Qantas Buying into Network?

[Capn Bloggs]

First it's the boats invading WA, now the Big White Rat itself! The Fin Review last Friday reported QF was looking at Network, and rumour has it they want 100 pilots!

What's the goss and where do I signup??? :}

[SOPS]

So fill us in, what do Qantas want Network for?

[Team America]

They want to get into the FIFO charter market out of Perth.

I heard the deal has been done.

[Skynews]

What's the goss and where do I signup???

Be careful what you ask for Capn Bloggs, 100 Pilots is about the correct number for the QLink contract isn't it?
What easier way to recruit 100 717 pilots on reduced terms then to buy and AOC and start again.

[Skystar320]

I am left bloody confused!

[PLovett]

They want to get into the FIFO charter market out of Perth.

Possibly a question born out of ignorance but aren't QANTAS already involved in the FIFO market through National Jet? :confused:

I realise that NJ is really Cobhams and it is separate to QANTAS but Cobhams are leasing the 717s from QANTAS and that is money for jam for QANTAS. :rolleyes:

So do QANTAS really want to get involved in something that is not their core business? Funny management if that is so. :hmm:

[Mach E Avelli]

If true, 'tis just a replay of the Impulse-Jetstar deal. Gotta be good business to create a third (low-low-low cost) player in the QF stable to starve out all those pesky Tigers and Strategics and any other wannabes that poke their heads too far above the parapet. Also sends a signal to Cobham to keep a very sharp pencil come contract time.
Not so good for pilot T&Cs.

[Capn Bloggs]

At great expense to my two-finger typing, here is the article:

Qantas eyes up Network Aviation

Qantas is in talks with Network Aviation, an airline based in Perth, with regards to an acquisition valued at as much as $100 million.

With 9 planes (six Embraer EMB120 Brasilias and three Fokker 100s), many of the charter flights the company conducts support “fly-in fly-out” mining operations.

Qantas and domestic rival Virgin Blue have upped the frequency of flights on existing “resource routes” and added new ones over the past year to tap into the most buoyant corner of the domestic market.

Qantas, which flies to mining towns rather than mine sites like Network Aviation does, has “regular and frequent conversations” with charter operators in all mining regions, said spokesman David Epstein. However, Epstein declined to comment on Network Aviation specifically. A recent review by the WA government resulted in the lucrative Perth-Geraldton route being opened to a second operator, with similar expansion opportunities to follow.

So while British Airways chief executive Willy Walsh continues to paw the ground for a union with Qantas, it seems the Australian airline’s focus remains squarely on matters at home.

Two years into the top job at Qantas, chief executive Alan Joyce has been more focused on organic expansion via the company’s low cost carrier, Jetstar, which he started in 2004.

[FOCX]

Capt. Bloggs,

No disrespect intended, but I think you're been supping on too much 1st Class wine!

100 mil for 6 D Cups, 2 working clapped out 100's and 1 engine-less bucket.

Maybe it's the brand their paying for!:E

[Capn Bloggs]

I think you're been supping on too much 1st Class wine!

The stuff I get in Row 0 definitely ain't 1st class, FOC! All I can say is *hic* "it's all happening around here!" http://www.smilies.our-local.co.uk/index_files/drunk1.gif

Maybe it's the brand their paying for!
The ultimate in "networking", perhaps? :ok:

[CaptHairDryer]

Drove past Network the other day; sorry but what's with the trashed F100 out the front in full view of their clients?? Not the most professional??

[Nil defects]

Yes, I heard it's a done deal too.

Latest rumour more F100's and 737's for Network.

Where does this leave Air Link/National Jet?

[R.Cruizo]

It was all supposed to be announced last monday I believe.

Latest rumour is Dash8 Q 300's for Network if the deal goes through as Qantas wanted a Turbo-prop operation.

[Mr. Hat]

Sounds like a big shake up in the WA FIFO scene. Perhaps Netwrok will be the next big thing. Who knows they might even move over to the new terminal.

[IFOT]

Perhaps Qantas is planning a Jetconnect style operation for WA?

[Icarus2001]

Where does this leave Air Link/National Jet? Well the Qantaslink (not Air Link) contract runs until 2012.

The National Jet operation, now Cobham are probably flat out with the Gorgon project and introducing two new RJ100 aircraft to worry about Network.

Good rumour to influence the minds of those negotiating contract extensions and EBAs etc. " If we don't take a pay cut we will lose it all to Network". They tried it with the 717 introduction and it worked a treat. The answer form the troops SHOULD have been, "well this is what we expect to be paid, if you (management) lose the contract to XYZ, we will go and work for them" but of course the seniority chestnut gets in the way, just like long service leave and egos. So lack of mobility of labour keeps them under control.

Good luck to Network. There is plenty of work over in the West for all the current operators.

[Capn Bloggs]

In an airliner mag yesterday I saw (well, it was read to me, on the ground of course!) that Network were getting 8 F@kkers. So that's probably where the $100m is going.

[Mr. Hat]

Dare say you'd get more than 8 Fokkers for 100 million bucks.

Link guys will probably do the RPT+Gorgon stuff and Network the mining stuff? Who knows.

Mining charter: contract one day gone the next.

The Skippers and Skywests of the world have got to be scratching their heads. Network wasn't even noticed only couple of years ago. Oopps!

[mince]

Quote:
"Latest rumour is Dash8 Q 300's for Network if the deal goes through as Qantas wanted a Turbo-prop operation."

They already have a turbo prop operation, it's called Sunstate/Eastern.*
Why would they want to start another from scratch?

[Mr. Hat]

Skippers seeing as they appear to be the biggest FIFO operator

I might be wrong but as far as I know Skippers whilst doing very well are not the biggest operator. Surely that would be Cobham or Skywest.

