QANTAS - WHERE TO NOW?
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FIRST AIRBUS A330 ARRIVES IN THAILAND Qantas Thailand welcomed its first Airbus A330 aircraft, named Kununurra, to Suvarnabhumi Airport on 10 June. The change of aircraft is part of our five year plan. The aircraft was welcomed by Qantas Thailand Manager Sriram Narayan and Airport Manager Louis Moser.
I suppose the WTF is superfluous
I suppose the WTF is superfluous
I'm sure this won't affect DA's engagement levels!
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Getting back to the first pages of this thread and the "where to now" question by Grip Pipe. I thought I would post this before I re-allocate my prune time to watching Being Lara Bingle.
I think GEOGRAPHY has been a big factor in QF's international decline. London and New York are a long way from Kansas Toto. Europe simply won't work because other carriers have a geographic advantage with crew bases etc. Flights to Singapore, Bangkok and Hong Kong return have just as much chance as making a profit as Thai, Singapore, and Cathay competing the other way all things being equal - Guess that comes down to Cost Base.
Just looked at SCOOTs webpage today and they have the CEO saying they have a 40% percent lower cost base than Legacy airlines. With all the Aviation degree's and MBA's in Aust, can someone actually get hold of some DATA on different carriers cost base? i.e. QF $1.35 per something, JQ $1.20, CX $1.25 Is there any graphs or tables in the academic or real world? Do we need more transparency from management with the these facts?
I think QF pulling out of Rome, Paris and London (Bangkok/Hong Kong) is a smart play until These destinations are possible in one "Hop". Frankfurt is a good performer, but geographically, the airline is competing through foreign soil which will surely fail in due course.
25% percent of QF's profit used to come from the POND. VA must be really hurting QF here - Can someone shed some light on this? Having the maintenance in one place would have obvious synergies.
The sound barrier and range is the REAL enemy of QF at the moment. The sonic cruiser is not dead with some Patents filed as recent as April this year: see sketches on my link under this thread.
The "Canton" Route - daily services to London via China announced for later this year in the papers this week mean "other's" are trying new idea's. Maybe the Seychelles, Male, or Columbo, Nairobi could work - maybe not. Trash at your leisure.
The good news is the economy is most likely going to be in such a bad state for the next 10 years, I think QF still has plenty of time and cash in the piggy bank to see this period through.
Sometimes "retreating" is the best option to "aggress" later. Sun Tzu wrote some good stuff on this in THE ART OF WAR. It has been mandatory reading for most business managers worth their salt for many years.
I'll drop back in again in a few years time. Hopefully its a much happier place then
I think GEOGRAPHY has been a big factor in QF's international decline. London and New York are a long way from Kansas Toto. Europe simply won't work because other carriers have a geographic advantage with crew bases etc. Flights to Singapore, Bangkok and Hong Kong return have just as much chance as making a profit as Thai, Singapore, and Cathay competing the other way all things being equal - Guess that comes down to Cost Base.
Just looked at SCOOTs webpage today and they have the CEO saying they have a 40% percent lower cost base than Legacy airlines. With all the Aviation degree's and MBA's in Aust, can someone actually get hold of some DATA on different carriers cost base? i.e. QF $1.35 per something, JQ $1.20, CX $1.25 Is there any graphs or tables in the academic or real world? Do we need more transparency from management with the these facts?
I think QF pulling out of Rome, Paris and London (Bangkok/Hong Kong) is a smart play until These destinations are possible in one "Hop". Frankfurt is a good performer, but geographically, the airline is competing through foreign soil which will surely fail in due course.
25% percent of QF's profit used to come from the POND. VA must be really hurting QF here - Can someone shed some light on this? Having the maintenance in one place would have obvious synergies.
The sound barrier and range is the REAL enemy of QF at the moment. The sonic cruiser is not dead with some Patents filed as recent as April this year: see sketches on my link under this thread.
The "Canton" Route - daily services to London via China announced for later this year in the papers this week mean "other's" are trying new idea's. Maybe the Seychelles, Male, or Columbo, Nairobi could work - maybe not. Trash at your leisure.
