Source: The Australian Author: Steve Creedy 08/03/2007
Subject Concerned: Aircraft Opinion Airlines Human Resource Cargo
Qantas says it can stand alone and does not need to merge with another big airline to survive.
While not ruling out a merger if it proved attractive enough, Qantas chief executive Geoff Dixon told the National Aviation Press Club recently that the airline was planning to grow organically rather than seek to consolidate with another big carrier.
"We're always interested in something that comes up but we've had enough experience now to realise that we must always plan to be doing it ourselves," he said.
Mr Dixon said Qantas management had created a much stronger company through growth and had to assume that it would continue to grow organically through Qantas and Jetstar.
If an attractive partnership opportunity came along the airline would obviously be interested, but the assumption was that Qantas would be on its own.
Asked if he thought the airline could survive by itself, Mr Dixon said: "Yeah, I do now."
Qantas is one of a number of carriers to turn away from the once conventional wisdom that big airlines needed to consolidate to survive. However, the Qantas chief made it clear that the flying kangaroo was still keen for investment opportunities in smaller carriers.
He was reluctant to name names or even specify target countries, but said the current investments in Singapore-based Orangestar and Vietnam's Pacific Airlines were not enough to address the airline's enormous growth potential.
He had earlier told the NAPC that the industry appeared to be entering a new growth paradigm where air traffic was predicted to double from its current 2.2 billion passengers in the next 15 years.
"For the first time in history, the aviation industry's centre of gravity is shifting to Asia," he said. "Within the next three years, the Asia-Pacific will be the largest single market, focused around China and India. This is a historic opportunity for Qantas."
"We have a small timeslot, just a few years I imagine, to make ourselves an indispensable part of this growth story."
Mr Dixon said Jetstar would remain the key vehicle for growth in Asia and would work closely with the existing Asia-based investment partners.
"We are looking to take advantage of other attractive opportunities for growth in Asia -- organically, via acquisitions or through partnerships -- to ensure we merit a chapter in what will undoubtedly be the biggest aviation story of the next 20 years."
Mr Dixon's comments come as the airline is considering a restructure that would see it spin off its freight, frequent-flyer and fleet operations.
Mr Dixon indicated that the airline would retain control of any spin-offs and that some news about the process could emerge after the August 15 board meeting. However, he said the process was likely to take 18 months and warned it would be in stages.
The move already appears to have the approval of some board members.
Director James Strong, who recently ruled himself out as a candidate for the chairmanship, said that the way management had picked up the new directions and ways of lifting performance was "absolutely spot on".
While refusing to confirm details, Mr Strong confirmed on the ABC's Business Lateline that the airline was heading in the general direction of the freight, leasing and fleet spin-offs.
"As you know that will be unfolded as the board agrees to each item," he said. "But what I want to indicate is that Geoff's doing a good job and he's got full board support so that general direction is the right way to go."