Reece

So much for our humble opinion. It is nice however to find that we are not alone and somebody as well versed in airline affairs as Bryan Grey agrees emphatically that overseas interests would offer either carrier little in real terms. In an in-depth interview elsewhere in the issue, Grey states that there is little in additional profitability or expertise that would be added to either Australian or Qantas if a portion of their ownership went abroad.

Grey goes on to suggest that the boards of these airlines, new or existing, would find it hard to rationalise the presence of foreign participation and vice versa. A few Germans, some Japanese, a Briton or an American on the Qantas or TN board would hardly be what one would term a magical advantage.

Furthermore, if, for instance, JAL purchased a major shareholding in Australian, what good would it really do Australia? Apart from the money, we feel very little. Would they get any more on carriage? Doubt it, as Australian gets most anyway due to Ansett’s marketing agreements with both Qantas and All Nippon. Are the Japanese any smarter at running a domestic carrier in faraway Australia than the present management team at Australian? We doubt it, as JAL is hardly known for its innovative marketing techniques or for that matter practical experience in anything less than the world scene. Is there any fleet rationalisation? No. Could Australian pick up any of their excess maintenance? No. And so it goes on.

During the late eighties there was a trend for major airlines to literally jump into bed together. Sometimes for real reasons, though more often than not to merely protect their patch against the once feared mega carriers from North America and a united Europe. To those who tend to think in practical terms and are not seduced by the day to day trends of the modern era, this all looked a bit dodgy and yes, several years later, we can honestly say that few, if any, of these marriages of convenience have produced much in the way of vibrant offspring.

What for instance has the teaming of Scandinavia’s SAS and Continental Airlines achieved? Has it really made SAS’s lot any more secure in faraway Europe? No. Has it given SAS a massive entree to the vast US market? No. Has Continental benefited by it? Not really, though the SAS quality assurance philosophy has rubbed off in a few of the right places and the beleaguered US carrier (refer major article elsewhere this issue) is at least trying for a new image. But not much else has happened that certainly could not have been achieved by a simple, inexpensive, good old-fashioned marketing agreement.

Similarly, the tripartite liaison between Swissair, Singapore and Delta has also done nothing more than what a basic marketing agreement could have achieved. British Airways’ foray into Sabena turned out to be a giant waste of time and money at a time when the airline now has to retrench staff and give away seats. And what did KLM get from its expensive acquisition of Northwest shares? What does even Ansett get out of owning just over a quarter of America West? And so it goes on.

So why is there such an emphasis by our two airlines and the Government alike to rush for foreign investment? Do they for instance consider that the necessary funds could not be raised within Australia with the Australian people and our own companies and superannuation-buoyed institutions retaining a full element of control of our airlines?

Bryan Grey’s Compass Airlines saw its $50m of stock literally avalanched in barely forty-eight hours of trading. If Grey and his team had had the slightest inkling that it would be so popular then they would have gone for much, much more. If an unknown quantity such as Compass attracted so much enthusiasm in the marketplace then what would a profitable Qantas and Australian produce?

You might say little at present and certainly it would be an appropriate response – at present. However, both airlines are in the process of a major restructuring that will a year from now leave them amongst the most efficient carriers in the world. Both have proud and successful histories. Both have modern stateof-the-art fleets. And we bet that for the fiscal year 1992/93 they will both be producing an operating profit second to none in an expanding domestic economy buoyed by significant increases in inbound tourism.

This is, of course, assuming that the Federal Government does in fact return the sale proceeds to the airlines so that they can get their debilitating debt/equity ratios back to more reasonable proportions. There is however a fear that the Federal Government, in an election mode, may well just take the money and run, leaving the carriers with sizeable and totally unnecessary foreign ownership and you and I, the man and woman in the street, asking just why our airlines are now, like most other things, largely controlled by overseas interests.

This must not be allowed to happen. There is no real reason why either Qantas or Australian need any foreign ownership at all. There are enough funds in Australia to make foreign ownership totally unnecessary, if not today then certainly a year from now.

Let’s keep the ownership of both our flying kangaroos where they should be – in Australia. For this generation and for those to come.