No surprise....

Qantas, in a US court, has been fined the better part of 70 million dollars (Aus) for engaging in "price fixing" on its US - Australia cargo routes. British Airways and Korean Airlines have been ordered to pay (USD) 300 million for their "roles in passenger and freight price fixing conspiracies".

This shouldn't surprise anyone. Even less surprising is the apparent rationale used: fuel levies. Anyone who has travelled by air recently will realise just what this little "surcharge" adds.

A marvellous revenue raiser are "fuel levies". The nice little earner works by the facade of being"up-front" with the punter by declaring that this outside the airline's control and this is what it costs. you know, just like all the other charges that governments impose. And, just like government charges, once in they are not ever removed and - a fortiori - never reduced. Used to be a day when airlines factored fuel as a running cost into a ticket price.

I suppose car dealers might charge a "rubber levy" to cover the increasing cost of tyres. Maybe a levy for the grease and oil supplied?

The US government takes a rather dim view of this anti-competitive behaviour:

(US Assistant Attorney-General) Mr Barnett said the latest guilty plea should send a message that price fixers would pay a heavy price for collusion.

"The shipment of consumer products by air is critical to our global economy.Our investigation into this important industry will continue and we will aggressively pursue those who engage in criminal conduct that harms American consumers."

As well it should. It remains a great pity the US has no need to investigate Qanats' passenger ticketing behaviour. Anyone who has travelled to the US on Qantas should read the following and feel, well, pissed off:

Qantas, which is presently offering US passengers return airfares to Australia of $US1298, or about 40 per cent of what it charges Australians to fly to the US, committed the breaches between January 1, 2000, and February 14, 2006, authorities say.

A pity there seems little political interest in decent competition here. It seems that Qantas will enjoy its "protected" routes staus no matter what stripe of government resides in Canberra. Airlines such as Virgin and Singapore might knock on the door forever and never be admitted. Can't have such open competition on Qantas' nice little earners.

That though is not "price fixing". That is price gouging.

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The whining kangaroo

I’ve written before regarding the tendency of Qantas, Australia’s locally-owned international airline, to gorge itself at the public affirmative-action teat.

Since then, Qantas has been busily whining to the Australian Government about how it’s too bloody hard to operate in a highly competitive market, so could they please have some more free kicks!

The airline has for some time been making ominous noises about shedding thousands of its aircraft maintenance staff in Australia, with the subtext that the mass layoffs just might happen unless it gets some more relief from the real world.

The, er, lobbying is not couched in terms of Government handouts, of course. As Qantas CEO, Geoff Dixon, puts it, “We have indicated that a range of decisions that Qantas must make, including purchase of aircraft, can only be made when we know the policy settings we are going to be operating under over the next three to five years.”

Such “policy settings” include Government blocking of the bid by Singapore Airlines to compete on the trans-Pacific Australia-USA route, and giving Qantas a stunningly generous depreciation schedule so that the airline can accrue massive tax benefits.

Well, it now looks like Qantas will get its way on the former, but not the latter. Will that be enough for Qantas to retain those thousands of Australian jobs?

Astonishingly, Qantas has been arguing that its difficulties have been largely due to the international aviation market being skewed in favour of national carriers whose operations are subsidised by their governments. The remedy would appear to be more of the same locally, except that the Australian taxpayer is expected to subsidise a private company, of which almost half is owned by overseas interests.

So much for the public benefit from privatisation.

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Qantas on Government’s ‘affirmative action’ teat?

It’s possible that I’ve become jaded and cynical, but it seems to me that a pattern emerges from some recent news stories. With my emphasis in the following, read on...

Qantas move offshore might cost 2500 jobs

Sydney Morning Herald, October 22, 2005

Qantas chief executive Geoff Dixon has put himself on a collision course with the unions, after confirming the airline was looking to move “significant parts” of its engineering operations overseas. Such a move could result in the loss of up to 2500 maintenance jobs.

Blue skies for Qantas in new workplace laws

Sydney Morning Herald, December 3, 2005

Business is forecasting financial windfalls from the Federal Government’s industrial relations overhaul, with Qantas tipped as a key battleground and a lucrative winner.

Qantas facing strikes

The Age, December 10, 2005

Qantas passengers face widespread disruptions next month, with thousands of maintenance workers threatening to down tools over the airline’s plans to cut wage conditions... Qantas executive general manager for people, Kevin Brown, denied the airline wanted to cut penalties, but said the unions’ claims would “significantly add to our cost base in an industry where there are massive redundancies” and competitive pressures.

Protection of US route likely to stay

The Age, January 30, 2006

In the strongest indication yet that the Howard Government will protect Qantas’ most profitable route from further competition ... the Federal Government [is] set to block a bid by Singapore Airlines to fly from Australia to Los Angeles..

Assuming Australia’s market economy needs or can support a local international carrier, surely a strong and resilient one can’t be built by all this mollycoddling and protectionism. Such ‘socialist’ measures might be understandable if Qantas was still publicly owned, but this is a private commercial enterprise, for heavens’ sake.

It can’t be argued that the company is providing jobs to Australians, because several thousand highly skilled positions seem set to be “moved” offshore.

Seems just another sorry example of more fumbling on competition policy by the Howard Government’s selective ‘socialism’.

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