QF to shed 2000 jobs [Archive]

desmotronic

17th Jul 2008, 05:02

Qantas labels job cuts as speculation
The Age July 17, 2008 - 11:31AM

Qantas has labelled claims in media reports that it is about to axe 2,000 jobs worldwide in a bid to offset skyrocketing jet fuel prices as "pure speculation".

Following an internal email issued to Qantas staff this week, reports in News Ltd papers suggested that the national carrier will slash up to 2,000 jobs next week, or about five per cent of its 36,000 strong workforce.

No work sections were expected to escape the cuts, the reports said, including senior management.

The airline is also expected to announce cuts to loss-making flight routes from both domestic and international schedules.

A Qantas spokesperson declined to comment on the job cuts, describing the reports as "pure speculation".

The spokesperson confirmed that chief executive Geoff Dixon had issued a message to staff on Tuesday in which he indicated that the results of an in-depth business review of the Qantas group would be released next week.

"The continuing increase in the price of oil has necessitated a further in-depth review of all aspects of the Qantas Group, particularly how our flying business will operate in this new cost environment," Mr Dixon wrote in the email.

"We undertake this review with some reluctance - knowing full well the effort put in and the changes accepted by all of us at Qantas over the past 10 years.

"However, the facts are that oil prices staying at over $US140-plus a barrel has changed forever the way we do business."

Overnight, oil prices settled sharply lower falling $US4.14 to $US134.60 a barrel on the New York Mercantile Exchange. The drop follows a $US6.44 sell-off Tuesday.

The two-day slide of $US10.58 a barrel marks a dramatic turnaround in crude prices, which as recently as Friday traded at record highs above $US147 a barrel.

But even with this week's sell-off, prices remain about 80 per cent above where they were a year ago.

Qantas and Jetstar's fuel bill will increase by more than $2 billion in 2008/09, representing around 35 per cent of the company's total expenditure.

Mr Dixon also wrote that he agreed with the comments of Emirates president Tim Clark, who said "this is the greatest crisis in aviation history" and that "the overall view of our industry is dire".

Mr Dixon went on to comment on the challenges of industrial action faced by Qantas.

"For Qantas the immediate issues facing the whole industry are being further exacerbated by the continuing industrial action by the ALAEA, the union representing 1,500 staff in Qantas Engineering.

"As you are acutely aware, this action is causing severe disruption to our network and services at a time when we can least afford it."

Centre for Asia Pacific Aviation executive chairman Peter Harbison said Mr Dixon's message suggested that the airline would focus more on its low cost offshoot Jetstar.

"I think the natural progression is to rely much more heavily on the lower cost-base Jetstar in this new environment."

Last month Qantas pruned about 100 staff and cut back capacity by five per cent - the equivalent of grounding six aircraft.

Virgin Blue has recently cut capacity by six per cent and announced a $50 million package of cost savings to help offset the effect of record jet fuel prices.

Virgin Blue is expected to unveil a second tranche of restructuring this week.

indamiddle

17th Jul 2008, 05:55

teresa, GOD tried to sack his nephew some 2 years or so ago but was moved out of NSW at that stage. nephews mum intervened with a threat that GOD's activities (you know what i am talking about) would have him front page news for the next six months. nephew is safe until the day GOD goes....make it soon

kotoyebe

17th Jul 2008, 06:56

My co-workers were doing high fives this morning when we heard about the retrenchments. 2000? I reckon you'd get 5000 if they really wanted to.

On a sadder note, some of this might be true, as we found out today that QF res in Tucson will be closed by next February. Not a huge lot of people, but still sad for them, especially considering their economy at the moment, and also they are a nice bunch of people.

Capt Claret

17th Jul 2008, 06:57

nephews mum intervened with a threat that GOD's activities (you know what i am talking about) would have him front page news for the next six months

bloody hell, he hasn't been walking on water again, has he? :ouch:

Capt Claret

17th Jul 2008, 07:20

Thread Drift,

climbs onto high horse.

personally i would like to see all the greedy buggers who have stayed on past 60 be the first to go. You've had a good run and you are stuffing it for the younger guys and gals.......time to **** off.

