Air Transport World

Pilots' walkabout boost Australian. (Australian Airlines) (company profile)

Melbourne-At about this time last year, everything was going great at Australian Airlines. The government-owned domestic carrier was putting the final touches on a record year, an operating profit of AUS$108.5 million for the financial year ended June 30, 1989. This was nearly double the profit for the previous year, which also was very good. But perhaps more satisfying to the people at Australian, particularly then-Managing Director/CEO James Strong, the airline was scoring some heavy hits on its longtime adversary, Ansett Airlines. For the first time in anyone's memory, Australian was taking lucrative business traffic away from Ansett. it was doing this well enough that in September, 1 988, it actually took the lead in market share for the first time and then established a commanding lead by March, 1989. A research firm showed that at that time, Australian actually had 47.4% of the business market, while Ansett had only 36%. State-owned underdog

Through most of its existence under Australia's two-airline policy (TAP), Australian, formerly Trans Australia Airlines, was the government-owned underdog against the privately owned Ansett. The TAP assured survival of both carriers and a fair amount of protection but Ansett, with its vast holdings under the Sir Peter AbelesRupert Murdoch empire, always seemed to have the edge.

Much of the credit for Australian's recent success goes to the youthful Strong ATW, 6/87) who renamed it in 1986, greatly changed the spirit and attitudes of the 10,000 or so employees and set the tone for a new, more competitive, service-oriented operation designed chiefly to attract the frequent business flier. Strong also is credited with establishing a yield-management system and doing other things to put the airline on a sounder financial footing. By this time last year, many of his programs were bearing fruit and the airline generally was on a roll. Then things began to come apart, not only at the airline but for airlines in Australia in general and in the country's economy as well. In one of the first blows to the airline, the government decreed that all CEOs running government-owned things such as airlines and the post office would have to reapply for their jobs, which already had the undesirable feature of salary caps. The youthful Strong was offered, and took, a much-befter-paying position with a law firm. Now the government's program is entering its next phase. All executives reporting to the CEOs must reapply for their jobs, again making things interesting at Australian and Oantas. So much for management stability. Also, during the second half of the airline's financial year-the first half of 1989the tourist boom that had begun in 1986 began to slow. In all fairness, few observers expected it to maintain the torrid pace of 1988, when the bicentennial and the spurt of interest from U. …

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