Qantas is an economic menace to Australia.
The airline’s anti-competitive behaviour at airports is locking out competitors. Its price gouging is forcing up inflation and directly harming the tourism industry. Its dominant position in the domestic market condemns millions of passengers to endure substandard service and overcharging that not merely shifts wealth from households to Qantas’ profits, but adds to the business costs of every firm that uses domestic aviation. And its ability to manipulate politicians damages policymaking in Australia.
All in an industry that is naturally prone to duopoly or monopoly, regulated under the cosseted world of bilateral international air services agreements, the most protectionist multilateral trade regime on the planet, which heavily restricts the capacity of airlines in one country from competing effectively in another (and when they are allowed, like Air New Zealand under our single aviation market with NZ, they choose not to).
A foreign airline wanting to increase capacity to and from Australia is a rare thing, even after 30 years of air services liberalisation and capacity expansion by successive governments (always opposed by Qantas, which hates any airline being granted extra capacity to Australia); as we’ve seen with Qatar Airways, that airline might be denied because the governments want to look after Qantas management and shareholders.
Since the privatisation of Qantas, Australia has notionally conducted international air services policy in the national interest, not in the interests of what used to be “the national carrrier”. But for some reason, many politicians seem to think that Qantas is still a government-owned airline — a mistake the airline’s management has gleefully exploited, along with the high regard millions of Australian used to have for it.
In fact, Qantas is a rapacious senior member of the Australian business community, devoted like many of its colleagues in the Business Council of Australia to cutting wages, making employment less secure and paying as little tax as possible.
As the Productivity Commission noted in 2015 when it looked at the Australian tourism industry, our options are limited when it comes to unilateral reform of aviation capacity. We could simply throw open Australian skies to all comers, but without negotiating agreements with other countries the benefits are likely to be limited for international aviation.
However, the government has demonstrated its willingness to regulate large oligopolists enjoying market power as a result of external circumstances and using it to inflate profits at the expense of consumers. Labor didn’t baulk at imposing a price cap on wholesale gas prices, and earlier this year extended the cap until 2025 in response to profiteering by energy companies off the back of globally high gas prices.
The cap was about “ensuring a stable and well‑functioning gas market for the benefit of Australian households, industry and manufacturers”.
Australia’s aviation markets, domestic and international, are anything but well-functioning, given the entrenched position of Qantas, the lack of capacity and overpriced fares on international routes, and the damage being inflicted on industries that rely on aviation.
But those markets are crucial to the Australian economy, just like energy markets are. With aviation prices still feeding into inflation, the case for gas industry-style price caps to address profiteering by Qantas is a strong one — indeed stronger than in gas, where international events have seen gas prices fall substantially since 2022. The lack of a functional aviation market will persist over the long term.
Nor would it require the expenditure of much political capital. Qantas is probably the most despised — certainly the most complained-about — company in the country. The gas giants at least provided their product, albeit at overly high prices: Qantas’ performance is abysmal, and it devotes substantial efforts to trying to undermine its competitors. Its management has zero credibility with the public.
The only thing lacking is the political will, and the far too cosy relationship between Labor and outgoing CEO Alan Joyce. Labor has some real explaining to do about why it won’t take any action against Qantas, let alone action to deliver a better functioning aviation market.
As does the ABC, apparently; yesterday on ABC RN Breakfast, presenter Patricia Karvelas told a spokesperson for Virgin that the government’s was protecting Qantas because it’s our ‘national carrier’. She used those exact words. The Virgin rep pointed out that Qantas is in fact privatised but Karvelas did not acknowledge or concede the point.
Would Karvelas (& others) refer to the Commonwealth Bank as ‘our national bank’ just because it was once government owned? Certainly not. Coincidentally, the Commonwealth Bank & Qantas were privatised around the same time (1996, 1995.)
The untold millions Qantas has cannily spent on emotive advertising campaigns (I Still Call Australia Home) keeps the misconception as ‘national carrier’ going.
49 % Chinese owned aint it ? I read that once
It must be true then
In fact it’s more than 60% owned by US investors.
Foreign shareholding in Qantas is limited to a maximum of 49%
yep not too good on Mastermind was she that one ?
Nothing “PK” says (and doesn’t she love to be called that) would surprise me. She and Speersey represent a slide in ABC quality as it panders to the Murdoch press from whence both came.
Karvelas is a bit of a joke these days. Self-promotion. The Greek Stan Grant.
Reality and facts are not Karvelas’ forte – her favourite words are I, Me, My.
Everything else is purely incidental which makes any program she is on a personal performance without regard for subject or audience..
If one suffers from the delusion that Qantas has any interest in the ‘national interest’ that can be finally cured by watching Alan Joyce’s belligerent and dishonest performance at the parliamentary enquiry last week. He shameless defends predatory capitalism in defence of Qantas shareholders and he is clearly supported in that attack on Australian society by the Qantas board.
The neoliberal sanctity for private business must end.
If the government gives taxpayer revenue to any private business, the government should mandate that as either a loan or as the purchase of equity in the parasitic rent-seeker. If that approach was taken with the car industry, we may still have a viable components manufacturing industry and a basis from which a domestic EV manufacturing industry could be grown.
And if the government owned $2.7b equity in Qantas, vermin like Joyce may come to understand the ‘national interest’.
Further to my previous comment, Labor’s refusal to allow Qatar Airlines to expand operations, expressly to protect Qantas’ profit and capacity to plunder Australian society is despicable. Just not being Morrison is way short of what is needed.
yep true that
give this person a prize – do you wanna run the joint ?!
Might I correct a slight misconception……………….
……….Joyce couldn’t give a rat’s arse about Qantas shareholders.
His sole interest lies in just how much he can extort from the carcass of a once-mighty airline before it finally tips over.
Stephen Jones’ dumb remarks about Qantas’ profitability being in the “national interest”: It used to be, When we all owned it. Now it’s privatized, and the shareholders and bosses are profiting from exploiting the workforce and squeezing the customers.
Yep they think We are idiots – they are cruel and inept
Stephen Jones has always been an ineffectual fool. I remember him from his time as leader of the moribund CPSU. Selling us down the river in the mid-late 2000s. One of the architects of ‘WorkChoices lite’ – the (un)Fair Work Act. Knowing him and seeing him operate as I do it’s no wonder his son is a mess. And knowing the NSW Greens as I do I know they will never take Albo’s seat off him, not Jones’s in the Illawarra. Both would be ripe for the taking but Max Chandler-Mather is shaping up as the Konrad Adenauer for the Queensland Greens and perhaps the Australian Greens but due to the confederate nature of the AGs, no one can put up decent candidates in the State of NSW for the Greens.
Every government owned turned into private has been a miserable failure; utilities, phones, airline, coal all the things that belonged to the people- gone. Huge failure.
yes of course because the only object is profit – Why dont we own it and push the profits to us? The lie is that all public owned organizations are wasteful !? That was due to lazy govt and slow dept failures now its that and were paying pirates to leave our kids credit slaves and indenture older women into angel careers
Yep. And thank you Keating and Hawke for getting that ball rolling
Qantas is acting in similar fashion to Telstra following its privatisation, both running all sorts of anti-competitive scams while enjoying the protection of the Feds; Telstra’s pole position was a major factor in the botched NBN rollout. Combining the worst features of private and public businesses is the true legacy of privatisation.