Jetstar redundancies [Archive]

QFinsider

27th Jun 2008, 00:43

As Willie Walsh alluded to the so called low-cost carriers will struggle. He went as far as predicting the demise of Ryan air and Easy jet.

As I have alluded to all along, it is the yield of the business that matters.

Given;

Very elastic demand
One way thin markets
A"brand" with no penetration

the writing is on the wall. There has been little sense in the exercise of Jetstar particularly as it relates to the international markets. It has gained little traction in any market it serves. Management cannot ignore the impact of oil. The cost base is under huge pressure and it isn't the pesky pilots or engineers.

The contribution margin of this business to the "group" is negative. Every airline that tried it canned it. The folly of this exercise has cost the company a fortune for no tangible results. The industrial aims are far from achievable and as such, it begs the question, who has allowed this self indulgant waste of resources to continue for so long?

LetsGoRated

27th Jun 2008, 01:16

May be pub talk

And you all get worked up! Christ! Doesnt take much?

Wingspar

27th Jun 2008, 01:31

Jetstar will go from a 'go alone' expansion plan to one which replaces QF marginal routes.
When Dixon goes so will the JQ momentum!

Jet Man

27th Jun 2008, 11:38

Don't think easy need any pilots as they have good pilot retention - according to mates who work for them!

I would have thought Jetstar would prosper in this sort of environment to the detriment of Qantas?

busdriver007

27th Jun 2008, 12:19

Jet man,
Guess who travels now.....not the battlers but the business people who demand the best and have to travel(look at SQ business class-all j/c to New York and Los Angeles). The mums and dads stay at home and pay off their credit card. Jetsar will not have a sponsor when GoD leaves...........;)

Henry Winkler

27th Jun 2008, 21:42

It was interesting in the SMH yesterday there was an article about the replacement of Dixon. The front runner being Gregg, and Borghetti not far behind. But the name Joyce, didn't even get a mention. Maybe Jetstar really is on the nose.

captaintunedog777

27th Jun 2008, 22:11

So let me see the SMH would know more about the future CEO position than the Qantas board. Yeah right! Interesting also knowing how the media is viewd by PPRUNE readers and contributors.

Henry Winkler

27th Jun 2008, 22:28

Ahhhhhh, I don't think they (or I) ever suggested they knew more than the QF board. Maybe this information came from someone close to the board, I don't know, and neither do you. Are suggesting you know what the QF board is thinking?
With regards to the way the media is viewed within Pprune. I think it's got more to do with accuracy of reports involving flying stuff (aircraft types, etc....), Not business stuff.:rolleyes:

captaintunedog777

27th Jun 2008, 22:38

Hey Fonz. Reading back through my reply I fail to see where I said I knew more than the board. I simply said the Qantas board are in the know.

With regards to the way the media is viewed within Pprune. I think it's got more to do with accuracy of reports involving flying stuff (aircraft types, etc....), Not business stuff.:rolleyes:

Oh thanks for that I didn't realised they F%^# up he flying stuff only

Henry Winkler

27th Jun 2008, 22:41

That's alright. It shows. Clown.

genex

28th Jun 2008, 01:19

QFInsider....

I am often moved by your posts to revisit some basic concepts and pressure test them to see all is OK.

I'm not sure, to start off with , that in discussing airline industry affairs I'd necessarily be using Willie as a primary source. Issues of a) credibility and b) vested interests come to mind.

Bigger issue though. "Yields are everything'. Good point...yields have to at least cover all costs, including overheads and cost of capital....QED. But since the first passenger stepped aboard a Zeppelin or DC-2 or whatever, about the time my mum was a toddler, YIELDS HAVE BEEN STEADILY FALLING. Even First Class yields are nowhere near what they were once.Nowhere near. Cold hard fact of life. On the other hand its what you'd expect isn't it? On average, since the DC-2....and if I could find the figure I'd tell you but its somewhere....yields have fallen on average about the same amount p.a. as technology has lowered the cost of putting a seat in the air. Increased passenger numbers are the link between the two.

There is no world where you can, on a sustainable basis, ignore this reality. Management have to manage the mix of fares and segments and their varying elasticities and sensitivities and needs of course. A big job. Some carriers have tried, with success, to embed a Jetstar" type carrier within their own liveried aircraft and cost structure, shoe-horning all available price seekers into the Y class cabin. Insofar as this increases load factors it is good.If it means the same pax travelling at lower fares then it is bad. Some carriers have tried to start up low cost half-arms-length subsidiaries and it never worked. United's Shuttle and TEd for example. Disasters. Jetstar is simply an example where its worked, thus far, and workled well. Quarantines the yields on the high-cost legacy parent and allows aggressive expansion and competitive defence...for the whole group...in price sensitive markets....which are ever growing.

