The spin at Q...

[QFinsider]

"Analysts point to the fact that the airline has withdrawn from European cities such as Rome, Athens and Paris because it doesn't have aircraft such as the 300-seat 777-200ER, which are perfectly matched for the passenger demand on those routes.
Qantas in fact is the only major long-haul airline that does not have a 300-seat jet in its fleet.
The airline's management in the 1990s was also slow to install seatback videos for all passengers, which is thought to have cost business.
Current Qantas chief Geoff Dixon took over in 2000, and with current chief financial officer Peter Gregg and general manager John Borghetti has moved aggressively to reposition the airline at the forefront of innovation both operationally and in market positioning with the launch of low-cost JetStar.
Qantas has the second-largest order of 20 of the giant 500-seat A380 and is the second-largest customer for the 270-seat 787, with both aircraft slated for delivery in mid-2008."
The Australian
12 January 2007

So according to this logic, the arrival of Geoff Dixon enabled Q to set a new course. Funnily enough there are six years in which this so called "strategy" has taken to come to fruition.
The irony is that in the first few years this tool sat there surrendering market share only to discover that he didnt actually have the right aircraft, an aircraft most other airlines already operated!.....Something HE could have fixed if he had any talent, particulalry in the wash up after September 11. :mad:

[B A Lert]

The spin is of some concern. The work experience kiddies just don't understand or know or even want to know -

Fact One: Dixon was the Qantas marketing head honcho for most of the 1990's when decisions to defer seat back video were made.

Fact Two: "Qantas in fact is the only major long-haul airline that does not have a 300-seat jet in its fleet" Haven't they caught up with the fact that Qantas has 10 A330 aircraft in its fleet? These aircraft have almost 300 seats with the published count being 297. Perhaps spin doctors still believe that Qantas is an all B747 fleet.

The article in The Australian is worth a read. Link below. It is interesting to read what an 'expert commentator' may be thinking. I wonder however if the guy in question may be thinking about his future consultancy.

http://www.theaustralian.news.com.au/story/0,20867,21044336-23349,00.html

Spin surrounds us. I recall that Virgin Blue made a great splash about being the first with Foxtel and 100's of TV channels available to their punters. They received great publicity, all of it free. More than a year later, I wonder just how many Virgin Blue aircraft have been equipped to offer Foxtel? Let's here it from Qantas's opposition and see what spin thay can put on their position?

[B A Lert]

apparently, no-one asked Flight Ops - the in-house experts in aircraft operations

Flight Operations have a lot of input but the payload/range experts are the Performance Engineers who conduct the studies.

Most pundits agree, QF should have bought 777s immediately after September 11 when there were spots available at cheap prices

That's right, but most of the Qantas heavies at that time were dancing with glee on Ansett's grave. They did pick up a lot of Boeings for domestic operations as they were obsessed with domestic operations. After all, they only had a basic grip on them at best so the International side of the business was ignored or debased, like putting sub-standard Air Canada B767's on Tasman and deploying quality long-haul aircraft and crew on domestic operations to help fill the void left by Ansett. And so the decline of L/H operations was accelerated to prop up the domestic side of the airline. IOW, Strong, Dixon and others took their eye off the ball to the xtent that they didn't exploit all available opportunities by buying some bargain proiced B777's that were available.

[surfside6]

After the merger/takeover most senior mangement positions were taken by individuals who had run TAA/Australian...they had a domestic airline operation skill set.
Hence the ineptitude with the LH operation and the emphasis on the domestic operation.
Qantas desperately needs new, talented managerial blood.
Consultants...Oldmeadow et al provide what innovation there is..and it aint much.
Jetstar was Oldmeadows idea..not Dixon`s

[roamingwolf]

Hey Balert Mate I thought you posted somewhere a whileback that Dixon was worth his bounus? Having second thoughts mate ?

[B A Lert]

Hey Balert Mate I thought you posted somewhere a whileback that Dixon was worth his bounus? Having second thoughts mate ?

No. Qantas deferrred the IFE decisions for good reason but the spin of other carriers managed to out-spin Qantas. Qantas need to get some of the flaks who are used by SIA and Emirates.

