Like the proverbial elephant in the room, there’s something about the revised Qantas deal no-one is talking about. The passenger experience.
If passengers hate what happens to service standards they can kill any possibility that APA will meet its forecasts and keep away the repo men chasing $4.5 billion in additional debt.
But if the privateers try to match the competitive offerings of total fleet renewals by Singapore Airlines and Cathay Pacific, and the all-new temptations of Etihad, Qatar, the long-haul Virgin Blue operation and the already successful upgrades from Emirates and Air New Zealand, they’ll have to cough up extra billions, well above the current $10 billion Qantas capex program set in motion pre-bid.
Within Australia, Virgin Blue is three months away from starting a $1.5 billion roll-out of new, flashy and spacious Embraer E-jets to take on Qantaslink in the bush — especially in towns where the resource dollar is generating a huge demand for flights — and Canberra. It’s the biggest single investment in regional aviation in Australian history, and the only answer Qantaslink has is to stuff passengers into smaller seats inside turbo-prop buzz boxes between rotating sets of knives.
The stuffing is already in full swing on Jetstar domestic, where Qantas shunts its loyal business travellers when it thinks it can get away with it. Jetstar isn’t selling cheapies to business travellers. They are charged the same type of ”full” fares that Qantas charges on its full-service routes, but with punitive legroom. And no complimentary breakfasts or dinners, often the only opportunity a sky warrior would get to take these meals.
Business travel consultants have been bitching about this for more than a year to no avail, pointing to a pay-on-demand snack service that would struggle to win approval for school tuck shops, has to be put on expenses, and is sold by flight attendants who don’t always get to every seat on a short flight.
So, they defect to Virgin Blue, if they can get on or the flight isn’t cancelled.
One of the goals of Qantas is to prevent its core of frequent flyers being ”contaminated” by exposure to superior service standards. Canberra used to be good for that, back when Qantas was seen as a taxpayer rather than a private-fee fest substantially supported by tax-deductible interest charges on private equity borrowings.
But it is abundantly clear that with Virgin Blue becoming a second national flag carrier, and with serious militancy from some sections of the tourism industry seeking more capacity and new competitors on key Qantas routes, an APA-controlled Qantas will need to find something more compelling than automatic parliamentarian memberships of the exclusive Chairman’s Lounges to make itself heeded.