Originally Posted by
43Inches
Profits are a lagging indicator with regards to who generated them, policies in place years before dictate the long term profitability of a corporation. Only outside factors like the GFC and Pandemic can change that in general unless a board is completely incompetent to spend so much in one year it sinks the ship. So the first three years of JB losses are leftover headaches from the previous years. Or are you someone who believes politicians who claim economic changes are their doing 3 months after entering office. BG generated profits at a time you could put a cat in the chair and the company would earn fist fulls of cash, very little competition, Jetstar in its infancy, a massive gap left by Ansett. The GFC sorted out who was successfully running businesses and who was lost at the helm when it got tough. There are very few ways to generate instant profit in business, not many are good for the long term health of the company, things like selling high value assets come to mind or sacking a wad of critical staff.
That's simply not true except in circumstances of overwhelming neglect. Here's a history lesson for you. When that clown with the bow tie took over at QF, coincident to BA paying nearly 80c more per share than the float, they demanded that they would not buy into a capital starved company. Qantas had about $1b in the bank then, $967M to be exact, from retained profits during its 45 or so years of government ownership. During those 45 or so years, it ALWAYS paid a dividend to the Commonwealth, ALWAYS. You'll find a struggle to find many, if any years, it did not make a profit. The Commonwealth failed Qantas in many ways because it never hardly put any capital in. At the time of the sale announcement, the total injected capital by the Commonwealth in 45 years of ownership was $147M. Yes, $147M - AND, $80M of that was in 1984 after John Menadue successfully used every lever he had from his time in government to embarrass the government into putting its hands in its pockets to enable the basis for loans to buy 6 747-300s and 7 767-200ERs. So, Keating, true to his promise to BA, injected $1.1b I believe it was, into Qantas as a capital injection. Mr bow tie then announced the following year that he had 'turned the company around' after it posted a profit 2-3 times previous. Well, OF COURSE, when you don't have to service as much debt, profit is going to increase.
It might also surprise you to know that Qantas often sold assets during the 70s and 80s. Buildings, hotels and other assets. There were a few hairy years of international downturn in the 70s where asset sales kept the company in a, albeit, small profit territory.
So, I reject that it is a lag from previous years, except in the case of someone like Pan Am where management was hopeless for the better part of two decades.
There is one clear reason why profits dropped at VA. Because someone started spending BILLIONS of dollars. Did VA
really need 'The Club'?? An outlandishly expensive piece of real-estate that sucked dollars like a damn bursting and generated virtually no revenue. Not to mention the absolutely ridiculous 'nazi-style' treatment of its own staff who knocked on the door to ask a question and were often told "DO NOT COME IN, STAY THERE". This was all a manifestation of the ego of the person running the joint. The 'Club' was far bigger than any Chairman's Lounge and it, along with an A330 trans-continental operation that I suspect never may a single dollar in profit, was all waste, waste and more waste.
The contribution of the offshore airlines was FAR outstripped by what was spent.
Originally Posted by
43Inches
I have a few bridges you might be interested in, you sound the type that knows a good deal when you see it... Or maybe a train tunnel in Melbourne?
You should instead build a bridge and get over it, he was a BAD CEO and no leader. Full stop.
As for sacking critical staff. Which planet are you living on?? The same one where European airlines are cancelling flights wholesale, they haven't contracted out their ramp and baggage because it's been contracted out for decades. So, Qantas got rid of a work group that had caused continual industrial mayhem for decades. Even the 'good old days' they were on strike every five minutes and had working conditions that were over-the-top by any reasonable standard. The same union at Ansett had overtime 'guarantees' for goodness sake. Now how would things like that be achieved without militant flexing of industrial muscle and constantly putting a gun to the company's head, usually just before Easter or similar.
BTW, VA when they were bought by Bain, sacked something like 9000 staff, a far greater proportion of people than QF has - VA's workforce more than halved. They seem to be doing OK now without 'The Club', the fancy and unprofitable 'The Business' and all the rest of the nonsense that sucked up billions. I flew on VA in 'The Business', yes, it was a great product, but so was Ansett's international first and business class, along with being completely unprofitable.
In case you've missed it, the entire industry is struggling, not just Qantas. In some cases, the delay problems are worse overseas. To blame the entire thing on sacking staff is just a perfect case of assuming post hoc ergo propter hoc.
I believe you mentioned Rex. Haha, did you forget the $100-200M they were 'gifted' to save their regional routes by the previous government, which they then used to launch a 737 operation?? All this nonsense about Qantas being a Job-Keeper 'recipient'. They didn't pocket that money, it was paid on to the staff. It's not like the staff went with no pay and the JobKeeper was just put in a Swiss Bank Account........... I know of people that were terminated after JobKeeper started who the companies could have happily kept employing but they decided to downsize on the basis that there was not going to be a prospect of that work for some time.
Do you really think airlines and other companies should just keep paying people and go bankrupt?? The other 'support' was in reduced or waived fees but you had to be operating to be eligible to save by not paying them and everyone got them.
I will however concede that the offshore call centres are a cock up, training obviously wasn't up to scratch.