What gives a selfish me-centric youngster the right to demand older folks walk away just for their benefit?

cloudsurfng, why don't you lead by example and be one of the first to bail out, thus giving those younger than you a "go"?

Kicks soapbox away

7378FE

17th Jul 2008, 07:22

Virgin Blue is expected to unveil a second tranche of restructuring this week.

Probably friday after the markets close, when people are focused on the activities of Benny the 16th :}

hadagutfull

17th Jul 2008, 07:28

:mad::mad::mad:

WhoFlungDung

17th Jul 2008, 07:52

So who is GD's nephew? And I know this going to sound really stupid, but what does GOD stand for? I know it obviously refers to Dixon but is that it. While we are at it, what does FOG stand for? Is it F$$k Off Geoff?

newsensation

17th Jul 2008, 08:09

Cut staff from where?
GOD should get out more and maybe take a walk through a terminal some time and just see how long it takes to check in a bag! passengers have to turn up 2 hours before a flight just to make sure their bag travels with them....
I agree with the earlier post Geoff should lead by example and resign, it is pretty obvious he only attended one class in management 101, how to make profits = sack staff... so by his reasoning if he sacks everyone he should make a killing... it will be sad to see Qantas go, if i was a share holder i would sell now :{

Masif Eego

17th Jul 2008, 08:44

From past experiences of QF "bloodletting" decent hard working people get shafted, buuuuut if you are a B#$ch and a dobber, or useless but a bullS$#t artist you'r safe, Believe me after neally 50 yrs in the airlines I have seen it all before, and I am so sorry for these good people.:(

Yep, agree with you there, was good place to work once.
Getting out was the best thing I ever did..........:ok:

Rabbitwear

17th Jul 2008, 08:59

The pilots need a furlough plan like in the states then they can go and sew their wild oats overseas and be reassured of a job back home when times are good again.
Too lose 2000 over all i would suggest at least 1000 will probably volunteer and Jetstar could probably soak up the rest over time.

mmmbop

17th Jul 2008, 09:04

Rabbitwear,

What planet are you on??

M

walaper

17th Jul 2008, 09:15

Only 2000:E

Qantas 787

17th Jul 2008, 09:37

indamiddle - I must be totally out of the loop. I have no idea what these "activities" you are referring too. Any clues?:confused:

airtags

17th Jul 2008, 09:49

from the outset you would have to be a wombat not to recognise that people are amongst the top 3 items on both the balance sheet and P&L....that said however in a business that relies on "service" as the primary separation point, people are the critical success factor.

The paradox is that it's the 'people' who can facilitate the greatest cost savings AND MORE IMPORTANTLY, it is only through 'people' that the triggers to facilitate greater/incremental yeild during times of downturn are expedited.

I would bet an exclusive case of fine Macedon red that each and every QF person COULD, without any difficulty, identify logical, sensible and responsible cost savings that do not erode the critical service USP AND most importantly, still build business and yeild.

Sadly, one step above the operational level, the shoe box mentality becomes the myopic norm. Even sader still is the total absence of a leadership culture.

Together, these cumbersome overgeared isolated empires predicate the failure of any effort to empower those who ultimately create the revenue outcomes.

It's time to stop buggerising around over 2% with the LAME's et; al. and for all levels of Q, especially at the top, (and even some old school union stalwarts) to start grasping a little more foresight and a little less foreskin.

Interesting comment from a QF frequent flier (top 10) who was boarding an EK flight last week..... "the fish goes off from the head first"

PS: Saving idea #1 - cancel the self applause Virgin like bullsh#t Jetstar tv ads - claiming a Skytrax gong that really means nothing to the punter - just get back to core and start SELLING what Q does best.

here endeth the sermon

astroboy55

17th Jul 2008, 13:12

Hey airtags...i heard that skytrax is a Q owned awards thingy anyway...so it really means nothing at all....can you confirm if this is true???

teresa green

17th Jul 2008, 13:16

Junk yard dog? Come come Geoffrey, don't be so modest.

teresa green

17th Jul 2008, 13:30

Cloudburst, settle down old chap. It is a proud airline tradition to complain about management, crew meals, ugly F/As, salary, lack of sex, super, tight reggrundies, bidlines, rosters, uniforms, Geoff, Geoff, Geoff, lost baggage, rude groundstaff, crew buses, hotel rooms, and dreading going home to a missus with a hot tongue and a cold A#se. BUT if anyone outside the Airline complains, watch them all close ranks. Its part of the fun old chap, especially when you run out of jokes. Open a cheeky red and relax.

