Thursday, December 14, 2006

Unsentimental about Qantas

Thirteen years ago Labor’s Deputy Prime Minister and Minister for Finance Kim Beazley stood in front of a Jumbo on at Sydney Airport and declared that all Australians would have a chance to share in the success of their own airline.

He launched an emotion-laden advertising campaign fronted by a raft of celebrities not normally thought of as investment advisors, among them Kate Ceberano, James Morrison, James Blundell, Hayley Lewis and Ian Kiernan.

As he put it, they were well-known Australians talking about “the chance that all Australians have to invest in Qantas, one of our great national companies”.
It made the idea of privatization not seem so bad. Qantas would still be publicly owned....

Not Now. If, as is inevitable given the offer price, enough Qantas shareholders accept the takeover offer in February Australia’s national carrier will become truly private. It won’t be possible to own any of it and it will be pretty hard to find out what it is up to. The new owners won’t need to report to the stock exchange or hardly anyone else.

If it had been known this was how things would turn out back in 1995 Kim Beazley would have found it far harder to sell the concept of Qantas going private, no matter how many celebrities he coaxed into miming “I still call Australia Home”.

He and his successors as Ministers would have found it hard to vote as they have done repeatedly to keep out competitors to Qantas on international air routes. Most recently a year ago Singapore Airlines was blocked from flying between Australian and the US in what was believed to be the national interest.

It wasn’t a decision taken in travelers’ interests; it was a decision in the interest of Qantas and its 100,000 Australian shareholders, most of them mums and dads.
Government MP Bruce Baird is a former Chief of the Australian Tourism Council and until now one of Qantas's great supporters.

He has argued strongly for foreign airlines to be kept off Qantas's routes.
Last night he put the airline on notice that he might do so no longer.
``If Qantas becomes just another company, and for instance start moving jobs offshore, all bets are off,'' he told me.

The new Qantas will find it hard to play the patriotism card. The government might start acting in the interests of travelers instead.