The good news is the economy is most likely going to be in such a bad state for the next 10 years, I think QF still has plenty of time and cash in the piggy bank to see this period through.
Sometimes "retreating" is the best option to "aggress" later. Sun Tzu wrote some good stuff on this in THE ART OF WAR. It has been mandatory reading for most business managers worth their salt for many years.
I'll drop back in again in a few years time. Hopefully its a much happier place then
Just another piece of the jigsaw......under oath this last week at arbitration it was said that Jetconnect is a loss maker as well. Combined with the admission that Jetstar asia longhaul (at least) is unprofitable it gets you thinking....Is any flying entity of Qf profitable apart from QF and Jetstar domestic? Based on Joyce's assertion that capital will only be invested if the cost of capital will be met, why is Jetstar asia first to get the 787's? It appears a double standard and continues to dent Joyce's credibility with those who closely follow his ever increasing mess.
The company hasn't denied JetConnect has been losing money (they reckon they've been bleeding money on the Tasman for years). They just say it is losing less than mainline would but they need to maintain a maningful presence on those routes. Ceding them to Air NZ, EK, Virgin would cost them more.
Not saying I believe it - I'm disengaged, remember? - but it's had to argue against from a business or IR perspective.
Not saying I believe it - I'm disengaged, remember? - but it's had to argue against from a business or IR perspective.
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Qantas CEO.4 Scenarios
1.He is being lied to by his minions
2.He is being set up as a a scapegoat
3.He is operating in an environment beyond his competence.
4.He is an overpaid buffoon
2.He is being set up as a a scapegoat
3.He is operating in an environment beyond his competence.
4.He is an overpaid buffoon
Not to detract from your razor sharp insight Keg, but I think those well thought out 'scenarios' of Race Bannon would actually make a better statement than list of options:
He is an incompetent buffoon portrayed as a scapegoat (puppet?) in turn being lied to by his minions in an environment way beyond his competence....
Lucky IATA
He is an incompetent buffoon portrayed as a scapegoat (puppet?) in turn being lied to by his minions in an environment way beyond his competence....
Lucky IATA
Last edited by V-Jet; 15th Jun 2012 at 22:51.
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Faring badly: Qantas yield hurt in price war | smh.com.au
Qantas has suffered its first monthly decline in yields from both its domestic and international operations in more than two years, in a further sign of the impact of a fare war with Virgin Australia.
Australia’s largest airline today released its monthly traffic statistics, which showed that total yields for its domestic operations – including Jetstar and QantasLink – were up 4 per cent for the 11 months to May, compared with the same period last year. Yields for the group’s international business rose by 1.5 per cent over the same period.
But excluding Jetstar – which analysts today described as the ‘‘only shining light’’ – the group’s monthly traffic figures reveal the toll the battle with Virgin for passengers on domestic routes is having on the core driver of Qantas’s earnings.
‘‘We have seen three or four months of weakening domestic airfare trends [from Qantas]. But we would have expected more of the weakness to be in the international side of the business,’’ he said.
While international fares have remained relatively flat in recent months, Qantas fares for domestic flights have been trending downwards, reflecting a large increase in capacity by airlines.
The weakness in Qantas’s domestic operations is a concern because it is the core of its earnings.
Macquarie Equities’ aviation analyst, Russell Shaw, said in a note to clients today that there was likely to be ‘‘limited upside’’ to Qantas’s share price because of risks to earnings in 2012-13 from a substantial increase in capacity from airlines in the domestic market over the next six months.
‘‘As capacity is ramped up more aggressively by Qantas over the next six months on both the mainline and domestic front, it is hard to see the yield growth trend heading anywhere else but further south,’’ he said.
Qantas has suffered its first monthly decline in yields from both its domestic and international operations in more than two years, in a further sign of the impact of a fare war with Virgin Australia.
Australia’s largest airline today released its monthly traffic statistics, which showed that total yields for its domestic operations – including Jetstar and QantasLink – were up 4 per cent for the 11 months to May, compared with the same period last year. Yields for the group’s international business rose by 1.5 per cent over the same period.