Angle of Attack

18th Jul 2008, 00:17

QANTAS ANNOUNCES JOB AND CAPACITY CUTS

SYDNEY, 18 July 2008: The Qantas Group said today it would cut 1,500 jobs worldwide
in response to the sustained high oil prices and changing economic conditions.
The Chief Executive Officer of Qantas Airways Limited, Mr Geoff Dixon, said that in
addition to the job cuts, Qantas would not implement its budgeted growth in flying in the
2008/09 financial year and would cancel plans to hire a further 1,200 people for that
growth.
Mr Dixon said every effort would be made to achieve the job cuts through voluntary
redundancy, early retirements, leave without pay, an accelerated leave program and
converting positions from full-time to part-time.
“However, some compulsory redundancies will be necessary, which we regret.
“The jobs to be cut will be principally concentrated in non-operational areas, although
operational positions will also go.”
“Over 20 per cent of our management and head office support jobs will be cut,” he said.
“The redundancy program will be completed by December.”
Mr Dixon said the aviation industry was facing a major crisis throughout the world and
Qantas needed to act decisively to ensure its future.
“Acting now, on top of the measures already taken, will protect our competitive position,
protect the great majority of over 36,000 jobs and enable us to grow profitably when
conditions improve.
Mr Dixon said as a result of today’s decision, the Qantas group would:

- maintain a recruitment and executive pay freeze for the foreseeable future;

- reduce forecast capacity growth in 2008/09 from eight per cent to nil growth;

-retire up to 22 older aircraft from its fleet of 228 (including announcements previously
made);

- close its long-running call centres in Tucson, Arizona and London at a cost of 99 jobs,
and concentrate all its call centre activity in Australia and New Zealand;

- suspend Jetstar’s recruitment program until the end of the year, including its recruitment
of pilots under the 457 visa program; and

- close Jetstar’s cabin crew and pilot base in Adelaide by the end of August, with Jetstar’s
37 return weekly Adelaide flights to remain and be serviced by aircraft and staff based
in Darwin and Sydney.
Mr Dixon said Qantas would also:

- proceed with its major fleet re-equipment program of new and more fuel efficient aircraft
such as the A380 and B787; and

- proceed with its customer-focused product and service initiatives such as domestic
Business class lounges, terminal facilities and opening the new Qantas Customer
Service Centre of Excellence.
He said Qantas was very conscious of the important role it played in business and tourism
throughout metropolitan and regional Australia.
“This was uppermost in our mind when reviewing all aspects of our operations in recent
weeks and, as a result, the latest schedule changes mostly involve a reduction of capacity
on some routes and not the wholesale elimination of routes.
“Also we need to keep developing new opportunities and we will, for example, proceed
with opening up already announced new direct services between Sydney and Buenos
Aires in November.”
Mr Dixon said Qantas had successfully responded, with the valuable support of its people
and its customers, to many crises since privatisation in 1995.
“We are confident of doing the same again, particularly now that we have reached an in
principle agreement with the union representing our engineers, the ALAEA. This should
mean a quick cessation to the difficulties our customers have experienced over the past
ten weeks.”
Mr Dixon said the agreement, and the one reached on Wednesday with AIPA, the union
representing 1,800 pilots, provided greater flexibility for Qantas and its pilots and its
engineers, certainty at a volatile and difficult time and maintenance of a sustainable wages
policy.

Capt Claret

18th Jul 2008, 00:34

- close Jetstar’s cabin crew and pilot base in Adelaide by the end of August, with Jetstar’s 37 return weekly Adelaide flights to remain and be serviced by aircraft and staff based in Darwin and Sydney.

I didn't think that Jetstar had started its DRW base, and heard the other day that it wouldn't. :confused:

insertnamehere

18th Jul 2008, 00:53

would be nice to hear that from somewhere other than the media... end of aug isn't that far away...

