Qantas~ A Business in Decline
The long post by T Vasis epitomises the problems Qantas faces. It is civil and informative and it contains exactly the same tired excuses that Qantas has been providing us with for Ten years.
With respect T Vasis, that is the problem.
Let me first focus on a few words that jump out of your post; "Acceptable return", "Investment grade".
You state that Qantas must make an "Acceptable return" to retain its "investment grade" status in the share market because that affects its cost of capital when it wants to borrow. This is hogwash.
If the rate of return on Qantas shares is deemed unacceptable by the market, then the share price falls until it is deemed acceptable. As for any airline being "investment grade" this is pure fantasy. An airline is one of the most volatile investments I can possibly think of.
In a sense I can see the argument because if Qantas was ever put under financial stress as a national carrier it can bring very great pressure on any Federal Government to bail it out because of its superb lobbying ability and deep connections with the NSW wings of both Labor and Liberal parties.
My point is that Qantas is using the whole "acceptable return" argument not to argue that certain routes are unprofitable, but to argue that they aren't profitable enough. This is purely and simply lunacy of the highest order.
The reason it is lunacy is because the notion of profit is highly subjective and can be manipulated to serve a wide variety of agendas as it has been by Qantas for years. Those agendas include, but are not limited to; The alleged "profitability" of the Jetstar operations and the entire "hub and spoke" model that has seen Sydney deliberately cream off a huge load of foreign investment by virtue of the fact that every other Australian Capital was at least Two hours further from London and New York thanks to creative Qantas scheduling.
If you really want to compare routes and operations, it is necessary to perform what is called contribution analysis which compares revenues after direct operating costs have been subtracted and before any overheads are allocated. On this basis posters here have long suspected that Jetstar is contributing nothing at all to Qantas and the dreaded "legacy airline" is contributing the lions share. I also suspect that routes abandoned by Qantas were paying their way quite well.
Furthermore, it is lethally stupid not to base business decisions on contribution analysis rather than profits because overheads have a way of staying around long after the allegedly "unprofitable" operations that supported them are wound up. For example, I'll bet that whatever sales network Qantas had in Europe still exists (and costs) long after Qantas abandoned Rome, etc.
The other word that begs a reply is that awful word "Premium", as in the "Premium" business class passenger. Do you folk at Qantas not understand that that market segment can be made to disappear at a few strokes of a pen? All that is required are State and Federal Cabinet minutes that all public service contracts and agreements will henceforth provide for economy travel only. Then where will you be? I always gave my employees a choice when travelling overseas; fly business class and return ASAP or fly economy and have a weeks holiday on the company wherever you like on the way.
Don't you understand that the gap between economy and business class fares is a huge risk to your business?
But what is worse, focussing on the "premium business class customer" necessitates providing a less than stellar experience to your economy class passengers - and by definition and contribution analysis those economy class customers are making the major contribution to the cost of running the aircraft. To put it another way, try making a quid out of business class when the back of the aircraft is empty, yet that is what you seem to be trying to do - turn the average punter who flies economy away!
And we are leaving. We want direct flights, or a stopover in a nice destination like Singapore or Dubai. We want modern, clean aircraft with a reasonable modicum of service and convenience. We do not want the torture of being hubbed and spoked through effing Sydney. Nor do we wish to disembark in Heathrow or Los Angeles unless we are insane.
If Qantas can't provide this experience too bad. We are not interested in your excuses and you shouldn't be making them anyway because your continual stream of excuses is the number one symptom of your problems.
With respect T Vasis, that is the problem.
Let me first focus on a few words that jump out of your post; "Acceptable return", "Investment grade".
You state that Qantas must make an "Acceptable return" to retain its "investment grade" status in the share market because that affects its cost of capital when it wants to borrow. This is hogwash.
If the rate of return on Qantas shares is deemed unacceptable by the market, then the share price falls until it is deemed acceptable. As for any airline being "investment grade" this is pure fantasy. An airline is one of the most volatile investments I can possibly think of.
In a sense I can see the argument because if Qantas was ever put under financial stress as a national carrier it can bring very great pressure on any Federal Government to bail it out because of its superb lobbying ability and deep connections with the NSW wings of both Labor and Liberal parties.
My point is that Qantas is using the whole "acceptable return" argument not to argue that certain routes are unprofitable, but to argue that they aren't profitable enough. This is purely and simply lunacy of the highest order.
The reason it is lunacy is because the notion of profit is highly subjective and can be manipulated to serve a wide variety of agendas as it has been by Qantas for years. Those agendas include, but are not limited to; The alleged "profitability" of the Jetstar operations and the entire "hub and spoke" model that has seen Sydney deliberately cream off a huge load of foreign investment by virtue of the fact that every other Australian Capital was at least Two hours further from London and New York thanks to creative Qantas scheduling.