I like that you believe so hard in what once was. But since, at least in this country, TAA entered the market and announced that it would introduce Economy fares (up til then all fares had been First Class)....prices have been falling. TAA's slogan was "One price for all...the lowest" or something similar. That announced the end of the days of protected yields and proetected markets. The world you long for and so admirably believe in and cling to....HAS GONE.

I'd suggest to you that you really do start with a clean sheet of paper, bottle of red and a good computer and do some research. To start I commend to you the concept of "Suspension of Disbelief".....start by thinking about what the QF Group has done with JQ in something other than negative terms. Susepnd your current thoughts and ideas.....look at the facts. Arrive at that point later if you will....but don't start that way.

On it's own....unless extremely well funded....and possibly not even then....Jetstar might not have started or prospered. And by exactly the same logic, without JQ, the Qantas Group would by now have drowned, carried down to join Davy Jones (and Braniff, Sabena, Swissair, Alitalia, TWA, Panam, Eastern etc etc), by inflexibility, falling yields, legacy costs and equipment and falling market share.

For now...the fortuitous alignment of the planets is that together, the various components of the QF Group, add up to far more than the some of the parts. Maybe imperfectly handled, maybe some un-needed malice in various quarters, maybe some attitudes borne of history not of the future. But it works.

Get back to me when you've thought through this without your pre-conceived ideas.

QFinsider

28th Jun 2008, 12:52

Simply put,

show me an audited set of accounts. Let me see just how much is gifted from the parent. From maintenace to walkie talkies, Jetstar is a farce.
Oh forget it

Let's see who is still standing with externally audited accounts in 12 months.

Qanchor

28th Jun 2008, 20:03

Have just come home from an industry do & word is J* have contacted PARC/RAL to see if they place 320/330 crews off-shore

genex

28th Jun 2008, 21:42

Sigh.....

QF Insider......As far as I know....Qantas Group accounts are audited. And as a listed company I presume Qantas abides by the reportng requirements of the ASX as well as the ASC, not to mention the analysis of the brokers and investment banks that guide investors.

If you are implying that there is fraud or shady accounting....take action.

Or....as I have recommended to you....study some facts and theory. There is no single method of the allocation of fixed costs within a major multi-faceted entity. How a group allocates its resources, is a function of its strategies.It sometimes lends itself to dissaggregation....sometimes not. For example if QF long-haul received a significant advantage because travellers used FF points earned on domestic and consistently travelled long-haul on business because of that lure, or read the Qantas inflight magazine often on domestic sectors so decided to travel long-haul on a holiday...does that mean that short-haul is subsidizing long-haul and therefore should be compensated?

Or let's say that a QF short-haul 737 crew cost 30% more than the "free-market" rate (i.e. the rate at which all positions if advertised would be filled by qualified applicants) because of legacy of non-competitive EBAs and having. Just as an example you understand. If that additional cost dampened short-haul growth in a way that impacted long-haul flow-on revenue and hence profit.....should short haul compensate long-haul?

"Structure follows Strategy"...."Concentrate resources at the decisive point".....these are the keys. The Group chooses how to allocate and fund its resources in order to meet its perception of competitive challenges, long and short term. It works, give or take, in a fairly unparalleled way.

If you can get your head around some of this stuff you'll be the better for it. If you are really as passionate as you seem...find yourself a study course in airline economics.....many folks have found that a few hours a day for a few years in that pursuit has opened their eyes and their career choices.

Venom has no place in business, bulletin boards or the cockpit. I commend that thought to you.

Mstr Caution

29th Jun 2008, 00:02

When I think of Dixon & the Jetstar experiment, it reminds me so much of Charles Ponzi.

In brief, a dud investment sold to those willing & hoping on its own success.

MC:8

Bula

29th Jun 2008, 00:23

I love the use of the term the "parent" company. As far as I'm concerned the parent group is the QANTAS group, of which Mainline, Jetstar, Sunstate and Eastern are all a part of. The point that mainline think that they are immune the trials of today shows a sense of being an illusionist.

The end is plain an simple. Unless the group can be adaptable as a whole Jetstar and mainline will both suffer. Market share will drop with capacity and OUR competitors will gain the footing they need to take a real chunk of our clients with them.

