Wounded roo

And in the international arena, Australia, particularly with its high local currency and a population that loves to travel, offers a rich source of traffic to the world’s best airlines who, thanks to liberalised air right agreements and almost unrestricted access to Australian airports, fly in with their superior product, one-stop flights to almost every meaningful destination on the planet, and significantly lower costs bases.

So what do you do in those circumstances? Minimise your exposure to international competitors you can’t hope to compete with by contracting to key hubs and partnering with key global airlines, and feeding your own and codeshare services alike with your dominant domestic traffic base.

Vigorously protect your one true competitive advantage, a 60+ per cent domestic marketshare. And continue to grow your low cost arm.

As recently as August 29 Qantas looked in pretty good shape. It had survived a tough 2013 financial year posting an increased underlying profit of $192 million (and a more modest $6m after tax profit). Fast forward barely three months to December 5 and Qantas announces it expects to post a $250-300 million loss for the first half of the current 2014 financial year. Remembering that the first half of the financial year is traditionally the strongest, some have extrapolated that to mean Qantas is on track to post a full year loss closing in on $1 billion.

That assumes Qantas doesn’t act, and clearly it has, as it always does, by announcing shedding yet more staff and other as yet unspecified cuts across the business that are expected to save a total of $2 billion over three years, plus flagging an asset sale program.

Regardless of the eventual number, Qantas is staring down the barrel of serious financial losses.

So I understand Qantas’s palpable anger that erupted after Virgin Australia announced its $350 million rights issue.

Up til that point, Qantas knew it was hurting. But I suspect it thought its competitor was hurting even more, as the domestic market capacity wars battered yields and bled red ink, and Qantas thought it could outlast a struggling Virgin that already had to raise cash through selling and leasing

But it turns out Virgin can outlast Qantas after all, thanks to that critical $350 million injection.

back aircraft and other assets such as its Brisbane maintenance hangar.

But it turns out Virgin can outlast Qantas after all, thanks to that critical $350 million injection, largely from its – cue xenophobic hysteria – foreign owned (and worse, foreign government controlled) major shareholders in Air New Zealand, Etihad and Singapore Airlines, plus the Virgin Group.

Because it is not just the first $350 million, it could be the second and third rights raisings that could well follow, if those deep-pocketed investors see that Qantas really is vulnerable.

So I understand the ‘fair go for Qantas’ campaign Qantas ramped up. The so-called playing field in Australian aviation isn’t level, and of course Qantas has the right to campaign for a fairer set of rules.

But the campaign felt confected, and the danger for Qantas is that it has overreached and harmed its cause as much as it helped it. As the Holden closure showed, Australians are not as sentimental and parochial about national icons as they once were. If the comments sections on the many stories our website ran on the issue are representative, for every one person defending Qantas and the need for a national airline, there were seemingly two lambasting its unsophisticated call to patriotism and its cynicism in railing against foreign ownership when Qantas itself is a foreign investor in its various Jetstar Asian franchises and that its major alliance partner is the most formidable foreign government owned airline of them all – Emirates.

The zeitgeist is not with Qantas, unlike it might have been 15 or 20 years ago. It turns out Australians are only loyal to Qantas for as long as they can hold on to their Platinum and Gold frequent flyer statuses.

It sounds like Qantas will succeed in its campaign to have the restrictions of the Qantas Sale Act removed or eased, but beyond that, the federal government has quite clearly indicated that Qantas is on its own, with debt guarantees unlikely and minority shareholdings all but ruled out.

If that is the message, it’s time to change tack.

As the old adage goes, ‘never let a good crisis go to waste’. Qantas’s current crisis is a bit more manufactured than actual. But if Qantas really is heading towards a $1 billion loss, that crisis will soon become real and present.

But that presents an opportunity – an opportunity to unite staff in the common cause in restructuring the business. Some pain seems inevitable, but a larger scale restructuring along the lines US airlines go through under Chapter 11 presents the opportunity to meld the best of the Qantas service and safety culture with Jetstar’s efficiency and low cost base.

How Qantas got to this point will be subject to endless analysis and scrutiny for months to come. But where it goes to from here is much more important. And that will require new vision, courage and openness.