Virgin Australia mulls legal action against Qantas, Alan Joyce

By Chris Chamberlin, November 20 2013

In response to foreign ownership comments made by Alan Joyce this week, Virgin Australia is reportedly considering legal action against the Qantas chief, says Matt O'Sullivan of the Sydney Morning Herald.

With the foreign capital investments of Air New Zealand, Singapore Airlines and Etihad Airways set to increase to a combined ownership percentage of 69.8%, Australian Business Traveller reported yesterday that this would result in a foreign ownership level of nearly 80% – owing to the remaining 10% stake currently held by the UK’s Virgin Group.

Considering the move to be a virtual takeover, Qantas has hit back through social media channels — dubbed as an “orchestrated media campaign” by Virgin Australia Chairman Neil Chatfield — centring around an online petition currently nearing 13,000 signatures.

Promoted through the hashtag #fairgo4qantas, the airline is hoping to petition the federal government in an attempt to prevent an increase to Virgin’s current levels of foreign ownership.

“It means Virgin, which will be 80% foreign owned, can use its unlimited funds to weaken Qantas in the domestic market and cripple our international business. It means foreign airlines having control of an airline which accesses Australia's valuable air treaty rights”, proffers the airline's petition site.

Speaking at the Virgin Australia AGM earlier today, Chatfield made his thoughts known on Qantas’ viewpoint, remarking that even if the airline considers Board representation for their three biggest shareholders, he will keep the board balanced with a number of independent directors and will continue to abide by the strict corporate governance protocols – with shareholders' best interests in mind.

In addition to comments made publicly, Joyce has also written to the airline’s workforce of 30,000 – asking them to contact their local MPs, and is visiting Canberra today to lobby both sides of government.

Your say…

Further to yesterday’s article, will you be signing the new petition, or do you feel that the current investment rules and restrictions are already reasonable?

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Chris Chamberlin

Chris Chamberlin is the Associate Editor of Executive Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!

Etihad

23 Jan 2013

Total posts 175

Qantas is just another airline. It's no longer Australian in my view. 

Virgin might be foreign owned, but they still employ Australians just like Qantas. 

The only real difference for me is Virgin doesn't go about huffing and puffing about how Australian they are while offshoring maintenance jobs. 

So, not surprisingly, I won't be signing the petition. 

31 Aug 2013

Total posts 61

Airlines invest in each other to diversify their risks giving more consistant returns, especially considering the ability of one off events to hurt their bottom line.  Everyone likes to talk about how much of an airline is owned, but forget how much they also own outside their own metal and why they do so.  If it was not done in the finacial industry people would be suing management for being incompitent.

Qantas - Qantas Frequent Flyer

25 Sep 2013

Total posts 1136

Virgin should so sue Joyce.

Qantas - Qantas Frequent Flyer

19 Aug 2011

Total posts 155

The restrictions on foreign ownership of Qantas should be eased.  

Qantas is aggressively anti-competitive as was seen by its tactics in delaying Singapore Airlines increasing its investment in Air NZ/Ansett, by offering the then NZ Government a deal to buy into Air NZ (which it knew would never survive competition authority scrutiny) - because it knew Ansett was bleeding, and because it knew a Singapore Airlines backed Air NZ/Ansett partnership would hurt it.

It worked, it saw Air NZ fall, it figured the NZ Govt would bail out the airline, but let Ansett falter, leaving Qantas (having also acquired Impulse) dominance of the Australian domestic market for years, and delaying growth in international competition.

Of course, it has come full circle again.  The only fair way forward is to let Qantas have higher levels of foreign ownership, although that is affected by limits in Air Services Agreements.  The way around that is to have two Qantas's, with a domestic/open skies based one allowed 100% foreign ownership, and the restricted bilaterals one kept as is.

Qantas made hay for some time in the Australian market, including serious milking of the Australia-US market (which ended because others saw an opportunity).  Now it is in bed with one of the most aggressive state-owned carriers in the world, and it plays the nationalist card.  Hilarious.

