Here is Dixon's letter to staff. The thing that "really gets up my goat" is that the man doesn't even have the guts to come out and say "we can't afford to give you a bonus this year". He just goes into hyena mode and says nothing.
Low life. Anyhoo, here it is:
17 August 2006
Message from the CEO - Annual Results 2005/06
QANTAS FULL YEAR FINANCIAL RESULTS
Today, the Qantas Group announced its results for the 2005/2006 financial year. Although a significant fall on last year, the result is good given the impact of escalating fuel prices. It is not, however, sufficient for long term sustainability.
I urge all staff to read the media release, issued this morning and provided below, for full details of our results.
There have been some significant achievements over the last 12 months. Yields have improved, loads have improved, our $1.5 billion Sustainable Future savings target has been met and customer service ratings are at record highs.
But despite all these achievements, which reflect the effort and dedication of thousands of staff across the Group, profits are falling. We have been running very hard to still slide backwards.
Fuel will remain our biggest challenge. This year alone fuel will add more than $1.1 billion to our costs, on top of the substantial increase in 2005/06. These are not the sort of increases that can be absorbed, nor is there any prospect of returning to 2004/05 fuel price levels in the foreseeable future.
Sustainability in this industry now means making fundamental changes to how we operate in both our new and our legacy businesses.
Earlier this week, Jetstar announced that international cabin crew will be employed on Australian Workplace Agreements (AWAs) because that is the right approach for this new business. The package will offer good conditions and the positions are heavily oversubscribed by people wanting to take on these new jobs. Although some have predictably attacked this initiative the alternative to change is not the status quo, it is irrelevance and decline. Jetstar is only opening new international routes and offering new job opportunities because it is offering low fares supported by a low cost structure. The alternative is these jobs are not created and the Qantas Group does not fly these routes.
The same can be said for the new wholly-owned Qantas freight business, Express Freighters Australia, which yesterday announced that its pilots were being employed under AWAs. This business – a growth business – will provide increased revenue, new employment for pilots and additional work volumes for Qantas engineers.
Change cannot be confined to any one of our businesses. Across the Group our achievement in reducing costs over the last three years has been underpinned by segmentation. Segmentation has given much greater transparency to costs and performance in each part of the business. We now need to move to the next phase of segmentation where Segments will move from cost centres to profit centres. Increasingly, each part of the Qantas Group must stand on its own record, recover its own cost of capital and compete within the Group for growth and investment. No one part of the business has a right to growth and investment; the test for investment and growth in each area will be the relative returns that can be achieved.
This next phase of Segmentation will have some impact on what being a Qantas employee means, with the main focus for careers, and pay and conditions, depending on the performance of the relevant segment. Our freight business, for example, needs to be more and more aligned to the Freight industry, not the airline industry. Similarly for catering, airports and engineering.
For some Qantas Group employees these changes will be subtle and, in others, have already occurred. In some areas it will mean a more fundamental change of mindset. For example, the current claim by the Australian International Pilots Association (AIPA) for a common Group seniority list that includes Jetstar, and to roll short haul, long haul and Australian Airlines pilots all into one Qantas agreement, is running totally against the tide and will never happen. Jetstar and Qantas will continue to develop as quite different and separate businesses.
There will be impacts on staff from further change and Qantas will continue to handle the impact of change on staff with sensitivity. The recent closure of the heavy maintenance base in Sydney provides a good example. Despite the magnitude of the change, all but 20 affected staff have accepted voluntary retrenchment or been placed in alternate jobs.
There are many areas in the Group where our costs are now above market, principally because of major benefits achieved from bankruptcy reorganisation by carriers in the USA, consolidation and mergers in Europe and Asia and the traditional low-cost nature of many Asian and Middle Eastern carriers. This has to be addressed and turned around. Matching our competitors' costs, providing a return on capital and achieving both these changes quickly are non-negotiable objectives: none of us has a long term future in this industry unless these objectives are achieved.
Thank you for your continuing support.
Geoff Dixon