Should Qantas be a Kangaroo?

I have been flying with Qantas for 60 years. Long before my first flight, many school teachers had related to me the saga of its valiant founder, Hudson Fysh, and the wonderful story of how Fysh teamed up with Flynn of the Inland to create the Royal Flying Doctor Service.

Then, I cheered the visionary decision that the Australian Government made to finance the expansion of Qantas overseas so that it became the flagship of the nation —The Flying Kangaroo — a symbol that the whole world identified with Australia.

I vividly remember the great day on which a Qantas 707 took-off from Sydney to take passengers on the inaugural flight right around the world. The entire legend made us

all proud, but now this great Australian adventure into international aviation has found troubled times. Qantas directors and management have been debating whether or not it is still possible to run a viable international airline from an Australian base. Their initial view is that the hub of activity for the nation’s airline has to be in south-east

Asia, where wages are lower, the tyranny of distance from the rest of the world is much less and there may be many more potential customers for both passengers and freight.

As a proud Australian, my first emotional reaction on hearing this was to label it as a betrayal of the fundamental fabric of our proud national spirit for which the Anzacs fought and died. But, after some quiet reflection, it became glaringly obvious that the world has changed forever since the glory days when Qantas was born. We have to face the sad fact that those good times are never coming back again.

So, Qantas has to change. But, what should those changes be and how can Qantas convince its customers and staff that they will benefit from them. At the end of the day, it doesn’t matter what the voters of Australia think about the strategy of the Qantas Board.

The real question relates to whether or not Australian travellers will continue to loyally use Qantas as their airline of preference. Is Qantas at risk of losing its power base — the very core of its profit structure?

In assessing this, we have to acknowledge that the first and permanent major problem for Qantas lies with the trade union movement — some of whose leaders are using this dispute to enhance their public profile in their quest to advance their political careers. Others want to practice greed on a grand scale, eg, the pilots, and there are those who give the impression of wanting to destroy the airline by deliberately giving poor service to customers.

However, the issue is much wider than this, reaching far beyond the corporate territory of Qantas.

The rapidly increasing frequency of industrial disputes all around the world has, as its very core, what ordinary people see as an extraordinary rise in the remuneration levels of chief executives, while many jobs are being lost in cost-cutting at lower levels. Irrespective of whether or not they think they have been cruelly misjudged, CEOs must voluntarily take a cut in salaries, bonuses and stock options, or strikes will rapidly become far more frequent. They cannot blame inadequate industrial laws, as they are not the cause of current industrial aggression.

Overpaid bosses are the cause. Too many enjoy totally unjustifiable levels of largesse — and it is difficult for them to justify either earning or deserving it. Because of this widely-held view of overpayment of executive salaries right around the globe, the union problems at Qantas won’t be fixed until the executive team give themselves a haircut that makes them look like Yul Brunner. The pilots can follow their example.

Of course, the turmoil at Qantas is only the tip of the iceberg in terms of the productivity of our nation. If we acknowledge that an airline can’t operate profitably in Australia at our current levels of wage costs, then no company in any industry here can survive either. Every significant industry in Australia will have to follow Qantas and move offshore.

If we don’t want this to happen, then we had better do something drastic about it. Not only must the bosses be paid less, all workers must also accept lower wages — like the Greeks and Italians are being forced to do with much kicking and screaming. If the world has changed for Qantas, then it has changed for all of us, and we have to swallow some harsh and unpalatable medicine. It is time to acknowledge that we are living beyond our means.

Be that as it may, let us get a bit positive. It seems to me that if Qantas really wants to have Australians cheering them on instead of copping flak for trying, its headquarters should move to Dallas, Texas, not Singapore.

The airlines in America are close to being the very worst in the world, and Qantas could get a substantial share of a badly-serviced market by taking over a local airline, making it more efficient and expanding its scope. From this new base, it could eventually dominate the Atlantic skies from Dallas, as Europe’s airlines are only marginally better than America’s, and many of them will go to the wall as Europe goes into a deep recession.

I was pleased to read that Qantas has had second thoughts about Singapore, where Singapore Airlines is well managed and prosperous. Additionally, they are not friends of Qantas as they have for many years deeply resented being denied the right to fly from Australia to North America. Nor is the Singapore Government a friend after our scuppering of the plan to merge their Stock Exchange with ours. Malaysian Airlines is a better bet, but it pales into insignificance compared to the American opportunity.

The Flying Kangaroo has a golden opportunity to show the world that the nation of its birth is the fastest growing and most stable in the G20. The time for the Kangaroo to jump high is now. Let us not try to take a small step into the highly competitive Asia scene when we can take on the whole world from the large base of an American market which is struggling.

All that is needed is a courageous leader to walk in the footsteps of Hudson Fysh and recapture his vision and tenacity.

 

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