, but I can't change the way the world plays the industrial game of automotive manufacturing and Australia has to play, Eleanor, to win.

IIRC funds were pulled from the car industry to reconstruct Qld after cyclone Yasi, which amusingly could have some of its intensity attributed to emission of greenhouse gases.

Here are some references to aid from GoUK
http://www.greenwisebusiness.co.uk/n...d-ford-green-investments-1224.aspx
By comparison, Australia looks pretty generous.

And all of these seem very generous compared with the terms that Airbus gets for RLI.

I would vote for GM repaying our grants in even 17 years (should be 4 for a car model) with interest and then getting a Royalty stuck on top.

Perhaps GoA should buy an A380 and lease it to QF on concessional terms, that would about match the investment in GM and give them a leg up against EK???

Given that governments are up to their hocks in supporting car industries, you would wonder what they say to service industries when they come a-calling. I dare say a QF engineer will be scratching his head as to why his job has less importance that one at Fisherman's Bend. The first Holden IIRC went to Essington Lewis who was mainly responsible for aircraft manufacture in Aus during WWII.

Then again, who knows what role GoA is having negotiating with Governments in Singapore, Malaysia, Vietnam and Japan in relation to the Joyce-proposed ventures (or frolics depending on yr POV) there.

Quoting Lufthansa (Reply 35): Couple that with what will always be a strong cultural link to Europe and there is a strong case for QF to have a hub in Asia...

It's going to be an interesting balancing act for the government. The unions hate the idea - outsourcing by stealth - but the government has to be involved in setting it up:

http://www.smh.com.au/business/qanta...ut-of-canberra-20111102-1mvts.html

"Qantas would have a snowball's chance in hell of persuading either Malaysia or Singapore that it should be given access if its own government was arguing against the plan. Even with the support of the Australian government, success is not guaranteed.

And so far that support has been forthcoming - from Albanese's Department of Infrastructure and Transport in particular.

Government officials are believed to have already held talks with the Singapore government. Qantas expects the support to continue and sees no sign this week that it is evaporating.

There has to be a trade-off for Singapore hub rights, for example, and the CW is that SQ will be given - at last - traffic rights for SYD-LAX. Well, maybe.

Then we get the cries of what a calamity that would be for Qantas, but it surely wouldn't be the only airline affected on the route and look what it would get in return.

The PM has already commissioned a White Paper (sort of) about how Australia engages with Asia in what she calls "the Asian century,"

Qantas is way ahead of her, it's already done its own White Paper and knows how it wants to be engaged with Asia - but how the government balances that with the union attitude is beyond this simple soul.

mariner

Quoting EK413 (Reply 3): There is and its called Virgin Australia...

I'd ditch this country if that ever eventuated...

Quoting TruemanQLD (Reply 4): Please, DJ will never replace QF as the 'national airline'. While recent events of late have turned public opinion of QF a little sour, it will rebound and DJ has a long, long, long, long way to go before being even close to being able to call itself Australia's flag carrier.

agreed!

Quoting EK413 (Reply 6): At least the spirit is on a high note as upposed to QF... Plus which QF are we referring to here... QF "The Spirit of New Zealand", QF "The Spirit of Singapore", RedQ We still call Singapore Home, wait JQ The Spirit of Japan...

So whats your point?, relative to QF, DJ is a very small airline with little international presence, what it's doing with its alliances and interlineing agreement is sending the passengers on OTHER airlines around the globe to get to their destination rather then building on their own services, so how is that any better??? Atleast with QF setting up divisions in other countries its supporting the main brand. Alot of the work for DJ is outsourced or contracted, at a much higher percentage then what QF do! Hardly say their 'spirit' is with Australians.

Quoting 747m8te (Reply 39): I'd ditch this country if that ever eventuated...

Would have thought a little extreme. Virgin ain't that bad  

Air New Zealand was effectively renationalised several years ago.

And today it has a more modern and efficient fleet than Qantas, with a superior product and a superior range of North American gateways. And the staff have far higher morale, and offer customer-centred services.

So if renationalising Qantas means bringing standards up to Air New Zealand's levels, I'd welcome it with open arms.

Fly on an NZ 747 to LAX or a QF 747 to LAX, and compare the experience.

Fly on an NZ 767 to HNL or a QF 767 to HNL, and compare the experience.

Qantas has had inadequate funds to invest in Qantas future. Instead it has put most of its $ and energy into Jetstar. This is not what the Qantas sale act was meant to allow. They found a loop hole.

I know this may not have worked but i would have liked to have considered a larger Qantas without Jetstar. A 4 or 5 class cabin that included a super economy or economy-lite class. We could have had flights to places like CDG, FCO, SFO, KUL, all fully integrated as a mega airline feeding into itself and other one world carriers. With a fleet of 777 A380 787 on international routes it would have been an huge modern airline.

