The End For Qantas?

[Don Esson]

With Jetstar being given first of the B787's, and given the current thrust to promote the rapid growth of Jetstart International, how long will it take for Qantas to wither on the vine? Rather than try to cure the ills from which Qantas suffers, all its "management" seems to want to do is to let the diseases - as if they are incurable - spread and instead tend to the perceived needs of its growing child. What a tragedy for a world leader, and a very proud Australian?

Speaking of death, the future for Australian and its fleet replacement must also be bleak --- it didn't get a look-in at any of the announcements. With its apparent "future" tied to Japan, this market will continue to enjoy tired old equipement under Australian's opertaions just as it did with Qantas where old classics and 767's have been used for many years. A case of no competition?

Do others share my pessimistic view of current developments?

[DeBurcs]

No.

[vortsa]

That's because AO is not in the plan for the future. We have been spreading the news for some time now, its about time your all woke up and realised that they are gone.

maybe sooner than later.

Be warned get out now while you still can.

[argusmoon]

The Japanese market is in decline.
The Yen is sliding against most major currencies making travel by the Japanese very expensive.
The Yen is currently trading at around 91 against the OZ dollar.
The BoJ is happy to let the yen slide continue.
Qantas increasingly sees Japan as a secondary market.
AO's days are numbered.
It will eventually be folded into Jet*
Qantas mainline will also decline and eventually will become an umbrella term applied to its subsidiary businesses.
The funeral will be held sometime before 2010.

[Ronnie Honker]

The Yen has today jumped up to 117 against the USD, from 120 yesterday.

In the last 5 years I have seen it at 146 to the USD, and at 100.

120-130 has traditionally been its median position over the past 5 years.

But AO will go. It was Dixon's first attempt at routing the QANTAS unions - or possibly a diversionary tactic, as JetStar was brought into play.

It must be wonderful to have the money to burn on destroying QANTAS, that Dixon has, and is.

[3 slips and a gully]

From the Age, Nov 9 2004,

Murdoch tops CEO pay packets
November 9, 2004 - 8:00AM

News Corp chairman and chief executive Rupert Murdoch took home the largest salary among Australia's chief executives last year.

The Australian Financial Review today put Mr Murdoch, whose remuneration topped more than $US20.6 million ($A27 million), at the top of the chief executive salary list.

The figure includes a $US12.5 million ($A16.4 million) bonus and was up 46.5 per cent on his remuneration package of $US14.096 million ($A18.5 million) last year.

Mr Murdoch is followed by Westfield Holdings boss Frank Lowy, who took home $A14.6 million including a $A13.4 million bonus -- up 9.7 per cent on last year.

Qantas chief executive Geoff Dixon came ninth on the list, with a pay packet of almost $A6.1 million, a figure which included $A946,907 in accrued equity benefits as well as post-employment benefits worth $A1.55 million. His package was up 163.8 per cent on last year.

The average total remuneration for the country's highest paid, including the value of share options packages, was $A1.7 million - up from $A1.35 million last year, the newspaper said.

Advertisement
AdvertisementMore than one third of the 100 highest paid received a bonus of more than $1 million.

Underpinning the 29 per cent pay rise for the top executives were the best company profits in more than a decade.

- AAP

Tighten those belts!!!! $6.1M is only $234K a fortnight before tax!!!

[pilotdude09]

My understanding was that qantas was introducing Jestar International so they could use the Impulse Airlines costing structure then by 2012 Jetstar would just go back to being Qantas, as by then all QF pilots and cabin crew would be on that pay structure
.....thats what ive heard anyway.
cheers

[Sonny Hammond]

Pilotdude, in 3 sentences you summed up the whole game. Nice work.
Thousands of hours of arguments can't even sum it that succintly.

If you won't fly for Capt 150K and FO 80K and god knows SO, find a new job.

[king oath]

Despite all this effort pilot salaries are not a massive part of the cost of operating aircraft. By halving salaries he's not going to find some wonderful secret way to make the operating cost halve.

[Sonny Hammond]

We've hung our hat on that argument for years but unfortunately they didn't teach that to the beancounters in wages 101.

What they did teach them is every dollar counts and that is it.

Trade 80 years of goodwill for a couple of good profits...done.

Slash wages and conditions to prop up the bottom line with scant regard for the future, when fuel costs would otherwise erode the profit (except his own of course)...done.

