smh.com.au
Qantas Shuts Down Loss-Making Jetstar Asia
Qantas closed its unprofitable Asian budget airline, Jetstar Asia, after 20 years of operation, resulting in a $35 million annual savings and freeing up 13 aircraft for more profitable deployments.
- What is the primary financial impact of closing Jetstar Asia and how does it affect Qantas's overall strategy?
- Qantas's decision to close Jetstar Asia, a budget airline operating in Asia for 20 years, is a significant strategic shift. The airline was profitable for only six of those years, accumulating substantial losses. This closure frees up 13 aircraft for Qantas to use more profitably.
- How did Alan Joyce's management style contribute to the prolonged operation of Jetstar Asia despite its consistent losses?
- The closure reflects a change in Qantas's management style from the centralized control under Alan Joyce to a more collaborative approach under Vanessa Hudson. The board's review criticized Joyce's decision-making, highlighting the airline's unsustainable losses and the board's failure to intervene sooner. This decision is financially beneficial as it eliminates a $35 million annual loss.
- What are the potential long-term strategic implications of this closure for Qantas, considering the competitive landscape and future fleet renewal costs?
- The closure of Jetstar Asia signals a strategic retreat from the Asian budget market for Qantas. The freed-up aircraft will be used to modernize the Qantas fleet, expand profitable routes (including mining routes), and enhance domestic operations, improving the company's overall financial outlook. The improved financial position of Qantas strengthens its competitiveness against Virgin Australia in the Australian market.
Cognitive Concepts
Framing Bias
The framing consistently portrays Alan Joyce's decisions as failures and highlights the negative financial consequences of Jetstar Asia. The headline (if there was one) would likely emphasize the closure and the financial benefits for Qantas, rather than a balanced assessment of Jetstar Asia's history. The article's structure and language emphasize the negative aspects of Jetstar Asia's performance.
Language Bias
The language used is highly charged and negative towards Alan Joyce and Jetstar Asia. Words and phrases such as "no-brainer," "greatest corporate understatements of all time," "challenged history," "business follies," and "commercial failure" are used to create a negative impression. More neutral alternatives might include 'straightforward decision,' 'unsuccessful strategy,' 'complex history,' 'past business practices', and 'financially underperforming'.
Bias by Omission
The analysis lacks perspectives from Jetstar Asia's management or employees, potentially omitting their justifications for the airline's continued operation. The article focuses heavily on the financial losses and the decision-making of Alan Joyce, without exploring potential mitigating factors or strategic goals that might have influenced Jetstar Asia's performance.
False Dichotomy
The narrative presents a false dichotomy by implying that the only options were either to keep Jetstar Asia operating indefinitely or to close it immediately. It overlooks the possibility of restructuring, strategic partnerships, or other intermediate solutions.
Gender Bias
The analysis focuses on the actions and decisions of male executives (Alan Joyce and, implicitly, members of the Qantas board), while Vanessa Hudson is portrayed more as a clean-up crew. While not explicitly gendered, the implicit framing reinforces gender stereotypes related to business leadership and problem-solving.
Sustainable Development Goals
The closure of Jetstar Asia, a consistently unprofitable venture, will allow Qantas to redirect resources towards more profitable areas, contributing to improved economic efficiency and potentially creating new job opportunities in more successful sectors. The reallocation of 13 planes to profitable routes and fleet renewal will further enhance economic growth and efficiency. The improved financial health of Qantas, resulting from reduced losses, also positively impacts the broader economy.