Friday, June 22, 2012

First Air Canada now Qantas.

It was Air Canada claiming that additional frequencies by Etihad and Emirates will cause the shedding of 10,000 jobs. Now it is Qantas complaining to the government that they will go under if Etihad is allowed to raise its stake from 3.96% to 10% in Virgin Australia. The reason is they might undercut Qantas by reducing domestic fares.

If Etihad and Virgin Australia wanted to reduce domestic fares they can do it anytime and without an equity stake. Qantas is complaining against "government owned" Etihad and Singapore, at least Emirates was spared this time.

Qantas suffered from rising fuel prices, labour strife that has grounded the airline for two days and of course A380 troubles. Qantas warned of a slump in profits. These problems are not the work of competitors. Still Qantas claims its international operations are suffering because they are being undercut by Singapore and Etihad.

The real issue for Qantas is for the government to remove the limit on foreign investment in the airline imposed under the Qantas Sale Act which dictates that the airline remains majority Australian owned.

It appears that legacy carriers find it easier to blame their problems on high visibility airlines like Etihad and Emirates than finding solutions.

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