Get a calulator, a Mutiply say $50k saved times say 500 pilots (in the short term, 3000 in the long run) = lots of 0000's. Add superannuation, holiday and sick pay, payroll tax and unfortunately for us that adds up to a massive amount.

Every year.

Mate, with that momentum against us we are gone.

[DeBurcs]

Yep 150K for a captain. Then when QF can't find enough drivers, the travelling public can enjoy being flown around by Indian pilots, slightly better trained than the hordes of "electricians", "plumbers" and other "technicians" the Howard gov't is opening the floodgates to.

[Bazzamundi]

What they won't factor in is the cost of pilots not giving the extra above the basic minimum required for the rostered job. Given our wages will be slashed, if we are being paid as unskilled busdrivers, why not behave as such. Why make the job any harder than it should be. May as well make sure we are carrying alternate fuel everywhere. Less stress and hard work. Surely that won't cost the company as much.

[Ejector]

PILOT DUDE 09 --- gets my nobel prize


My understanding was that qantas was introducing Jestar International so they could use the Impulse Airlines costing structure then by 2012 Jetstar would just go back to being Qantas, as by then all QF pilots and cabin crew would be on that pay structure




:ok:

[lowerlobe]

Pilot dude09 is right, the whole point of this exercise by Darth Dixon and others is to lower the cost base then re brand the new boy the old boy. That means tech crew, cabin crew, cleaners...everyone...Remember when he said he was keeping impulse for a rainy day...well it’s here. “The King is dead ...long live the KING”

He won’t have to go to India to get tech crew ,there are hundreds of pilots in GA and young kids who when old enough who want to fly and don’t know or remember the good old days and who are willing to work for a lot less than the current ones just to get a job.

If the current bench mark is $x ,they will still apply for that and expect that and listen to the stories in crew rooms of the old days. Jetstar , Virgin Blue and AO are examples in point of people who are willing to undercut others so they can get a job simply because there are no vacancies in the “traditional airlines”and bosses like Darth are laughing all the way to the bank with their bonus’s.

Even if the command pay is 150K you are not going to get any sympathy from the public because they are earning a lot less than that and there will always be people who are willing to accept that because they want to fly and it is a hell of a lot better than basically paying someone for the privilege of gaining hours and bus drivers earn a hell of a lot less than 150K , also I don't think anyone appreciates being called unskilled

The problem is what do or can we do about it?????

[pilotdude09]

PILOT DUDE 09 --- gets my nobel prize
Thanks :O :8


Okay i know pilots are going to be undercut and ripped off but it shouldnt be about the money it should be about the love of flying, but then again you should get paid well especially when you have worked hard for years to get that far.
cheers

[Mr Hankey]

Pilotdude, you are 100% correct.

Now we will see if QF pilots close the airline down to stop the cheap and nasties taking over and undermining the profession. Good luck to them.

[lowerlobe]

QF pilots are unlikely to close the airline down or even threaten to do so.They have shown what they think when they just voted up their EBA.

GD is a very good card player and has just bluffed everyone

[Capt Claret]

In time
QF Dom to operate between ML, SY, BN, AD, PH.
QF INTL to operate ex ML SY BN PH on high yield routes.
JQ to operate remainder of QF DOM and INTL routes, feeding mainline where required.

[captainrats]

Capt. Claret what does your Crystal Ball see for AO?

[The Full Monty]

In an article in the "Bulletin" magazine dated 12/07/05 entitled "On a wing and a dare", it said (in the context of an interview with Alan Joyce):

"...And then there was the troubled Delta and Song arrangement. Some budget offshoots of major carriers made the mistake of adopting a cost base akin to their parent airlines. Song was one. “What Song did was use aircraft from the parent group,” Joyce says. “They did a lot of things that didn’t ensure they had the lowest possible cost base. Song’s costs were 30% higher than [rival US budget carrier] Jet Blue’s.”

Consequently, one of Jetstar’s key challenges was to differentiate itself from budget carriers like Song, and ensure its cost base was as low as that of its major Australian rival"...

IMHO, those two paragraphs describe the way ahead for Australian. That is, Qantas made some compromises industrially (ie crewed aircraft with mainline pilots, with aircraft from mainline), and as such, has proved to be not as a successful model as Jetstar, where no such compromises have been made.

Australian has a lot of capital tied up into an operation that does not make any sort of ROI. It did not appear in any announcement re the new fleet for Qantas and Jetstar, thus based on the quotes above, it may appear that the winding up of the carrier, to tie in with the roll out of Jetstar International, is the strategy.

