Originally Posted by
SandyPalms
I wonder if we’re about to find out the truth, once Gregg squeals?
‘Truth is incontrovertible. Panic may resent it. Ignorance may deride it. Malice may distort it. But there it is'
-Sir Winston Churchill
Ever wonder why Lucinda Holdforth was gagged when wanting to write about the events leading up to the 'spontaneous' grounding of Qantas 29 October 2011?
Maybe, for a passenger on-carriage point of view. From a stand alone view point? Qantas, from a "pays the bills" viewpoint pays it's own bills and still makes money. Jetstar? Where would they be if they were buying their own aircraft, or perhaps paying their own fuel bills? I certainly think Jetstar needs Qantas far more than Qantas needs Jetstar.
Evidence of absence is not absence of evidence.
Sitting in the bowels of QCA are the management accounts showing who pays for what.
That Qantas management choose to provide zero detail is indicative that the 'amazing business' exists on in the mind of Little Napoleon and those in Fort Fumble that believe every problem an airline faces is solved with adversarial IR.
It is plausible that JQ was created to 'wedge' VAH. It is equally as plausible that it was an invention of consultants, sold to inept management as a panacea to labour unit cost.
Indeed the old stomping ground of Bruce Buchanan Boston Consulting Group (BCG) had such a 'matrix'. To inept airline managers, it may have seemed divine.
Jetstar could simply have been a bit of both; a bit of a wedge, stimulating 'eleastic' leisure travel. Mr Gregg also highlighted during a hearing by your Australian parliament that it would 'generate competitive wage pressure' .
It is worth noting that until Little Napoleon and the Fossil got hold of Qantas, JQ was, contained within the fenced paddock. It may be the reason for the falling out between Mr Dixon and Little Napoleon. Once Little Napoleon had unchecked access to those management accounts, it grew exponentially. A little from Column A and a little from Column B, no one noticed. Before long JQ was as big as the parent,
yet despite all this lacked the ability to drive revenue and margin. Seeing his creation myth grow before his eyes is one thing, but for a business spoken so highly of, in carefully worded statements, scant proof of its performance is forthcoming, with the exception of carefully crafted narrative supporting figures. Curious minds may wonder why? The answer is that they are not required to demonstrate under the audit provision in the very slack accounting governance framework in Australia. They are not required to disclose who pays for what, wonder why they choose not to!
It is further worth noting that the board are lightweight. Wearing T Shirts and a scraggy appearance might be hip but it doesn't necessarily mean one can understand corporate finance. Throw in a bunch of Freehills lawyers and a few leasing people and the reality that Little Napoleon could spin a big yarn and be believed is not implausible.
It is possible that the whole lot of them know little, care less.
One might hope that Mr Goyder learned a little from his attempt at Wesfarmers to re-invent the hardware wheel here in Europe with Bunnings.
With most of the cost an airline incurs setting up and running the
business being fixed then the possibilities are few as to where JQ would actually enjoy 'cost savings' Simply look at the seed of start up capital of any stand alone airline that started in the last 15 years. Until they generate sufficient scale they require more capital. JQ was 'profitable' very early. It was never going to stand alone. Thus where would it generate actual realisable 'savings'?
- Labour at the margin
- Out sourced everything
- Borrow lots from the parent and not be required to pay
- 'Lease; aircraft from the parent at less than a market rate
With a very elastic revenue model the business is not probably what Little Napoleon's ego would have him tell himself every day.
Qantas need the new fleet.