Under Pressure?

Competitive challenges ahead for the airlines

In January Australian Consul-General John Olsen told the rich and famous in New York that there is far more to Australia than “Crocodile Dundee and calling girls Sheila. ” At the glitzy function celebrating all things Australian, hosted by none other than Qantas Ambassador at large John Travolta, Olsen said – against a backdrop of Qantas logos – that “Australia was an innovative country, started by immigrants in a harsh land, and it had to cut out a new economy, country and society. ” Perhaps he should have added that the innovation of opening up the country’s skies – almost unique in the airline world – had set up a competitive landscape that will severely challenge the bottom lines of many airlines as AirAsia eyes Virgin Blue, Tiger spreads its wings – or should that be claws? – and Indonesia’s Lion Air hopes to partner SkyAirWorld and start domestic operations.

The Qantas Group is going to have to be extremely innovative in 2008 to ward off this greater competition, not to mention the increased services from the likes of Emirates or the canny New Zealanders attacking markets such as Melbourne and Adelaide to the US.