It was last year when Qantas recorded a loss of $89 a second. The CEO Alan Joyce said the company has lost $2.8 billion after the tax loss, which is the worst in the 90 year history of Qantas. Even though Mr. Joyce announced recovery is on its way, consumers will now have to pay higher for Qantas to survive the competition.
Qantas is a Sydney based Airlines. It is the largest airline in Australia and the second largest in the world. The company allowed consumers to fly at a low fare, and that era is probably going to end now. National consumer advocate Christopher Zinn said “We’ve had a golden age of low fares but any withdrawal of capacity and easing of competition will impact fares.”
The main factors behind such a record-breaking loss were rising cost fuel cost and tough competition from state supported and low cost airfare providing companies. Experts believe the aviation industry in Australia has been going through a sluggish patch. It needs to be brought back to the route to profit and sustainability. More so because the competition is relentless and alongside the domestic players, many international airlines have entered into the fray.
Some economists suggested investment from overseas countries may show Qantas a path to relief. Qantas has recently formed an alliance with Emirates which is based in Dubai and a staunch rival to a number of Australia’s domestic carriers. Another deal (code share) took place between Qantas and China Southern Airlines. The deal will let the two carriers to share passengers, heading for a domestic or overseas journey.
Qantas has also attempted to convince Australian politicians to increase the cap of foreign investment to more than 49%. But if it happens, will that help Qantas? Experts have cast doubt. A marketing analyst called John Roberts said “If you look at the number of passenger airline miles that Qantas is flying, they are diminishing, and diminishing, and diminishing.”
The year 2013 wasn’t auspicious for Australian aviation industry altogether. Jester posted a profit of $138 million in 2012 but in 2013, a loss of $116 million. Qantas International recorded a eye-watering loss of $497 million.
We need to wait and watch if Qantas really recovered and how.