If you really want to compare routes and operations, it is necessary to perform what is called contribution analysis which compares revenues after direct operating costs have been subtracted and before any overheads are allocated. On this basis posters here have long suspected that Jetstar is contributing nothing at all to Qantas and the dreaded "legacy airline" is contributing the lions share. I also suspect that routes abandoned by Qantas were paying their way quite well.
Furthermore, it is lethally stupid not to base business decisions on contribution analysis rather than profits because overheads have a way of staying around long after the allegedly "unprofitable" operations that supported them are wound up. For example, I'll bet that whatever sales network Qantas had in Europe still exists (and costs) long after Qantas abandoned Rome, etc.
The other word that begs a reply is that awful word "Premium", as in the "Premium" business class passenger. Do you folk at Qantas not understand that that market segment can be made to disappear at a few strokes of a pen? All that is required are State and Federal Cabinet minutes that all public service contracts and agreements will henceforth provide for economy travel only. Then where will you be? I always gave my employees a choice when travelling overseas; fly business class and return ASAP or fly economy and have a weeks holiday on the company wherever you like on the way.
Don't you understand that the gap between economy and business class fares is a huge risk to your business?
But what is worse, focussing on the "premium business class customer" necessitates providing a less than stellar experience to your economy class passengers - and by definition and contribution analysis those economy class customers are making the major contribution to the cost of running the aircraft. To put it another way, try making a quid out of business class when the back of the aircraft is empty, yet that is what you seem to be trying to do - turn the average punter who flies economy away!
And we are leaving. We want direct flights, or a stopover in a nice destination like Singapore or Dubai. We want modern, clean aircraft with a reasonable modicum of service and convenience. We do not want the torture of being hubbed and spoked through effing Sydney. Nor do we wish to disembark in Heathrow or Los Angeles unless we are insane.
If Qantas can't provide this experience too bad. We are not interested in your excuses and you shouldn't be making them anyway because your continual stream of excuses is the number one symptom of your problems.
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Jetstar Asia a sham
What about this for the truth about Jetstar Asia? I'm puzzled why no-one hasn't brought this up before?
The carefully avoided issues in a tiny Jetstar Asia profit – Plane Talking
The carefully avoided issues in a tiny Jetstar Asia profit – Plane Talking
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A Worrying Proposition
"For a country which works on ponzinomics, and relies on debt funded growth, and can’t feed itself, or make things, or even retain control its own public utilities and transport infrastructure, the fate of a Qantas which appears to rely on Jetstar to survive is an interesting and obvious detail in a much larger and more difficult to study tableau."
Offshore transport and the associated jobs.Offshore the Stock Exchange and all the Associated jobs.Manufacturing has gone.We never built a plant to refine our own wool.The lucky country has certainly missed opportunities and certainly seems hell bent on turning the place into a dormitory.
Where do we move to?
Singapore or ENZed?
Forced out of your own country to accommodate the world's swelling masses.
Sorry~feeling a bit paranoid today.I simply dont like whats going on and even more concerned by the apparent lack of government concern or awareness
Offshore transport and the associated jobs.Offshore the Stock Exchange and all the Associated jobs.Manufacturing has gone.We never built a plant to refine our own wool.The lucky country has certainly missed opportunities and certainly seems hell bent on turning the place into a dormitory.
Where do we move to?
Singapore or ENZed?
Forced out of your own country to accommodate the world's swelling masses.
Sorry~feeling a bit paranoid today.I simply dont like whats going on and even more concerned by the apparent lack of government concern or awareness
It isn't as bad as that.
There are some excellent manufacturing businesses in Australia, you just never hear about them, they are too busy making money. My experience when I worked in the industry development area was that the whiners were always the uncompetitive guys who had never invested in their own business and people.
The biggest issue for Australian industry is that you must ensure you are internationally competitive, or you will fail. That is as it should be.
..And now we come full circle - to be internationally competitive, you need to travel internationally a lot......... and thanks to effing Qantas, international travel is more expensive and time consuming than it should be for Australians. Qantas is therefore a drag on manufacturing, and I'm not even goingto mention the air freight thing.
There are some excellent manufacturing businesses in Australia, you just never hear about them, they are too busy making money. My experience when I worked in the industry development area was that the whiners were always the uncompetitive guys who had never invested in their own business and people.
The biggest issue for Australian industry is that you must ensure you are internationally competitive, or you will fail. That is as it should be.
..And now we come full circle - to be internationally competitive, you need to travel internationally a lot......... and thanks to effing Qantas, international travel is more expensive and time consuming than it should be for Australians. Qantas is therefore a drag on manufacturing, and I'm not even goingto mention the air freight thing.
