In the red corner

“I think given the trading circumstances Qantas was having great difficulty pursuing the strategy that Alan inherited,” Clark said.

“This was a structural problem and couldn’t be solved overnight with a magic wand and was accentuated by the global recession and needed to be dealt with in a structural way.

“To have done nothing would have been a disaster would have led to bankruptcy eventually. So Alan knew he had to take out the big knife and make some surgical changes to the way Qantas operated.”

In a sober note Clark said he wouldn’t have done things any differently to the actions taken by Joyce.

“I couldn’t have done anything else.”

He added Joyce has picked out the things that are working – such as Jetstar, the frequent flyer program and Qantas domestic, and is growing them.
Clark added Qantas has had a very tough time over the past two years.

“Perhaps we will look back and say these were the changes that had to be made to position them in 2015 and 2020 because that is where you have to look when you are investing capital in fleet.”

“These issues – the grounding – are watersheds that had to happen to reposition the airline.”

In a blunt note on the agitation by former Qantas management and investors wanting to buy a stake in Qantas, Clark said perhaps Joyce’s predecessors should be asked about their roles in creating what he inherited.

“Now these are the people who say they want to come back.”

Clark suggests former Qantas CEO Geoff Dixon “should enjoy his retirement – I am sure I will.”

Clark added that when he retires, if he is giving advice to the new Emirates management he will “kick” himself in the tail.

But the takeover rumours do not surprise the Emirates boss.

“Nothing surprises me (on takeover rumours). They will gain traction particularly with the unions.”

“It will not be the last, but I assure you within three years things will be completely different [at Qantas]. They will be eating their words.”

“The Qantas share value will rise – its trading well below par at the moment – investor interest will increase as will respect increase for what they are doing.”

On the recent Virgin Australia alliance deals with Tiger Airways, Skywest Airlines and Singapore Airlines Clark said it was “game on and the consumers will benefit.

“Looks like we are going to have two big players and the consumer is the big winner.

“We will all be on our toes. You will have two strong blocks competing for consumers.”

And Qantas and its passengers will be the big winners with the proposed Qantas/Emirates alliance, if it is approved by the ACCC says Clark.
“Our proposition to Qantas is to grow your business through Dubai.

We are hoping that they will expand which will enrich them and enrich us.”

Clark said he is hoping the deal will cause Qantas to have a rethink about Europe as there has been some negativity at the airline about the region.

“We want to work with Qantas and its 787s [in 2016] to fly to destinations in Europe that work for Qantas and for us.

“Let’s look at what Qantas wants to do and let’s work at what is best for both of us.”

He is adamant Qantas has great potential and dismisses suggestions that it is a one-sided deal.

“We want them to be a robust partner. If Qantas wants to lay on more capacity to multiple destinations with Dubai as its hub that is great.”

“There was a question about Frankfurt and suggestions of a reduction of one flight a day to London prior to this alliance announcement but we want them to expand.”

“There was certainly a degree of negativity at Qantas about the Europe space. The reality is if we don’t do this deal where would Qantas go .., pull out of Frankfurt and cut one flight to Heathrow?”

Clark added: “Very quickly it will be barking obvious to Qantas that they can expand through Dubai.

“On paper this deal has great potential and all you need to do is look beyond the current global recession. Once everything is sorted [the Qantas restructure] in Australia it has great potential.”

Clark added Qantas has had a few difficulties and “has been going through a difficult transformation.”

“We are not the transformation agent – all we are is something that has come along at the right time to add value to the strategy and this is the right way to go.”

And Clark says this alliance is all about the future of aviation.

“In the not too distant past there have been alliances where they would hardly speak three words across a table.”

Asked why Emirates shouldn’t go it alone Clark was quick to highlight Qantas’s many strengths.

“Qantas is a very strong partner and our alliance is more powerful working together. Qantas is the Australian national carrier and it has enormous commercial power, it is a formidable proposition.”

Clark was coy on Qantas’s three Heathrow slots that are currently leased to British Airways. “It is up to Qantas, but why shouldn’t they get them back and use them themselves. They are optimal slots for them, why not use them? Heathrow slots are gold.”

Quizzed as to why the deal wasn’t done with Qantas in 2005, Clark said that at the time Emirates was public enemy number one.

“We were not flavour of the month. There was staunch opposition to our growth. There were dire predictions of bankruptcy to Qantas if we got any more slots into Australia.”

Clark said Emirates kept arguing that they would bring passengers that Qantas would never bring.

“Each time we came up against opposition we said we can bring business you do not have – we are not taking passengers.”

“We are not going to take over Qantas’s marketshare or British Airways’ marketshare – we have simply gone to places that no-one would go.”

“You know, KLM, Alitalia and Lufthansa were throwing bricks at us for flying to Australia and they were not even flying there.”

Clark said the days of airline alliances are over.

“Everyone is rethinking alignment. You have KLM/Air France/ Etihad and Air Berlin, you have Air New Zealand and Cathay Pacific.”

Clark said network alliances will be replaced with alliances based on commercial reality.

“Today’s alliances were formed in the 1990s as marketing alliances. Today there is a new world order. Why are passengers travelling? Where are they travelling? We have to understand that.

“The traditional alliances are turgid, inflexible and self-serving and they didn’t make the changes for the new in the traffic flows,” argues Clark.

There is of course little doubt that Emirates’ global strategy is working with another excellent result for the airline posted the day before Clark spoke to the Australian media.

The Emirates Group posted a AED2.1bn (A$548m) net profit for the first six months of its current fiscal year ending September 30 2012, up 68 per cent from AED 1.3bn (A$340m) the previous year.

Despite fundamental challenges, the Group’s revenue and other operating income rose to AED 38.2 billion (A$10bn), an increase of 16 per cent over the last year’s results.

As the fleet increased Emirates invested further in its network by adding five new destinations that have joined the 10 new routes added since September 30 2011, for a total of 15.

The airline continues its broad global expansion now flying to 126 destinations, up from 114 last year to 74 countries compared with 67 last year.
It is a powerful network for Qantas to plug into.