EPIRB

18th Jul 2008, 00:59

Maybe 717's?

ebt

18th Jul 2008, 01:03

Hey airtags...i heard that skytrax is a Q owned awards thingy anyway...so it really means nothing at all....can you confirm if this is true???

Not true at all, so don't get so excited. If they were don't you think QF would be rated as a five star airline, rather than their competitors?

Angle of Attack

18th Jul 2008, 01:17

Skytrax is an online survery where anyone can lodge a vote for the airlines listed. There is no group or board making the decisions just the votes from users online. A system easily manipulated if someone wants to win the award. :mad:

speedbirdhouse

18th Jul 2008, 01:39

Did I hear him say they were going to retire 744s ??

mmmbop

18th Jul 2008, 02:30

Speedbirdhouse,

Yes you did. He stumbled through saying 747-300s, older Dash 8s and 744s. Not really that surprising to get rid of some of the older clunkers. I know we are capacity contrained but he didn't give a time frame - I'm guessing that when we have a few 380s up and about that the 744s will begin to go. He did appear like he was a bit caught on the hop with that question - I would have thought that he would have also mentioned 734s and older 76s

As I said - no time frame was mentioned so the statement itself could just be re-inforcement of current plans anyway.

M

ps I did like the way he sledged Steven Creedy..... :-D

Cheechos

18th Jul 2008, 02:43

Does anyone care to speculate whether pilot recruitement will cease for the time being? I hope thats not a selfish qn considering current staff may loose their jobs.

HardCorePawn

18th Jul 2008, 02:47

The NZ Herald story... 'borrowed' from AAP (http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10522275)

Qantas cuts 1500 jobs, shuts US, London call centres

Qantas says it will cut 1500 jobs across the world to try to offset the rising cost of jet fuel and challenging conditions in the aviation industry.

The national carrier has also scrapped plans to hire another 1200 workers in the new financial year and will retire 22 older aircraft from its fleet of 228.

Chief executive Geoff Dixon said the aviation industry is facing a major crisis and Qantas needs to ensure its future.

"The jobs to be cut will be principally concentrated in non-operational areas, although operational positions will also go," he said in Sydney.

"Over 20 per cent of our management and head office support jobs will be cut."

- AAP

20% of management you say?? <insert Tui Billboard here> :rolleyes:

I wonder how many of the 1200 new hires were going to be tech crew??

Dragun

18th Jul 2008, 03:13

Agreed Cheechos. I would also like to know the effect on mainline pilot recruitment without wanting to sound selfish given that people will be losing their jobs.

Obviously some idea of the impact would be beneficial to personal plans given that many of us still have an LOI. I did notice they announced a holt to J* tech crew recruitment but no mention of mainline. Hopefully at least the courses currently planned will go ahead.

chickendrummer

18th Jul 2008, 03:36

Just heard that the closing of the J* Adelaide base is now official.

Sunfish

18th Jul 2008, 03:40

And if Qantas is true to form as described in Pprune, the cuts will be made as painful, and as drawn out as possible, for the emotional benefit of the torturers at the top.

TID edit: Lets just leave that out of it, thanks.

Teal

18th Jul 2008, 04:12

The Crikey.com.au take on it from veteran aviation writer, Ben Sandilands:

Qantas slashes lightly. A bit.

Ben Sandilands writes:

When Qantas CEO Geoff Dixon signed a peace deal with its rebellious mechanics at 8.30 pm last night the media had spent a day running the company line that up to 3000 jobs could go.

At 10am today the real figure was revealed. There will be 1500 jobs going, out of a current 36,000 employees including Jetstar, no route closures were announced, but frequency of service would be cut and unless oil prices plummet fares will rise sharply on domestic routes.

The Qantas-slashes-itself-lightly media event this morning was the vaguest ever given by its management. There was no profit guidance for the current financial year, no cost saving figures for the job cuts except for the obvious concession that 1500 jobs won’t pay for a feared extra $2 billion in fuel costs, and no clarity over what the airline meant by "further changes to our business model" in terms of operations, or the transfer of services from Qantas to Jetstar.

