I just had dinner with my father, and we managed get a whole 30mins talk about the dilemma that Qantas are currently having.
Firstly, my father is an accountant. So he thought what Alan Joyce was doing was spot on. I think he's both right and wrong.
The way I see it,
Qantas Long Haul is loosing money. Why? Let's quote AJ himself..
No doubt, Australian's are a little bit proud of Qantas, but a shrinking number of people are actually buying a ticket
Example... Our Average Australian... Let's call him John Smith.
John is an average citizen, he flies to Europe once a year in Economy. He jumps onto the internet to book his annual trip to London:
Singapore - $1800
Emirates - $1850
Qantas - $2100
John isn't stupid, he books with Singapore and is on his merry way to London. Qantas is competing in a global market, and we need to think about that more.
If I look around my house, most of it is probably made in china. Australian manufacturing no longer exists (Well, the vast majority) because there are others overseas willing to do it for less, which is why other airlines overseas can offer much lower fares compared to Australian airlines. Unfortunately Qantas has a significantly higher cost base compared to other foreign airlines. This is due to our higher labour costs and higher standard of living here.
In my eyes, there is two things that Alan Joyce can do to save Qantas International,
1. Turn into another Asian carrier, move most of your work offshore, become a 'global' airline and lower your fares as a result of your lower cost base and compete directly with other airlines based in Asia and the Middle East.
2. Take Qantas back to the days when we were all proud of it, most importantly, when average Australian's were proud of Qantas. Control the spending while keeping everything on Australian soil. But, make Qantas an appealing, Australian airline in which we are willing to pay 100-$200 more to fly on, knowing that we are funding an Australian airline, with Australian pilots and our maintenance done here. Create a sense of enthusiasm towards the airline, so people are proud of it, and proud to say "I'm flying Qantas home". People are willing to do that, if they know it's something special.
I for one hope they do the second option.
Qantas need to become 'our airline' again, the one we are always proud of, the one that people are willing to pay a bit extra for simply because it's Qantas. It needs to become a premium airline again, with nice aircraft, nicer crew and improved service, then people are going to be able to justify the extra money required to fly Qantas.
My two cents.
Liam.