Dixon and his domestic cronies have done a reasonable job but there is now a need for an injection of new blood at the top. GD has done well in a difficult environment but most capable CEOs would have done the same or better. How Qantas would have fared if it didn't buy Impulse, and Virgin went down the tube instead of Ansett? This almost happened. Ansett "won" the race to the bottom but if DJ bit the dust, Qantas would not be where it is today.

[stubby jumbo]

No. Qantas deferrred the IFE decisions for good reason but the spin of other carriers managed to out-spin Qantas. Qantas need to get some of the flaks who are used by SIA and Emirates.


Hey never-be alert.

Could you decode/decipher your latest post.??

I've only had 4 VB's and 3 glasses of Charddy and still I do not understand what you're getting at-above ??:confused:

[Bug Smasher Smasher]

...like putting sub-standard Air Canada B767's on Tasman...

Now come on B A Lert, Qantas is NOT and has NOT EVER used sub-standard Air Canada B767s on Tasman services.

Just sub-standard British Airways B767s. ;)

[ozangel]

Not that I care, but fyi I did fly on a qantas flight to christchurch back then aboard an Air Canada 767 with Air Canada crew. It was a Qantas flight, and the crew were doing rotations for the short time the aircraft was here.

Good crew, and nice aircraft, although i was in J.

[noip]

BSS,

Well, maybe they were'nt sub-standard, but QF did use Air Canada for a time to do the Tasman ....

N

[jackthedog]

Rumor is that the AIPA Committee of Management resolved on Jan 10 2007 to initiate a Legal, Political, Financial, and Industrial Campaign to block the APA Bid if AIPA is not able to obtain, (prior to the offer documents being sent to QF Shareholders), assurances and undertakings necessary to satisfy AIPA Members' concerns. The AIPA President and the AIPA General Manager are scheduled to meet shortly with the CEO of QF and APA's Directors in an effort to avert proposed action. Confirmation anyone?

[max autobrakes]

Jack,
try sniffing for bones else where.

[mustafagander]

Jack, do you imagine, even in your wildest dreams, that anyone "in the know" in AIPA is likely to broadcast their strategy all over this forum??

[Agent Mulder]

Alternatively,

Jack, do you in your wildest dreams believe there is anyone "in the know" in AIPA.

They can have as many chest beating love ins as they like, but when no one takes you seriously (and thinks you are all mad) it is all wasted.

Ego (someone said it's not a dirty word).

[Nemisis]

Max Autobrakes and Mustafaganda,

I think you are spot on. Jacks bone sniffing on PPRUNE has come up with precious little and I agree that AIPA aren’t about to broadcast their well considered strategy here.

As for Mulder every time he attempts to bash AIPA it simply reassures me that AIPA is doing its job.

PS Mulder I believe the bile and bad manners in your post of the 27/12/2006 must say a lot about you. Keg was a gentleman and an absolute clear winner in the exchange.

[B A Lert]

The following article is from today's Sydney Morning Herald. The spinners from deep in Qantas at a high level must be responsible for this stuff but anyone with half a brain could successfully see off every arggument the writers puts forward in favour of the takeover.

Still call it Australian-owned

You may not have heard of David Bonderman, but you will hear more about him if the $11 billion bid to take over Qantas and turn it into a private company is successful. His deals have been described in The Wall Street Journal as "audacious".

Bonderman made his name after taking control of one of the worst major airlines in the world, Continental, in 1993, after it had entered bankruptcy protection for a second time.

Once, on a Continental flight, Bonderman was so appalled by the food that he kept his meal, took it off the plane, and sent it by express delivery to a senior Continental executive with a message: this is unacceptable. If Continental had failed a third time Bonderman's private equity firm would have gone down with the ship.

Instead, Continental became his calling card. Since 1995 the airline has become viable, profitable and doubled in size. Then Bonderman and the Texas Pacific Group did even better with their next airline, another bankrupt carrier, America West, which has since quadrupled in size and revenue.

But their best airline growth story was yet to come. Twelve years ago TPG became an investor in Ryanair, which has since grown exponentially by providing low-cost but reliable air service in a market previously dominated by bloated national carriers.

Since TPG invested in Ryanair, the airline has grown from eight jets to 108, has the largest route network in Europe, staff has expanded from 500 to 3500, and the airline has a market value higher than that of British Airways. Bonderman is chairman of Ryanair.