However, a few items stand out. Dixon says the deal with the maintenance staff (who have refused to work overtime for the past 10 weeks) stays within the company’s line on wages, which was no pay rise of more than 3% per annum.

The pilots' union accepted a new five year 3% per annum deal on Wednesday, like the deal with the mechanics and engineers this agreement has to go to a vote of members. The licensed engineers and mechanics association has secured other payment or leave concessions however which may point to a costly face saving formula for Qantas in lieu of their members getting the flat 5% per annum for three years it had insisted upon. It is too soon to know if the "extras" will carry the vote for the maintenance crews. The pilot deal is considered a dead certainty.

For the long suffering Qantas customers who were scarcely mentioned this morning there is no precise estimate as to how soon flights will return to normal, whatever "normal" means because of high fuel and demand which Dixon conceded was slipping.

But he did say the longer fuel stayed high "the more the idea of airline consolidation will become reality".

Hello Singapore girl?

StallBoy

18th Jul 2008, 04:33

Qantas Customer
Service Centre of Excellence.:bored::bored:

CaptCloudbuster

18th Jul 2008, 05:05

Ben Sandilands writes:

The pilots' union accepted a new five year 3% per annum deal on Wednesday....... this agreement has to go to a vote of members.

The pilot deal is considered a dead certainty.

Rumour has it this "deal" before going to the members has to pass the AIPA COM in a special meeting scheduled for the 31st July.

My sources indicate that an issue regarding accommodation is yet to be resolved at the special meeting before this "deal" is to be "signed off"....

in spite of what has been touted by GOD and the press:=

Keg

18th Jul 2008, 05:19

There are a couple of areas of loose wording in the pilot deal. One area in particular will see the 744 and A380 crew kill it stone cold dead if it's not resolved.

Other than that, yep, 3%, slight increase in super and a couple of little sweetners. :ok:

Capt Kremin

18th Jul 2008, 05:24

It seems the cutbacks are coming to Jetstar more than QF as far as pilots go.
Wasn't Jetstar supposed to be gearing up for the 787 this year? Bit hard to do with a freeze on recruitment.
Fuel costs are now 50% of Jetstar's operating costs and Dixon said that business travel was holding up whilst the "leisure market" was softening.

KRUSTY 34

18th Jul 2008, 08:26

Quote:

"Wasn't Jetstar supposed to be gearing up for the 787 this year? Bit hard to do with a freeze on recruitment."

Certainly strange Capt'

Problem is there appears to be significant delays with the 787 program. I'm not sure, but I don't think the prototype has even flown yet! GOD is probably using this to freeze recruitment, amongst other things.

Another problem is that down the track when this thing blows over (and it will, already the price of oil is softening), and the 787 finally becomes available, will there be enough drivers around for the planned expansion?

By then of course GOD would have moved on and that aspect will be someone else's problem. Interesting "Rollercoaster" over the next decade methinks!

Frazzled

18th Jul 2008, 08:50

Has Qantas just solved Rex's recruiting problems??:{

DutchRoll

18th Jul 2008, 09:17

Funny that they say the Pilot's Union has "accepted" the new deal.

The simple fact is that the EBA has essentially been agreed to between the two teams of negotiators, but the pilots still actually have to vote on it yet!

There is a fair amount of "robust" debate on other private forums regarding the merits of the new deal. What AIPA says is good and what the majority of pilots think is good may well be two different things (as we have seen in the past). Time will tell I suppose.

Keg

18th Jul 2008, 09:47

The interesting part of all of this is the 787 acquisition. Given J* already has relatively new equipment in the A330 and it's supposedly working for them, perhaps QF may become the initial type operator of the 787. It'll enable QF to retire the significantly more thirsty 767 fleet and reinvigorate the domestic product which is currently yielding better than the J* operation. It'll lower the average age of the 'group' fleet in the short term and still leave J* with a relatively efficient aircraft to continue to fly to the 'softening' (according to Geoff himself) international tourist markets. Of course if J* can't make those markets work with the A330 and the 787 makes the difference then it's a very marginal route to start off with. In that case you'd probably make better money with that 787 asset in different colours on the mainline network. :E

It's a bit like the 777, maybe if I say it often enough it'll come true! :ok: :cool:

KRUSTY 34

18th Jul 2008, 09:56

Gidday Frazzled.