But excluding Jetstar – which analysts today described as the ‘‘only shining light’’ – the group’s monthly traffic figures reveal the toll the battle with Virgin for passengers on domestic routes is having on the core driver of Qantas’s earnings.
‘‘We have seen three or four months of weakening domestic airfare trends [from Qantas]. But we would have expected more of the weakness to be in the international side of the business,’’ he said.
While international fares have remained relatively flat in recent months, Qantas fares for domestic flights have been trending downwards, reflecting a large increase in capacity by airlines.
The weakness in Qantas’s domestic operations is a concern because it is the core of its earnings.
Macquarie Equities’ aviation analyst, Russell Shaw, said in a note to clients today that there was likely to be ‘‘limited upside’’ to Qantas’s share price because of risks to earnings in 2012-13 from a substantial increase in capacity from airlines in the domestic market over the next six months.
‘‘As capacity is ramped up more aggressively by Qantas over the next six months on both the mainline and domestic front, it is hard to see the yield growth trend heading anywhere else but further south,’’ he said.
short flights long nights
About a week ago I posted on another thread that I predicted the next thing we would see was that "Domestic is not making money."
Did not take long, did it?
Did not take long, did it?
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Jetstar saving us??? The April BITRE figures are out. Load factors for J* Int 69.4%. QF Mainline 79.8%.
Jetstar Int carried 186,000 people in and out of Australia. Qantas released figures of 394,000 to the ASX.... 208000 Oz and Kiwi domestic passengers make up the difference.
Oh yeah... lets give them the 787...
Jetstar Int carried 186,000 people in and out of Australia. Qantas released figures of 394,000 to the ASX.... 208000 Oz and Kiwi domestic passengers make up the difference.
Oh yeah... lets give them the 787...
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Brilliant.
Enter into a price war. yields down. 
Reason created to gift more routes to JQ. Job done.. 
Enter into a price war. yields down. Reason created to gift more routes to JQ. Job done..
Last edited by ampclamp; 2nd Jul 2012 at 09:58.
But excluding Jetstar – which analysts today described as the ‘‘only shining light’’ – the group’s monthly traffic figures reveal the toll the battle with Virgin for passengers on domestic routes is having on the core driver of Qantas’s earnings.
The ASX release only provides a yield for total group domestic. You cannot determine yield for the individual segments from the ASX release. To determine yield, you need to know the revenue figure for each segment, the ASX release does not provide that information.
So either:
1. These analysts do not know what they are talking about, but are somehow trying to derive yield from RPK's alone.
2. Qantas is providing extra financial information to a select group of analysts - probably highly illegal.
My money is on 1.
Last edited by The The; 2nd Jul 2012 at 10:29.
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The powers and players behind the future of Qantas
By ABC's Ticky Fullerton
Updated July 04, 2012 11:03:01
Earlier this month on the ABC's The Business, one of the more likely participants in any bid for Qantas, financier Mark Carnegie, put on the record:
Well, that's that then; or maybe not? Surely it would be unwise to write off a bid at some later stage when markets settle, particularly given the interesting repositioning of players around the Flying Kangaroo?
One scenario in particular is worth a muse, not least because it is remarkably intertwined with the last private equity bid in 2006. And like last time, it may well involve current members of the Qantas board being awfully enthusiastic about a sale.
In 2006, the bidding members of Airline Partners Australia were the two big foreign private equity firms Texas Pacific Group and Onex Partners; Australia's aircraft leasing specialist Allco (then run by David Coe but now defunct); and Macquarie Bank driven by Nicholas Moore.
Crucial to this bid were a couple of Qantas directors: then chief executive Geoff Dixon and chairwoman Margaret Jackson. At the time, this was controversial, with allegations of conflicts of interest for some board members while they were reflecting on their duty to recommend the decision that would be in the best interest of all shareholders.
One Qantas director was James Packer, who was also a top 20 Macquarie Bank shareholder at the time. Advising the board was Mark Carnegie.
