Thursday, 16 February 2012

Qantas - A freckle on your face

Qantas is about the 48th largest company listed on the Australian stock exchange.  It has a market capitalisation of around $3.7 billion making it smaller and less significant than the likes of Resmed, Sonic Health Care and Worley Parsons.

Woolly who?

Unless you are some crazy stock market punter, you've probably barely heard of those companies who by the way, might be hiring or firing at the moment.  Who knows.  If today's employment report is any guide, they just might be adding to their staffing levels as the economy trundles along.

The total value of stocks listed on the ASX is about $1.3 trillion or so, meaning that Qantas accounts for about 0.25% of the value of listed stocks.  If you then throw in privately held companies, the government sector and small business, Qantas is less than a freckle on the face of the Australian economy.

So why the blanket coverage of the 500 job losses at Qantas today?  Because it is an "icon"?  Because it has a series of powerful union lobbies impacted by there job losses?  Because its management has some other motive is highlighting this news?  I don't know.

The Qantas news is frankly insignificant, except for the people directly impacted by the announcement.  That is 500 plus possibly their families for whom the move is very bad news.  Thankfully Australia has a fantastic workforce safety net, reskilling and training programs and most importantly, an economy that is doing pretty well.  I reckon most of those who lose their jobs from Qantas will find another one soon.

I wonder what the thousands of Telstra workers who lost their jobs 4, 5, 6, 7 and more years ago are doing?  The shock and horror of those job cuts is a distant memory.  If we could ever find the data to check it out, I'd bet almost all of them are gainfully employed.  

And that massive over coverage of Qantas seemingly dominated news today showing 46,000 jobs created in January.  That's almost 100 times more jobs created last month nation wide than will be shed by Qantas.  

That's the headline news today - or it should be. 


  1. Hear hear. I'm curious about your take on the jobs data though. On Saturday you, correctly, called a possibly large jobs number but in that weekend post suggested that any such increase would be "superficially large".
    Given yesterday's number do you now think employment is growing "around trend"? If so I would be really interested to read a piece from you outlining what you perceive the changes have been in the past few weeks that have resulted in you shifting your position (and this is in a non-"Joye rubbing your nose in it" kind of way but from a genuine "I'd be fascinated" desire.

  2. It is news because it is a highly visible symptom of the effects of Australia's increasing invovlement in the the competitive side of the world economy and the impact of the resources-driven high aussie dollar. Qantas isn't a manufacturer but relies on heavy maintenance. It also competes head-on in a highly commoditised marketplace with businesses that are foreign owned, foreign run and foreign maintained. If Qantas falls off the perch it will be the death of what was until recently a relatively healthy canary in the coal-mine that is the Australian manufacturing industry.