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Old 3rd Dec 2014, 00:16
  #5283 (permalink)  
Join Date: Nov 2011
Location: Inside their OODA loop
Posts: 242
At a recent love in, the new COO was asked directly why QF needed to have a specific return on capital before investment on new airframes, yet JQ Intl didn't turn a dollar and had the newest aircraft in the fleet. His answer was that he acknowledged the truth in that, but simply wasn't able to answer that question as he didn't know the reason.
Because it was always a "Baffle them with Bullsh!t" justification for an outcome they had predetermined. Management had already decided to chase the Pan Asian strategy (lots of LCC aircraft = lots of leasing & third party opportunities for the those in the know). Even better when the businesses are run across multiple jurisdictions with complex accounting structures to designed to deliberately obfuscate. Then layer the language issues on top of that, & Asia is the looks like the golden goose for the chosen few.

"Until it returns its cost of capital" is meaningless gibberish that can never be tested in a court of law. Management simply needed a plausible cover story in order to justify the process.
FYSTI is offline