Originally Posted by
Blitzkrieger
Outsourcing has cost more than they will ever admit. Maintenance, ground handling, flight crew, you name it, have all had a deleterious effect of the brand at times. It will never be known how much the most expensive CEO in our nations history has cost the airline. Outsourcing is never more than a own goal and an impotent threat.
The entire Jetstar experiment likely commenced as a sales pitch from "hollywood white" teethed US consultants. The Boston Consulting Group's Bruce Henderson pitched the Growth Share Matrix to companies all over.
Executive management "buy" the concept and take the consulting project to board for approval. BCG have deep tentacles at QF.
A Star was born, having Geoff Dixon et al frothing at the mouth:
A way to grow market share AND lower unit cost.
In comes Little Napoleon. The original market share argument long forgotten, and as convicted felon former CFO Gregg detailed at a parliamentary enquiry, Jetstar would create "competitive unit cost pressure"
Jetstar became the solution to everything; viewed through the IR prism it made complete sense as long as one ignored the actual subsidy required to create the illusion. The QF group has actually contracted in revenue and footprint. Clever accounting and well timed write offs aside, its peer comparison is poor.
Poor corporate governance, led by the idiot Clifford saw no questions asked: Jetstar expanded.
Focused entirely on internal wars, something that led to the hurried exit from Rio Tinto, was Clifford's only play.
A more nuanced and balanced board and executive management would have seen the natural limits and inherent weakness to Jetstar's model: unit elastic demand.
Blind to the obvious, the village of idiots outsourced everything they could to Jetstar.
There is a very real reason why no other airline has the scale of operation that Jetstar has.