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As published in The Age . . . my bold and italics regarding the comment about QF International's viability.
Qantas considers alliance with Chinese airline
Qantas to become the 'flying dragon'?
Andrew Heasley
February 7, 2011
QANTAS might come to be nicknamed the ''Flying Dragon'' if the airline succeeds in forging a partnership with a big Asian airline to shore up its ailing international service.
Qantas chief executive Alan Joyce has senior executives exploring all options - including a joint venture with a Chinese carrier - to economically reinvigorate its international services by adding new routes.
''We know that joint ventures with British Airways work, so it could include us looking at joint-venture activity with other airlines to give ourselves a bigger network footprint,'' Mr Joyce said.
And China looms large on the Qantas radar.
''Last year, 56 million Chinese people travelled abroad, with the Chinese outbound travel market forecast to grow at around 16 per cent per year until 2020.''
Centre for Asia Pacific Aviation analyst Derek Sadubin said there were a range of potential Chinese airline partners: Cathay Pacific, Air China, China Eastern, China Southern and Hainan Airlines.
But he warned each match-up had complications.
Cathay Pacific (and its subsidiary Dragonair) is in the oneworld global alliance with Qantas, but so far there has been minimal co-operation. Some observers have described what little relationship there is as difficult.
''Interestingly, Qantas do very little with Cathay Pacific, which is very well entrenched in the Chinese market and has a joint venture with Air China,'' Mr Sadubin said. ''It's one they could potentially revisit.''
Air China is in the rival Star Alliance. China Eastern and China Southern are members of the SkyTeam alliance.
''That's not to say they [Qantas] wouldn't look outside their alliance and do something bilaterally that made sense,'' he said.
Hainan Airlines is not in an alliance but Cathay Pacific competes with Hainan group-invested airlines in their home market, he said.
A critical element is the Asian hub a joint-venture partner would deliver for Qantas, Mr Sadubin said.
China Southern has a major hub in Guangzhou and is strong in Beijing, he said. China Eastern has Shanghai as its base.
''The key hubs for Qantas would be Shanghai and Beijing. They've looked at Shanghai in the past as a staging point for services to Europe and it makes sense geographically; Beijing is a bit further north.''
Another added difficulty is securing approval from the communist Chinese government.
''There is still very much central control over aviation in China, which could act as an impediment.''
Mr Joyce warned Qantas faces ''severe limits to growth''.
''If we continue on our current path, there will be a real question mark over the viability of Qantas international. And I have no intention of letting our flagship business decay through lack of action,'' he said.
Andrew Heasley
February 7, 2011
QANTAS might come to be nicknamed the ''Flying Dragon'' if the airline succeeds in forging a partnership with a big Asian airline to shore up its ailing international service.
Qantas chief executive Alan Joyce has senior executives exploring all options - including a joint venture with a Chinese carrier - to economically reinvigorate its international services by adding new routes.
''We know that joint ventures with British Airways work, so it could include us looking at joint-venture activity with other airlines to give ourselves a bigger network footprint,'' Mr Joyce said.
And China looms large on the Qantas radar.
''Last year, 56 million Chinese people travelled abroad, with the Chinese outbound travel market forecast to grow at around 16 per cent per year until 2020.''
Centre for Asia Pacific Aviation analyst Derek Sadubin said there were a range of potential Chinese airline partners: Cathay Pacific, Air China, China Eastern, China Southern and Hainan Airlines.
But he warned each match-up had complications.
Cathay Pacific (and its subsidiary Dragonair) is in the oneworld global alliance with Qantas, but so far there has been minimal co-operation. Some observers have described what little relationship there is as difficult.
''Interestingly, Qantas do very little with Cathay Pacific, which is very well entrenched in the Chinese market and has a joint venture with Air China,'' Mr Sadubin said. ''It's one they could potentially revisit.''
Air China is in the rival Star Alliance. China Eastern and China Southern are members of the SkyTeam alliance.
''That's not to say they [Qantas] wouldn't look outside their alliance and do something bilaterally that made sense,'' he said.
Hainan Airlines is not in an alliance but Cathay Pacific competes with Hainan group-invested airlines in their home market, he said.
A critical element is the Asian hub a joint-venture partner would deliver for Qantas, Mr Sadubin said.
China Southern has a major hub in Guangzhou and is strong in Beijing, he said. China Eastern has Shanghai as its base.
''The key hubs for Qantas would be Shanghai and Beijing. They've looked at Shanghai in the past as a staging point for services to Europe and it makes sense geographically; Beijing is a bit further north.''
Another added difficulty is securing approval from the communist Chinese government.
''There is still very much central control over aviation in China, which could act as an impediment.''
