Keeping QANTAS Australian

"I still call Australia Home" Source: Flickr

The flying red Kangaroo on the back of an aircraft has signalled the iconic Australian brand of QANTAS for decades. It is seen as a patriotic institution; the airline that takes our athletes off to the Olympic games and the airline that "still calls Australia home". Though there is something to be said about the cost of keeping that iconic national image. Australian financial support (and management) of the airline isn't making it competitive and something needs to change.

The reason behind QANTAS' turbulent troubles is complex. A high Aussie dollar, more international and domestic competition, high fuel prices, Australian wage conditions, questionable management and foreign ownership restrictions all come into the mix. So what are the options?

1. Government Assistance. Bailouts, government assisting with debt, buying a stake in the airline; the list goes on. It's an easy option to sell to the public but it is not a long term solution. The government should only intervene in exceptional circumstances. If the airline can't keep afloat (or have a sustainable business model) without government assistance for 'tough times', it will never be a business that is self sufficient. Every time businesses claim they are experiencing 'tough times' I question when they were not experiencing tough times. Being in business is always tough. Get used to it. Business is a dog eat dog world.

2. Changing foreign ownership laws. It doesn't really matter if the airline is mostly owned by a foreign corporation. If the government changes the QANTAS Act so that it requires the airline to still be Australian (ie, employ Australian workers, have flights within Australia) the airline will still be Australian. Vegemite is owned by American giant Kraft, though we still cling to Vegemite as being the iconic Aussie spread. This is the most favoured option, but if the government is seen to be selling off the Red Kangaroo, it could result in some voter backlash.

3. Do nothing. Some call it 'minimal government', I call it lazy government. The QANTAS Act imposes  heavy regulation on a large Australian business. If that business is cutting 1000 + jobs, the government needs to pay attention and provide some assistance, or heavily justify why it should do nothing.

4. Assist the newly unemployed. If you don't care about the business itself (a risky thing to do!) care about the newly unemployed QANTAS workers. Help find them employment in new industries. Business become lazy with handouts. Tied handouts to the unemployed can act as a great incentive to encourage them into new fields of work. However, it isn't a long term solution if more jobs are to go in the future.

More options than these 4 do exist, though by our calculations, they're the most probably. It will be interesting to see in the coming weeks what actions the Government and QANTAS take to stabilise the QANTAS business model.

Links:
Tony Abbott cool on handouts for Qantas - SMH
Can Qantas fly without strings? - The Age
Tony Abbott says ditching Qantas Sale Act restriction on foreign ownership not 'unreasonable' - ABC Online