Today’s AFR story on the probability of extensive pilot cutbacks in Qantas long haul sets the scene from a fresh struggle for public, political and investor ears.
The essentials in the story are correct, and the associated opinion piece by Andrew Cleary ought to put management on notice that just blaming the unions and allegedly unfair foreign competition might not cut it for much longer in the court of public opinion.
Not that it will give labor a free run either.
The first difficulty for Qantas will be to continue the truly absurd line of reasoning that setting up an Asian flag carrier somehow controlled by Qantas, to operate a premium narrow body airline and take business off existing premium product Asian flag carriers, and cross subsidise Qantas international operations, will allow a resumption of its long haul expansion, which the current management is murdering.
This reasoning is still looking for the reality of such an Asian project taking off. At the moment about the only chance of this happening is to enter a joint venture with Malaysia Airlines.
It is one of the most poorly enunciated business plans ever made by Qantas, and not helped by some truly bizarre statements made in its support in the past eight months by group CEO Alan Joyce.
At the same time the sane Asian expansion plan, involving the Jetstar low cost franchise has seen its Vietnamese brand, Jetstar Pacific, set up to be folded into Vietnam Airlines, its principal opponent, and Qantas has signaled its desire to invite a fourth cornerstone investor into Jetstar Japan, to share the fabulous rewards of that venture with foundation stakeholders Japan Airlines, Qantas and Mitsubishi.
The issue that Qantas might not be keen to explore as it moves to shed hundreds of experienced pilots is its own dismal failings in fleet, network and product. The reason why Emirates, Singapore Airlines, Cathay Pacific and others have grown so rapidly at its expense is because it lost relevancy. The unwillingness of Qantas to serve secondary but growing markets in Europe and central Asia with capable long range fuel efficient twin engined jets goes back to 1999, when it could have introduced Boeing 777-200ERs.
Subsequent to that it could have migrated, as Singapore Airlines did, into the larger and even more capable 777-300ERs which support its core A380 fleet. It was an opportunity for Qantas to do something to both keep passenger share, and reduce its largest cost variable which is fuel.
Blaming the likes of Emirates for serving Germany, Italy, Spain, and secondary UK cities on the grounds of unfairness is ridiculous. These are markets that a defeatist set of Qantas managements chose not to address, in the expectation that somehow those customers would subject themselves to the inconvenience and time wasting involved in connecting to British Airways flights at Heathrow.
Instead the passengers went to other carriers with newer, more fuel efficient jets, that flew them to their destinations up to half a day sooner.
Which is where the displaced Qantas pilots will inevitably go as well, to better airlines with better, newer jets, flying to places people want to fly to, and from.
The debate about pilot job losses should be one about why management pursued a Little Qantas strategy, and allowed its competitors to take from it so much of its investment in piloting and operational standards excellence.
There is a view in Qantas that displaced ‘legacy’ pilots will accept jobs in Jetstar.
It’s like the view that passengers who can’t get a Qantas service on routes it previously flew will inside automatically switch to Jetstar. They won’t. They will switch to airlines that offer them a viable alternative to either their Qantas career or Qantas product.