The Markets of Jetstar and Qantas are aimed at different clientèle. Jetstar is drawing a line in the sand, accepting a small loss while continuing to expand while mainline reduces capacity and still remains profitable because of their large business base. For those that feel Jetstar and QANTAS are competitors, they are only showing how naive they really are. We are on the same rubgy team, don't let management play it into any other direction. The flight crew at Jetstar are, for lack of a better term not the "Strike Breakers". We are only doing what mainline can not and by that maintain the Qantas groups market share.

The only people to suffer here is Virgin and I feel the Qantas group is in a very strategic position to squish the market share Virgin has.

QFinsider

29th Jun 2008, 00:27

The only venom has been the venom eminating from Dixon and co.

J* international was nothing more than an attempt to lever down working conditions for mainline employees. Its business case was shaky at best. The logic firmly supported by a Liberal workchoices IR environment that no longer exists. To validate its viability would necessitate comparing like with like.

As I cannot compare like with like and see just what price is paid by J* for the assets it is gifted/borrows/"buys" from mainline, the question remains.

At $140 a barrel, low yield and zero if any contribution margin, just what is the reason shareholders funds are poured into an entity that relied on low yield high volume patrons? The same patrons being the first to feel the changing of the economic cycle.

Sure group accounts are audited, but the contribution and apportioned cost of the J* entity is not. Dixon made a big show of segmenting the business units to facilitate "competitive pressure" allowing units to compete for capital. Let's just see how well J* competes when issues of transparency including transfer pricing are available for all to compare..Like with like

genex

29th Jun 2008, 02:53

If Qantas could give a free wheelbarrow to an employee and in doing so fend off a competitive thrust by another carrier and in doing so saved the cost of many wheelbarrows....what would you say?...."No, that guy must pay full price for the wheelbarrow".......even if it costs the parent company a heap? No....and this is why you need to study and understand the very basics of competitive behaviour. You really do.

Don't use emotive thinking in these forums or at a bar, any more than you would...if you are a pilot...in the cockpit. As I said...and I'm not by far the only one....without Jetstar there might be now Qantas by now....and that may be equally true the other way around. That is what synergy means and as said much earlier...economies of scope. If you confuse synergistic and symbiotic mechanisms with parisitic behaviour then you are truly lost and I for one, as a QF shareholder, am glad you don't sit on QF's executive committee.

altocu

29th Jun 2008, 04:26

Genex,

I can't speak for every Qantas employee, but personally I wouldn't mind if Jetstar were receiving "free wheelbarrows" if the company would do us the service of calling a spade a spade. It gets a little tiring hearing geoffwit bang on about the legacy costs of QF when it is patently clear that we are subsidising the the JQ operation. :ugh:

Altocu

genex

29th Jun 2008, 05:53

Sigh.....IT IS NOT A SUBSIDY anymore than saying that the passengers "subsidise" the extravagant payscales of legacy mainline pilots.

Anyway....I give up. If you guys are indeed pilots.....I worry about your situation awareness. But I no longer wonder why they use the word Legacy. It bleeds from you every sentence......good luck if you ever get your wishes and destroy with Jetstar the cutting edge of your employer's competitive capabilities. You'll need it when you follow so many other colleagues onto the unemployment lines.

Bye

Keg

29th Jun 2008, 06:52

Lets see. Is this a subsidy?

Parent company purchases sims over a number of years for a particular aircraft. One year, the airline that purchased the sims wants to train record numbers of crew on said sim. Unfortunately, because of the number of 'subsidiary' crews utilising said sims, the parent company is forced to send crews overseas. In doing this they accumulate accommodation, allowances and costs for sim time that are attributed to the parent company. Parent company's figures don't look too flash.

Why don't we send the subsidiary crew o/s instead? Unfortunately, the additional 'cost' of sending crews o/s can't be absorbed by the low yields of the subsidiary carrier. Their training figures don't show this o/s excursion and so their figures look excellent.

The seperate training subsidiary recently set up by the parent also looks excellent because their sims are fully utilised. PS: They too were 'gifted' the sims from the parent.

Ultimately the 'cost' to the entire group would be close to the same no matter who went o/s, the point is that the 'parents' figures look bad that year- and the employees of the parent airline are told that they have 'legacy' costs and are uncompetitive- whilst the subsidiary airline is held up as the saviour of the parent company.

So you may be right genex. It may not be a subsidy. However to believe in the last statement- that the subsidiary airline is the saviour and has great numbers- is as equally naive as the belief that QF would survive unchanged without the subsidiary.

drshmoo

29th Jun 2008, 07:15

Genex ........... sigh

without Jetstar there might be now Qantas by now
without JQ, the Qantas Group would by now have drowned, carried down to join Davy Jones (and Braniff, Sabena, Swissair, Alitalia, TWA, Panam, Eastern etc etc), by inflexibility, falling yields, legacy costs and equipment and falling market share.

