Qantas Case Study

Qantas – Privatization

Privatization: Privatization is the transfer of public sector resources to the private sector.

The different forms of privatization are:

• Sales of Nationalized industries
• Contracting out
• Sale of land and property

Qantas

Qantas, one of the oldest airlines in the world, founded in 1920, initially as an airmail service, was subsidized by the Australian Government. The Australian Government privatized Qantas, in 1992, giving it access to the national, domestic market, for the first time in the history of Australia. A year later, the company was fully privatized, and investors from around the world invested in their shares. Throughout the years, Qantas has developed and grown, by ordering new and more luxurious planes, which would not have been possible without the privatization. The privatization gave the Australian Government proceeds of $1.45 billion Australian Dollars. The privatization allowed for more competition between airline companies, bringing more investors to invest in their shares. The government having less control of the airline market, allowed Qantas to choose their share prices, allowing the firm to have a larger turnover. Within the domestic market, Qantas has between 60-65% market shares, making it a legal monopoly giving it price control over the domestic market. The monopolizing brought an increase in profit for Qantas, but losing the benefits that come with domestic competition, such as consumer choice and lower prices for consumers