With Qantas announcing it will axe 500 jobs, another huge financial loss and a major restructure of how it operates, questions are being asked about how the airline will look in the years ahead.
While it is not threatened with extinction, CEO Alan Joyce said the current situation was “unsustainable” and change, radical change, was necessary. And so he outlined wide-ranging plan to remake the airline for a more profitable future.
In speaking the company’s troubles, Mr Joyce said Qantas had “a huge national footprint and a huge national interest”, but what would it mean to the average Australian if competition seriously wounded the Flying Kangaroo, it was drastically downsized or it disappeared completely?
Flights out of Australia
Qantas still has rights to certain flight paths, such as pacific routes to the USA, which some of its other competitors like Singapore Airlines and Emirates do not, according to Adam Susz, a Qantas pilot and the Vice President of the Australian and International Pilots Association
Senior economist at Monash University Professor Stephen King said the average consumer would not be affected if the government opened up these routes to foreign carriers in the absence of Qantas.
But Mr Susz said that this would result in a greater degree of uncertainty for consumers.
“We would be at the whim of a foreign carrier, and if it doesn’t suit Emirates, for example, to fly from Australia to America they could just withdraw,” said Mr Susz. “Suddenly, Australian travellers and business people [could be] stranded without help, whereas Qantas is here to provide that vital link to the rest of the world.”
While Qantas has some advantages on foreign flights, it currently receives no benefits over other airlines in the domestic market. In its absence, there’s likely to be little impact on the services made available by the remaining competitors.
“If consumers do not find Qantas offering the services, prices and the value that they want, they’ll go else,” said Professor King. “And if Qantas fails or is taken over or becomes smaller because of that, well good. That means consumers are getting the services they want from other airlines.”
Prices and quality
Of course, there is a risk that other airlines may not step into the breach left by Qantas in quite the same way in terms of quality and pricing.
“If Qantas were to leave the market, and nothing were to take its place, then what you’d see is airfares would go up and consumers and passengers would be worse off,” said Tony Webber, former chief economist at Qantas.
Mr Susz also said that the absence of Qantas would lead to a loss of important knowledge about airline safety that might not be readily available at other airlines, putting consumer confidence at risk.
“If Qantas were to leave the market, what you would see is the departure of an airline with probably the proudest history in terms of safety and operational excellence. The safety record of Qantas is impeccable,” he said.
Qantas has historically been the first point of call for the Australian government when it seeks to rescue its citizens from emergencies abroad. For example, Qantas was on hand when Cyclone Tracy devastated Darwin in 1974, and helped fly out those injured in the Bali bombings in 2002.
While Tony Webber thought the air force or other airlines could be relied upon to repatriate our citizens in times of need, Mr Susz said neither of these options are as reliable as Qantas has been in the past.
“When we have crises overseas … in places where Australians are stranded and need repatriation, Qantas is a phone call away. Without that backing, you can’t possibly rely on a foreign-backed airline like Emirates or Singapore Airlines to come to the rescue.
Speaking to the media today, Opposition spokesperson for Transport and Tourism Anthony Albanese said that the Flying Kangaroo was integral to promoting Australia abroad.
Back in 2012, Tourism Australia said it was “inextricably linked” to Qantas, describing it as “integral to the success of Australian inbound tourism” despite the company ending its million-dollar agreement with the national tourism body that same year.
Mr Susz agreed.
“When Qantas touches down in all corners of the globe, the symbol of the Flying Kangaroo is a symbol of Australia,” he said. “It’s an advertisement to people to come to Australia. It’s also a symbol to Australians – welcome home. When you board a Qantas flight in various parts of the world you’re already half-way home.”
But Professor King thinks this link to our national identity is more of a “jingoistic” marketing gimmick on Qantas’ part than a tangible benefit to Australia.