What are you on??:ugh:
Get off the gear buddy:ok:

Perhaps instead of pontificating and ranting abouts ones own education and suggesting others find one - you could should look at the facts.
The group is segmented and told by GD (FOG) that we all have to compete for everything. It pushes us all to do it cheaper and to compete for things like 787s. Now its all well and good to say that we are on group but when we are competing for assets and are told its on a cost basis - then why should Jetstar be rewarded for being cheaper, when a substantial slice of their costs are mainline subsidised. So mainline are being double penalised. Its all a bit technical really - but a man (or woman) of your education could see this I'm sure.:ok:

Now if some of the Jetstar pilots were seconded off overseas for a while, that would mean that the Group wouldn't lose all these highly trained individuals. For some it would be a great couple of years flying overseas etc but obviously not great for everyone. I can't see any big changes to Jetstar in a negative way while GD is still at the helm.

genex

29th Jun 2008, 11:43

I try not to pontificate and my education is, though robust, not something to drone on over. Broadmeadows Tech was a great place but hardly Harvard.

I have been simply trying to make the self-evident point (I did learn a few things in those long years since Tech) that transfer costs, allocation of fixed costs where there are joint products, variable intra-company cost of capital and the use of multiple brands to entrench Group strength are simple part of daily business life for the strategic planners in any diverse group, not just QF.

Years ago when the then Federal Airports Corporation there were endless debates in Canberra over the issue of pricing for access. QCs, PhDs, very senior public servants, competition gurus, consultants and airline honchos all argued over who was subsidising who when a Dash 8 was occupying a runway at KSA that a 747 would like to have used. Similarly, what should the usage price be for a Dash 8 operator who only wanted say 4000 ft of 100 ft wide low strength bitumen but was stuck with cost recovery for a 14,000 ft 16/34 RW at KSA. All complex issues. QFLink might argue that its not their fault that Sydney has such long RWs and they shouldn't have to pay for the bit they don't use.

Moving onward from that.....Lets say that the Qantas group decided there'd be no internal subsidies between its own aircraft using KSA. "Everyone should pay the same". Should there be an equal charge for a) each aircraft movement?, b) each available seat?, d) each occupied seat?, e) each hundred dollars of revenue?, f) each KG of total payload?, g) each 1000 kg of fuel used getting there?, h) each KG of Max Landing Weight?, i) each 1000 km that the aircraft has travelled on that journey?, j) combinations of the above....and the list goes on. Or should we just auction the slots to a "highest bidder" concept?

Do we give an advantage to the 737 and A320 because they do say 6 sectors a day and generate more revenue and passengers than a 747 in that day? Do we try and bias toward the aircraft that use less fuel per seat or the ones that make more profit? Do we put a surcharge on older, noisier, thirstier aircraft to encourage fleet upgrades.

If you happen to be the one person who can resolve all these (and more) questions to the satisfaction of every stakeholder then you'll have done well. Then...you might start thinking about how (or whether) Jetstar, Qantas Link, Qantas short haul and Qantas long haul cross-subsidise each other and if so is that necessarily a sub-optimal outcome for the whole airline? What is the ideal? How do you allocate the cost of joint products (such as the "A Qantas Group Airline" brand?

Fascinating stuff....not like flying but interesting.

FOCX

29th Jun 2008, 12:49

Genex, you seem to be ignoring what Keg, Altocu, QFinsider and the like are peeved about. You can call it what you like; subsidising/reallocation of assets/transfer pricing, but whatever you call it the end result for mainline employees is the same. GD comes out telling all and sundry how cost effective J* and that QF Mainline is struggling against its legacy costs, which is not completely true. As Bula pointed out for the Qantas Group it’s because you have ex number of aircraft crewed at a considerable discount able to operate on otherwise unviable routes to the benefit of the group, but as a stand alone op paying market rates for third party supplied services in a deteriorating market that would be nothing but struggle street, as VB may be finding it. All the while GD distorts the reality to jurnos and the public because he’s using or trying to use J* to force lower pay and conditions across the whole Qantas group.

As to your comment on Qantas pilot pay, extravagant, I don’t think so. If you’re at the top you are well payed, but it takes years to get there and if you don’t fight for your rights pilots might as well start wearing blue singlets as that’s how we’ll be paid, as poorly as your average courier driver, teacher or nurse.

Mstr Caution

29th Jun 2008, 13:06

Jetstar is simply an example where its worked, thus far, and workled well.

Working well in a softening market are we?

