Virgin's war chest to attract the lucrative corporate and government passenger sector

[Plutonus]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

To me, this response from Qantas is a bit childish (and so is virgin's legal threat), but really just showing how worried they are of Virgin's owners' deep pockets, and how it will affect their bottom line and shareholders.

This isn't about the passengers, but well done to Qantas for spinning it in such a way. Always handy when you can wrap something up in an equality and 'fair go for all' bow.

 

[grubbidok]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

QF are just pissed that VA have found a way around restrictive Australian government guidelines that works better than their 'Orange Cancer' approach. They're just moaning because while they faffed it VA is finally getting their's to pay off. This is rent-seeking pure and simple

 

[pauly7]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

QF are just pissed that VA have found a way around restrictive Australian government guidelines that works better than their 'Orange Cancer' approach. They're just moaning because while they faffed it VA is finally getting their's to pay off. This is rent-seeking pure and simple

Haha funny post but with respect, it is a whole lot more complicated than that for reasons and circumstances already stated and discussed in this thread.

 

[grubbidok]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Haha funny post but with respect, it is a whole lot more complicated than that for reasons and circumstances already stated and discussed in this thread.

Agreed, it is a bit more complicated. And I would agree that VA are probably being very creative in their interpretation (but if you don't like the rules you need to change the rules, not punish the people who know how to make them work).

However, it can't be denied that a lot of this is simply about both parties flopping it out to see who's bigger. I would suspect the timing of this announcement to coincide with a new more nationalistic government and discussion of other sensitive foreign ownership issues (Graincorp, Huawei) is no accident, QF know this argument carries particular currency at the moment and can be used to bludgeon their competitor more effectively than it may have before.

QF complaining about the perils of foreign ownership and harping on about the importance of having a 'national airline' is a little bit hypocritical when what they ultimately want is the ability to be foreign-owned themselves, IMHO.

I personally couldn't care who owns the airline, as long as it runs properly - neither VA nor QF (as a privatised entity) have cared about the 'national interest' since day dot anyway, so foreign ownership is unlikely to change anything.

 

[openseat]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

QF have launched a petition:

Qantas

A little desperate!

 

[mono88]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

To me, this response from Qantas is a bit childish (and so is virgin's legal threat), but really just showing how worried they are of Virgin's owners' deep pockets, and how it will affect their bottom line and shareholders.

.

It doesn't matter how much money you have. If you don't spend it well it will just be splashed up against the wall.
No clear evidence yet that either QF or VA would know how to spend any large cash injection to enhance shareholder value, whether $350 m, $1bil or any sum you can think of.

 

[pauly7]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Looks like all QF's lobbying and campaigning has paid off - pretty strong words from the Federal treasurer. Very interesting times!!



Hockey flags lifting Qantas foreign ownership limit

Federal Treasurer Joe Hockey has flagged either lifting the foreign ownership restrictions on Qantas Airways or providing the airline with government support as he acknowledged it was no longer operating on a level playing field with its domestic rival Virgin Australia.



http://www.afr.com/p/national/hockey_flags_lifting_qantas_foreign_2kKsGSvuryS2M3S5mJXXVK

 

[pauly7]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

A little desperate!

Seems to have worked...!

 

[777]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Looks like all QF's lobbying and campaigning has paid off - pretty strong words from the Federal treasurer. Very interesting times!!

Of course the irony is that lifting the Qantas sale act simply allows Qantas to do the every thing it says shouldn't be allowed to do. Wouldn't be surprised if some choice quotes get dug up as the campaign heats up.

Having said that, i've no problem with lifting the QSA but thought campaigning against foreign investment in Australian airlines was an odd way for QF to go about it.

 

[medhead]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Of course the irony is that lifting the Qantas sale act simply allows Qantas to do the every thing it says shouldn't be allowed to do. Wouldn't be surprised if some choice quotes get dug up as the campaign heats up.

Having said that, i've no problem with lifting the QSA but thought campaigning against foreign investment in Australian airlines was an odd way for QF to go about it.

That irony is certainly lost on Joyce. Is he really arguing the "National" carrier should be allowed to be taken over in the same way as virgin by foreign governments and implement a loss making strategy.

