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Saturday, 20 August 2011

Hand-wringing over Qantas expansion will be forgotten

Here are two images showing air transport in action. At the top is a Qantas aeroplane, the kangaroo emblem on its tail significative of a solid, safe Australia. As Matt O'Sullivan describes it in his story today in Fairfax papers, Qantas is "linked to the national identity" in a way that many other companies are not. While Qantas no doubt enjoys some market advantage as a result, the link also brings with it the distinct disadvantage that changes to the way Qantas operates are always greeted with a chorus of jeers, as has happened in the past week or so since the airline announced that it would establish a premium carrier in Asia and extend Jetstar's reach in Japan. How will it pull off the move? What about jobs lost in Australia? Asia is already catered to. Will the brand become diluted? Is the sky falling in? Sacrilege!

Unfortunately for those in the public sphere who lambast the current Qantas plan, the second image shows the reality in air travel. It's a crowded marketplace and companies who want to compete and survive must adapt to changing circumstances. Asia's middle class is growing year-on-year. Australia is fortunately situated next door to Asia. So why is the Qantas expansion of its brand to the region seen as a threat to national pride, or something even less appetising - as a threat to a national emblem that represents something essential about Australia? Alan Joyce, the airline CEO, frames the argument in dire terms when he compares the weakening situation now faced by Qantas with other airlines. Ansett went broke, he says, and we don't want to go down that route. While naysayers conjure up a range of emotionally-charged reasons why Qantas should stay "truly Australian", men and women like Joyce will be mindful of the weakened condition of such a premium carrier as Japan Airlines, which has not been able to expand its operational base in a way they now propose and which is in deep trouble.

In Southeast Asia, Qantas' competitors must be wringing their hands in anxious expectation that their prestigious Australian competitor will take customers away. Everybody knows that Qantas has a gold-plated safety record, and the airline's managers will be packaging their marketing messages to profit from that fact. Exporting Qantas operational systems to Asia could be a way of improving airline safety in the region generally, and the challenge for the company's management will be to ensure that nothing gets in the way of the brand's zero-fatality record enduring for another 90 years.

Ultimately, the argy-bargy we're being exsposed to will fade from memory as long as that safety record is unblemished. Australians will be even prouder of the flying kangaroo if they can see it taking customers away from major competitors like Singapore Airways and Cathay Pacific in the markets where these companies now dominate. We anticipate seeing aerial photographs of Qantas planes skimming over the towers of modern Shanghai when, one day, Qantas finally cracks the big one: China's massive market.

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