Qantas CEO puts the airline's future on the line

Qantas boss Alan Joyce believes that the airline's survival is far from guaranteed in an increasingly competitive global market.

Addressing the 2011 Aviation Outlook Summit in Sydney today, Joyce also described the globalization route for his business as "not optional".

Joyce confirmed that he will announce the strategy for revival of the long-haul main brand on 24 August:

"Our review process is based upon four pillars: continuing to be Australia's leading premium international airline; a strengthened focus on alliances; a review of non-performing assets; and participation in the Asian opportunity."

Amongst the other highlights of a presentation that cut directly to the quick about industrial relations challenges were:

* The three realities of globalization are new markets, new business models and new technologies.

* The Qantas Group has already begun to position itself to emerge as a major player in tandem with an increasingly prosperous and globalised Asia: "There is certainly a place for Qantas in the new markets of Asia and we would be remiss not to seize it... to find new sources of revenue and
profit for our business."

* "...if we want Qantas to join the elite group of companies of the future, we need to... do this via new business models that capture new markets, build regional and global networks, and anticipate the globalised aviation future."

* "...we are looking at further opportunities to use close partnerships to extend our global reach."

* "We see continuing opportunities for the Jetstar model, and lessons to be learned for Qantas. I want to see both our brands maximizing their global potential."

* "...our Frequent Flyer business which is now among the most successful loyalty programs in the world... is a business model that can be replicated in other markets."

"...some union leaders are simply out of touch and trying to block our use of new business models."

"...new technologies... have always been at the heart of global aviation progress and competition... but we can only justify these investments if we can fully maximize their benefits."

* "We are asking them (the unions) to understand the simple logic that new technologies require new work practices."

* "our maintenance and repair costs are among the least efficient and most expensive in the world."

* "...over 50% of our domestic fleet are new generation aircraft. They do not require the same degree of intensive, repetitive maintenance... This therefore makes redundant the current practice that a highly specialized licensed engineer should receive and dispatch each aircraft."

* "To secure our future we must face up to the new global realities, seize new opportunities, and make the external and internal changes that will enable us to compete effectively."

To exemplify the technology innovations that will drive the airline's future, Joyce pointed to a new airworthiness control system, entitled Project Marlin.

"Project Marlin cost more than we wanted and took longer than we liked. But this is the largest and most complex IT project Qantas Engineering has ever implemented, and we were always going to make sure we got it exactly right.

"Put simple, Project Marlin means that we can look at a sophisticated database and get an instant update on the maintenance past, present and future of any one of our aircraft, anywhere in the world.

"It means our engineers can use mobile devices like laptops and iPads while they work on aircraft to obtain maintenance instructions, locate and order spare parts, and certify their work."

Project Marlin is being implemented initially for the A380s, but will be progressively rolled out to the rest of the airline's fleet.

Joyce remains adamant that there is no room for manoeuvre with recalcitrant unions; that a new order is essential for the airline's survival.

He's almost certainly right – but there's no sign yet that the unions are hearing the message.