May 22, 2014

Capacity crunch: will cutting flights pull Qantas out of its spiral?

Qantas' decision to abandon its domestic capacity goal is a landmark in the recovery of the airline. CEO Alan Joyce is trying to stem losses in an unsustainable industry war.

Ben Sandilands — Editor of Plane Talking

Ben Sandilands

Editor of Plane Talking

In the bigger picture, Qantas blinking in the capacity war it was waging with Virgin Australia doesn’t change the external factors that have destroyed what might be called the classic post-’90s privatisation model, in which the airline set out to be a blue-chip enterprise earning the dividends that made it an important — and performing — part of numerous investment fund portfolios.

By deciding not to grow available seats faster than available passengers Qantas aims to prevent further loss of value in a game where it cannot survive in the form that it’s in today.

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One thought on “Capacity crunch: will cutting flights pull Qantas out of its spiral?

  1. pragmatic

    Clifford might be able to run a mining company, but it is clear that he should not be running an airline.

  2. Gavin Moodie

    Thanx very much for this analysis, which I found interesting.

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