But what would I know, I just fly the aircraft, I don't run the business!

[rescue 1]

The statement made by Mr Joyce is quite correct.

With that in mind though I would have to question the current strategy of Jetstar - adding another 50 staff to work on the international plans, now offer per-assigned seats, carry cargo, and are moving towards two class, using the parents aircraft...Hmmm is that a baby QF??

Wasn't Mr Joyce quoted as saying [inpart from Monty] "...Some budget offshoots of major carriers made the mistake of adopting a cost base akin to their parent airlines. Song was one. “What Song did was use aircraft from the parent group,”

[Zigzag]

In time

QF Dom to operate between ML, SY, BN, AD, PH.

QF INTL to operate ex ML SY BN PH on high yield routes.

JQ to operate remainder of QF DOM and INTL routes, feeding mainline where required.

This would suggest fleet make-ups far different (% wise) than Dixon's line in the sand (20%), would it not??

Capt Claret - have to say your Crystal Ball looks a lot more believeable than Dixon's! :ok:

rescue 1

No doubt Jetstar will morph closer and closer to Qantas in time.
However, note the relevant words in your quote - "cost base".

Make no mistake - Jetstar will never approach Qantas cost wise, but Qantas may well get towards Jetstar, if you catch my drift........:ugh:

[numbskull]

What do you reckon will happen to AO captainrats??? Jetstar is hugely succesful and will be the first to get new 787's while there is no mention of AO recently apart from one lonely,soon to be obsolete 767, for extra runs to Japan.

Keep your eyes posted to the ASX website. They will be the first to know of the "official" windup of AO.

[triadic]

You "experts" seem to forget or you are not aware that the role that AO fills is one that QF want it to fill. If this means it operates with little or no profit, then so be it. If QF if were to do these services, the results would be far worse for the "group".

The jet* model as it is now, would not be suitable for the Japan market and would most likely be rejected by that market. As QF want to keep serving Japan, then it will keep AO as its cost base is somewhat less than QF.

AO is a success in many way and provides customer service which far exceeds the other group carriers - something I hear they are trying to copy.

Be assurred that AO is part of the QF master plan. As for aircraft types, my guess would be that AO will be the last to operate the 767 within the group - and that would mean at least another 5+ years for the 767.


:ok:

[lowerlobe]

Triadic,

Your argument that AO loses less money than QF would and is therefore a financial success holds as much water as a colander.

GD thinks of only two things,the first is how to make more profit for the group and the second is how to maximize his bonus.

If the cost base of J* international is less than AO and from all indications it will be then AO has a lot to worry about.

It does not matter how much profit AO makes because if J* international can make more with a lower cost base then AO will go the way of the dinosaurs .There is no sentimentality for the AO brand as there is with QF.

[relax737]

king oath from the previous page, I agree that by halving pilots' salaries, dixon won't reduce operating costs by half, anf that pilot costs are a minor part of the overall costs, but if the current bill for pilots is say 400 Million, then if he halves it, the bottom line is increased by 200 million. That would have to be worth 5 million to him as a bonus wouldn't it???

That's what it's about mate, not increasing efficience or halving the operating costs; it's about Dixon's bonus, no more and no less.

And if he can somehow miraculously halve the operating costs, then that's worth another few percent on the bonus.

lowerlobe I reckon you've go t it back to front; Geoff thinks only of how he can increase his bonus but if he manages that, the profit for the group has probably increased. He's a little like a fund manager; F#$% the investors, I get my fees whatever the performance.

[lowerlobe]

Relax

You are right but Darths bonus is inextricably linked to the performance or rather bottom line of the group.

It is not really about revenue either but about profit as a result of slash and burn management which is not that difficult or skillfull but requires and an uncaring attitude to other people.

Now if the unthinkable occured and we had a boss who actually nurtured morale and developed new products and markets ,we would really be going places and maybe our share price might reflect that confidence...but as the line goes "I'm dreaming"

[rescue 1]

I see the add for the B787 in Jetstar colours now adds "a Qantas Group airline" like on the side of AO aircraft.

I wonder what Virgin will respond with given the commitment to run JQ as an independent to the big brother?

Might be time to call in the ACCC.

[Eastwest Loco]

Hmmmm - maybe Bowyang will rename it from the Dreamliner to the Binliner.

Best all

EWL