Add to Keg's comments the surplus A330 mainline crew whilst aircraft were transferred to J*

4PW's

29th Jun 2008, 17:39

It happens with every new generation.

Educated with 'fascingating', new-fangled ideas, a select few of the generation x or y or z (or are we back at a yet?) set out to change the world.

Scorning those who've gone before them whilst fooling others with thick smoke and shiny mirrors disguised as words, the new kid on the block sees everything in terms of the new paragidm.

Made for interesting reading, for a brief moment during sleep cycles, until the ranting about how good the education was and how extremely interesting and oh so clever we all were as we pontificated on who pays how much.

Thank Christ I didn't waste my money on that scam, the Masters in Aviation.

clawmonstar

29th Jun 2008, 21:47

So back on track again.

Are there any redundancies planned?

genex

29th Jun 2008, 22:27

I have no special insight into the issue of redundancies. But as fuel heads north of US$150/bbl I imagine that somewhere in Sydney a small group of people with whiteboards and computers will be going through the group with a fine tooth-comb thinking of which bits will still pay their way with a stagnant world economy and the second horseman of the apocalypse, $200 fuel.

One imagines that aging aircraft, outdated work practices, non-core functions, under-used assets would be on the hit-list while all opportunities to increase revenue in these tough times would also be high on the agenda. Having a suite of capabilities from low yield to high, from short range to long, the Group is better suited than many to cope. I would be guessing that any pilot EBA being negotiated now would be a very different beast from one negotiated a few months back.

As those who might fear I speak from scripts prepared while studying for a Masters in Aviation or anything even remotely similar....sorry....my formal education in aviation related matters stopped at my ATPL, subjects completed long before there were the various "Generations" be they X, Y or Z.

Mstr Caution

29th Jun 2008, 22:51

One imagines that aging aircraft, outdated work practices, non-core functions, under-used assets would be on the hit-list while all opportunities to increase revenue in these tough times would also be high on the agenda. Having a suite of capabilities from low yield to high, from short range to long.

All the above can be achieved without one airline "embedded" within another.

speeeedy

30th Jun 2008, 00:05

Genex is obviously onto something with his thinking. But as usual his not so well hidden disdain for mainline pilots and their conditions colours his thinking.

He seems to concede that the J* model won’t work in the present environment but hangs his hat on the lower cost winning over from those pesky mainline people.

There is no doubt that with the suite of choices available, the ultimate combination for management would be to have the J* cost structure with the QF revenues. In other words as you retire the older QF aircraft re-badge the J* aircraft into the higher yielding and far more resilient mainline brand.

Some say this was the plan all along. And to a certain degree I think it was, but this fuel crisis has brought the whole J* sham to a head a lot sooner than planned, and there is a spanner in the works.

Redundancy cost.

If you need to get rid of, say, 300 pilots in a short period you have to understand the cost of moving those pilots out of mainline versus the alternative. The Longhaul EBA is very prescriptive on how this works, far more so than the J* EBA.

Maybe it is a perfect time to be negotiating the LH EBA, for example I’m sure the attention of AIPA is now firmly focussed on the big picture issues like maintaining and even strengthening the redundancy provisions rather than short term issues like a x% pay rise.

Can mainline survive at $200/barrel? The answer is yes, I say this because there will still need to be airlines, there will still need to be business travel, and there will still be plenty of wealthy people who will travel.

Of all the airlines QF is one of the most profitable (and no thanks to J* despite what Genex thinks) and therefore even as fuel costs skyrocket they will still be one of the most profitable (or least loss making as the case may be).

As the other, less resilient, airlines fail, then the QF position actually could improve. It is possible that after a few years of severe pain, that at $200 + a barrel QF could actually make more money than ever before from fewer assets due to the collapse of the competition.

And the most important bit, is that at $200 a barrel the wage difference between the Mainline and J* group will be largely insignificant. Fuel will be 60% of the costs, wages about 15%. Think about it.

Having said all that, I suspect that fuel will not get to $200, in fact, quite the reverse, but only time will tell. But one thing is for sure, airlines will have to at least plan for the eventuality of $200 fuel and therefore the tough decisions will be made regardless.

Muff Hunter

30th Jun 2008, 01:19

Latest is that all JQ CC are now being retrained to QF procedures...

Is this the start of something????

Capt_SNAFU

30th Jun 2008, 02:03

I think that as a concept, the J* domestic ops experiment has been one of GD's better accomplishments and success'. For all the vitriol, domestically it has achieved what it was set up to do. It has maintained market share for the group and stifled the competition. J* domestically has taken on some of the unprofitable routes to the benefit of the entire group.

