Remember Qantas earns 2.65 times the earnings that Jetstar does!
It is not well understood just how poorly JQ do.
Mr Buchanan desperately tried to avoid expansion into long haul low fare as most of the purported advantages of Low Far Airlines were readily eroded. It is known that he personally stated numerous times that no way would JQ International ever be able to achieve unit cost needed for such a low yield business. The transfer of the original 14 788 (which became 11) was part of his last effort to eradicate the unit cost over run. When he demonstrated his concern to the lightweight board, his tenure was subsequently short lived: Little Napoleon does not tolerate insolence.
Presently it is impossible to see how poorly JQ International do. Despite having more aircraft than the Qantas segment, management do not dis-aggregate into Domestic and International. Something Qantas management did in 2012 to show how 'poorly' Qantas International was faring.
Given every cost Qantas ever incurred from ticketing to uniforms is replicated, JQ now fly 48% of the ASK Qantas fly.
For all their efforts, it is obvious: JQ "group" generate 22% of the Revenue of Qantas. No 'unit cost advantage' that we ever have observed would cover that gap. Fortunately Qantas domestic has sufficient dominance to stem the losses. Simple factor productivty like this indicates that JQ is likely overscale (has grown too big) To those who suggest that this is anti JQ, it isn't. It is however a critique of the lengths to which Little Napoleon will go to ensure the 'myth' of his airline acumen is maintained.
The problem is AJ still has capital to burn the shorts through buy backs. Executive renumeration is now tied to ASX & global peer relative return performance, thus the buy backs will continue to ensure the hurdles are exceeded, at the expense of CAPEX no matter the long term damage to the business.
That was the point of this thread. The disingenuous nature of the Chairman attempting to link the QSA 1992 to the Capital re-equipment problem deserves comment and rebuttal for the Capital Expenditure will need to be expended anyway. Whilst Mr Clifford and his ilk may well grace these pages, no amount of babble changes the simple fact: Qantas need a new fleet and they haven't done that.
The wastage of shareholder funds on personal glorification , social engineering and image management is staggering. Fortunately for them the tide hasn't gone out
yet.
Qantas need a new fleet