Chicago Convention on International Civil Aviation

What will putting the interests of Qantas ahead of Qatar Airways cost? $1 billion per year and a new wave of protectionism of legacy carriers

Retrieved on:

Friday, September 1, 2023

For more than 15 years I’ve had the privilege to research and teach airline strategy in the context of global aviation bilateral air service agreements.

Key Points:

For more than 15 years I’ve had the privilege to research and teach airline strategy in the context of global aviation bilateral air service agreements.
These agreements are essentially trade deals between the 193 governments that are signatories to the 1944 Chicago Convention on Civil Aviation.
Australia has traditionally tried to deregulate international aviation, to make air travel easier for both Australians and visitors.

$1 billion per year in economic damage

By my conservative estimate, the decision will cost Australia’s economy about $1 billion per year in lost income from tourism, business travel and freight.
By my conservative estimate, the decision will cost Australia’s economy about $1 billion per year in lost income from tourism, VRF (visiting friends and relatives) as well as business travel and freight.
Qantas announced last week it would add 250,000 seats to its international network, but not a single one was on flights to Europe.

Extra costs in reputational damage

When COVID hit in 2020 and airlines including Qantas grounded their fleets, Qatar Airways temporarily became Australia’s “de facto international airline”, getting Australians home who might otherwise have been stranded.
During the pandemic, some Qatar flights arrived in Australia with just 20 seats filled.

The weak case for offering Qantas protection

There might be a case for offering Qantas protection if it was at risk of needing a taxpayer-funded bailout to stay afloat.
But Qantas has returned to profit – a record A$2.5 billion profit in the year to June, after doubling its revenue.
But for years (including after last week’s profit announcement) Qantas has been returning capital to its shareholders by share buy-backs instead of using it to buy planes.

Is there something we don’t know about?

It is important to recognise that these are trade agreements of considerable magnitude and that decisions taken by Australia invite retaliation.
As I keep telling my students, these seemingly-boring bilateral air service agreements can have big consequences if mishandled.

What will putting the interests of Qantas ahead of Qatar Airways cost? $1bn per year and a new wave of protectionism of legacy carriers

Retrieved on:

Thursday, August 31, 2023

For more than 15 years I’ve had the privilege to research and teach airline strategy in the context of global aviation bilateral air service agreements.

Key Points:

For more than 15 years I’ve had the privilege to research and teach airline strategy in the context of global aviation bilateral air service agreements.
These agreements are essentially trade deals between the 193 governments that are signatories to the 1944 Chicago Convention on Civil Aviation.
Australia has traditionally tried to deregulate international aviation, to make air travel easier for both Australians and visitors.

$1 billion per year in economic damage

By my conservative estimate, the decision will cost Australia’s economy about $1 billion per year in lost income from tourism, business travel and freight.
By my conservative estimate, the decision will cost Australia’s economy about $1 billion per year in lost income from tourism, VRF (visiting friends and relatives) as well as business travel and freight.
Qantas announced last week it would add 250,000 seats to its international network, but not a single one was on flights to Europe.

Extra costs in reputational damage

When COVID hit in 2020 and airlines including Qantas grounded their fleets, Qatar Airways temporarily became Australia’s “de facto international airline”, getting Australians home who might otherwise have been stranded.
During the pandemic, some Qatar flights arrived in Australia with just 20 seats filled.

The weak case for offering Qantas protection

There might be a case for offering Qantas protection if it was at risk of needing a taxpayer-funded bailout to stay afloat.
But Qantas has returned to profit – a record A$2.5 billion profit in the year to June, after doubling its revenue.
But for years (including after last week’s profit announcement) Qantas has been returning capital to its shareholders by share buy-backs instead of using it to buy planes.

Is there something we don’t know about?

It is important to recognise that these are trade agreements of considerable magnitude and that decisions taken by Australia invite retaliation.
As I keep telling my students, these seemingly-boring bilateral air service agreements can have big consequences if mishandled.

What price placing the interests of Qantas ahead of Qatar Airways? $1bn per year and a new wave of protectionism of legacy carriers

Retrieved on:

Thursday, August 31, 2023

For more than 15 years I’ve had the privilege to research and teach airline strategy in the context of global aviation bilateral air service agreements.

Key Points:

For more than 15 years I’ve had the privilege to research and teach airline strategy in the context of global aviation bilateral air service agreements.
These agreements are essentially trade deals between the 193 governments that are signatories to the 1944 Chicago Convention on Civil Aviation.
Australia has traditionally tried to deregulate international aviation, to make air travel easier for both Australians and visitors.

$1 billion per year in economic damage

By my conservative estimate, the decision will cost Australia’s economy about $1 billion per year in lost income from tourism, business travel and freight.
By my conservative estimate, the decision will cost Australia’s economy about $1 billion per year in lost income from tourism, VRF (visiting friends and relatives) as well as business travel and freight.
Qantas announced last week it would add 250,000 seats to its international network, but not a single one was on flights to Europe.

Extra costs in reputational damage

When COVID hit in 2020 and airlines including Qantas grounded their fleets, Qatar Airways temporarily became Australia’s “de facto international airline”, getting Australians home who might otherwise have been stranded.
During the pandemic, some Qatar flights arrived in Australia with just 20 seats filled.

The weak case for offering Qantas protection

There might be a case for offering Qantas protection if it was at risk of needing a taxpayer-funded bailout to stay afloat.
But Qantas has returned to profit – a record A$2.5 billion profit in the year to June, after doubling its revenue.
But for years (including after last week’s profit announcement) Qantas has been returning capital to its shareholders by share buy-backs instead of using it to buy planes.

Is there something we don’t know about?

It is important to recognise that these are trade agreements of considerable magnitude and that decisions taken by Australia invite retaliation.
As I keep telling my students, these seemingly-boring bilateral air service agreements can have big consequences if mishandled.