Like many other Australians flying with our national carrier, I’ve been blessed by several supernatural miracles of late: Qantas flights arriving and departing as scheduled. Luggage miraculously appears on time and in the right city. Alas, divine intervention has its limits for your humble correspondent. Overseas flights – exorbitantly expensive and exhibit A, B, and C of price-gouging – are cancelled and comically rescheduled.
One particular leg of mine suffered such a fate. It was rescheduled to land an hour after the next connecting flight was due to depart. In a scene reminiscent of the BBC sitcom Fawlty Towers, a poorly trained, innocent call centre operator expertly played out the part of the Spanish waiter Manuel in a follow-up call seeking rebooking assistance.
All these problems with Qantas would, in my view, place the airline’s CEO, Alan Joyce, in contention with RBA governor Philip Lowe for the tile of Australia’s most loathed public figure, after the latter oversaw a 10th successive interest rate rise in March.
Amid talk of Joyce’s departure and his mooted successor, the same old issues of a quasi-monopoly national carrier exercising extreme market power have re-emerged – accusations of price gouging, excessive executive remuneration, shoddy customer experience, sham flight credits, overworked striking refuellers, and delayed flights.
No amount of spin promising to train and hire 8500 new workers by 2033 (when Joyce will be long gone), can obviate past and present behaviour – virtually halving Qantas’s workforce since 2008 and unlawfully sacking 1700 baggage handlers. This is to say nothing of feasting on billions of dollars of taxpayer largesse, paying little corporate tax and treating customers as a mere aviation inconvenience. We’re being taken for a long-haul ride – as Joyce’s recent gloating over a $1 billion half-year profit demonstrated.
According to research company Roy Morgan, the previously highly trusted Qantas is on the nose, falling 31 places in its latest “net trust” rankings, moving from the 9th most trusted Australian brand in the September quarter to the 40th most trusted brand in the December quarter.
To be sure, the problems at Qantas are not isolated from the rest of the economy. Aside from the cost-of-living crisis, government figures, policy experts and your average Joe and Josephine are talking about a lack of competition and dynamism in our economy. As columnist Ross Gittins argued in this masthead, weak competition or “pricing power” also allows businesses to pay workers less than they should. As the economic storm clouds gather over the world and Australia, this point is more salient.
The Spirit of Australia extends only as far marketing slogans, not a corporate social responsibility. One idea, promoted elsewhere, is for Qantas, like Telstra, to be subject to minimum service and performance standards by parliament, obligations enforceable by serious financial penalties on executives, management and the board if not met.
Another option is for the Productivity Commission acting on a recommendation by Treasury to launch a public inquiry and report into the Australian aviation industry.
Indeed, late last year, the commission flagged it would be “happy to contribute” to consultations on the federal government’s aviation white paper if asked. After all, the Productivity Commission has conducted four in-depth inquiries into the aviation sector in the past two decades. The white paper has the objective of articulating long-term policies for the aviation sector.
An independent Productivity Commission inquiry, while acknowledging the unique tyrannies of distance and relatively small-scale of our aviation market, could ably inquire into abuses of market power, accusations of price gouging and lack of competition in the sector, taking submissions and hearing testimonies from airlines, policy experts, consumers, the wider community and, of course, the workers who labour to keep the aviation industry operational.
Specific terms of reference are a matter for Treasury. However, the commission possesses the ability to undertake self-initiated research. Indeed, last week it released its Advancing Prosperity report recommending 71 far-reaching changes to address Australia’s recent low rates of productivity growth. Section 3 of the report explicitly called for more competition and higher rates of business creation through changing regulation.
One ventures to predict that a public inquiry would eclipse the number of attendees to the Sydney Theatre Company, of which Qantas CEO Joyce was recently appointed chair, and provide the public with a healthy dose of drama-packed entertainment. Most importantly, it might help make our aviation sector a source of national pride again.
To borrow from the name of a recent ultra-low-cost entrant into Australia’s domestic airline market, a Productivity Commission aviation inquiry is a Bonza idea, divinely inspired or not.