Qantas threatens Australia to support the Emirates deal

AirDrama: Camel Race now gets ruined by Qantas' rhetoric

Qantas' plays hardball with the Australian Competition and Consumer Commission (ACCC) in its submission that if its deal with Emirates is rejected, it would quit its European network, and focus on profitable routes only.

It all sounds logical, but its attempts to play the nationalist card throws he argument credibility away:

"Under such a scenario Australians will lose the benefit of Qantas operating a strong locally based international network airline. This is not in the national interest."

Didn't Qantas state in its announcement that it is tying up with Emirates in a bid to stem losses? Why is Qantas now saying basically, "approve it, we'll stem some losses, not approve it, we'll stem more losses..."

Did someone really chop the Roo's head off?

Qantas stemming losses by throwing parties!

AirDrama: The Qantas continues like a soap opera...

(Artwork by: Rimanti N)

Qantas' decision to dump British Airways for Emirates was claimed as "to stem losses in long-haul operations"... yet, The Age reported they had a bloody nice party after the announcement, with even nicer goodie-bags to take home...

"But the biggest enigma lay within the goodie bag handed out to the needy throng. Guests got travel guides, a passport folder and a bottle of bubbly - and not just any old plonk, but Taittinger's 2000 vintage Comtes de Champagne, which fetches $320 to $350 a bottle.
So who paid for all this largesse? "It was a joint venture," a Qantas spokeswoman said. "Both Emirates and Qantas contributed to that goodie bag."

Sorry, but what was the excuse Qantas said? 
To stem losses?

The OneWorld Kangaroo Race heats up!

Air Drama: OneWorld's Kangaroo Race heats up with... Camels!
(Click image for Large Size! Artwork by: Rimanti N)

The Kangaroo Route is an elusive one to grab. One would expect that domination belongs to the empire and it's aftermath, that is, British Airways and Qantas, both OneWorld alliance founders. The truth is, that market is lead by: Star Alliance member, Singapore Airlines, who share its Singapore hub with the Qantas/BA European Ops scissor hub there; and the other leader and a major force to be reckoned with on this route is, Emirates.

Qantas' position on the Europe-Australia route continues to weaken. Only Frankfurt and London remain. Paris, Rome, etc, all gone. Emirates and Singapore Airlines compete vigorously on the London route, and have literally obliterated Qantas from the rest of Europe. The London-Sydney route, also sees competition from Virgin Atlantic and Cathay Pacific (LHR-HKG-SYD). Emirates' domestic neighbour and rival, Etihad, had allied with Virgin Australia to give it better access to Australia quickly.

Qantas' position on the European routes seemed doomed. It can't ask for help from Cathay because Qantas' Jetstar is setting up operations in Hong Kong. Cathay would gladly help in exchange for Qantas to abort the Jetstar Hong Kong plans.

So Qantas decided to yet again do the unthinkable. Last week, in a bid to stem losses from its long-haul operations (and while not busy playing with Jetstar), they announced they're dumping British Airways, and moving their European cooperation to Emirates. You know the saying:

If you can't beat them... join them..

BUT this poses several perceived problems, especially within the OneWorld alliance.

• Qantas plans to move its European scissor hub to Dubai. This means Singapore Airlines (Star Alliance) now have a free hand on the traditional Kangaroo route, and OneWorld now has literally nothing there!
• Qantas will ally its European route to British Airways' big rival to Asia, Emirates, which do not belong to any alliance. This does not please British Airways.
• Etihad and its alliance with Virgin Australia now poses problem for either Etihad or the OneWorld alliance because Etihad owns 29% of Air Berlin, OneWorld's newest member, who are suffering from losses, and is dependent on Etihad for its long term future.
• Etihad will likely to strengthen its ties with Virgin Australia as a reaction to Qantas/Emirates, this could take focus and resources away from AirBerlin.
• Malaysia Airlines' bid to enter OneWorld was sponsored by Qantas was based on a hope to have massive cooperation with Qantas (including entry to the alliance), and it remains eager to put Kuala Lumpur as a major alternative to Singapore as OneWorld's Kangaroo scissor hub which would greatly boost its aspirations to be a major player on the Kangaroo route. If Qantas does another upset by leaving OneWorld (unlikely, but Alan Joyce's consistency is as reliable as Michael O'Leary's good verbal gestures), Malaysia Airlines would not be able to enter OneWorld.

BUT, it doesn't look bad does it? British Airways could go with Malaysia Airlines to keep it's Kangaroo route presence, or go to Cathay and squash Virgin Atlantic's Kangaroo escapades... here comes the last piece of the mess...

• British Airways had decided instead to talk on an alliance to handle the Asian (and Australian) routes with Qatar Airways , whose ambition is "to beat Emirates", which means it includes plans of dominating the Kangaroo route, and the world.

