PPRuNe Forums - View Single Post - Future of Qantas in jeopardy: Joyce (Merged)
Old 12th Jun 2011, 00:51
  #283 (permalink)  
QFinsider
 
Join Date: Jan 2005
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You just don't get it.

Short haul flying is actually more costly than long haul...H. Kelleher South west airlines.

Crew costs per hour are less than 4% of operating cost of a shiny jet.

Defined costs including, enroute costs, landing charges and even handling charges are determined vary little from airline to airline. Maintenance is a given. Fuel accounts for 40% of the cost. Hedging reduces the variation.

You can then as Qantas do, tell pilots they can't compete and that Jetstar are 30% cheaper..blah blah. So they save maybe 1%..

To further cloud the gullible, add back costs for engineering (so engineering is a profit centre) Add back the "sale" from FF of a seat. Stack on an accounting charge, for services rendered (Hey presto, accounting is a profit centre). Commercial charge a premium price (to maximise their revenue and "profit") when needing seat to position pilots to operate, qantas commercial slug flight operations (profit again) Of course without pilots to operate the service, ALL revenue would be severely curtailed.

The summary is really simple, every cost gets duck shoved. The responsible "manager" will protect budget and hit those KPI. As the genius Dixon said all segments have to compete for capital..The problem is that some centres are cost centres, some profit. In the end the business bears the cost, irrespective of where the accountants put it.

So as it relates to Qantas flight operations we get loaded all sorts of ancillary costs, probably ranging from uniform to duty travel...Of course the flying operation can be made to struggle. Selective definition of "cost" by management clouds it further for the gullible.

The camel is carrying too much straw with all these ancillary charges, but it isn't related to the damn salary a pilot earns..

Go read up on the damage business segmentation causes the firm engaged in it..Geez

Further have a look at the ratio of operationally related staff to administrative staff. Any public holiday sees many thousands of staff enjoying a long weekend, whilst the operational people keep doing what airlines do. That is put people on planes, with a meal, a cabin and flight crew, engineers fuel and a flight plan,their bags...
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