Hi Steve:
Firstly thank you for your time and trouble to put together the document and I comment as follows:
1. I have never ever described your members or Qantas pilots in anything but glowing terms. Recently I have had more opportunity to talk about the pilots’ skill level because of the well publicised incidents.
2. I am well aware of the qualifications of engineers, the long hours, the shift work and the list goes on. Many would say that not nearly enough credit is given for the work that is done. The same can be said, of course, for the pilots.
3. You say: “You have also on a number of occasions supported Qantas comments about overseas facilities being as good as those in Australia. It appears from what we have heard that you are running directly from a Qantas
PR running sheet.” There is no way that I am a Qantas mimic as you constantly say – hardly! The fact is simply this. LH Lufthansa Technik, HACEO and Singapore Airlines facilities are world class and used by airlines across the globe. If you have serious concerns about their facilities why not name them? You would be hard pressed to question the maintenance record of airlines such as Cathay Pacific and Lufthansa.
4. You say: “Qantas has said that it does and will not have enough A380s in their fleet to justify HM on this aircraft type. Qantas will ultimately have 20 A380s. Lufthansa on the other hand have 8 in service and 7 on order. Please do not support Qantas statements about aircraft numbers to justify maintenance facilities knowing that Lufthansa can do it with less planes than Qantas.” This reasoning is simply not correct and you know it. As everyone in the industry knows LH Technik is the world’s largest aircraft engineering business and it has set itself up as an A380 service centre for a host of airlines regardless of how many A380s they have. Which is why it will be - and is advertising as such - a 787 maintenance facility when it has not ordered one 787!! Steve, your point is a distortion of the facts which possibly raises questions about other items that you highlight.
5. Steve your claims regarding the 737s are at odds with my engineering sources and also Qantas’ so I am not sure where that leaves us. Can you produce the list of the 500 defects?? Perhaps you can post it on PPrune? With regard to the 90 defects I think in the end only 6 were confirmed as of Malaysian origin –which they deny - but regardless six is not acceptable I agree and I understand QF is not using them anymore.
6. You say that you don’t expect all your claims to be met but why include claims that will be ridiculed by the media. Not just by me but many others. Problem is just one silly claim in 28 can crucify you even if the other 27 are really valid and some clearly are.
7. Without knowing the full detail of the QF staff travel program I agree that it is wrong for say a one-year management graduate to get a seat ahead of a 20 year veteran.
8. I think it is a shame that your EBA negotiations are concurrent with the long-haul pilots and TWU because much of the media coverage lumps all the claims together into “airline unions are demanding” which doesn’t necessarily show you in a good light and blurs the issues.
9. But I agree with you that Qantas - and we in the media - should use one year figures to explain increases not three years or in your case two years. I certainly will do so from now on.
10. On wages do your figures include the 17.5% leave loading and the shift penalties which I believe can be up to 44% for the hours worked?
11. As I said rather than a lapdog for Qantas I am without doubt its most strident critic and have done so in various media platforms for years. I have long argued that Qantas has been last to market with cabin innovations that has cost them dearly and EK, SQ and CX etc have taken – higher yield - passengers away as well as millions of economy pax. See my article: (Where next for Qantas in the April Edition of Australian Aviation.) And this is not hindsight stuff…..
a. I lobbied then CEO James Strong in 1997 about Premium Y arguing that Australians are amongst the tallest in the world and we had many of the longest sectors to fly.
b. I also warned him about DVT becoming an issue.
c. I suggested one zone of a 747 be used and there be an increase of 10% in legroom and a 15% increase in fare level. He said they couldn’t make the business case.
d. I was touting the market draw of IFE for Y in the early-mid 1990s but to no avail at QF.
e. I also touted the virtues of a long-haul 300-seater (777 or A340) to serve many European cities that the 747 was way too big for. Again deaf ears.
f. Dixon later admitted that theses were all mistakes by Qantas and I still think it should order 10 to 20 777-300ERs now to replace the 747s over and above the 20 A380s.
g. I was also one of the few critics of the Airline Partners Australia Deal in 2007/08. You may recall Dixon touting Texas Pacific as the saviors of Continental as a reason to support the deal. I wrote strongly in Australian Aviation that that link was very wrong and mischievous.
h. Also I was scathing about the QF/BA deal in late 2008.
12. With more and more passengers - by percentage - flying on low cost carriers into Australia Qantas is now marginalized in many markets. Squeezed between better product /value premium carriers at the top end and LCCs below. Thus it is harder and harder for Qantas to command the higher fares that it used to. One member of PPrune posted that the latest BITRE figures were just one report. Indeed they are but go back over the last eight years and you will see that LCC numbers climb year-on-year and Qantas’ share declines year-on-year. It appears to be an irreversible trend.
13. On the same problem Qantas also once attracted passengers with its safety record but as airline safety in general has improved the ability to charge that premium is disappearing. Passengers change airlines for $10…I see it every day. Aircraft such as the 777 and 717 have never had a fatality.