Confused? Well, you're not the only one. But don't let that worry you. Aussies are no stranger to camels, and British expats in the Middle East have camel riding as an initiation ritual... so, the OneWorld Kangaroo Race, has literally become a camel race!

So I invite all of you to caption the above illustration using the comment boxes below. You can caption the illustration as a whole, or caption what each person is saying (and if you can, keep it simple, clear, and understandable... unlike my writings!). I'll pick the best one and maybe give a prize or something... *no promises*

About the illustration:

I asked Rimanti N to make the Airdrama illustration. She's a 2nd year visual design student who is working on a comic about the airline industry (to which I am an industrial adviser in her project), with one of her comics already published while she was in high school. Aside from being a very good comic artist, she is also an AvGeek (something to do with her family's history). Follow her at @rimanti_n or find more about her work at:

http://rinota.deviantart.com

http://reachingtheskyofdreams.blogspot.com/

http://www.pixiv.net/member.php?id=2300458

Did someone chop the roo's head off?

I've always known Qantas as the "Spirit of Australia", and I've always liked the endless (albeit monotonous at times) variety of "I still call Australia home" adverts they can come up with. The recent change in marketing campaign however, leaves me doing nothing but shake my head.

The campaign starting in July, focuses on a new tagline. "Spirit of Australians", with "the tale of two letters." Two letters... they hope can change the fate of Qantas. I thought this would make a nice new change to Qantas, I agree on the underlying marketing lingo explaining the change. 

I actually thought it was going to work... That was until I read a fellow blogger's article: Qantas rewords, rephrases, repositions...

This isn't a rebranding campaign, not a change of company slogan campaign, this is just... "adding" of two letters, add "n" and "s" to the "Spirit of Australia" on the left side of the aircraft to be "Spirit of Australians"... on TWO aircraft only !

In my eyes, his is a half-hearted attempt at regurgitating Ansett Australia's "Absolutely" campaign. Perhaps they were fearful that CEO Alan Joyce might scream at the bill of changing the writing at the whole of the right side of the aircraft? (Yes, even on just two aircraft!)

This sentiment is shared by fellow blogger, Kinny Cheng who runs UXmilk.com. Over the past week we've exchanged ideas, jokes, and criticism at this recent campaign. Whilst he has other (very witty) conclusion, mine is simply, half-hearted.

But the campaign doesn't just stop there! UXmilk ran another blog article which simply made me continue shaking my head. Qantas… is going to make me famous?

So, "Spirit of Australians" will put 2 extra letters on one side of two aircraft, add the names of 2 competition winners on those two aircraft, and the rest is (nothing more than) a testimonials campaign by Australians!

One newspaper quoted a very good phrase to describe this campaign. Qantas Marketing Manager Lewis Pullen has described the change as a "leap of faith".

One hell of a half-hearted leap of faith!

Inflight Connectivity, hunger for hype, telecommunications law? Do we really need a bogeyman?

I had the pleasure of meeting RunwayGirl and Winglets747 from FlightGlobal during the Paris Air Show. We had an interesting discussion on Inflight Connectivity and the developments surrounding it. One interesting question that came up is, "Why can't Australian airlines provide GSM connectivity through the satcom?" (Hey, they already got it installed)... afterall, Emirates is already providing it through Aeromobile on flights to/from/over Australia. Another point that came up was whether WiFi services could be provided instead for Australian airlines.

As interesting as the discussion went, one thing keeps bugging me. Everytime I explain to someone about Indonesia's Telco laws (Law No. 36/1999), people kept saying, "Oh your country is so protective", or "Oh, you're a monopoly, riiight!", or even, "Gee, your country is so backward when it comes to global trade."

So, tonight, I decided to have a look into how Australian law affects their airlines on connectivity, and how it differs from Indonesia.

The law in Australia separates telecommunications into two parts:

1. The physical act of telecommunications, this is covered by the Radiocommunications Act of 1992. (RCA)

2. The service act of telecommunications, this is covered by the Telecommunications Act of 1997. (TCA)

What is interesting is that RCA defines Australian territory to include space outside the atmosphere above Australia (S18 RCA), but TCA does not cover anything above the stratosphere (S28 TCA).

TCA covers the use of radiocommunications facilities from a point in Australia to another point within Australia or outside. It covers basic telephony services, public mobile telecommunications services, and satelite based facilities (but there are some exemption provisions).

A lot of the contents of the laws are similar with Indonesian law (Law No. 36/1999 regarding Telecommunications). However, the Australian law does not appear to restrict Airtime charges for services used by an Australian company to have to be purchased from or paid to an Australian owned company (but I'm not clear on whether the service company has to be Australian or not), although S65 TCA does mention "Conditions about Foreign ownership or control". And if one thinks about "using an Australian companies" as an intermediary, it's covered by TCA under S87.

