WEEKEND COLUMNISTS Commercial air travel can be tedious. The Moneypenny family travelled to Australia over the Christmas holidays, courtesy of an airline with a kangaroo on its tail. Mr M went first, accompanied by the three cost centres, reflecting the facts that (a) he can take more holiday than me and (b) it is his country, so he wants to spend longer there. From one perspective, Australia is the most fabulous holiday destination on earth. From another, it is a woefully underpopulated country where it is almost impossible to make any serious money. A group of people hoping that the former view will help them to disprove the latter is the team taking the kangaroo airline private in an A$12bn deal. That sounds big until you convert it to UK£.
I drove the Moneypenny team to their appointment with the pre-Christmas Heathrow chaos. They checked in six pieces of luggage; a suitcase each, a bag of revision for Cost Centre #1’s AS levels, and Mr M’s golf clubs. Only one piece arrived. The golf clubs.
From one perspective, Mr M’s, this showed that the baggage handlers had their priorities right. From another, namely mine, 12,000 miles away, it was a massive inconvenience. This was because Mr M, faced with the prospect of playing golf in the clothes he flew out in, took the type of resourceful action that he always does in a crisis - he called me.
Several telephone calls by me later (to BAA, British Airways and then American Express, our insurers), I was able to tell Mr M that he could go out and spend A$6,000 on clothes. That is big even when you convert it to UK£.
Cost Centre #1 thought that Santa Claus had arrived a few days early. Not only had any danger of exam revision been removed by the loss of his schoolwork bag, but he was also given carte blanche to go out and spend money on clothes. Mr M, on the other hand, dislikes shopping for clothes with children, and so between them they managed a paltry A$2,400.
I flew to Sydney a few days later. This caused some comment, because although I flew on the same airline, I flew first class - the earlier party had been made to travel at the back of the aeroplane. I make no apologies for this. Children, in my opinion, should not be allowed to travel anything other than economy, unless they can pay for it themselves. Small children make a noise and annoy me - if you can afford to fly your children at the front of the plane, you can afford to pay for someone to travel with them at the back of the plane. Larger children, on the other hand, are being ruined by their parents’ largesse. A whole generation is growing up with no appreciation of the value of money because, among other things, their parents are flying them round the world in first and business class.
Presumably the key people taking Qantas private are hoping to make enough money to fly themselves and their children first class, or even better, by private jet, for ever. But I just don’t get it. The deal will be leveraged to the hilt in the usual manner of these things. Where are they going to get the improvement in performance needed to pay it all back? What will they sell? And to whom? And whatever they do, surely it won’t be anything that a competent and properly incentivised management team couldn’t have done under public ownership? They are even keeping the same CEO, Geoff Dixon - couldn’t he have managed whatever rabbit he is going to pull out of whichever hat as a public company? Margaret Jackson, Qantas’s chairman, and her board, have missed a trick, in my opinion. They will pass into the history books as having got the offer increased from A$5.50 to A$5.60 (which, in any currency, is an increase of less than 2 per cent) rather than seizing the opportunity to become the heroes of the institutional investor community. Qantas will be refloated or sold in a few years and a small number of investors will make a large amount of money. Had the board delivered the same performance improvement under public ownership many more people would have been able to share in the gains.
Despite the leaf tea served in Qantas first class (what a pain for the cabin crew to wash up) they don’t offer Krug, an omission that I hope will be addressed once the new owners of the airline take possession. Not least because a non-executive director of Allco Finance Group, which will be the largest shareholder, is Sir Rod Eddington, who has previously run both Cathay Pacific and British Airways, both of which serve Krug in first class. They also have far nicer pillowcases.
Sir Rod is also a non-executive of News Corporation. Here he has Rupert Murdoch as chairman. Mr Murdoch famously used to travel between New York and London by commercial airline, in the days when Concorde was still in service. He did, of course, have access to a private jet, but it wasn’t supersonic so took longer. Instead it crossed the Atlantic, carrying his luggage. Which would certainly have ensured that it all arrived.