These deals have left Bonderman walking in the footsteps of the best and most influential airline executive of all time, Herb Kelleher, the founder of Southwest Airlines, the model for the low-cost, low fare, high-reliability airlines around the world. More importantly, Kelleher and Southwest enforced a morality on the business - and I don't use the term lightly - with simple, cheap and transparent fares, a strategy that has not changed in 35 years. (I once made a pilgrimage to Dallas for a 45-minute one-on-one meeting with Kelleher, the airline equivalent of an audience with the Pope, a pontiff who drinks and smokes too much.)

Bonderman and TPG have seen something in Qantas, although this is the first time they have invested in a major carrier that does not need rescuing. The crux of this deal is that the partners in this takeover offer see Qantas and Jetstar as the best and possibly only chance to attempt in Asia what Southwest has achieved in the US and Ryanair has achieved in Europe, though using a different model, one that offers the option of full service on long-haul flights, not just one-class, low-costs, low fares.

This is why they are willing to pay $11 billion for a company that the stock market valued at about $6 billion before the bid. The consortium, Airline Partners Australia, is offering a fat 50 per cent premium over the previous prevailing market value because it believes it knows more than the stock market about creating value and growth in the airline business.

Between them, TPG, Macquarie and Allco control more than $100 billion in equity. All three have had exponential growth over the past decade.

They also have far more experience and success in the airline industry than the existing ownership and board. The consortium's board would include four aviation heavyweights - Geoff Dixon, David Turnbull (former chief executive of Cathay Pacific), David Coe (chief executive of Allco, a long-time business partner of Qantas) and Rick Shifter of TPG (who has served on the boards of Continental, America West and Ryanair) - plus advice from Rod Eddington (former CEO of British Airways), who is on the board of Allco, and, of course, Bonderman, whose TPG would have a 14.9 per cent stake.

A formidable line-up. But the big red kangaroo on the Qantas tails carries a lot of baggage - emotional, symbolic, historical - including some excess baggage. A Roy Morgan opinion survey conducted since the takeover offer was announced found a majority of Australians still think of Qantas as their airline, either Australian-owned or government-owned, almost 12 years since Paul Keating's Labor government sold off Qantas in 1995.

The emotional baggage may explain why so much mythology has sprung up about this deal: that it is a foreign takeover; a Macquarie Bank fee feast; jobs will be cut; debt will be too high; regional services will be slashed; maintenance jobs will go to Asia; the company will be broken into parts for resale; low-cost Jetstar will engulf Qantas; government's protection will diminish.

None of this is true. The Qantas Sale Act caps foreign ownership at 49 per cent and is still the law. The consortium is 51 per cent Australian-owned. The Allco group would have a 35 per cent equity share. Macquarie, because it already controls Sydney Airport, has only 14.9 per cent. Senior Qantas management has 1 per cent.

Allco, a global finance company born and bred in Sydney, has been given the leadership role by the partnership, with a 45 per cent voting share. This means that Australian companies would control 62 per cent of the private ownership. As for Dixon becoming a plutocrat off the deal, he will give any proceeds to charity. "I'll probably be making a little bit less [salary] than I'm making now," he told me, "but I may have a lot more to give away."

The consortium likes Qantas management and the Qantas business model. It supports the plan to spend $10 billion to expand capacity by 40 per cent over the next five years. And it loves the deal Qantas extracted from Boeing in 2005 when it ordered or optioned 115 Boeing 787s. It was a great deal for Qantas. It forms the bedrock of the airline's growth and survival strategy in the brutal competition but enormous potential of Asia.

[Agent Mulder]

Love is blind Nemesis.

[king oath]

Surfside 6.
You make a good point.
Dixon was Strongs acquaintance. Strong ran TAA which he renamed Australian. Guess why Dixons star rose in the heavens. Maaaaaate.
They were both working in mining industry at Gove as young blokes. A recent story by an ex pollie in a national newspaper, related to his experience with Dixon when he was a young wannabe at Gove, humorously telling the story of his driving abilities at the time. To read it is to understand this bloke.
At least Strong learnt to fly an aircraft. The pollie hoped Dixon would never learn to fly, after the standard set by the car accident.