Good question. The Chief pilot of REX has always held up the possibility of a downturn in the industry as a "solution" to REX's crewing whoes. Indeed the attrition of REX pilots has slowed. The reality is, downturn or not, the fundamental reason for these issues has not been addressed. Just as Jestar, QF, DJ and all the other airlines look towards expansion in the coming years, REX will be scratching even more for "experienced" pilots well into the future.

Currently more than 50 REX F/O's have been bypassed as the move down the seniority list continues. The latest available Command candidates are now only 50 from the bottom!

Sorry about the thread drift mods, just trying to answer a question.

teresa green

18th Jul 2008, 10:33

Congratulations Geoff, you are now able to do what you have been busting to do for a long time, get rid of staff. The unions cannot touch you, the Govt, will make oh dear! noises, and you will appear on TV with a suitably sad expression. The reality is if you asked any staff member of ways that could save money and increase productivity they could and would come up with some brilliant ideas, that would keep people in employment and increase QFs ability to operate in the tough times ahead. Yes there is deadwood in the company, mainly in middle management, unable to go any futher themselves, stuck half way up the ladder, but making damm sure nobody else passes them, with their little spivs keeping a eye out for anybody that could be a threat(these little creeps will keep their jobs because they are useful) (no it does not involve any in my family they are either up the sharp end or on the hanger floor) but it angers me, because there are many people who are already doing the jobs of one and a half people, just ask anybody who tries to check in. A Airline has to provide service, a Airline has to have a good well trained cabin crew (they have the ability to make or break a company) a Airline has to have happy well trained ground staff secure in their jobs, a Airline has to have good morale, a Airline has to have highly trained, happy, secure pilots and engineers and without these ingredients the airline is basically :mad:. Let there be no doubt, QF is at a crossroads, and it is going to take careful management to get it back on track, and I am not talking about oil prices. The travelling public will wear the increase in prices, just like the poor buggers will wear increases in food, petrol, and high interest rates, because they have no choice, and many of them will have no choice but to travel for all sorts of reasons and QF knows that. Fcuk the shareholders Geoffrey, somehow, someone, has to get this once proud, once amazing icon back on to straight and level, for the sake of everbody in it and for the country itself. My rant is over. ( and for those who scoff at the possiblilty of QF ever being a happy functioning airline, believe me it was once and can be again):ugh::ugh:

sthaussiepilot

18th Jul 2008, 10:39

Any truth in what I herd?

that Qantas will basically be cutting down to pretty well nothing (compared to what it is now), and moving everything to Jetstar to make people on a smaller wage, the magicly go straight back to Qantas in a much larger size with cheaper employees....

Any Truth?

FGD135

18th Jul 2008, 12:19

teresa green, your bitterness is causing you to make some pretty wild statements.

This statement:
The reality is if you asked any staff member of ways that could save money and increase productivity they could and would come up with some brilliant ideas...
Is plain wrong.

And this statement:
The travelling public will wear the increase in prices...
Plain wrong as well!

mmmbop

18th Jul 2008, 13:44

Teresa Green,

As FGD 135 said.

To everyone else,

Jester Intl ain't getting the 787s. Bye bye Intl LCC bullsh1t.

M

Muff Hunter

18th Jul 2008, 14:00

Maybe JQ won't get the 787 but the QF boys are dreaming if they think they'll be fly'n em......

From my inside sources in mangement, alot of resources sent to JQ in the next 12 months,.......maybe even JQ pilots flying with gold bars on their shoulders.......

Heaven Forbid!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!

Angle of Attack

18th Jul 2008, 14:48

With all due respect I think teresa Green even though self admitted it was a rant, has a valid point. The QF structure has been steadily getting top heavy the last few years, to a point of tipping over. And a fairly minor industrial action by engineers (banning overtime and a couple of 4 hour stop works), combined with a delay of maintenance brought on by last years APA takeover bid have resulted in the last several weeks of chaos. It just shows how thin on the company is on front line jobs, while the office beancounters have festered and increased. In some ways the minor action by engineers has just shown how the front line staff are holding QF up, managers or not when it comes to the crunch it's the coal face holding the product up. I hate anyone to lose their job but I hate to say the management has become too fat in the product, its a fact.

