Sometime today at the IATA annual jamboree in Beijing, somewhere on the side lines, or in the side rooms, Qantas group CEO Alan Joyce will get the same message some of his colleagues have already received from a large airline based in Hong Kong.

Which is that if against the administrative odds, its gets permission for Jetstar Hong Kong to begin operations next year, that airline group will set up an operation in Australia, as Australian law allows, and Hong Kong would insist upon exercising, that will destroy Qantas and Jetstar.

It doesn’t take much. Half a dozen A330-300s and maybe a dozen single aisle jets offering fares cheaper than Qantas can ever afford to match for a few years are all it would take, and since Jetstar Hong Kong will by definition be international in network, the retaliatory investment in Australia should also have a structure similar to Virgin Australia, allowing it to fly, let’s guess, to Los Angeles, or anywhere else that it might usefully instruct Qantas in the realities of starting turf wars it can’t ever finish.

However, the way things are going for Qantas, or for whoever bands together to buy the more valuable body parts, there may not be much left to destroy at the current rate at which this board, and management, have hacked their way through Qantas customer loyalty, staff engagement, and the value of the shares.

IATA in Beijing is where Joyce’s empty rhetoric and damaging posturing about an Asia based, Qantas controlled, yet minority owned carrier often given the working title Red Q, meets rooms full of people who were supposed to be its victim.

Red Q was to put larger than A380 sleeper seats in A320s, take market share off the established Asia brands, and divert enough of its profits past the majority Asia based board members to recapitalise the Qantas long haul operations that Joyce has already helped diminish to the point where Qantas really doesn’t have nearly as much to offer as it had even recently if it comes to cross border rationalisation of international services based in the Asia-Pacific hemisphere.

Joyce’s problems include saying foolish things that the Australian media tends to sanitise and forgive, but which the managements of certain Asian carriers and the relevant sovereign authorities note down and do not forgive.

Beijing is where Joyce can explain himself to those he insulted by making statements in the Australian media about how Qantas was coming to get them, and by about now, if his early posturing is used as guidance.

What a pity he can’t also arrange to be in a room full of customers who didn’t make business meetings, weddings, or other family engagements both happy and sad, because he woke up one morning and decided to ground the airline without warning in order to end protected industrial action that resulted from a failure by Qantas management to negotiate renewed enterprise agreements in a timely manner.

The only time that Joyce will get a rapturous reception in public by the aviation powers of the Asia hemisphere is when they ‘have’ Qantas in the biblical sense and according to whatever metaphors readers might wish to insert.

Behind the polite and formal face of an IATA meeting Joyce faces the reality of his ruinous tenure as Qantas group CEO.

Australians face the diminution of an iconic brand that fell into the wrong hands, and investors have been set up for a range of possible break ups or deals that can never be priced high enough to recover lost dividends and the debasement of share values.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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