[Mach E Avelli]

Mince, by buying in they are not starting from scratch. It is no big deal to add another similar-capacity type to an existing AOC. And why? See post #7. Eastern/Sunstate pilot conditions are far too good for those cowboys in the wild wild west.

[mince]

Mach E, So are you suggesting qantas want to spend $100 000 000 just to screw a few pilots over? Wow that's a pretty big pineapple!

[The Green Goblin]

I'd suggest it's more the fact they need the facilities to operate from. Hangers, offices and a place to park a few so to speak. Perth is pretty congested these days and it makes plenty of sense.

I wonder if they'll be able to afford to paint those 120's now :}

[Spinnerhead]

Rumour is Q400's not burnt out Q300's heading your way.

[Capt Claret]

Are the 400's approved for gravel strips?

[Capn Bloggs]

I wonder if they'll be able to afford to paint those 120's now
The silver bullets are the best-looking boats on the airport! :D

[lemel]

The $100 million wouldnt be just for the aeroplanes. In that you have the hangers, terminal, parking, ramp space (more than you could get at skippers) and most importantly, the current contracts that network has (which there are quite a few of).

If you go back only a few years, skywest was only the size that network is at the moment. Now look at them. The only reason Network isnt expanding (which it could easily do btw) is the owner wants out and wants to retire. So getting into debt doesnt look appealing to any potential buyers.

Lets look at who QF could buy out in Perth.
Skywest - too big and expensive and is in bed with VB.
Alliance - although not as big as skywest in the west, they do have bases around the country. So as before, they also will be too big and expensive, but also keep in mind that QF want to get into the West and not inherit whatever else alliance has around the country.
Cobham - too big & expensive.
Maroomba - No high capacity AOC & the place is a joke. I need not say more on this one.
Skippers - too expensive compared to Network. In addition they have no ramp space and QF will also be buying metros and conquest which it doesnt want.

If QF dont buy into the mining sector in WA, I dare say that it would cost more than $100 million to setup an operation from scratch. Dont forget that the biggest problem also is that there isnt any space left at perth airport for another operator to setup shop.

A few of us got talking and this is purely speculation on our part, but we think that the so called "clapped out" F100 would stay (and get more of them). The reason being, aeroplanes such as the 717, 737, A320 etc. are just to big and heavy to get in and out of the airstrips that the F100 goes to. The biggest problem for them is their ACN/PCN. Bigger types might be introduced, but the F100 would stay.

On the prop side of things, expect the bras to be gone :(.
Q300's are only fractionally slower than the bras but can carry more pax. Q400's would also be on the cards, but not right away. Along with these new types, expect to see cadets bashing around the sky in the west.

FYI folks, this take-over may not happen. The only reason anyone knows about it is because it got leaked in the Fin Review. Its still early days and a contract hasnt been signed. So any rumors about announcements are 100% not accurate. It could be 1-6 months before we hear anything.

I personally think that in the long run, this is going to be a bad thing for the guys/gals at network and will drive down conditions in the industry for everyone. Hope I'm wrong.

[Fuel-Off]

Captain Claret, to answer your question the Q400's aren't approved for gravel strips (by choice of the company mind you). The boffins in Flight Operations are are too precious about their new toys and wont allow them to head into unprepared strips.

Although I have a question for Lemel...if QF wouldn't buy Maroomba because they don't have high capacity on their AOC, why would they want to buy Network who dont have RPT on theirs? Or would QF just want Network's FIFO work?

Fuel-Off :ok:

[Capt Claret]

Thanks Fuel-Off. Mind you, the AFM supplement to allow gravel ops probably comes in at MEGA $$$$$

[Mach E Avelli]

Mince, of course no company would sink 100 million into just screwing over a few pilots. But if the rumour is true, no way will they use east coast crews on this, other than for the obvious start-up check and training. Driving down aircrew (not just pilots) costs is very much part of the QF game plan. Lemel's excellent analysis on their other reasons for interest in Network is probably very close to the mark. Having that ramp space is a very big factor.
Adding RPT to a hi-cap AOC is not difficult if the basic company structure is sound. If not, I guess that's where some of the 100 mill will go.

[lemel]

Fuel-off

You will find that getting a high capacity AOC is a huge undertaking with all the company restucturing, paper work, engineering etc that need to be looked at and at the required standard. I guess CASA may look at the company check and training standards for the pilots also.

Once you have a high capacity AOC, its not that difficult to get RPT added to it (dont get me wrong it is quite an involved process, but nothing when compared to getting you initial high capacity AOC issued, which Network have got).

One would imagine that getting an RPT AOC, if QF were to buy Network, would not be a huge issue considering QF's primary business is RPT flying. Make no mistake, if this buy out is successful, QF will expand into the FIFO market, but additionally will set up RPT routes to go up againts skywest and skippers once the routes are deregulated.

[Johnny_56]

Stupid question maybe, but wouldn't QANTAS already have a high capacity AOC? Why would they need to buy another company purely on the basis of their AOC?

Couldn't Qantas just buy whoever (with best ramp space/hangers/contracts/whatevers) and import their AOC?

[The Green Goblin]

Stupid question maybe, but wouldn't QANTAS already have a high capacity AOC? Why would they need to buy another company purely on the basis of their AOC?

Couldn't Qantas just buy whoever (with best ramp space/hangers/contracts/whatevers) and import their AOC?

Pretty much :ok:

Network will become the Sunstate/Eastern for western operations and when the Cobham contract runs its due course, Network will take over.

Good thing for the Network guys that are there now, particularly if they hire a heap of new Pilots as they will be high on the seniority list. Bad for others who want to come from over east, as they will start at the bottom.