 

[Jousams]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Whilst I totally believe that the QSA should be lifted, Something about having a company with 63-67% market share just doesn't sit right.

Ideally we would have 3 airline groups in this country, but that's unlikely.

I would however like to see govt organisations progressively move towards splitting their travel 50:50 QF/VA so we could hopefully have two strong groups (but still in a somewhat competitive environment)

 

[anat0l]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Looks like all QF's lobbying and campaigning has paid off - pretty strong words from the Federal treasurer. Very interesting times!!



Hockey flags lifting Qantas foreign ownership limit

Federal Treasurer Joe Hockey has flagged either lifting the foreign ownership restrictions on Qantas Airways or providing the airline with government support as he acknowledged it was no longer operating on a level playing field with its domestic rival Virgin Australia.



Hockey flags lifting Qantas foreign ownership limit

Just scrap the QSA and be done with. The rest is redundant and for someone like Joe Hockey who seems very much capitalist and far right, the thought of providing government support to Qantas would almost be a cardinal sin.

Whilst I totally believe that the QSA should be lifted, Something about having a company with 63-67% market share just doesn't sit right.

Ideally we would have 3 airline groups in this country, but that's unlikely.

I would however like to see govt organisations progressively move towards splitting their travel 50:50 QF/VA so we could hopefully have two strong groups (but still in a somewhat competitive environment)

Why is a 66% market share in an essentially 2-player market unhealthy or "wrong"? That is just a figment of the current competition climate.

Had it been 66% with a bunch of 10%-wielding players, that may be a cause of concern but then you'd ask yourself why is the big shot doing so well and the others not.

Especially with VA having aggressive backers and concept-proven that they can wrest market share away from QF, there's little risk here that VA is in danger of exiting the market, let alone its current market share against QF proving that the market is unhealthy.

I wouldn't mind a new entrant, but I really think they will have a tough time unless they can offer something significantly unique. It'd basically be doing something like JB did to VA, except on steroi_s, really fast and with a lot of finance in the wings (pun intended). Not likely any time soon. And let's not forget, a new entrant would be to offer more choice, not to "seed" or "repair" an "unhealthy" market (there isn't one). And lower air fares? How much lower can they possibly go?


Finally, didn't the government travel policies change from largely QF travel to a more pragmatic or economics-based selection? (Wasn't this instituted during the Rudd era? There was even a discussion of that on AFF)

I know some people say that workers in such contracts can "rig" the system in order to fly one airline or the other, but you can't possibly blame that on the market players.

 

[dk4]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Why is a 66% market share in an essentially 2-player market unhealthy or "wrong"?

A dominant player can use that strength to manipulate the market, you see QF doing that right now by flooding the market with double the capacity of VA's increase.

Markets basically fail as a mechanism for effectively and efficiently managing supply when a single player has that sort of power, because through many different mechanisms they can ensure that other players can't compete effectively, especially in an industry where the barriers to entry are so high.

The effective goal of a free market system isn't for competitors to struggle to reach a single winner, like a sports competition, that would leave us with monopolies everywhere. So, when one company becomes too dominant, the government (i.e. "we the people") steps in to level the playing field, to ensure that the game continues (and isn't one sided), so that "we the people" get the best distribution/pricing/availability of goods and services to suit our needs (through energetic competition).

 

[anat0l]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

A dominant player can use that strength to manipulate the market, you see QF doing that right now by flooding the market with double the capacity of VA's increase.

And what would stop VA's stakeholders from investing money in it in order to match or "out-flood" QF in the market?

The effective goal of a free market system isn't for competitors to struggle to reach a single winner, like a sports competition, that would leave us with monopolies everywhere. So, when one company becomes too dominant, the government (i.e. "we the people") steps in to level the playing field, to ensure that the game continues (and isn't one sided), so that "we the people" get the best distribution/pricing/availability of goods and services to suit our needs (through energetic competition).

The more that regulation has a hand in competition, the more it detracts from a free market system. You might as well re-regulate the industry, a la a hark back to the two-airline system of the days of yore.

