PPRuNe Forums - View Single Post - Alan Joyce Chief Executive Qantas June 22/6/11 Address to the National Press Club"
Old 21st Jun 2011, 23:11
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Captain Sherm
 
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Ia et al,

Emotion aside, and as journos may be trawling through these posts as they prepare questions, it is probably appropriate and desirable to focus things a little:

You listed a number of reasons Qantas long-haul is in trouble:

1. Qantas doesn't fly to many places and its quicker/easier to connect on the likes of EK usually at a cheaper fare

This is a critical item and deserves first place. Have a look at Singapore's route map and compare. As a matter of pure arithmetic even Singapore would have a least performing route. So if once a month they cut out that least performing route, then the next month the least performing of the ones that remain etc etc.....in a finite number of months they would have no routes at all. So drowning the weakest kitten in the litter is not a desired strategy.

2. Qantas is still flying 744s when in many instances a 773 would make far more $$$$

Yes, almost so self-evident that it goes without saying. No-one else has the same fleet strategy as QF. And the 787 whenever it comes doesn't solve this problem. It will help flesh out the route map and be much better on domestic and regional routes than the 767. However since the first 787s are going to Jetstar it is not at all sure that their delivery will do anything at all to help the bottom line of QF Long Haul. Boeing have not anywhere near finished the development of the 777 suite of airplanes and they will be being delivered for years if not decades. Still plenty of time to fix this gaping hole in the fleet and the associated haemorrhage in fuel and maintenance costs

3. Loyal pax are running from QF because they hate JQ

Seriously doubt this is an issue for long-haul. Hard to imagine some pax refusing to fly with QF on long-haul because they don't like JQ domestic. And where JQ has replaced QF Long haul on international routes then if existing QF pax voted with their feet it would be JQ International that would be bleeding, not QF Long-haul. Long haul load factors are generally excellent and the yields probably fairly good otherwise, with the hideous fleet mix, they'd be losing even more money.The problems with QF long-haul are far more on the cost side and that isn't fixed by putting lipstick on the fleet pig, it's getting the basic structure right, routes, fleet, productivity and product focus.

4. We have had volcanos in Europe, Ash in Australia, disasters in Japan and NZ

This is a factor though given the slim margins overall that QF makes when the fleet is grounded a number of variable costs are not incurred. And many of the pax will resume their journey anyway so the revenue will come back. In any case it is a cost that most airlines are bearing and another resosn to have your basic structure right in the first place.

5. The QF PR machine went into reverse years ago

6. The worst CEO who had only ever worked for loss making airlines before arriving at The Qantas group


Item 5 is annoying but doesn't mean much on the income statement. Item 6 relates to the non-delivery of items 1, 2 and 3, nothing personal at all, just an inability to get the Board to fund the correct structure and a lack of understanding of how to reform in a difficult competitive environment.

Looking forward to the Press Club address and the Senate report. Lots to talk about them!

Safe flying

Sherm
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