Qantas.con

History, they say, repeats itself. Let's hope not.

Almost eight years ago to the day, Tansy Harcourt - in The Australian Financial Review of 9 December 2005, PM defends Pacific route, quoted Australian Prime Minister, John Howard:

"[a]ll the arguments are not in favour of changing the policy [regarding access to the trans-Pacific route]. There are very strong arguments put by Qantas [QF] that the current policy, at least in the near term, should be kept. I believe in the value of competitive tension in any market. But you have got to be absolutely certain that each participant in the market is coming from the same launching pad as far as government support and so forth is concerned."

In short: QF 1: Australian Consumers 0.

Two years earlier, in the Singapore-Australia Free Trade Agreement, trade in air services was not liberalized. QF maintained the lion's share of passenger traffic on many routes including the highly profitable trans-Pacific route from Sydney to LAX.

Again: QF 1: Australian Consumers 0.

The Australian government, like a broken record has long droned that it will liberalise Australia'sinternational air services when it is in thenational interest to do so.

Reprehensibly, Coalition and Labor politicians cunningly and willfully confuse the nation's aviation interest with the interests of nation's carriers. Today it seems to be Labor's Anthony Albanese's turn. In years gone past it was the National's John Anderson, who while voted in as the Member for Gwydir acted often like the Member for Qantas.

On Wednesday 9 December, it was Qantas CEO, Alan Joyce's turn to panhandle.

He hit the print media lobbying for government assistance.

Doing his best for his shareholders, especially the six who collectively own 77% of the near monopolist airline, Joyce was a tad economical with the truth.

He raised several issues. Let's look at a few.

1. "Since 1995" he screeched, the airline has performed strongly with no subsidies or concessions. Hmm. What exactly do you call leaning on the Federal government when negotiating the 2003 Australia-Singapore Free Trade Agreement to grant QF an unfair commercial advantage by omitting air services from the suite of products and services for which there would be no anti-competitive barriers to trade between the two allegedly free trade partners?

Eschewing free trade in aviation services within the FTA means Singapore Airlines was and remains forbidden from offering Australians the choice to fly, say, directly from Sydney to LAX or Miami or JFK, a situation that would no doubt scare the heck out of QF and squeeze its margins, forcing it to raise its game. After all, it would then be competing head on with an airline that charges similar prices to itself but offers a level of customer service that even other airlines, including QF, can only talk about.

Case in point: comparing airfares a few weeks ago for travel in November to LAX, I opted for China Southern's back to back A380 flights (Sydney to Guangzhou and then to LAX with a transit in between) even though I so did not look forward to the 26 hour ordeal in a 506 seat sardine can. I did that so as to save a fistful of dollars on the QF (SYD-LAX direct) fare. A very pleasant surprise was that the customer service on China Southern, which even with the language barrier very much outshone that of QF. Not that it's hard to do.

2. Joyce asserts, "Qantas receives no preferential treatment on airport access or government travel". The fact that frequent flyer points are offered with some government travel surely qualifies as an incentive for bureaucrats, who can – in the absence of a rigorous departmental oversight, choose QF and thereby socialise the cost of the ticket while privatising the frequent flyer points (i.e. by keeping them for themselves).

He adds that "for nearly 20 years, (QF) has (been) handcuffed by the Qantas Sale Act, which limits the company's access to foreign capital". The claim that QF is handcuffed to the QSA is as deceptive as a chap who moves homes to live under an existing flight path only later to complain of the noise. The handcuffs were on from the get-go. Live with it.

3. Qantas, he pleads is not looking for protection from the free market. Yet he rails against the foreign ownership of Virgin Australia (VA). The fact is that only foreign ownership and expertise could produce a credible competitor to QF. We have all seen how depleted Australian pockets and a lack of experience have fared in fighting a Goliath like QF: Ansett, Tesna, Compass I, Compass II amongst others are all dead and cremated. Both the pools of Australia's capital markets and local private sector expertise are too small and too shallow to yield any semblance of competition to the near monopolist that has over 66% of the domestic airline business and yet pleads poor.

4. "Qantas", Joyce proclaims, "is here to make a profit, deliver returns to shareholders and serve Australia as its national carrier; Virgin Australia's three biggest shareholders are focused on the interests of Singapore, Abu Dhabi and New Zealand".

Here's a heads up Mr Joyce.

Few outside your head office care a hoot if VA is financed by emirates that run budget surpluses (due to perhaps their never ending petrodollar income) or if VA is financed by incredibly rich camel herders or race horse owners who have nothing better to do with their United Arab Dirhams than dump cheap seats on Australia's domestic market. The bulk of consumers care only about the price/quality decisions they make every time they decide to fly. And your airline's recent announcement of lousy first half-year results lends credibility to the argument that on a price/quality trade off, QF is out of touch with reality. Its product is simply overpriced and low end.

5. Qantas is not seeking an anti-competitive handout or bail out, Joyce states. "We are talking to the Abbott government because legislation and regulatory decisions (the Qantas Sale Act, the Air Navigation Act, and decisions by the Foreign Investment Review Board) have created the uneven playing field we find ourselves playing on. We are seeking a fair go".

True Mr Joyce, you are not asking for a cash bailout to help your mismanaged, overpriced airline. You are far too bright to be that crass. No, you want changes that will suit QF to a "T".

Rather than dance around the issue Mr Joyce, please tell the Australian people how you want to continue to pollute the national debate by pretending that what's good for Qantas is also good for Australians. It just isn't.

So what is it that you want the taxpayer to pay for, directly or indirectly?

1. Exemptions from some regulations?
2. Application of new regulations, favourable to QF?
3. A fatter slice of the Federal government's travel pie?
4. Favourable legislation?
5. Repeal of legislation?
6. Obstacles to current market participants growing their business?
7. Obstacles to potential carriers entering the market?
8. Taxpayer loans?
9. Taxpayer gifts?
10. Easier access to credit?
11. Access to cheaper credit through Federal loan guarantees?
12. Taxpayer purchase of equity in QF?
13. Lower tax rates?
14. Hyper accelerated depreciation allowances?
15. Cutting and pasting the QF friendly 'no free trade in air services'approach from the Singapore-Australia FTA into the Korean, Chinese and UAE FTAs under negotiation?

Mr Joyce's job is to go into bat hard for his shareholders. On that score there is no argument. He is right to advocate one or more, or hey, even all of the above when he or his hard working lobbyists scratch backs in the corridors of Parliament.

What is demanded however of politicians, especially those in government, is to say 'no' to any solution, legislation, regulation, idea, concept, suggestion, innuendo, action or inducement that will corrupt the economic system in favour of so few, at the cost to so many.

Simply put, on behalf of the Federal government, Treasurer Joe Hockey cannot stand for two causes at the one time.

He can stand either for QF's 6 major shareholders (and the 124,000 small fry), or he can stand for the 23 million Aussies who are not shareholders.

He cannot possibly do both.