[surfside6]

Would you have a link to the article?

[Bleve]

http://www.smh.com.au/news/opinion/still-call-it-australianowned/2007/01/14/1168709614367.html

[Keg]

Congrats to Phil for a kick ass response to the spin from QF published in the AFR in recent times.

Author:
Publication: Australian Financial Review (43,Tue 16 Jan 2007)
Edition: First
Section: News
Keywords: Qantas (22),Virgin (9),Blue (9)

--------------------------------------------------------------------------

Jennifer Hewett and James Hall claim Qantas pilots earn double what Virgin Blue pilots earn and that we work less. This is completely wrong ("How to make Qantas soar", December 16).

While our hourly rate is higher, our pilots have agreed to work to an exemption to the Civil Aviation Orders that allows us to fly longer each day than Virgin Blue pilots. We also fly more hours a year.

These factors give efficiencies to Qantas that are unavailable to Virgin Blue.

As Qantas operates B737-400 and NG aircraft, our pilots require two separate endorsements. Virgin Blue pilots need only one endorsement as they fly only 737NGs.

We earn more money because of more hours and more qualifications for a start.

Bernard Kellerman's "Ryanair strategy a flight plan for Qantas watchers" (January 3) claims Qantas captains earn up to $400,000 a year and work only 700 hours. Once again, your journalists have failed to check the facts. In 2006, Qantas urged pilots to use up their annual leave or risk being forced to take leave. With this in mind I used 51 days of accumulated annual leave in 2006. Despite taking nearly two months off work, I still managed to work nearly 1500 hours for the year, considerably more than the 700 hours Kellerman's article claims. Of the nearly 1500 hours I worked, Qantas paid me for 960 hours, including my annual leave payments. If I took sick leave, I received either zero or three hours' pay a day.

In summary, I was paid for 63.9 per cent of the hours I actually worked and for every hour I worked, I spent an average of 1.45 hours away from home. That seems like a pretty efficient pay structure for Qantas if you ask me.

I am a first officer on the Boeing 737; the same aircraft type as operated by Virgin Blue. In 2006, my income (including annual leave, superannuation and bonuses) was $140,114.80 plus meal allowances.

According to our enterprise bargaining agreement, which you can access on the net or via the pilots' professional organisation, Australian and International Pilots Association, my hourly pay rate is 59 per cent of that of the most senior 737 captain at Qantas.

This would make a 737 captain's salary somewhere in the vicinity of $237,000 a year plus meal allowances; a far cry from the $400,000 your journalists are reporting.

Qantas pilots fly more hours per year, work longer days and operate more aircraft types than Virgin Blue pilots, thus giving Qantas added efficiencies in operations, crewing and training.

Trying to compare the total remuneration of the two pilot bodies is therefore irrelevant.

What would be more relevant is the crewing cost per hour, which I am sure AIPA could provide all the relevant details for.

The total crewing costs for Qantas international operations are even more complex and this is an area in which our second officers provide Qantas with an incredibly efficient workforce.

With these facts in mind, I ask why your paper seems intent on focusing on relatively small pay differences between domestic pilots in this country?

Why is the focus on Qantas pilots and not the Qantas management?

A cursory glance at the 2006 annual reports for both airlines reveals that Qantas chief executive Geoff Dixon outearned Virgin Blue CEO and joint founder Brett Godfrey by 473 per cent. Dixon does run the whole Qantas group, though, so there are probably more pertinent comparisons.

John Borghetti, the executive general manager responsible for Qantas domestic, outearned the CEO of Jetstar, Alan Joyce, by 226 per cent and Godfrey by 235 per cent.

The biggest disparity, however, seems to be between the total remuneration of the chief financial officers.

Qantas CFO Peter Gregg (quoted in Kellerman's article) outearns his Virgin Blue peer, Keith Neate, by a massive 633 per cent.

Instead of publishing articles on non-existent 50 per cent pay discrepancies between Australian domestic pilots, who have delivered this country arguably the safest aviation industry in the world, a more pertinent question would be: "Are Qantas shareholders getting value for money from their board of directors and executives who cost them 232 per cent more in remuneration in 2006 than Virgin Blue's?"