QFF

12 Apr 2013

Total posts 1446

Some (or even many most) may disagree, but I personally hate when aviation was deregulated. We not paying much less comparing to Qantas-Anset time, we just paying it differently. I clearly remember when I bought return ticket MEL-OOL-MEL 15 or so years ago at highest possible season for $399 while today I have to pay more – cheap fares only available at unwanted time. And today I have to pay for parking while then long term one was free. And today I have to pay for baggage when I try to snatch cheapest fare and list is going on.

From other hands if you look at the best air companies, you found that all of them actually owned by governments. Singapore airline may be the best example.

I do not like cutting throat competition in aviation and I do not like to fly for a dollar. I like safe aviation and obviously it cannot be cheap.

YMMV

31 Aug 2013

Total posts 61

That's nearly $600 in todays currency which I think even you can agree means 95% of passangers are enjoying much much better deals.  On top of that you have the inefficencies of unsold seats and unaccessed markets that the regulated system created which hurts the general economy.

QFF

12 Apr 2013

Total posts 1446

"Red E-Deal" fare (not full fexible one that can exeed $800 one way while during good old days it was $930 TWO ways!!! Flat!!!) by Qantas on high-demand time is hovering around $220-$260 one way (and can be substantially more, up to $400),  plus I have to pay $80 for one week parking (or $100 for two way taxi), so on average it 240+240+80=560 and we came back to square one. ONLY advantage that I can use different carrier to fly back and thus pick better timing. But days when I flown last plane from OOL to MEL with 11 (eleven) passengers on board of 767 gone forever. Novadays they call me and say that "for technical reason" my flight is canceled and I can rebook for any other plane without penalty and they even can give me accomodation. Already happens to me. You not going to change my mind - 15 years ago flying was far more civilized and predictable and if you know rules not much more expensive then today.

YMMV

 

QFF

12 Apr 2013

Total posts 1446

PS Yes, one can enjoy "much much better deal" if (s)he prepare to fly at times when no-one care to fly. Or pay much much more for return ticket.

31 Aug 2013

Total posts 61

Your forgetting that the cost of fuel represented under 15% of the flight costs as now it's around 40%...  So not only are you selectively picking fares which only a few people pay instead of most, you're also misrepresenting the realities of the situations.

Then you're also trying to include costs which don't even belong to the airline which are the airport costs.  These having nothing to do with airline deregulation.  These are simply ownerships of the airports changing and society's view on parking changing where now parking spots are paid for to try and force people to use other means.  That's why you now pay for government parking spots when you use not to!  It's a feature of the growing world with limited resources, not deregulation.

Fact is most people are paying much less today, for a better matched service than they did under the two airline policy which forced airlines to use bad methods that hurt the economy and pricing.

QFF

12 Apr 2013

Total posts 1446

I do not care to whom I paying – freighter or airport. May be you even try to convince me that $10 fare + $50 taxes actually equals $10 ticket price? I am paying to get from MEL to OOL and back and today I paying no less or even more (aka full flexible economy) then 15 years ago. And in return I have much much worse service.

Airport privatization (and introducing long term parking fee) is EXACT result of deregulation. AFAIK airport parking is not government venue, but rather airport one. In the past it was supported by Qantas and Anset who were making their money on flying. Now everyone on his own and airport as business like to have own share.

People are fooled that they paying less, on average they paying more and they only MAY pay less for UNWANTED stuff. Some may be happy with such scenario and I am OK with that. However I still do believe that I personally worse off.

And in fact deregulation actually hurt OUR economy and hurt it badly. If you do not understand what I am talking about then read the news – they plan to suck another 300 people from Avalon. In past when prices was identical they (Qantas and Anset) was fighting for customer by trying to offer better service, while now it is only money, your comment about “better matched service” is plainly ridiculous. We got what we paying for and may be this is what majority want. Sadly I do not belong to majority to enjoy whole process.

Virgin Australia - Velocity Rewards

03 Aug 2013

Total posts 8

Screw Qantas! They say they're always going to come out on top in a fight yet they're acting like little babies by saying virgin will ruin our domestic flights and cripple our international flights. Choose virgin always!!!

Virgin Australia - Velocity Rewards

03 Aug 2013

Total posts 8

Screw Qantas! They say they're always going to come out on top in a fight yet they're acting like little babies by saying virgin will ruin our domestic flights and cripple our international flights. Choose virgin always!!!


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