History never repeats?

This is not an exclusive Australian problem – it’s global and unstoppable.

History watchers will recall the comments of former American Airlines Chairman and CEO Robert

Crandall, who said to a Senate Inquiry into the airline system in 1977; “You f***ing. . . academic eggheads. You can’t deregulate this industry. You’re going to wreck it. You don’t know a goddamn thing.”

And the academic eggheads were led by Alfred Khan a Cornell University economics professor who was appointed by US President Jimmy Carter to head the then Civil Aeronautics Board.

Mr Khan famously bragged about his lack of aircraft technical knowledge: “I don’t know one airplane from another. To me they are just marginal costs with wings.”

With that lack of knowledge Khan also said that “the assumption that you are going to get really intense, severe, cutthroat competition just seems to be unrealistic when you are talking about a small number of carriers who meet in one market after another. I just do not see any reason to believe that the airline industry cannot prosper and attract capital.”

Khan later –and too late – admitted he was wrong.

With that sort of counsel the US government deregulated its airline system and essentially destroyed what was the world’s finest airline system.

Lay media and politicians were captivated by the fact the after 1979 fares went down and passenger numbers went up.

The fact that had done so every year since records were kept in 1929 was ignored.

And politicians across the globe were sold on de-regulation which sowed the seeds of Ansett’s demise as it did for hundreds of airlines.

Now domestic de-regulation is being over taken by globalisation with liberalisation with airlines such as AirAsia sweeping all before them effectively merging – to save – Malaysia Airlines last month.

Successive Australian governments have opened the way for access to Australia’s domestic and international air routes leaving our airlines vulnerable and seemingly ill-equipped to combat the onslaught.

Yet one airline has learnt from the demise of Ansett and that is Air New Zealand.

Its turnaround from near collapse in 2001 has been nothing short of extraordinary.

Its management has been inspirational, staff loyal and focused and the airline’s innovation has won the airline a string of awards for redefining travel and the travel experience.

So much so that in a recent Australian based survey the airline was only just behind Qantas as one of the admired “Australian companies.”

In its home country it is the most admired and last year over 70,000 people applied to join the airline.

In an Aviation Week airline ranking survey Air New Zealand ranked 5th ahead of Qantas at 7th.

This is an extraordinary result from an airline that is absolutely at the end of the line that relies mainly on tourist traffic and has a tiny population of just 4.4 million.

There is little doubt that the pace of change that has many rattled with increase and increase significantly.

We as an industry must look long and hard at what happened to Ansett.

Forget the ludicrous blame game of whose fault it was – it was everyone’s.

Politicians who opened the flood gates, management who blundered, staff who wouldn’t embrace global trends.

The fact was simple. Ansett was indeed a great airline but a lousy business with costs hopelessly out of touch with the market.

And the problem is no different at Qantas.

It is clear that few at Qantas have learnt from the Ansett collapse and that does not bode well for the future.

Never before has Qantas faced such tough competition.

Virgin Australia is a serious competitor and it has awesome allies in Etihad, Air New Zealand, Singapore Airlines and Delta.

Greater access is being given to foreign airlines to Australian markets by the government and all those airlines have lower costs than Qantas.

Even legacy carriers have costs up to 25 per cent less than Qantas and when passengers will change airlines for $10 that is sobering.

Everyone at Qantas should reflect on the famous philosopher, essayist poet and novelist George Santayana who said; “Those who cannot remember the past are condemned to repeat it.”