So from an operational perspective J* has been a success domestically. J* implementation, (international in particular) from a HR and PR perspective have been bad for the group. I think that the problem comes from the fact that management come to the realisation that J* apart from the purpose of maintaining market share, J* could ALSO be used to provide leverage against mainline cost. A good thing from the companies perspective = more profits, but very difficult to implement seamlessly. They failed in the implementation and as a result disengaged a huge section of the work force. In doing so they have created a belligerent group of employees from what was a loyal group. J* is far from the only reason for this, poor leadership and double standards are also players amongst others. See some of the things mentioned above by Keg. But this is starting to hurt the group, see engineers, FOG etc etc.

It seems that they have forgotten the core of the business. i.e high yield passengers and instead of focusing attention on this primary part, a part which was starting to show signs of decay, e.g Aging fleet. They have seemingly inexplicably given priority to a pet project. The international LCC. Whilst treating the core of the business with contempt. Why a full fare paying QF mainline pax should be forced to endure international travel on a 767 (whose cabin was ragged 8 years ago when I joined) whilst a J* international pax is on board a new A330 or even a 787 beggars belief. Can someone please explain how this is a good decision and the rationale for it? Would Singapore airlines treat their business class pax like this? No chance. Singair has always stayed focused on core business and although helped by govt and position does not do badly for a "legacy" airline.

It is not that there is no place for a international LCC. There is. But if your business model can only support it if you make it the focus to the detriment of your core business then it is not the time to do so. They should have waited for the 787 to replace the 767 and 743 and then gone into int LCC ops with A330s or 787s.

GD and co have made some very good decisions, J* domestic and purchasing the 738s. The A380 and the 787 should be good decisions also. They have also however made some clangers. Private equity bid, No 777's or no more 744ER, A330-200s on domestic, disengagement of the staff, freight conspiracy and losing sight of core business to pursue his baby J* int.

Jetbest

30th Jun 2008, 03:58

A Little History Re Susidies.
1.In the early 50`s when QF was nationalised it was technically insolvent.Another month of trading and QF was no more.
2.Between the nationalisation of QF and the early 90`s when QF was privatised some 12 billion in todays money was given to QF to keep it affloat.It was nothing more than another gov`t department soaking up money.Unfortunately some of the employee work practices followed suit and still remain today. The Pilots LH EBA is 655 pages[Would make the wharfies pre Corrigan blush]
3.This Gov`t ownership also allowed for cheap borrowing of funds with QF `s AAA credit rating.
4.Before privatision 1 billion in debt was payed off by the gov`t,Australian airlines[which was proftable] was traded for a book debt of 400 million,and contracts like the armed services where won by QF for the first time in history, all weakening AN terminally.
5.An collapsed and QF has never been more profitable.

What is my point!!!

Whether you like GD and his team or not he has successfully steared QF to success since privatisation.The current problems Qf face are world wide.Unless all current employees realise this,especially ones on outdated work practises,they will be left behind.
Qf Mainline and its subsidiaries,including Jetstar,have a big future but change is upon us and has to be welcomed.

Capt Kremin

30th Jun 2008, 04:17

Capt Snafu: Good post. Agree entirely:D

Keg

30th Jun 2008, 04:21

Qf Mainline and its subsidiaries,including Jetstar,have a big future but change is upon us and has to be welcomed.

The false assumption implied here is that the change is not welcomed by the 'legacy' personnel. This is simply not the case. I don't know of a single pilot that isn't excited at the prospect of a successfully expanding QF group. All of us want to see QF grow and prosper. Heck I'd love J* to be a rampaging success and build up routes that mainline could then take over and make even better money on whilst J* heads off onto yet more new routes.

Most significantly however, if you want me to embrace the change then don't exclude me from it. Personally I think it's a tragedy that pilots who joined QF in 2000- prior to the Impulse buy out- are still F/Os whilst pilots who were flying for a competitor at that time or joined well after that date are Captains in J* and most of the QF crew aren't allowed a look in.

So bring on the change. Just don't bs me with platitudes, false economies and distortions of reality. Don't tell me that mainline is 'expensive' whilst costs are foisted onto us. Don't tell me that QF isn't making money on Japan and then heap a product onto the market that is widely despised by those they claim to want to attract. Don't tell me to accept change whilst screwing me over along the way. I'm more than willing to help and grow a successful pilot group but if I'm treated like an idiot, don't be surprised when I respond in a negative way. Ultimate the people that get hurt the most are the only people that Geoff reckons he works for- the share holders.

AnQrKa

30th Jun 2008, 06:18

“All of us want to see QF grow and prosper.”