Mr Joyce warned Qantas faces ''severe limits to growth''.
''If we continue on our current path, there will be a real question mark over the viability of Qantas international. And I have no intention of letting our flagship business decay through lack of action,'' he said.
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aaah yes but
It wont be their fault.They(management) have absolved themselves of blame for all screw ups to date.It will just a communist plot to take over Australian transport.
Wish they would take over NSW railways
Wish they would take over NSW railways
U got to spend a dollar to make a dollar!
Here we go again,whinge whinge whinge-Qantas market share is declining because they basically go nowhere that the general travelling public want to go to,they could easily have used their own A330-200,s to start and grow some markets instead of leasing(giving) them to Jetstar.If Jetstar had to get their aircraft from a non-subsidised leasing company it would be interesting to see their financial results.
Instead of bleating and crying,it is time for the management to get out in the real world,listen to what the travelling public is telling them and respond to the market by providing regular reliable service to new destinations and even if it doesnt make a profit of more than 100%,at least there is opportunity there to grow instead of retreating from basically every market they get some competition in.
The other carriers take risks-time for QANTAS to take some risks and make some decent decisions.
Instead of bleating and crying,it is time for the management to get out in the real world,listen to what the travelling public is telling them and respond to the market by providing regular reliable service to new destinations and even if it doesnt make a profit of more than 100%,at least there is opportunity there to grow instead of retreating from basically every market they get some competition in.
The other carriers take risks-time for QANTAS to take some risks and make some decent decisions.
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A Little Ray Of Sunshine ?
Qantas Airways Ltd., Australia’s biggest airline, is preparing to revamp its international operations and may add long-haul routes to regain market share from rivals Emirates and Virgin Blue Holdings Ltd.
Chief Executive Officer Alan Joyce has formed a task force of about 20 people to look at “all options” for the international business, he said in a Feb. 3 phone interview. The division won’t be “relevant” if it keeps losing market share, he said.
More fuel-efficient aircraft, including on-order Airbus SAS A380s, would underpin the new routes, said Joyce, 44. An alliance similar to Virgin Blue’s venture with Etihad Airways for long-hauls from Australia may also help Sydney-based Qantas expand while controlling costs.
“They’ve got very limited options, as Australia is a small market of 22 million people at the end of the world,” said Peter Harbison, managing director at Sydney-based industry consultant Centre for Asia Pacific Aviation. “The real key is they’ve got to develop a relationship with another carrier.”
Qantas’s long-haul international traffic to and from Australia dropped about 8 percent in the year ended June 2010, leaving it with a 20 percent market share, compared with 35 percent in 2000, according to government data.
Eroding Dominance
The carrier’s budget unit Jetstar had an 8.1 percent share last fiscal year. Emirates had 7.9 percent of traffic, according to the government’s Bureau of Transport & Regional Economics.
Jetstar contributed A$131 million in earnings before interest and tax, while its frequent flyer program added A$328 million to group profit in the year ended June 30. The Qantas- branded carrier, which includes long-haul services, added A$67 million.
Qantas “isn’t returning its cost of capital, and the other businesses have been compensating for it for some time,” Joyce said. “That can’t continue, and we need it to grow.”
The carrier scrapped a potential merger with British Airways Plc in December 2008, less than a month after Joyce became CEO. Talks on a tie-up with Malaysian Airline System Bhd. also failed.
Dreamliner Routes
Deliveries of the first of Qantas’s 50-plane order of Boeing Co. 787 Dreamliners in 2012 will also help the airline add routes, Joyce said. The carrier has options for a further 50 Dreamliners and plans to use the 787 on Jetstar and Qantas routes so it can retire less efficient 767s.
“We will utilize the 787 a lot for new destinations, and that will depend on the arrivals of the aircraft,” Joyce said in the interview. “We also need to think about how we partner with other airlines.”
Qantas agreed last month with AMR Corp.’s American Airlines to expand an alliance for services to North America and to add flights to Dallas after Virgin Blue sought a similar tie-up with Delta Air Lines Inc. Both airline agreements are subject to regulatory approval.
The route across the Pacific Ocean was once Qantas’s most profitable, when it only competed with United Continental Holdings Inc. Since 2008, Virgin Blue and Delta have added trans-Pacific flights from Australia.
Share Performance
Qantas gained 0.8 percent to A$2.43 as of 12:52 p.m. in Sydney trading, and have declined 4.3 percent this year compared with a 2.5 percent gain in the benchmark S&P/ASX 200 index. The stock fell 15 percent last year and was the worst performer among the 29 stocks in the Bloomberg World Airlines Index.
Net income for the six months ended Dec. 31 may rise almost fivefold to A$281 million, analysts at Macquarie Group Ltd. said in a Feb. 4 report. Qantas reports first-half earnings Feb. 17.
