Qantas’ finance chief has taken a swipe at the airline’s “armchair expert” critics and defended its profit-draining strategy of maintaining a 65 per cent market share.
In a blog post on Qantas’ website, chief financial officer Gareth Evans said criticism of the airline’s strategy and its financial troubles were based on a “fundamental misunderstanding of the aviation market and Qantas itself”.
“There is never a shortage of armchair experts with theories on how to run Qantas, and the cabin has been especially crowded recently,” he said.
“For many on the sidelines, it seems few businesses are easier to run than the national carrier.”
He said the airline had faced a tough global economic environment, high oil prices, and competition from Asian carriers with lower costs.
And he defended the airline’s much-criticised strategy of maintaining its 65 per cent market share against rival Virgin, which has has been working to expand its capacity.
“Stepping back from the 65 per cent would effectively be waving the white flag, not to mention abandoning our role in regional Australia and betraying the loyalty of our frequent flyers,” he said.
“Imagine someone saying Woolworths should start closing stores in response to the threat from Coles.
“We plan to keep improving and strengthening our competitive advantages, not walking away from them.”
In December, Qantas flagged a $300 million underlying loss for the six months to the end of 2013 which prompted ratings agencies Standard and Poor’s and Moody’s to downgrade its credit rating to junk status.
The airline is cutting costs in response to the loss and has been lobbying the federal government for assistance.
But Mr Evans said Qantas wasn’t a “lazy company seeking a government handout” and simply wanted the government to level the playing field with Virgin.
Mr Evans also rejected criticism of its move to expand budget carrier Jetstar into Asia, which some have argued is distracting Qantas management and losing money.
“In truth, the value of these airlines is already significantly more than their foundation capital, and it will increase as the Asian middle class drives nearly half the world’s air traffic growth over the next 20 years,” he said.
“It takes breathtaking small-mindedness to dismiss this growth as an Asian distraction.”