Qantas in private hands?

It is certain that various promises and commitments will have been made to assure the government and the population that all will be well, but history tells us that it may not.

And one doesn’t have to look too far back in history to see many examples of the turbulence that has beset airlines that have at first been Christmas Labrador puppies only to be tossed aside homeless – and broke.

Air New Zealand, Philippine Airlines, Malaysia Airlines, TWA, Eastern Airlines and the list goes on.

While some of the players in the Qantas bid come with excellent credentials, it is extremely unlikely that the same team will be together in 10 years, and make no mistake they are there to make money – and lots of it.

And the airline’s board make up will be different – very different.

The challenge for the prospective owners will be to achieve substantial returns to service the debt. This will almost certainly require spinning off assets, paring back of fleet acquisitions and sending work off-shore, while making more savage cuts in the workforce.

It can be argued of course that some of these measures are both necessary and inevitable regardless of any buy-out, but if the bid is successful they will all happen and perhaps in a less compassionate way than otherwise might have been the case.

And the effect will be to make Qantas less Australian with less of the spirit that it touts so well through choir members standing on iconic sandy beaches. That situation will not be lost in the corridors of power in Canberra, or the board rooms of the airline’s major corporate customers, or even in the lounge rooms of the average Australian homes.

For the potential owners of Qantas if “Australia” perceives that the airline is less Australian, the urge to keep Singapore Airlines off the Pacific will rapidly disappear and both corporate travellers and average mums and dads will look more willingly at other airlines.

Qantas is profitable on the back of its virtual stranglehold on the Australian corporate and government market and its Pacific routes, and it is able to keep its economy fares low because of that robust front end support.

The potential buy-out risks this fine balance and thus alienating the airline with the government, not to mention the paying public and lay media.

Like it or not, governments and particularly the public consider airlines more of a public service than a business, and for many countries the ‘national’ airline is more important than the air force.

We only have to look at the travails of Air New Zealand through the 1990s, which while listed was essentially in private hands – by virtue of its largest shareholder.

The New Zealand government was forced to step in to save the airline when the major shareholder bailed out when the going became too tough.

But has the time come when Australians say, “does it really matter?” Singapore Airlines, Cathay Pacific, Emirates and Air New Zealand serve the country – internationally at least – extremely well and many argue they are more innovative than Qantas.

Australians may well ask – and do to this writer – why is Qantas one of the last major airlines to install seat back videos, and why hasn’t the airline introduced a premium economy class for the second tallest people in the western world who regularly fly the longest routes. And why is the airline the only major long haul airline not to have a 300-seater in its fleet, a situation that has made servicing Europe a major problem.

Domestically Virgin Blue is refining its product to become a credible alternative for the corporate market.

Perhaps the future – and a warning – can in fact be predicted by Mark Twain who also said: “A banker [or financial institution and equity fund] is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain. ” Many, including this writer, sincerely hope Mark Twain is wrong when it comes to Qantas, otherwise its future will be very predictable – turbulent!