The company has 65 percent of the Australian domestic airline market, including more than 90 percent of corporate and business travel.
Joyce said he wants to use more of that market power to draw customers to international routes. Virgin Blue, whose CEO John Borghetti is a former Qantas executive, is aiming to expand its market share inside Australia and on international routes through its alliance with Etihad.
“Qantas is a portfolio business and the best part is the frequent flyer program, which is so lucrative,” said Harbison. “They can’t afford to see frequent flyers going onto Emirates.”
Grow the Business? What a novel idea.No wonder these guys get paid the big bucks
Chief Executive Officer Alan Joyce has formed a task force of about 20 people to look at “all options” for the international business, he said in a Feb. 3 phone interview. The division won’t be “relevant” if it keeps losing market share, he said.
More fuel-efficient aircraft, including on-order Airbus SAS A380s, would underpin the new routes, said Joyce, 44. An alliance similar to Virgin Blue’s venture with Etihad Airways for long-hauls from Australia may also help Sydney-based Qantas expand while controlling costs.
“They’ve got very limited options, as Australia is a small market of 22 million people at the end of the world,” said Peter Harbison, managing director at Sydney-based industry consultant Centre for Asia Pacific Aviation. “The real key is they’ve got to develop a relationship with another carrier.”
Qantas’s long-haul international traffic to and from Australia dropped about 8 percent in the year ended June 2010, leaving it with a 20 percent market share, compared with 35 percent in 2000, according to government data.
Eroding Dominance
The carrier’s budget unit Jetstar had an 8.1 percent share last fiscal year. Emirates had 7.9 percent of traffic, according to the government’s Bureau of Transport & Regional Economics.
Jetstar contributed A$131 million in earnings before interest and tax, while its frequent flyer program added A$328 million to group profit in the year ended June 30. The Qantas- branded carrier, which includes long-haul services, added A$67 million.
Qantas “isn’t returning its cost of capital, and the other businesses have been compensating for it for some time,” Joyce said. “That can’t continue, and we need it to grow.”
The carrier scrapped a potential merger with British Airways Plc in December 2008, less than a month after Joyce became CEO. Talks on a tie-up with Malaysian Airline System Bhd. also failed.
Dreamliner Routes
Deliveries of the first of Qantas’s 50-plane order of Boeing Co. 787 Dreamliners in 2012 will also help the airline add routes, Joyce said. The carrier has options for a further 50 Dreamliners and plans to use the 787 on Jetstar and Qantas routes so it can retire less efficient 767s.
“We will utilize the 787 a lot for new destinations, and that will depend on the arrivals of the aircraft,” Joyce said in the interview. “We also need to think about how we partner with other airlines.”
Qantas agreed last month with AMR Corp.’s American Airlines to expand an alliance for services to North America and to add flights to Dallas after Virgin Blue sought a similar tie-up with Delta Air Lines Inc. Both airline agreements are subject to regulatory approval.
The route across the Pacific Ocean was once Qantas’s most profitable, when it only competed with United Continental Holdings Inc. Since 2008, Virgin Blue and Delta have added trans-Pacific flights from Australia.
Share Performance
Qantas gained 0.8 percent to A$2.43 as of 12:52 p.m. in Sydney trading, and have declined 4.3 percent this year compared with a 2.5 percent gain in the benchmark S&P/ASX 200 index. The stock fell 15 percent last year and was the worst performer among the 29 stocks in the Bloomberg World Airlines Index.
Net income for the six months ended Dec. 31 may rise almost fivefold to A$281 million, analysts at Macquarie Group Ltd. said in a Feb. 4 report. Qantas reports first-half earnings Feb. 17.
The company has 65 percent of the Australian domestic airline market, including more than 90 percent of corporate and business travel.
Joyce said he wants to use more of that market power to draw customers to international routes. Virgin Blue, whose CEO John Borghetti is a former Qantas executive, is aiming to expand its market share inside Australia and on international routes through its alliance with Etihad.
“Qantas is a portfolio business and the best part is the frequent flyer program, which is so lucrative,” said Harbison. “They can’t afford to see frequent flyers going onto Emirates.”
Grow the Business? What a novel idea.No wonder these guys get paid the big bucks
Blubak, well said,exactly.
As everyone has been saying mgmt forgets that aviation is a "service industry" and people want/expect good service and if they don't find it they will go elsewhere.
The other side of the coin is that most are no longer prepared to pay much for it as they expect to fly for less than the cost of a cab/bus ride on some routes. In economy that is at least. Hence the lower cost model airlines.
That has become the norm due to cutting fares to unsustainable levels.
