Qantas has never had the luxury of going bankrupt where it could start again with new labour contracts at more competitive rates.

That's the view of Australia's most respected aviation commentator Peter Harbison in an opinion piece in the Australian Financial Review.

Mr Harbison said that "when judging Qantas’ performance over the last couple of decades, some important factors are being entirely buried in the current discourse. Joyce has been severely criticised for “trashing the brand”. I’m not going to argue that corner, except to respond to one particular aspect of concerns – cost-cutting, and staff reductions.

"The economies have certainly been extreme, but there’s one important fact that’s being overlooked in our great big bubble. That is, almost every airline Qantas competes with has either been bankrupted during the past two decades or is government-owned. It’s hard to think of a single airline that doesn’t fit into one or other of these categories.

"All the major US airline international airlines have gone through Chapter 11 bankruptcy, as has Air Canada. In this region, almost without exception, it’s either government ownership or bankruptcy, or both, that has secured the airlines’ survival. Ansett collapsed, leaving 16,000 staff unemployed, Air New Zealand was re-nationalised after it collapsed, and Virgin Australia went into administration during COVID. Among all this carnage, only Qantas has survived them all and, by going the difficult course, its cost base is greatly reduced. It’s in a position to survive. It wasn’t an accident.

"The significance of Chapter 11 bankruptcy – broadly similar to administration – is that aside from destroying all shareholder equity, it allows the surviving airline to return to the market with greatly reduced costs and a totally refreshed workforce. Essentially, the airline can start again from scratch. Staff are cut, wages reduced, contracts cancelled or shaved.

Qantas never had this luxury. Under Joyce, it did it the hard way, but seriously, would it have been better for everyone if the airline had simply gone broke like all the others?"

Mr Harbison adds that according to IATA, 86 airlines went broke during COVID-19. Pretty much every airline in the world would also have failed had they not been bailed out by their governments in one way or another.

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