By Paul Clough, Solicitor 

Recently, Senator Barnaby Joyce, the maverick senator from Queensland, went into bat for Qantas and its financial wellbeing. It is common knowledge within fortress Qantas that, for the last five or so years, this Australian icon has not been travelling well.

As a legal practitioner, there is sufficient rumour and innuendo coming out of the workers at the Qantas coal face to hypothesise that the profit bottom line is being gleaned from cost cutting on maintenance and service to the public. The bottom line is also being assaulted by the ‘Global Financial Crisis’.

One of Qantas’ problems is its longevity. Qantas has flown the same routes since Pontius was a pilot: Australia to Britain, Australia to the US and side trips to the Far East and our Tasman relatives. Since the last King of England reigned, many of  the stops on the way to these points have become substantial countries in their own right. No longer do we have a British Empire or the British Raj but Qantas still deals with the old stopovers as if they are benign native enclaves.

Each of the emergent countries on the pre-war routes has sovereign rights, such as fifth freedom rights under aviation rules. There are five freedom rights integral to international agreements on aviation. The first two are an ability to overfly and, in an emergency, land and, after repair, take off again. The fifth freedom relates to picking up passengers and freight in that intermediate country and flying them to another destination other than the country of origin of the carrier. Each of the emergent states on the old routes guards this fifth freedom jealously. Most counties do not mind a carrier flying from Australia to their country with passengers and freight as that will be good for tourism, that country’s economy and foreign exchange.

The smaller states on Qantas traditional routes have now developed their own flag carriers. Singapore Airlines, Thai Airways, Malaysian Airlines and Air India did not exist in the 1930s and 1940s. In the early days of Australian developmental airlines, Australia relied on ties to the UK to smooth over the landing rights on air passage to the UK. But the British Empire is no more and, gradually, Qantas has had to rely on the good offices of the federal government to smooth the path for fifth freedom rights.

The present status is that internationally, Qantas flies to and from many places in the Far East as single destinations. Likewise, each of those countries is permitted to fly to and from Australia as single destinations. But the big passenger traffic generator is the in situ population of those countries as those citizens want to travel to the centres of the major economies in the world, which just happen to be the EU, UK, USA or Japan. To access those passenger and freight ‘mother lodes’, Qantas needs fifth freedom rights to pick up passengers in those countries.

What is the position in that regard? Only Singapore and Thailand permit fifth freedom rights to Qantas to pick up and fly passengers and freight onwards. As Australia seems to be the end of the line, we can offer little value to other airlines’ fifth freedom on carriage.

There is something of an imbalance that affects the economic viability of Qantas in this exchange of rights. Singapore is an island of about four million people. Australian is a country with about 21 million people with many large cities. Singapore airlines accesses seven places in Australia: Darwin, Cairns, Brisbane, Sydney, Melbourne, Adelaide and Perth. Qantas accesses only one airport: Changi. But Qantas gets the right to pick up and fly one stop to Europe. As a country we give a lot away to get the fifth freedom of a small state, Singapore. Qantas does not go to Malaysia as it is not profitable. Malaysian Airlines has access to Australia. Qantas does not go to the Middle East but Emirates, Etihad and Gulf Air fly into Australia with rights to almost anywhere in greater Europe. Little wonder Qantas is struggling to make a quid in the flying game.

So, what can be done about the slow decline of Qantas? The aviation world is an ever changing feast. In the 40’s and 50’s Gander was the airport on the way to Europe. In the 70’s and 80’s Anchorage was the airport flavour of the year. The big boys on the block at the moment economically are China and India, with 1,200 million people and 1,000 million people respectively. It would stand to reason that access to this pool of bums in seats would warrant the Australian Government to foster fifth freedom rights to and out of these countries and restrict the smaller states to limited access to our pool of passengers. If Qantas could get fifth freedom rights through Shanghai or Beijing or Mumbai, to the UK and EU, that airline may not be as dependent on Singapore and Bangkok as they are now.

China is eager to invest in Australia. Rio Tinto had about $190 billion in mind recently and certain mineral shows have only survived because of Chinese investment. China is expanding by about 8%, which is about 9% better than anywhere else. China wants friends in the Western world. Can we provide the friendship that the Chinese crave? Yes we can.

It requires some statesman-like thinking and action from our fearless leaders in Canberra to develop fifth freedom rights with both India and China for Qantas to expand and develop financially and not remain in a form of general poverty. It may require the brilliant minds  in Canberra to encourage flying training in Australia for Chinese or Indian airline students or cross-training with Qantas. It may need secondment

of aircrew to both China and India to lift their handling skills as mentors. It requires our leaders to think out of the box. Can Australia do this? Yes we can. Will it happen?

Watch this space…