The concept of "too dominant" in a free market system is a farce. If a competitor is getting "too dominant" then the other competitors are not trying hard enough or deserve to die. VA have already proven two concepts: (1) the market can exist with at least two major players (through the establishment of Virgin Blue and survival of it even pre-JB era); (2) they can wrest market share from QF (JB era and established continued pressure we see today). So this is hardly an unhealthy market, and we're not even a true free market as it is right now.

You can't have it both ways. If the people want their "active competition" and best products, then a regulated market is the only way. Pretending otherwise is only promoting an unhealthy, farcical and hypocritical regime. Free market dynamics are dictated by the people who will decide who deserves business and who doesn't. If that means the demise of a competitor, it is because the people decided. The side effect of that on the market and prices is purely brought about by the people.

Just as in a sports competition: competitors aren't "loaded" in order to account for their differing physical abilities in order to make a more "exciting" competition. They all start at the same blocks, they all run the same distance, and they all are rated on the same basis.

 

[amaroo]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Just scrap the QSA and be done with.

+1....1992 was an awful long time ago - things change.

 

[777]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

And what would stop VA's stakeholders from investing money in it in order to match or "out-flood" QF in the market?

Haven't we just witnessed an attempt to stop exactly that? VAs shareholders shave reached into their pockets and QF have run screaming to the government to ban it.

 

[anat0l]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Haven't we just witnessed an attempt to stop exactly that? VAs shareholders shave reached into their pockets and QF have run screaming to the government to ban it.

So what's your point? QF is not the government or the decision maker. They've screamed loud; doesn't mean the government has to do what QF says. No matter what amount of screaming QF does, in principle QF cannot stop VA from doing what it wants to do. Yell, cough, moan, promote, petition, lie to the public, whatever - there is nothing that Qantas can do to stop Virgin in its venture.

Joe Hockey expressed "concerns" but he's just Joe Hockey and if he follows QF's whim then someone should call him out to be a hypocrite and gutless (not that he already is, but that's beyond the point). Joe Hockey could do a favour by moving that the QSA be scrapped. That gives a true free market and level playing field.

I think people (or the government) has to get over that Qantas is in the Australian core national interest. It's not - it's just another company.

 

[777]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

So what's your point? QF is not the government or the decision maker. They've screamed loud; doesn't mean the government has to do what QF says. No matter what amount of screaming QF does, in principle QF cannot stop VA from doing what it wants to do. Yell, cough, moan, promote, petition, lie to the public, whatever - there is nothing that Qantas can do to stop Virgin in its venture./QUOTE]

In practice I think you're right. But in order for us both to be right we are both assuming that qantas will fail at what it is trying to do. It is clearly trying.

 

[anat0l]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

In practice I think you're right. But in order for us both to be right we are both assuming that qantas will fail at what it is trying to do. It is clearly trying.

Try as they might, even if they "succeed", that is no credit to them except the idea. The real action (blame and credit, as it may be) will ultimately be at the decision-maker, viz. the government.

Sure, if it turns out that way, Qantas will pat itself on the back and all, but it never had the powers to bring about that action in the first place, so it should stop pretending that it can wield that action. Similarly, the population should realise that it's the government bending on a QF whim, not QF being the decision-maker.

In practice, QF will appear to be looking like the one who is ultimately responsible for any action it succeeds in bringing (if any) but due to naive associative logic (which seems to work brilliantly in bamboozling the majority of the population); at the very least QF will be brushed and tarnished (as the case may be) in the consequences of the action.

 

[777]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Try as they might, even if they "succeed", that is no credit to them except the idea. The real action (blame and credit, as it may be) will ultimately be at the decision-maker, viz. the government.

Sure, if it turns out that way, Qantas will pat itself on the back and all, but it never had the powers to bring about that action in the first place, so it should stop pretending that it can wield that action. Similarly, the population should realise that it's the government bending on a QF whim, not QF being the decision-maker.

I suspect the entire PR/ Lobbyist/ Government relations industry would disagree with this. Governments don't make decisions in a vacuum they make them in response to public/ financial/ political pressure and the exertion of positive and negative influence a lot of the time. If they change policy in this area it won't be because they woke up one morning and thought it was a good idea it will be because the protagonists put pressure on them.