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6 Dec, 2013

Time is up for Qantas – Sydney Morning Herald

Time is up for Qantas. The government cannot fix the commercial disaster that the national carrier faces. The airline is in crisis and in need of radical surgery and the first partial limb to be harvested and auctioned to the highest bidder will undoubtedly be its lucrative Frequent Flyer program.

The next might be the budget carrier Jetstar. Qantas will retain some stake but the company has little choice but to engage in a giant hangar sale.

Despite its impeccable airline safety record, from a financial perspective Qantas is careering towards a crash. It has endured numerous external shocks since it was privatised in the early 1990s – the bombing of the World Trade Centre, SARS, the global financial crisis and the industrial relations-inspired grounding of the fleet.

But it now faces its first operating loss in the six months to the end of December. Qantas is solvent but bleeding at the rate of up to $300 million per half year, and these losses could deepen. Qantas has so far survived most of the external shocks, but has been felled by simple competition.

Read the rest: Qantas falls deeper into crisis.