Qantas

I really do wonder if there is a genuinely free-market airline out there in the world.

There’s just so much government involvement, from cheap financing in Asia, to cheap fuel in the middle east, to the control of carriers that can fly certain routes associated with national interest (everywhere).

One thing is for sure, this is a market that is not free of government involvement that impacts airline profitability and competitiveness.

So, to Qantas, I just flew back in economy on a red-eye from Singapore. This will not happen again.

It was a very old aeroplane lacking a re-fit. The video display was about the size of my Nexus 6 but with far fewer pixels. The non-touch controller took up valuable elbow space. The fat old couple in front of me actually flopped back far further than they should suggesting genuine fatigue in the mechanicals of the seat. Half of my foot-space was taken up by one of those old school video boxes. And the seat cushioning was worn out to the point of non-cushioning – both my elbows and my arse suffered from pins and needles.

And yet the plane was full, suggesting some useful government control of competition on the Singapore-Sydney leg. Given an open market this plane would have been empty.

I get it. Qantas is barely profitable and can’t afford to upgrade its fleet. Part of the lack of profitability is due to unfair competition, some due to high wages – a leftover over of a former protected domestic market with unionised labour, and partly it is due to corporate incompetence.

And all those superfund investments into Qantas – they demand dividends. And cash is what the company should be re-investing, not handing out to shareholders. Especially when they are flying aerial versions of the Morris Minor.

I suspect they need to invent a whole new business model. They could, for example, follow the time-share model and sell their working capital (the planes) to their customers in exchange for cheap travel. Imagine the financing benefits of getting all that money ahead of time?

Or they could just stop being an airline altogether and become a brand company. They could then white-label operations from some middle eastern airline on a pay-as-you-go model.

Whatever. They have to do something because struggling along year by year in zero profit model with crap planes and unfair competition looks to me like a recipe for a long painful death.