Dixon and Jackson were utterly convinced of the benefits of such a takeover for all shareholders including themselves. (And let's admit, with hindsight, for those shareholders, that $5.60 deal looks sweet today with shares at just over $1.)
The attractions were obvious, particularly for a chief executive. It has long been the frustration of CEOs who have little ownership in the company they run that their potential for upside with a rise in the company's fortunes is capped to the executive salary they receive topped with a bit of options icing if they're lucky.
One of the most famous examples of this was John Elliott, who grew Elders IXL into the extraordinarily successful beer giant in the early 1980s. It was Robert Holmes a Court's wealth creation from his Bell Resources at about the same time that was said to have driven Elliott to create the management buyout company Harlin which bid for Elders. Alas, Harlin was super-leveraged in a very bad year, 1987, and it all went to custard.
At Qantas in 2006, Dixon's drive had delivered great success and high in the airline cycle. At the time of the APA bid, it was John Elliott's son Tom, then a fund manager with MM&E capital, who told me during a Four Corners program:
It is the extraordinary backdrop of relationships among financiers, advisors and executives that has led to a soup of speculation as to when and how a new bid might be formed, and by who.
We know as of early June that the main financier to the APA bid, Macquarie Bank, is now advising the Qantas board on its defence strategy, or should I say advising the board on the best course to recommend to shareholders – accepting or refusing a bid, should one present itself.
Mark Carnegie last time around was advising members of the Qantas board as to what they should do. This time, he makes good odds as a central player in any new bidding consortium, along with Geoff Dixon (still close to Qantas in his current role as chairman of Tourism Australia), and some of the old APA consortium members, like David Coe from Allco. Another chap, Peter Gregg who was finance director at Qantas and close to Geoff Dixon in 2006, also has ties to Mark Carnegie, the two involved in number of business investments over the years since then.
The next question is, how much garnering of support of today's Qantas board members is underway? Again, plenty of room for speculation, since these directors have a deliciously high level of private equity expertise between them: Leigh Clifford, the highly respected and straight-talking Qantas chairman, is also a senior advisor for private equity firm KKR.
Another director who came on board only last year recently is Corinne Namblard. She spent a decade running the Luxembourg-based Galaxy Fund, a transport equity fund.
Then there's Alan Joyce. The current chief executive is said to be in regular contact with Geoff Dixon. In March this year, the SMH snapped the two of them having a drink in the Rocks reportedly deep in conversation for three hours. Joyce has recently had quite a major management reshuffle, which perhaps makes a takeover and restructure a little easier.
As to what parts of Qantas any consortium might choose to keep, sell or shut down, there are as many theories flying around as there are airlines on the Kangaroo Route these days. Moreover, allegations periodically surface around cost shifting within Qantas, particularly the dumping of costs on the loss-making international division, always categorically denied by the airline. Now we have clear split of the International business under the latest restructure.
When Mark Carnegie wrote off a full bid as currently inconceivable, he also remarked:
There's cash, but there's also a lot of debt, there's a lot of planes, there's a lot of complexity and there's still the unresolved issues of, what are you going do on routes through Asia to Europe when a whole series of countries use their airlines as instruments of national policy rather than companies?
This, of course, is where Alan Joyce's strategy implementation becomes critical. Off-shoring? A new partner in China? Just throwing it out there. Plenty of midnight oil is being burned in the CBD on those unresolved issues.
Ticky Fullerton presents The Business on ABC News 24 and ABC1. View her full profile here.
By ABC's Ticky Fullerton
Updated July 04, 2012 11:03:01
Earlier this month on the ABC's The Business, one of the more likely participants in any bid for Qantas, financier Mark Carnegie, put on the record:
I think it's inconceivable that there's a full bid for Qantas in the offing given everything that happened, given the state of credit markets in Australia, and all I'd go back to say is it looks like accepting the $5.60 that was offered all those years ago was a pretty smart idea on behalf of the shareholders.
One scenario in particular is worth a muse, not least because it is remarkably intertwined with the last private equity bid in 2006. And like last time, it may well involve current members of the Qantas board being awfully enthusiastic about a sale.