14. More than anything else, what the airline industry in Australia is facing is the fallout from government policy over the past 20 years of privatizing airlines, allowing greater access to the Australian market in line with global liberalization and also giving 100% foreign owned airlines access to the domestic market. (Virgin Blue in 2000 and Tiger Airways).
15. On that issue I have also been a strident critic of deregulation repeatedly warning about its effects on the industry. It has devastated the US airline industry and ruined many lives.
16. A number of PPRuners have questioned my relationship with Qantas. Over the past 10 years it has been more “toxic” than “working” but that has certainly improved over the past two years. Yes I am a QF FF with silver status thanks to the linking of credit cards rather than flying and I note QF is onto that and now going to increase rewards for people who fly rather than accumulate points via CCs. And for the record yes Qantas does from time to time provide me travel to industry functions however I prefer to stay at home and would reject the majority of the trips offered by airlines in general. However in many cases I actually pay for my trips as it is policy for a number of the organizations I do work for. With regard to the Chairman’s lounge yes seen it twice in Perth to do interviews with Joyce and to set up a TV shoot for Channel 7. And no never had a bottle of Grange, which is good as I don’t drink red.
Steve, this industry is at the crossroads as we are seeing a tsunami of LCCS in Asia and Australia and I am deeply concerned about the affects of AirAsia on our industry in Australia. It has seat mile costs of approximately 2.5c ASK and Australians are flying with it in droves! How do you stop that? I don’t think you can!
You guys in Sydney haven’t seen the affects of Air Asia yet but look at the numbers ex Perth and Melbourne to Bali and KL…awesome and frightening. Indonesia AirAsia is four times daily between Perth and Bali and AirAsia X double daily with an A330 to KL. And yes AirAsia does not compete with Qantas but more Jetstar however its fare levels have the effect of dragging down fares across the board.
The local tourism industry in WA has been hit very hard as people make the choice between a trip down south or flying to Asia. In Feb 2011 largely because of AirAsia, Bali was the second most popular destination out of Perth with 44,000 pax with KL third at 29,000 pax. Singapore was number one ex Perth with 70,000 mainly because of SQ.
Steve you say in your email that “regarding increases to redundancy entitlements – We shall only press these claims if Qantas refuses to deliver the job security we are after. The idea is that if you want to tear the house down, we will make it too expensive for you.” It will not be Qantas that tears that house down it will be the travelling public.
I agree absolutely with your members Qantas has to be far, far smarter to make Qantas a compelling first choice for travel. (Some PPruners have criticized Qantas for flying around old aircraft. To be fair the QF Group should have 35 787s by now and nearly their full fleets of A380s but as we all know it has been let down badly by Boeing and Airbus.)
Question is, how do we achieve all of this in the current toxic environment? Perhaps you can lead the way and say roll over the EBA for 12 months and let’s reinvent Qantas. Challenge Joyce to reinvent travel! You would have every Australian behind you!
Qantas will not fall down this year or next nor in five years but unless this toxic environment is fixed and unless the airline gets on the front foot with commercial innovations it may not see its 100th year. Doomsday? All you have to do is look at history. Hundreds and hundreds of airlines have collapsed in the past 30 years, many of them household names or institutions. Who would have ever thought in the 1970s that Pan Am would be gone in 20 years or TWA shortly after. And more recently Japan Airlines bankruptcy is the biggest corporate collapse in Japan’s history with more than 16,000 staff gone. Sure Qantas isn’t Japan Airlines but if it wasn’t for the FF program and Jetstar it would be in lousy shape and that is a cold hard sobering fact!
Steve I deliver management and staff lectures on the need for change and delivered one this week in China. I start off with pictures of flight lines and production halls from Long Beach (Douglas and then McDonnell Douglas), Palmdale (Lockheed) and San Diego (Convair ) in California and also Boeing from 1960 to 1990. It’s a great picture show –if you like planes- but the point I make is that in the PP slides there are 45 airlines and five manufacturers. Today only five airlines and one manufacturer survive in their own right with the rest bankrupt, merged or out of the commercial aircraft business. Sobering stuff!
If SQ or EK smell blood what is to stop them setting up a domestic operation in Australia? Nothing! More likely what is to stop Etihad taking a slice of Virgin Australia and investing serious capital to fast track 10 more A330s? Nothing! And with the $A so strong Australian domestic operations are far, far more lucrative to an offshore airline. There has never been a better time. This isn’t rocket science it’s holistically simply history repeating itself which it has an annoying habit of doing.
The wider issue of where our industry is at is a Four Corners type story. Would you like me to raise it with them? My story on QF 32 in Australian Aviation was the basis of the A380 piece they did recently.
I could go on and on but a number of people who have contacted me over this issue have said that they didn’t read all of your reply as it was too long. Of course there was a good reason for that but I am sure people may have already switched off to my ramblings by now.
Again I thank you for the time and trouble you have given to put your members’ concerns across and in perspective and I will strive to get these points across both in print and electronically ASAP.
Regards,
Geoffrey Thomas
[email protected]