COMPETITION FOR QANTAS

Had former CEO Geoff Dickson, his worthless board of directors and kiss-ass management team got their way and sold the company to a bunch of private equity thugs who were 100% financing the deal, Qantas would today be out of business. Why? Because if it weren’t for their strong balance sheet, there would be no way it could have tackled the forces of competition that it now faces. Delta is about to start daily flights to Australia and this will cut hugely into Qantas American business as right now Delta through an interline agreement place 200 bums per day into Qantas seats. Virgin, only after operating one month on the North American route, is expanding to daily flights LAX-SYD and LAX-BNE.

Never in the history of aviation between the two countries have fares been so low and still flights are departing half full. Showman, Richard Branson, may have bitten off more than he can chew here. First of all, he is a bit of a Donald Trump. He doesn’t exactly use his own money and that being the case, his backers may have a different view from him into how much of a loss the airline can sustain before they will want to pull the pin. With Delta, they are so used to bankruptcy, so it is a slightly different case. Once upon a time Continental and Pan Am (United bought the Pacific routes in the eighties) ruled the skies to the South Pacific and Delta, now the world’s largest carrier, feels it can pick up that mantle once again. American carriers have an advantage that reorganizing in bankruptcy is a “piece of cake” so the decision for Delta to fly where they have never done so before was done on the basis that commercial considerations obviously took second place. If it fails, bankruptcy is an easy option out!

My belief is Virgin will not last very long and Delta, just like Continental, Northwest and America, will pump a fortune into promoting the route only to fail like their three predecessors. Qantas will prevail, because it possesses the image of the most successful international regional carrier in the world, something that Dickson a couple of years ago set out to destroy.

Tags: BNE, Continental, Delta, Donald Trump, Geoff Dickson, LAX, PanAm, Qantas, Richard Branson, south pacific, SYD, United, Virgin