Qantas flies into Asia's century
SHAREHOLDERS have welcomed the announcement by Qantas of its strategy to tap the lucrative Asian market, and indeed this is the time for boldness. While it continues to dominate Australian skies, the national carrier has been warning for some time that its international operations do not turn a profit.
SHAREHOLDERS have welcomed the announcement by Qantas of its strategy to tap the lucrative Asian market, and indeed this is the time for boldness. While it continues to dominate Australian skies, the national carrier has been warning for some time that its international operations do not turn a profit. SHAREHOLDERS have welcomed the announcement by Qantas of its strategy to tap the lucrative Asian market, and indeed this is the time for boldness. While it continues to dominate Australian skies, the national carrier has been warning for some time that its international operations do not turn a profit.Competition in the global aviation industry is fierce, with the emergence of many low-cost carriers. This is good news for travellers, who have perhaps never enjoyed such bountiful competition for their travel dollar. But it's been bad news for Qantas shareholders who have watched their share price struggle. For them, the present way of doing business is not working; time to try something new.And that, under the stewardship of the Qantas chief executive, Alan Joyce, is to head north. Qantas will establish two Asia-based airlines, one lower-cost carrier based in Japan and one premium carrier in a yet-to-be determined Asian location, perhaps Singapore or Kuala Lumpur.Amid the declining power of the United States and Europe, Asia remains the most likely driver of economic growth this century. Indeed, the Gillard government has dubbed this the ''Asian century''. And so it seems appropriate that Australia's iconic national airline should mirror the Australian economy more generally and hitch its wagon to the Asian growth story.But Qantas is not the icon it once was. Declining revenues and cost cutting have caused the slow erosion of its once-proud reputation for customer service. Australians no longer view flying as the luxury experience it once was, but rather something we do by necessity, to get from A to B. Passengers want an airline that operates safely and on time while delivering cheap deals and value for money.The challenge for Qantas is to hit these new markers while also turning a profit. Joyce has a fight on his hands, made no less so by the fractious nature of his relationship with his largely unionised staff. Unions representing pilots, cabin crew and engineers have indicated they will fight planned job cuts of about 1000 positions.It is easy to sympathise with workers who face losing their jobs. And cuts must not come at the expense of safety. But structural changes in the global aviation industry demand that Qantas explore ways to save money. No one's job is made safer when Qantas' international flights fail to turn a profit.Qantas' Asian strategy is a high-stakes gamble, but one that appears to offer the best odds of success. A great change is upon the westTHE restructuring of Qantas and other big Australian service-sector companies is but part of the great shifts in our economy and society caused by the rise of modern industrial nations in Asia. The rush for Australia's mineral and energy resources is starting to undermine our long-standing patterns of human settlement.In the darkest days of the Pacific war, our defenders drew up the famous ''Brisbane line'' within which were then our key cities, industries and resources. The rest was mostly a vast and unproductive expanse across which invaders would have to struggle. Now our strategists would have to weigh in assets such as the Queensland coalfields, the Pilbara iron ore mines, and what - with the $43 billion offshore gas developments around Barrow Island - will be the world's biggest liquefied natural gas industry.Building and running these industries is a huge, mostly temporary workforce (20,000 in the Pilbara alone) who fly in from homes as far away as Tasmania or New Zealand for intensive work spells of two weeks, interspersed with longish breaks.The fly-in, fly-out model worries many. It robs small and remote towns near projects of the investment and business that would otherwise be a spin-off. Families are deprived of their men (in most cases) for much of the year. The workers could be more prone to excessive drinking or drug abuse, or depression. A sleazy camp culture can develop in the absence of families.Some studies suggest it will be a short-lived phenomenon anyway. Much of this workforce is engaged in constructing facilities that will need only a small operating workforce when completed. The law of supply and demand will gradually fill the local housing shortages that make fly-ins more competitive.The limited social studies suggest most workers cope quite well with the routine. Their big pay packets, meanwhile, boost the struggling communities in the south where their families live. For Aboriginal communities, which were devastated by the first iron ore boom of the 1960s but are now much more empowered, the new investment wave offers opportunities as well as dangers.We suspect that gradually a terrain once judged by all but a few non-indigenous Australians as too harsh and subject to climatic extremes for settlement will gradually come to be appreciated, and that the existing string of small towns around the north-west will grow in population and sophistication, just as we've seen with Darwin. Already we're hearing worries expressed that Broome, for example, could become ''another Dubai''. Great change is upon us.