Although the dogs have barked and the Qantas-Emirates caravan has moved on, as it would have inevitably in one form or another, questions remain as to what persuaded the ACCC to reject claims Qantas advanced as to its international operations being a ‘failing business’ and related claims about cost disadvantages forcing it off various routes.
Part of the reasons may be found in the submission by the ALAEA the Qantas licensed aircraft engineers association.
It argued, no doubt to the astonishment of some of its members who might have read the submission, that Qantas is in fact a world beating carrier, or up with the best, in terms of key efficiency metrics.
For example, by passengers per aircraft per year, Qantas financial filings show it carried over 200,000 passengers per hull in 2011 exceeded only by Emirates, which has an all wide body fleet including the world’s largest fleets of A380s and 777s. For Qantas, with dozens of turbo-props, and single aisle jets, that was quite a performance.
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The figures are also reformatted to show that Qantas carried more passengers per employee than the benchmarked carriers that are active on the long haul routes between Europe and the Asia Pacific.
However none of the above explains why the declining Qantas share of international traffic nor its claimed financial under performance has come about if as the figures seek to demonstrate, the airline is by global standards highly efficient.
Those factors would presumably include the liberalised state of access to the Australian market, and the fact that in any contested market, unless fares are regulated not even efficient carriers will command pricing power.
But that also opens a number of circular lines of debate. It could be argued that Qantas is forced to be as efficient as it is because it hasn’t the pricing power it enjoyed in the smaller much more regulated, and much less consumer friendly markets of the past.
And in terms of liberalised access, what Australia gains through its free trade friendliness produces economic benefits to the national economy that are far more valuable than policy settings that would lock everything down to suit Qantas, or another Australian flag carrier.
It is the argument that says a protected Qantas is a poorer Australia. In fact when Qantas was ‘protected’ and skies were largely closed rather than open, Qantas was hopelessly unviable and propped up by taxpayer fundings justified as being in ‘the national interest’, which was the same argument used by all the major economies to justify their state protected and often state owned carriers.
The ALAEA submission was quite late in reaching the ACCC and does not therefore on its own explain why it made the findings it did. Yet it must have played a role.
If the Qantas licensed engineers association hadn’t unwisely sent its ACCC submission exclusively to The Australian, a union hostile publication where it was put behind a paywall and given cursory treatment anyhow, some of the points it sought to make might have seen daylight before the competition commission made its ruling.