The DJIA could end the month at its lowest for June since 1930.

The airline industry aint gunna do much growing in the next couple of years.

Might shrink a bit though.

kotoyebe

30th Jun 2008, 08:45

Unless all current employees realise this,especially ones on outdated work practises,they will be left behind.

I don't suppose "current management" will be left behind? You know...the ones with the outdated management practices. Management practices that include flying the entire board first class to NYC, along with their assorted hangers on/wives/partners. Holding the QF107 LAX to JFK for "commercial reasons" for the delayed QF93 because their was a board member on the QF93. Then shuttling everyone around, no doubt in limos, and no doubt putting the whole lot of them into 5 star hotels. You know...the current management leader who puts shareholder return ahead of everything else. That whole exercise didn't cost the shareholders anything, did it?

4PW's

30th Jun 2008, 09:17

Apologies to genex.

Couple of questions:

1) Has the Big Q hedged fuel at $70/barrel or not? If so, why the bleating about higher fuel costs.

2) What is it with poster's decrying pilot wages? Come on. Have a look at Dixon's benevolent comments about freezing management wages. What a grand gesture. Bit of history on the recent payrises he and his band afforded themselves, please. Oh, was that 42%, then 30% then another 35%, or figures similar - THIS YEAR. Compare those hundreds of millions in director fees and management salary to the supposedly bloated pilot wages.

3) Is the Big Q profitable because of the lack of items on the debit side of the ledger? Could it be that longer-term necessary expenditures in core items - reequipping with new planes, maintaining spare parts inventories, building engineering support, improving cabin crew training, adding morale boosting techniques to the troops in the planes and on the ground - haven't been booked for many years, making the credit side more promising?

Yeah, the Big Q is profitable. How were those profits booked?

If at the expense of reinvestment, doesn't that accounting technique have a half-life?

Dropt McGutz

1st Jul 2008, 07:22

Hi Waren. I can't agree with you about the pay scales. The low cost carriers only pay that way because they can. Pilots pay scales is only a very small part of the hourly operating costs of an aircraft.
I don't want to be negative towards those of you that fly for low costs carriers but what really concerns me is that the average passenger isn't going to be able to afford to fly with the way that fuel costs are going up. When travelling overseas, the average business person travels either business or first as it allows them to get work done and allows them to be fresh on arrival for appointments etc. They won't go in economy. What concerns me is that technology will increase to the point that business people won't need to travel thus decreasing the numbers of those who use air travel.

Iron Bar

1st Jul 2008, 12:46

So Warren while every other profession from teachers and nurses to doctors, surgeons and lawyers, (Not forgetting every truck driving, dirt shoveling or kitchen handing resources boom bogan from Bowen to Bunbury.) are winning CPI plus wage rises you are happy to trade down and take a pay cut to move to a low cost carrier for what i imagine is essentially the same job?

Please correct me if I am wrong.

I thought the object was to check-mate your opponent, not yourself and your colleagues.

ferris

1st Jul 2008, 14:02

Yes, Iron Bar I, too, am perplexed.

When I interviewed at Jetstar and declined the (non-pilot) job on the basis that they weren't paying the market rate for my skills, the Jetstar HR lady looked bewildered and said "well, we are low cost you know". I was genuinely amazed that people were so readily accepting/embracing this new company "culture", where it seemed that it was perfectly reasonable to accept lower remuneration, because "it's the future".

The word idiots comes to mind.

So, just to be certain, Waren; your gamble (as you put it) is to guarantee yourself a much lower remuneration now and into the future, foregoing a much higher remuneration into the forseeable future, just so that you will have any sort of remuneration much later in the future? In an industry as fickle as the airline industry? Making these statements on a thread titled "Jetstar redundancies"?

Yes, the right word came to mind.

Nunc

1st Jul 2008, 23:28

I hope there are not to many Warens around, just when I had thought I had heard/seen it all. Unbelievable piece of logic.

genex

2nd Jul 2008, 01:07

Actually NUNC, and there is no spin in this....it's not a bad idea as your career progresses to be looking around carefully at other opportunities, even if there's some short-term pain in some way (salary, training bond/pay, relocation etc).

I have had a number of US friends who let the "golden" pension plan and a high seniority number blind them to either a) the fact that their airline was dying by degrees and/or b) really exciting opportunities to get in on the ground floor of new carriers. I have alluded elsewhere to one friend who knocked back a single digit seniority number at FEDEX because "it was poorly paid and would never work".

The guys who left AN a year or two before the shutters came down seem to have prospered. I certainly never regretted the short term pain of a few years "single pilot" in Asia that resulted in a wide-body command.

