Qantas moves to Asia

In a surprise publicity assault yesterday, Qantas chief Alan Joyce delivered a swag of announcements about new directions for the airline.

But it was quickly obvious that the carefully orchestrated revelations were awash with mixed messages - and a generally hostile reaction in the media and the marketplace was evident long before the end of the day.

The first signal that something was up was the multiple full-page ads in the dailies over breakfast proclaiming that Qantas would always "call Australia home".

Then the word was around that Joyce would be proclaiming to a small, specially selected group of media at a Sydney hotel at 1000.

It was by then obvious that Qantas was jumping the gun on the announcements about future directions that had been promised for the 24th.

Why the surprise timing? Undoubtedly all involved understood the probability of a seriously adverse reaction and the potential damge it could do to an already tarnished brand.

Because what was announced was far more than the expected strategy for salvaging the international division.

Consider the amount of attention directed to expanding reach via alliances with partner airlines, with particular mention of BA, American Airlines and Malaysian.

Consider the postponement of the last six A380s by up to six years and the retirement of four B744s, alongside a huge order for up to 110 A320s (including 78 neos).

But the unveiling of Jetstar Japan, to begin domestic ops next year followed by international a year later, could only have been trumped by the announcement of "a new premium airline based in Asia... with a new name, new aircraft and a new look and feel".

(We're putting the early money on Kuala Lumpur as the base for the new airline.)

There was more, but those are the immediate eye-catchers.

Joyce said that "At the end of this process we expect that we will be established on a competitive global platform, with high growth potential across all markets. Instead of being restricted to an Australian-based international airline, Qantas International will be participating in regioanl Asia opportunities, and in the world beyond."

Oh, and around 1000 jobs will go in the process.

The Government was quick to acknowledge that it could not intervene in what was "a commercial decision" - but pointed out that the Qantas Sale Act requires the HQ of the airline to be in Australia and the Qantas name must be preserved for the airline's scheduled international passenger services. But what does that mean for "a new premium airline based in Asia"?

That is unlikely to be the last word on this from government.

Meanwhile, ACTU secretary Jeff Lawrence described the scenario as "one of the darkest days in the history of Qantas". And he was, of course, in concert with union commentators across the board. Qantas unions are talking serious disruptive action.

But there were voices of support (notably former British Airways supremo Sir Rod Eddington) - and the stock market liked the news. As did Airbus, unsurprisingly.

It's certainly a huge gamble in more ways than one. It looks like the airline is ceding the ground in its home country to the Middle Eastern invaders, while shifting its energy and resources to a region that will put it inevitably up against powerful Chinese interests.

But this story is just beginning...