Thought this comment in the above article by 'Ex QF Management' was an interesting read:
Ex QF Management:
12 Dec 2012 12:00:26am
It amazes me how poorly researched "investigative journalists" in this country really are. They generally regurgitate company spin and never really look at the numbers in any great detail.
Jetstar was never a good idea; no full service carrier in the world has successfully managed to do what Qantas management have attempted to do.
Jetstar Asia has never made a true operating profit. It has bled Qantas to the tune of $70M + per annum since its inception in 2004. Loss to the group $500-700M.
Jetstar Pacific prior to its nationalisation by the Vietnamese government in 2012 cost its parent $50-60M per annum just to keep the doors open, stated by the CEO of that airline himself in the Vietnamese Post. Do a simple google Ticky. Founded in 2007 thats at least $200M blown.
Jetstar HK. $100M and they haven't even got approval yet.
Jetstar Japan another $100M.
Jetstar international ex Australia, $500M loss, its inception in 2008 dovetails neatly with QF international's sliding "profitability". QF international is not haemorrhaging money of its own accord, it is paying for all these disasters out of its operating profit. Where else do you think the money is coming from??
John Borghetti himself stated privately that Jetstar has never made a cent in any of its incarnations. A simple close look at load factors vs revenue of each operating segment shows that. Yet the mainstream media just regurgitates the tripe QF management has been spinning for years.
The only reason these airlines where created was to park 110 Airbus A320's. Aircraft whose leases were going to GAAM amongst others, routed through Ireland and onto the Caymans and The British Virgin Islands. Guess who was profiting from those?
That's the primary reason why Joyce was placed by Dixon in the top job and why Borghetti was sidelined. Because he wouldn't play ball. Buchanan was fired because he wrote a paper outlining the fact that the low cost carrier model does not work beyond 5 hours flight time. In house legal resigned, company secretary resigned, company auditor, resigned. All left the sinking ship fearing the mother of all corporate collapses.
Joyce took it too far due to his ego being completely bound by the folly that is Jetstar and was facing a corporate collapse soon enough due to his utter ineptitude and inability to run an airline. Any airline.
They were trying desperately to do a deal with Temasek in Singapore until the 11th hour but couldn't get it over the line for the simple reason that SQ management detest Qantas management, as do Cathay. Joyce was a dead man walking and in desperate need of any deal to save his skin.
Emirates saw a bleeding man and took full advantage. Qantas is doomed with this man at the helm and frankly it is a sad state of affairs where a Dixon alternative is the preferred option.
Simple maths, the year Joyce became CEO in 2008 Jetstar international ex Australia was launched. The Qantas group made a $1.6BN profit in 2008 of which Jetstar's domestic reported contribution was a negligible amount, less that 10% of the total. A figure which in itself is questionable seeing as Jetstar's costs have always been subsidized by QF international. This was on the back of multiple record profits over many years.
Every year Joyce has been CEO has seen a substantial drop in operating profit, share price, no dividend etc, culminating in a disastrous grounding which cost over $200M, a massive figure allocated of course to the international division and pre-planned long in advance of it actually taking place.
The often quoted drop in passenger numbers to 18% of the total Australian traffic is again, a furphy faithfully regurgitated by the Chairman's lounged mainstream financial media.
The Qantas group still holds 28% of the total, 10% of Qantas International's traffic having been gifted to Jetstar International and Jetconnect since 2008, neither entity having made a profit since inception. This "gifting" dovetails precisely with Qantas International's supposed demise. The gifting of that 10% not only cost mainline 100's of millions in set up and operating costs it also robbed mainline of the revenue it would have earned throughout this time. A double whammy. The Qantas group incidentally held 34% at the time of privatisation in 1992.
All for a series of Jetstar airlines that no one aside from those who work there, the hapless CEO who "created" it , and the bankers at GAAM and Investec who profited from the aircraft leases generated by their expansion, would mourn its passing if they were made to stand on their own two feet.
A shareholder activist take over of control at QF would be the best thing that could happen at this time. This is a completely different proposition to the APA bid, a bid incidentally that Joyce was a great cheerleader for and which would have netted him in excess of $20M had it gone through, something he has conveniently forgotten now. One wonders how much he will be making out of the Emirates deal if it goes ahead. A question nobody seems to be asking, if Qantas is such a basket case, why are the ex managers of the business so keen to buy it? What do they know that the market hasn't been told?
Qantas should not be in this position, however now that it is, it is a matter of national security if nothing else that the Emirates deal is stopped and the senior management and Board are replaced with people who have full service airline experience, many of whom (me included) jumped ship and are now happily at Virgin under Borghetti, the man who should have gotten the nod in the first place.
In his own words to a management conference call not so long ago, "We have nothing to worry about whilst Joyce is running Qantas."