FGD135

2nd Jul 2008, 01:15

ferris,

waren9 is employed - and will probably always be with that outlook. Are you employed? With your outlook it seems to me that you are far more likely to be unemployed than waren9!

ferris

2nd Jul 2008, 02:13

FGD135. Yes, I am employed, as any number of posters will confirm. After a look around the job market, I accepted employment at just under 4 times the remuneration offered by Jetstar.

I dont consider selling myself short in order to gain some sort of long-term leverage or 'security' in the aviation industry to be a sensible outlook. If Waren9 is the 'new world order', good luck. Take a leaf out of the book of those that run QF/Jetstar, the very people selling this culture: Shining examples of restraint and thrift. Do you think they are working for below the market rate? I mean, it is low cost, you know! What a joke.

Dont get me wrong, I could see the logic of sidestepping or even backstepping under certain circumstances, in order to advance. But re-read Warens post. It's snake oil sales, plain and simple.

teresa green

2nd Jul 2008, 06:53

An interesting read. I just wonder for those feeling a little insecure, would it not now be a good time to look towards the sand pit? Emirates and Etihad both seem to come with their own oilfield, and a happily ordering away new A/C as they can see some great new routes opening up, as other airlines falter by the roadside. Nobody knows what the future holds, but a recovery world wide right now seems unlikely. I think if I was a young bloke, I would be certainly wondering should I buy a bucket and spade for the kids and head up there.

Wizofoz

2nd Jul 2008, 07:31

teresa,

The problem with that is that Aeroplanes don't run on crude oil, and while Dubai and Abu Dhabi produce oil, they don't refine jet fuel. We have to pay for it like everyone else and (in the case of EK) are expected to make a profit as well (Etihad are currently a chronic loss maker, but will probably have to start being financially independent one day).

EK are probably one of the best placed to weather the storm, but for the same fundamental, strategic reasons they've been so successful so far (Well positioned, cheap labor, diverse market). Fuel costs are hurting up here plenty, and it will slow growth like everywhere else.

Jabawocky

2nd Jul 2008, 07:43

Wiz,

What are your loadings and forward bookings like? I hear down this way they are a bit thin on the ground.

The fuel price affects those who are buying tickets.....not just when they buy jet fuel but when they buy fuel at home, food, and anything else that has a fuel cost input.

J

Colonel Kurtz

2nd Jul 2008, 08:18

Lads, the only flying job with a garanteed future until the end of the Great Oil War is the Airforce.

Some say there are too many people driving cars tomorrow. Others suggest there are just too many people.

To be sure: humans, like the rat, when starving and cornered will cease working together and start to fight.

FFRATS

2nd Jul 2008, 08:43

Any answers to the thread topic or will we have to continue to wade through the standard fodder to get to the point :ugh:

Wizofoz

2nd Jul 2008, 09:49

Jaba,

Don't know where you heard that. Hovering around 86% fleet wide, and I can't get on an EK flight to Sydney until well after Christmas (we are probably flying Etihad to get home!!).

Mstr Caution

2nd Jul 2008, 12:44

waren9 - Join date July 2008 posts #1

I'd say a management stooge trying sell the LCC mentality.

"Come on board, it's the way of the future" Yeah right!!

MC:8

Douglas Mcdonnell

3rd Jul 2008, 10:43

Mstr Caution. I have to agree. Who is this new fly by night fwit?. If you had called yourself Warren 1 maybe that would have more credibility. Perhaps the redundancies could happen on a "squirrel cage" system.

DM

Bula

3rd Jul 2008, 22:33

Squirrel Cage system... hahahaha... CLASSIC!

Wouldn't happen to be taking the piss would you?

Just remembers lads, 4.6% growth in Asia over the last month. Its not all doom and gloom.... and anyways, I wonder how many flight crew Ek need to crew their 58 wide bodies over the next 5 years.

We are still "jolly green giants" walking the earth.

Mstr Caution

3rd Jul 2008, 22:33

In my opinion GD's chicken little approach to fuel costs, international & LCC competition, bird flu, terrorism etc etc etc need be acknowledged but not feared.

Consider the Mainline Cadet program.

It's a good indicator as to a "health check" of mainline operations. Always has & always will.

Over the last 30 years, mainline has had the cadet program running whenever forecasted times where good & the cadet program comes to a holt when a downtown occurs or is forecasted.

Considering the roadshows about to occur around the country & the forecasted numbers required, I'd say that "health check" is looking good for mainline.

At present the only limitation on continued mainline recruitment is the ability to get the numbers through the training system.

MC:8