Captain Sherm:
1. What would Qantas look like if someone else had started Jetstar and Qantas was competing with this JQ sized competitor on the current QF mainline cost structure?
2. If yields for Qantas mainline fell say 10% in the above scenario amidst a bloody “price war” (and given that, as you often state landing fees, fuel costs, interest rates etc etc are the same for all carriers) how far would productivity (or aircraft and people) have to rise and in particular, how far would unit and overall labour costs at QF mainline have to fall in order for the Group to regain profitability?
3. To what extent therefore are Qantas yields quarantined from reduction by having the competition “in house” at a lower unit cost, therefore making money for Jetstar and lessening losses by Qantas?
Sunfish, the question of how, when and indeed whether QF could maintain a dominant and flexible market position under a single brand is the real question. What would the EBA's look like, how much compromise would AIPA have to make, how would productivity need to change, what fleet would you need? etc etc.
Taking all those questions together, Qantas would look nothing like it did under the reign of Scrotum face.
1. It wouldn't call itself "The Qantas Group". It would have pared away about Six levels of management, starting with "Group General Managers" and "Executive General Managers", cut it's Administration and head office staff to the bone, and most importantly moved the majority of its whats left of it's head office functionality into low cost office accommodation.
2. In support of that process, it would have devolved decision making powers as far down the organisation as possible.
3. It would have restructured its Board, rooted out the narcissists from senior management, and looked for the equivalent of Air New Zealands CEO.
4. It certainly would NOT have opened overseas bases and subsidiaries like Jetstar Asia.
5. It would have moved the bulk of its Maintenance out of high cost Sydney. Get the States to start a bidding war for the relocation of all of it.
6. It would have rejigged its schedules to be less Sydney centric, with much more direct flights from other State capitals, reducing as much as possible, the need for that domestic connecting flight.
7. It would have a huge internal review of its cost base and identified what needs to change.
8. It would go to Boeing and Airbus get them both to compete for a complete fleet replacement program, domestic and international - a complete turnkey package, including financing, the lot. Airbus and Boeing know how to do this.
9. Create a new brand image and market it for all it's worth. Revel in the competition (or appear to). I would also consider a capital raising and a shareholder discount scheme, although the big investors might kill the idea.
10. Armed with the certainty of a new fleet coming, and new maintenance facilities to be relocated, a revitalised Board and management, and, to borrow a phrase "Change we can believe in", I would approach all unions with the same basic story - "are you part of the new Qantas or the old Qantas?" with a list of issues.
My entire internal communications strategy would be that Qantas has to change or go under. I would be counting on the "Freeze, Unfreeze, refreeze" human behaviour to allow me to make great changes in a relatively small period of time. Jeff Kennett did this (almost) to perfection for Two years when he took office in Victoria.
...And of course, the Board and all Management would be
leading by example. Otherwise everything fails.