Qantas has shut down and this is front page global news. The dispute — which appears to be about the usual — has now escalated to punish Qantas customers and send a signal to future ones that Qantas may not be reliable. It is, of course, this is the part that is surprising and brings us to wonder whether this was a decision truly in the interests of shareholders. But the dispute is long-running and I couldn’t really glean from the media reports what was really going on.
But here’s the thing: since 2001 and before, Qantas has had an unparalleled position in Australian aviation. It has a 70% domestic market share and a large international one for flights in and out of Australia (especially when you take into account the ACCC approved alliances with BA and American Airlines). The latter monopolistic condition is, of course, the fault of the Australian government, who for decades has resisted continual calls for opening up Australian skies. We can’t even integrate Australia and New Zealand for goodness sake. It is a travesty that harms Australian business and tourism.
Whatever the details, I am pretty sure that this dispute has occurred directly as a result of Qantas’ dominant position. It is that position that gave Qantas workers the desire to improve their conditions and it is that position that has now led to a shut down that truly negatively effects the rest of Australia. Had Qantas had market shares akin to airlines in more competitive markets, the shut down would not have had the external spillovers, publicity and also the ability to shield Qantas — both managers and workers — from personal long-term consequences of such brinkmanship.
So when Australians look for a target to blame for the conditions that led to this, the need to look at successive government decisions that have generated this outcome. And if they want to avoid it in the future, something needs to be done to free up Australian aviation.