Now if you try to put your fares up even a few dollars punters will fly with someone else to save ,literally $5-10. Same has happened in USA years ago.
I still remember a front page story in 2006 where a major (Delta) couldn't risk putting up fares $5 on some routes due to its fear of losing out to its competitors on those domestic routes.
People paying top dollar in business or 1st class definitely expect the best, they are prepared to pay for it.
As has been said, the many adverse business decisions made by mgmt over the past 15-20yrs has taken a huge toll and may not be fixable in the long term, despite anyone's best efforts.
As everyone has been saying mgmt forgets that aviation is a "service industry" and people want/expect good service and if they don't find it they will go elsewhere.
The other side of the coin is that most are no longer prepared to pay much for it as they expect to fly for less than the cost of a cab/bus ride on some routes. In economy that is at least. Hence the lower cost model airlines.
That has become the norm due to cutting fares to unsustainable levels.
Now if you try to put your fares up even a few dollars punters will fly with someone else to save ,literally $5-10. Same has happened in USA years ago.
I still remember a front page story in 2006 where a major (Delta) couldn't risk putting up fares $5 on some routes due to its fear of losing out to its competitors on those domestic routes.
People paying top dollar in business or 1st class definitely expect the best, they are prepared to pay for it.
As has been said, the many adverse business decisions made by mgmt over the past 15-20yrs has taken a huge toll and may not be fixable in the long term, despite anyone's best efforts.
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Watchdog has his yearly bark.- KSA / YSSY
Can anyone think of anything Joyce has done that was even slightly intended to improve engagement?
As a Sydney person, KSA was built by Qantas, if you go back to the QF TN AN days. Not sure if Qantas was ever rewarded properly for the "good will" it provided when the Federal Government sold it off. I always felt Qantas should have been in this deal where it shared the yearly profits for the airport. say ten percent of total..he he.
Just 1 % of the car park would do me fine.
meanwhile, .
Watchdog has his yearly bark.
The Australian Competition and Consumer Commission's annual airport monitoring report typically features criticism of service at Sydney. But yesterday's report was particularly harsh and went close to suggesting the airport was abusing its monopoly.
The commission chairman, Graeme Samuel, said Sydney Airport stood out compared to other airports that had responded to concerns about service quality.
''The airport's monopoly position, the airlines' ongoing dissatisfaction with the service they receive, as well as increasing prices and profits over time, all point to Sydney Airport earning monopoly profits from the services it provides to airlines,'' the report said.
The commission chairman, Graeme Samuel, said Sydney Airport stood out compared to other airports that had responded to concerns about service quality.
''The airport's monopoly position, the airlines' ongoing dissatisfaction with the service they receive, as well as increasing prices and profits over time, all point to Sydney Airport earning monopoly profits from the services it provides to airlines,'' the report said.
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Peers don't think much of AJ's performance!
Etihad tells Qantas chief to stop complaining
Matt O'Sullivan
February 8, 2011
ETIHAD'S chief executive, James Hogan, has told Qantas's management to focus on their own business instead of complaining about the threats posed by Middle Eastern and Chinese airlines.
In a warning about the viability of its full-service international operations without a change of direction, Qantas's boss, Alan Joyce, last week blamed foreign airlines for flooding the market with extra capacity.
The Abu Dhabi-based Etihad and Emirates have both said they will not be lobbying the federal government to increase their quota of flights to Australia for the next two years.
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Mr Hogan disputed Mr Joyce's claims that the foreign airlines were ''simply taking existing demand'', saying that Etihad had opened up new markets in Europe, India and the Middle East.
''I have been hearing this for a long time from my mates in Australia. [But] we have opened up the market,'' he said yesterday. ''They should get back and fight and let the customer decide who wins. I can't sit here and complain about capacity and people moving into my market.''
A week after gaining clearance from regulators for its alliance with Virgin Blue, Etihad has signed a codeshare agreement with Air New Zealand for flights across the Tasman. It will need regulatory approval.
Mr Hogan said the latest deal meant that it could now focus on using the existing air rights to Australia and building its codeshare network with Virgin Blue. However, Etihad still has plans to fly to Perth within the next few years.
Emirates also said it would not be seeking any additional air rights at the next round of bilateral negotiations because it had adequate capacity for the next two years.
The airline was rebuffed by the federal government last year after it lobbied for a ''reasonable'' increase in the number of flights to Australia from its cap of 84 a week.
In contrast, Etihad was last year awarded seven additional flights a week to Australia.
It also won the right for a further seven flights between Australia and Abu Dhabi on the proviso that flights be to or via regional airports.
Qatar Airways also has a daily service between Melbourne and Qatar's capital, Doha, but is yet to begin flights between Sydney and the Middle East despite plans to do so last year.
