Qantas might go private but the Australian government lied ot the public

Australia has joined the private equity boom (especially in media) with the two largest TV network media groups, 7 Media and Channel 9 owning PBL, having combined with KKR and CVC Asia Pacific respectively. I am a bit late with the story on this blog, but the newest Australian candidate for going private is the Red Rat - Qantas. I am not known for my kind words about Qantas (for screwing up online, for charging a fortune for free travel here and for having no idea about customer service) but my largest and loudest rants related to Qantas have been the Australian government's outrageous defence of the pacific route duopoly.

You may recall my quote of then Federal Transport Minister Warren Truss when to defend excluding Singapore Airlines from this lucrative rout he said

"The economic modelling work [on the Pacific Route] that we have done suggests that the benefits of an airline such as Singapore entering that route would be very, very small to the Australian tourism industry,"

Now comes something even more stupid out of the mouths of Australian parliamentarians and an admission that Truss was making it up. Here is a quote from a Melbourne newspaper

...several Liberal MPs [government parliamentarians] have told The Age they believe the Prime Minister is more likely to embrace an open-skies policy if Macquarie and its national private equity partners succeed in their $11 billion takeover.

That is - that despite all claims of making decisions based on economic realities, the government would abandon its protection of Qantas on the pacific route if it ceased to be a public company because, well just because. If this proves true then it will go down as one of the greatest acts of business hypocrisy by any centre right/conservative government in living memory. If this becomes policy then Truss will be proven to have lied to the public earlier this year.

I am mad not just for the principle of the thing but because I/my company has to pay almost twice the per km cost to go the US than the UK while being forced to use an inferior product to market leaders Singapore Airlines, Emirates, Cathay Pacific etc. Just as before there is no justification in the pacific route duopoly and even less justification in believing a government that says that there is.