4 class 777-300ER 150 economy lite, 150 economy, 40 economy plus, 35 business

Quoting jetfuel (Reply 42): ghts to places like CDG, FCO, SFO, KUL

And just how do you propose that carrier would have been able to compete with the frequencies SIA and EK
have thanks to the fact they can feed their hub from more places than just Australia, plus the fact they can upgage
aircraft bringing down CASM. Coupled with the fact thanks to its local laws/geographic location and the fact it can secure finance at rates only the gov of Dubai can arrange... how do you think it would have supported the 25% cost advantage, frequency advantage and ability to thus offer a superior product cheaper?

In reply to jfk777 -"why does Emirates fly to NZ" - the answer is for several reasons:
1. It's cheaper for them to keep their aircraft in NZ for the day than to keep them in Australian ports.
2. QF, NZ and DJ fly most of the services on the Tasman with B737s and A320s which have no room for freight.
Emirates can make a killing on the freight carried. The freight probably covers all the costs of the NZ extension to
Australian routes. QF have only in the last year to 18 months put a 767 on the Tasman - it should have been done years
ago
3. Emirates offers the only "real" J class and F Class on the Tasman apart from a few services by NZ 777s
4. The fares Emirates charge on the Tasman often undercut the other Tasman carriers which is all cream because of the
freight carried.
Pretty good reasons for Emirates to go to AKL I would have thought!

Lufthansa misses the point. By his logic, how does Air New Zealand thrive on LAX-LHR?

Qantas' inept management has for too long had only the huge 747 for long-haul flights, and then chose only to augment it with........the A380. Consequently they only really service London, Sydney and Los Angeles properly.

A fleet of 777-200ER and LR aircraft could have made multiple European and North American flights viable in 230 seat aircraft.

But Qantas' inept management decided to skip a generation and wait for the 787. But long before it arrives, other carriers have scooped up the market.

Oh god Kuroman, for the last 15 years I have been saying QF should have ordered either the A340-300 or
the 777-200ER. At the time, especially given what cathay were doing, a joint A340-300/A333 order would have made
a hell of a lot of sense, enabling a daily south africa and deeper into south america long before it was done, as well
as destinations like SFO, CDG and amsterdam having some kind of presence. This of course was before the rise of the mightly EK and Dubai hub. I don't for a second doubt that fleet mistakes were made. At this point QF wasn't even flying BNE-LAX direct. A 340-300 would have been perfect for it daily. The 777-200 nicer to fly in yes, but the ETOPS free operations at the time were designed for exactly some of the routes QF fly, or should have been flying.

What I am saying is, given what the competition are doing, and THE PRICE they have the ability to do it at NOW, coupled with the ability to have larger aircraft with higher frequencies a more diverse fleet alone wouldn't have done it.

NZ does well for a few reasons. Firstly UAL is the largest carrier at LAX so there is a big bunch of star flyers in the Region, and they have by far the best star product offered direct. Next, they actually have a significant cost advantaged compared to UK carriers. But by that same logic, NZ wasn't able to keep FRA flying... it dumped it years ago. And FRA has strong star alliance flyers at both ends. (but still a lot of connecting pax) And I would dare say the majority of NZ J class pax are going the full distance AKL-LHR. This is there heavy O & D route, so, if NZ can sell maybe 40% of the seats at LAX a lot of the risk of that flight is already taken out of i. That is, it doesn't need feed. NZ on the other hand would have a much harder time flying say LAX-CDG. American tried it. TWA did it with a 763, they all didn't last. the DL/AF combination works because of feed. That same feed, the QF group could use to make cities like AMS work again. Indeed it is that very same feed EK are using against them. (QF).

Quoting YYCowboy (Reply 32): How did an upstart Arab see something that a historical Qantas didn't? Australia was Qantas's to give away, and they did.

The Arab carriers and the Asian ones advantage over QF in this regard, they can utilize the hub and spoke system far more efficiently, the geographical advantage also helps immensely.

It would be highly inefficient for QF to do this because to get to Europe it requires a stop somewhere and while they can hub people in SIN or HKG from all major Australian cities but its not incredibly efficient to send say 6 aircraft's per day to several Euro destinations. So they do it through code sharing which doesn't work as well having only 2 partners in Asia CX and JAL.

Aircraft choice plays a role in this but Australia is only 23 million people and how much local traffic is QF going to pick up out of say SIN and HKG. I also think that a lot of this traffic would be seasonal as well.

Quoting 747m8te (Reply 39): So whats your point?

Sarcasm look it up in the dictionary...

EK413

Quoting EK413 (Reply 48): Sarcasm look it up in the dictionary...

Yes...could easily see that...but through that you were trying to have a dig at Qantas, when the competition Virgin Australia is doing the same!