Matt O'Sullivan
February 8, 2011
ETIHAD'S chief executive, James Hogan, has told Qantas's management to focus on their own business instead of complaining about the threats posed by Middle Eastern and Chinese airlines.
In a warning about the viability of its full-service international operations without a change of direction, Qantas's boss, Alan Joyce, last week blamed foreign airlines for flooding the market with extra capacity.
The Abu Dhabi-based Etihad and Emirates have both said they will not be lobbying the federal government to increase their quota of flights to Australia for the next two years.
Advertisement: Story continues below
Mr Hogan disputed Mr Joyce's claims that the foreign airlines were ''simply taking existing demand'', saying that Etihad had opened up new markets in Europe, India and the Middle East.
''I have been hearing this for a long time from my mates in Australia. [But] we have opened up the market,'' he said yesterday. ''They should get back and fight and let the customer decide who wins. I can't sit here and complain about capacity and people moving into my market.''
A week after gaining clearance from regulators for its alliance with Virgin Blue, Etihad has signed a codeshare agreement with Air New Zealand for flights across the Tasman. It will need regulatory approval.
Mr Hogan said the latest deal meant that it could now focus on using the existing air rights to Australia and building its codeshare network with Virgin Blue. However, Etihad still has plans to fly to Perth within the next few years.
Emirates also said it would not be seeking any additional air rights at the next round of bilateral negotiations because it had adequate capacity for the next two years.
The airline was rebuffed by the federal government last year after it lobbied for a ''reasonable'' increase in the number of flights to Australia from its cap of 84 a week.
In contrast, Etihad was last year awarded seven additional flights a week to Australia.
It also won the right for a further seven flights between Australia and Abu Dhabi on the proviso that flights be to or via regional airports.
Qatar Airways also has a daily service between Melbourne and Qatar's capital, Doha, but is yet to begin flights between Sydney and the Middle East despite plans to do so last year.
Join Date: Nov 2005
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I don't believe that any Australian pilot out there would enjoy seeing any Australian company being put out of buisness by any other foreign company.
We already have Lakemba in Australia, we don't need now our airlines to become affected. They have pockets much deeper than ours, that doesn't mean we shouldn't compete, it means we need to compete harder.
I don't care if you work for Virgin, Rex, British Airways, Qantas, Air New Zealand, SIA... The 'home brand' should be the one getting the assistance. If Joyce has realised he's f*&ked up and it asking for government support then fair enough. He had his chances, realised his mistake and is trying to make a mends. That doesn't mean you go kicking him while hes down. You don't go around giving away more seats into and out of Aus because the CEO made a mistake, what, to teach him a lesson? To put Aussies out of work? The problem is foreign carriers can pay up for slots. And I get that, but it's not Australians doing the flying (sometimes it might be, but not always.)
Virgin are tied up with Etihad, no drama, but I just dont want to see an all foreign airline, in their colours, flying their flags, operating in and around Australia more than there already is. Protect our jobs, like they do. I'd rather see Virgin gain success in Australia and become a large full scale airline than some other crappy brown and light brown coloured aircraft flying around.
We already have Lakemba in Australia, we don't need now our airlines to become affected. They have pockets much deeper than ours, that doesn't mean we shouldn't compete, it means we need to compete harder.
I don't care if you work for Virgin, Rex, British Airways, Qantas, Air New Zealand, SIA... The 'home brand' should be the one getting the assistance. If Joyce has realised he's f*&ked up and it asking for government support then fair enough. He had his chances, realised his mistake and is trying to make a mends. That doesn't mean you go kicking him while hes down. You don't go around giving away more seats into and out of Aus because the CEO made a mistake, what, to teach him a lesson? To put Aussies out of work? The problem is foreign carriers can pay up for slots. And I get that, but it's not Australians doing the flying (sometimes it might be, but not always.)
Virgin are tied up with Etihad, no drama, but I just dont want to see an all foreign airline, in their colours, flying their flags, operating in and around Australia more than there already is. Protect our jobs, like they do. I'd rather see Virgin gain success in Australia and become a large full scale airline than some other crappy brown and light brown coloured aircraft flying around.
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Ultegra,
Suspect there is not a single sane person on this site that would disagree with you, we all want Australians employed and competing at a world class level.
This is not a staffing problem, but the staff are suffering the consequences of decisions made by the Board and Exec for many years. It has got to the stage where us mere mortals feel they are having a lend of us big time while the pantry continues to be raided. Bleating to the press doesnt help.
The only way this will turn around is with some action by someone. Most of the issues in the press are of little consequence while the really important things keep building away.
What are the travelling public supposed to do?
Suspect there is not a single sane person on this site that would disagree with you, we all want Australians employed and competing at a world class level.