International (Foreign) operators and/or their local partners providing services to Australian companies must watch out for TCA S367, which covers "National Interest", to which the Australian government can always intervene at will.

OK, so that doesn't pose too much of a problem for airlines to use OnAir or Aeromobile services for Australian airlines (especially for domestic flights) right? Well, let's have a look at RCA.

There are a few differences between the Australian RCA and Indonesia's Telco laws the radio station permits and spectrum frequency use for airborne mobile satellite services. RCA does not cover foreign aircraft flying to/from/through Australia (RCA S32). The Indonesian law, only provides exemption on the telco certification end for foreign aircraft flying in/to/from Indonesia, so there is a little bit more flexibility with RCA. So, Australia's RCA is less strict than Indonesia's Telco law right?

Errr... not really.

• RCA S16 covers Australian companies using their equipment even outside Australia, Indonesia's telco law only covers airtime when talking about use outside Indonesia for Indonesian companies.
• RCA covers one way emissions (forgot which section), and Indonesia's telco law covers only two way communications (and one-way for broadcast service, but excludes foreign broadcast). Theoretically, GPS receivers, should fall under RCA too! (But again, there are probably sections covering that as exempt).
• Both countries have Spectrum usage charges (RCA S67 for Australia).
• Both countries require the spectrum license to be issued to local residents/companies (RCA S69A for Australia)

I guess, the only difference is, Australia can issue the spectrum licenses for Iridium or Inmarsat-4 services to more than one company for each service, while in Indonesia, each spectrum license for a particular service can only be issued to one company (and one company cannot hold more than 1 foreign satellite spectrum license to prevent monopolistic practices).

Locals here complain, "Oh that means our Telco law makes our local companies not competitive!" Well, I think Australia's RCA makes them less competitive than ours!

Nothing is stopping airlines in Indonesia, or Australia, from providing onboard connectivity provided they follow the respective laws. From what I know, one mining charter airline in Australia already has connectivity installed using the local SatCom providers. Why won't Qantas or Jetstar or Virgin do the same? When it comes to GSM connectivity, why can't they work with the Australian mobile providers for it?

The same questions apply to Indonesia... We already have the highest number of Blackberry addicts outside the Americas, one of the largest social media population in the world (according to Facebook users and Twitter users), why can't the airlines provide onboard connectvity?

Well, the answer is, THEY CAN! But, the question really is more on "Do they want to do it the right way and the lawful way?"

In the case of Garuda Indonesia, the CEO had stated in the past that Garuda plans to introduce onboard connectivity services. In an article dated 18 June 2010, it was revealed that Garuda was preparing to spend US$17.5 million on connectivity. The telecommunications regulators in June 2010 stated that onboard connectivity services can be provided as long as they comply with the applicable telecommunications law. This means that, the service provider for the Satellite service must have the permits, the cellular service must be provided by local operators, and same with the internet service (non-cellular). Back then, no company has the permits for the satellite service. Local cellular provider, Indosat, had agreed to provide onboard connectivity services with Aeromobile and that they would offer the service to Garuda, unfortunately, Indosat has no permits for the satellite services required. This was what prompted the Telco regulator in Indonesia to "warn" everyone about the permits.

The irony is, now that there IS a satellite service provider in Indonesia with the right permits, that can provide onboard connectivity, Garuda seems uninterested.

V-Australia and Qantas had previously announced that they were to use OnAir and Aeromobile, but nothing can be found in their websites today, except that V-Australia states it as "Coming Soon". Perhaps, they ended up falling to the same "trap"? Maybe, in the frenzy to gain media hype on providing this latest "in-thing" in the airline industry, they too, like Garuda, forgot, that airlines need to comply with more than just the respective aviation laws, and that, when they decided to provide connectivity service, they forgot about the telecommunications law when they made the announcements?

On another confusing note, during Paris Airshow 2011, Air Asia announced that they were going to provide connectivity, initially on AirAsiaX, and later on to AirAsia's shorthaul networks. It was announced that they were going to provide the service "leveraging on their EFB connectivity technology", which means, using FlightFocus's Iridium connectivity. I hereby pose a question, what happened to the Air Asia connectivity plans with OnAir that was announced on 24September 2010? It appeared that they went one step further than most, in partnering with local Malaysian mobile service provider, Maxis, for the GSM connectivity, but, look at AirAsia's website today, or talk to the crew, no one seems to know about it! Is it because they didn't talk to or couldn't get an agreement done with Inmarsat-4 rights holder for Malaysia (Telekom Malaysia?) or was it because the service wasn't profitable?

If it wasn't profitable, perhaps they should have attended the "Airline Retail Conference" in London last weekend?

So, what have these airlines really missed? Anyone?