March 06, 2014 | Graham

Albanese’s QANTAS ownership own goal

Anthony Albanese didn’t need to make the claim that eight out of the top ten airlines in the world are majority government-owned to make his case out. But he did, and if he was properly briefed he must have known that claim was wrong.

Now he must certainly know that claim is wrong because the ABC’s fact checking unit has done a very comprehensive survey of the evidence.

The highest number of majority government-owned airlines they can find on any top ten list is 5 – and that top ten list is airlines ranked by customer satisfaction.

When you look at any other top ten list, measuring airlines by number of passengers, passenger miles, capacity, profitability, fleet size and number of employees – all much more serious measures of being a top airline, the highest figure they can come up with is 3 (but often 2).

It doesn’t get more definitive than this, but it does get worse.

Here is a list of the majority government-owned airlines from those lists:

Airline  Country
China Southern Airlines China
China Eastern Airlines China
Emirates UAE
Singapore Airlines Singapore
Xiamen Airlines China
Shenzen Airlines China
Egyptair Egypt
Air China China
Qatar Qatar
Etihad UAE
Garuda Indonesia

This list tells us that out of all the top ten airlines in the world, no matter how measured, the only ones that are majority government-owned, with the exception of Singapore Airlines, come from third world countries, one of which is the communist behemoth of China (5 airlines), 2 of which are middle east oil states (3 airlines) and 2 of which are just third world (2 airlines).

To further complicate matters, Wikipedia scores Xiamen Airlines as privately owned.

The list also tells us that the Luddites in the Labor Party are taking as their models dirigiste and corrupt regimes who for the most part can’t provide a reasonable standard of living to their inhabitants.

So when they’re not swooning over European social democracy, they’re wishing us into the company of some of the least politically hospitable regimes in the world.

For my part, I reckon if England, the USA, Germany, France and Korea (to name a few) can run successful top ten airlines without the government owning them, then so can we.

It’s time for Labor to get with the modern program. Under Kevin Rudd and Julia Gillard they claimed to be about the future. That all seems so long ago.


Posted by Graham at 12:57 pm | Comments (4) |


  1. If I understand the current proposal on the table, it is to allow the domestic arm to be sold off to another airline or airlines, with the loss making arm to be retained? [Domestic airlines, Virgin and Rex are around 80% foreign owned?]
    Who would buy it?
    The two most profitable and comparable international airlines appear to be Singapore air, and the Emirates, both state owned, and therefore not necessarily burdened with a comparable tax bill or comparable debt service obligations!
    The only private models that can compete with that model, are those with access to chapter 11!
    This means ordinary tax paying mums and dads take all the real pain, every time this chapter is invoked, and think, this is on Alan Joyce’s wish list!?
    All this means the only way we can once again provide the much touted level playing field, is to reverse the very first and biggest mistake and nationalize the Airline. Easy enough given the shares will be virtually worthless in a couple of years, if current trends continue? And a bullet that neither side of dither home goal scoring politics, has the testicular fortitude, or the required intellectual acumen to bite!
    We’ve lurched from one crisis to another ever since Qantas was privatized? And not for any understandable reason, but solely for ideological purposes.
    As an Australian owned enterprise, it was very profitable, and virtually ruled the Australian sky!
    And built up an enviable reputation as the world’s safest airline!
    It has been going backwards ever since, given, no privately owned airline can ever hope to compete with state owned players, that offer comparable service.
    There have been a lot of own goals scored during the entirety of the debate/exercise this debate, by both sides of politics, the first being Keating, who privatized it and the com’bank, both of which used to provide a healthy return to consolidated revenue and a Stirling service model for the owners.
    One can make a case to divest oneself of a loss making enterprise, but never ever one returning a very healthy dividend, and an excellent service; which by the way, kept the other enterprises competing fiercely for market share.
    Qantas has under Alan Joyce’s stewardship, gone from a reported 40% share of the market to just 17%? So the first order of business ought to be, the removal of Joyce, for demonstrable incompetence.
    The second ought to be a ASAP merger with the Emirates, and the resumption by the Fed of the remaining shares?
    This will open many doors, including one to lower cost fuel and allow us to compete finally on the much touted level playing field.
    The only thing that would or could prevent that outcome, is the total irrationality of the ideological and very short term fix, which has demonstrably fixed nothing; and has brought a once proud national airline, with an enviable reputation and cash flow, to its financial knees!
    Well done all round, seemingly, totally irrational, Australian politicians!
    Alan B. Goulding.

    Comment by Alan B. Goulding — March 7, 2014 @ 11:36 am

  2. If the foreign ownership rules are loosened, and Emirates and/or Singapore Air buy into Qantas, that will make Qantas partly ‘state-owned’. So is it OK for a foreign state to own part of Qantas, just as long as the Australian Government doesn’t?

    I agree with the previous comment – the whole exercise seems totally irrational.

    Comment by JH — March 7, 2014 @ 1:35 pm

  3. Alan, if you look at the list of airlines plenty of non-state-owned airlines compete with state-owned airlines. State-owned airlines are in the minority.

    Yes JH, it’s fine if a domestic airline is owned by companies owned by overseas governments (the foreign part of the operation has to be still 50% Australian owned).

    If other countrys’ taxpayers want to subsidise our air travel it would appear to be a win for us. The issue isn’t what stupid things other people do with their money, but ensuring we don’t do anything stupid with ours.

    Comment by Graham — March 7, 2014 @ 3:19 pm

  4. State owned airlines are in a minority. True enough Graham, but then so are still profitable international airlines, with among the most profitable, being State owned Singapore and the Emirates! While Qantas’s international arm, continues to bleed, running at a significant loss. Perhaps we could sell it to Ukraine, where average wages are just a $100.00 a month!
    We could rename it, Australian and Ukraine air service, or ANUS for short!
    It would be good if we could export Alan Joyce there as well, as deserved reward for service?
    Moreover, the mad hatter capacity wars between Qantas and virgin, is costing both airlines big time.
    Private enterprise, needs all sorts of conditions, cheaper labor, chapter 11 and outsourcing, just to compete.
    Furthermore, there just too many airlines, competing for market share, even as that market continues to shrink!
    Also, there are just too many airports now in private hands, along with exorbitant fuel costs, adding exponentially to operating costs.
    The carbon tax component is simply not a factor, given it is covered by a customer surcharge. And it applies equally to Virgin or Rex!
    There are patently too many shortcuts, outsourcing and substandard maintenance, that is simply not up to our local standard, created it seems, by less rigorous safety rules offshore and aircraft not retired early enough.
    As a former business man I’m in favor of private enterprise, always providing, it doesn’t include essential services; given the additional cost factors that always apply to privatization, impacts much more on local business and the entrepreneur, than would be the case, if we just had Lee Kwan Yu’s Pragmatism!
    Pragmatism that lifted war ravaged and economic basket case, resource poor Singapore, into one of the tiger economies, and a standout engine house economy in Asia!
    And if applied here, would crack on with a very rapid rail service, that would force Virgin and Jet air, to compete with Rex, on the regional destinations and service. All very possible, with a vastly more pragmatic service model, like that which allows British travelers, to fly from London to New York for just $15.00
    Alan B Goulding.

    Comment by Alan B. Goulding — March 9, 2014 @ 1:48 pm

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