This is not a staffing problem, but the staff are suffering the consequences of decisions made by the Board and Exec for many years. It has got to the stage where us mere mortals feel they are having a lend of us big time while the pantry continues to be raided. Bleating to the press doesnt help.
The only way this will turn around is with some action by someone. Most of the issues in the press are of little consequence while the really important things keep building away.
What are the travelling public supposed to do?
Join Date: May 2004
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Qantas picked the wrong CEO to replace the wrong CEO.
He has made huge mistakes and wrong decisions at the expense of Mainline.
The product is now unimpressive and below par from other full service competitors and the punters will not keep accepting it.
Winging in the media will not change anything. Only sound business decisions in every area of the operation. Time is a ticking though. But maybe thats what he wants? A full Jetsar operation with some of them in Qantas paint.
He has made huge mistakes and wrong decisions at the expense of Mainline.
The product is now unimpressive and below par from other full service competitors and the punters will not keep accepting it.
Winging in the media will not change anything. Only sound business decisions in every area of the operation. Time is a ticking though. But maybe thats what he wants? A full Jetsar operation with some of them in Qantas paint.
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Qantas and an UnAustralian Job Policy
The CEO is Irish
The head of Cabin Services is a Kiwi
New Zealand pilots run back and forward across the Tasman on Qantas owned aircraft
Australian Cabin Crew jobs have been taken by establishing a London Base,an Auckland Base and until recently a Thai Base
Heavy Maintenance is now done in Asia and Europe putting australian engineers out of work.
Lets not even begin to talk about the Jetstar (a Qantas wholly owned subsidiary) base in Singapore.
Qantas is Australian in name only .Its employmeny practises are all about either not employing Australians or driving Australian wages down.
Qantas is in trouble because of management ineptitude.It trots out the "Australian Icon" nonsense when it wants to gain sympathy from the australian public.
Guess what?
The Australian public aint stupid.They know they are paying top dollar for a third rate product.The public are voting with their feet and using other carriers because they get fair value and are not treated with contempt.If you have ever had a problem with Qantas that needed to be sorted
contempt and indifference take on a whole new of meaning.
Qantas Australian? My derriere!!!
The head of Cabin Services is a Kiwi
New Zealand pilots run back and forward across the Tasman on Qantas owned aircraft
Australian Cabin Crew jobs have been taken by establishing a London Base,an Auckland Base and until recently a Thai Base
Heavy Maintenance is now done in Asia and Europe putting australian engineers out of work.
Lets not even begin to talk about the Jetstar (a Qantas wholly owned subsidiary) base in Singapore.
Qantas is Australian in name only .Its employmeny practises are all about either not employing Australians or driving Australian wages down.
Qantas is in trouble because of management ineptitude.It trots out the "Australian Icon" nonsense when it wants to gain sympathy from the australian public.
Guess what?
The Australian public aint stupid.They know they are paying top dollar for a third rate product.The public are voting with their feet and using other carriers because they get fair value and are not treated with contempt.If you have ever had a problem with Qantas that needed to be sorted
contempt and indifference take on a whole new of meaning.
Qantas Australian? My derriere!!!
Join Date: Apr 2008
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you got to love it though.........cry wolf to get public support...wave the flag and shed a tear for the red tail...tell us all how much Australian pride Qantas represents, and at the same time outsource everything that is Australian about Qantas. These 2 clowns we call CEO's and the board are incompetent to a criminal level.......To even think J* as being as being a national carrier...makes me not only sick to my stomach but also makes me want to pack my bags and move overseas again......It is unfortunate though that this laid back attitude we have in this country is going to be our undoing...NO ONE is immune to this disease these bastards are spreading...WAKE UP PEOPLE!!!!!
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....and Thats Part of The Problem
The Muppets who run Qantas focus on the little stuff.The position of a name badge and whether or not you have a waiters cloth in the cabin.
The big picture stuff is beyond them.
The aircraft break down,constant delays,crap IFE system,poor quality seating,not enough food.But hey the wines good.Alcohol appears to be Qantas' panacea for everything.
You should see management hoe into the stuff on board.More than a few of them have had a technicolor yawn mid flight.HR and legal types appear to be the worst.Boy do they spill their guts when they've had a few.
Big picture folks.Big picture.Fix the birds before you worry about the farking wine.
The big picture stuff is beyond them.
The aircraft break down,constant delays,crap IFE system,poor quality seating,not enough food.But hey the wines good.Alcohol appears to be Qantas' panacea for everything.
You should see management hoe into the stuff on board.More than a few of them have had a technicolor yawn mid flight.HR and legal types appear to be the worst.Boy do they spill their guts when they've had a few.
Big picture folks.Big picture.Fix the birds before you worry about the farking wine.