In 2006, the bidding members of Airline Partners Australia were the two big foreign private equity firms Texas Pacific Group and Onex Partners; Australia's aircraft leasing specialist Allco (then run by David Coe but now defunct); and Macquarie Bank driven by Nicholas Moore.
Crucial to this bid were a couple of Qantas directors: then chief executive Geoff Dixon and chairwoman Margaret Jackson. At the time, this was controversial, with allegations of conflicts of interest for some board members while they were reflecting on their duty to recommend the decision that would be in the best interest of all shareholders.
One Qantas director was James Packer, who was also a top 20 Macquarie Bank shareholder at the time. Advising the board was Mark Carnegie.
Dixon and Jackson were utterly convinced of the benefits of such a takeover for all shareholders including themselves. (And let's admit, with hindsight, for those shareholders, that $5.60 deal looks sweet today with shares at just over $1.)
The attractions were obvious, particularly for a chief executive. It has long been the frustration of CEOs who have little ownership in the company they run that their potential for upside with a rise in the company's fortunes is capped to the executive salary they receive topped with a bit of options icing if they're lucky.
One of the most famous examples of this was John Elliott, who grew Elders IXL into the extraordinarily successful beer giant in the early 1980s. It was Robert Holmes a Court's wealth creation from his Bell Resources at about the same time that was said to have driven Elliott to create the management buyout company Harlin which bid for Elders. Alas, Harlin was super-leveraged in a very bad year, 1987, and it all went to custard.
At Qantas in 2006, Dixon's drive had delivered great success and high in the airline cycle. At the time of the APA bid, it was John Elliott's son Tom, then a fund manager with MM&E capital, who told me during a Four Corners program:
Those executives or those directors who stood to benefit personally from the takeover, and obviously Geoff Dixon was the most prominent, he stood to make anywhere between $60 and $100 million, which he said in advance he would give to charity. But that's not really the issue here. I believe he was conflicted.
We know as of early June that the main financier to the APA bid, Macquarie Bank, is now advising the Qantas board on its defence strategy, or should I say advising the board on the best course to recommend to shareholders – accepting or refusing a bid, should one present itself.
Mark Carnegie last time around was advising members of the Qantas board as to what they should do. This time, he makes good odds as a central player in any new bidding consortium, along with Geoff Dixon (still close to Qantas in his current role as chairman of Tourism Australia), and some of the old APA consortium members, like David Coe from Allco. Another chap, Peter Gregg who was finance director at Qantas and close to Geoff Dixon in 2006, also has ties to Mark Carnegie, the two involved in number of business investments over the years since then.
The next question is, how much garnering of support of today's Qantas board members is underway? Again, plenty of room for speculation, since these directors have a deliciously high level of private equity expertise between them: Leigh Clifford, the highly respected and straight-talking Qantas chairman, is also a senior advisor for private equity firm KKR.
Another director who came on board only last year recently is Corinne Namblard. She spent a decade running the Luxembourg-based Galaxy Fund, a transport equity fund.
Then there's Alan Joyce. The current chief executive is said to be in regular contact with Geoff Dixon. In March this year, the SMH snapped the two of them having a drink in the Rocks reportedly deep in conversation for three hours. Joyce has recently had quite a major management reshuffle, which perhaps makes a takeover and restructure a little easier.
As to what parts of Qantas any consortium might choose to keep, sell or shut down, there are as many theories flying around as there are airlines on the Kangaroo Route these days. Moreover, allegations periodically surface around cost shifting within Qantas, particularly the dumping of costs on the loss-making international division, always categorically denied by the airline. Now we have clear split of the International business under the latest restructure.
When Mark Carnegie wrote off a full bid as currently inconceivable, he also remarked:
There's cash, but there's also a lot of debt, there's a lot of planes, there's a lot of complexity and there's still the unresolved issues of, what are you going do on routes through Asia to Europe when a whole series of countries use their airlines as instruments of national policy rather than companies?
Ticky Fullerton presents The Business on ABC News 24 and ABC1. View her full profile here.