And I'd hate this thread to become a JQ QF bashing forum please like the last few posts, its a fact, Jetstar have halted recruitment (as well as the leave of absences given out) and QF recruitment is still going to go on at a slightly reduced pace. Leisure travel is softening rapidly, it will always be the first to go, in a slowing economy. Remember Oil is down around 14%the last 3 days, its still volatile but I hope it doesn't cause different pilot groups to bag each other too much we are all in for the ride ! :ok:

aviator's_anonymous

18th Jul 2008, 15:03

Sadly Geoff Dixon isn't 1 of the 1500 jobs being made redundant....

Mselle AA

18th Jul 2008, 15:08

FDG & MMBOP, Im afraid Theresa G is correct about the cost part at least

1. The cost of grounding planes in Australia due to incident or accident is inexcess of $114m pa (conservatively, 2006 costs and current stats in I&A up to 30% higher) . If you read CASA findings - based on policies and procedures required to decrease I&A - and the testimonies of crew/maintenance staff - you'll see that the majority of A&I could be efficiently and effectively reduced -simply by having taken their advice earlier.

Cost benefit it is a no brainer - except the costs imposed on staffing are borne by the airline, but the costs from A&I are more broadly distributed. Its a question of cost base not cost efficiency.

The proposed legilsation increasing liabilities to airlines may change this equation, so we can only hope there are some good bean counters (like me:O) doing this C/B Analysis and proposed job losses will be smaller.

Though as often raised, the decision makers - namely Geoff who is out the door any day now, has a shorter term cost escalation concern. He'll likely take the risk that the major costs in I&A will occur after his retirement.

2. Um, UBS, JP Morgan & Citibank analyst reports of July all concur that the 35% price increase since Aug '07 is above their fuel cost margins. Dont believe the hype.... customers are paying for profits, not oil.

Happy to take you through the figures

Moral of the story - listen to your elders.

Mselle AA

18th Jul 2008, 15:12

sorry, I meant ATSB data not Casa

Bula

18th Jul 2008, 22:16

its obvious that JQ wont be flying the 787........ you have to be kidding me. Hey I tell you something, we will be flying the 787, we will still be receiving our A320's, we will be operating the A330 into Europe and be receiving more of them over the next couple of years, hence doubling the fleet.

Heaven forbid!!!!!!!!! :mad:

Grow up. Such ill fate makes me sick. Everyone is affected by this. I don't want to be spiteful but Karma boys and girls, Karma, and a bit of empathy for your fellow man.

Why do people always turn a productive forum into a pissing contest. :hmm:

Captain Sherm

18th Jul 2008, 23:32

As I understand it from friends who are former 777 drivers now employed by JQ, they are well down the AOC preparation path in flight ops and engineering and if it weren't for the Boeing delays would already be operating the 787.

Is there any special value that QF mainline ops and engineering would bring to the 787 that JQ can't?

As for the international LCC model....I'd hazard a guess that about 85% of overseas seats are sold to travellers whose primary concern (after safety and sometimes not even that) is price. Go and have a look at Gatwick anytime and see the endless stream of folks off on 4 to 12 hour flights to warm places.

I imagine that if Qantas manages the product and yield in the premium end of the JQ business then they'll continue to do well. Qantas, and almost all successful airlines, has continually refined the fleet/product/yield mix for its suite of business and market segments and will continue to do so. I would have thought that Jetstar was simply another viable tool in their armoury.

BUt as my children often point out to me....I could be wrong.

Keg

19th Jul 2008, 00:31

Can we leave the 'my tool is bigger than your tool' discussion behind WRT the 787? JQ is quite capable of operating and starting up the 787 operation. My comments were about whether or not the equipment would yield more effectively domestically. QF have made decisions like this previously. In the aftermath of the Ansett collapse we pulled off HNL-Canada due to the fact that the 767 asset made more money domestically than it did flogging into Canada. That is the only point I make about the 787. In terms of yield we're probably far better off replacing the 767 with the 787 than replacing A330 capacity! :eek:

Tankengine

19th Jul 2008, 00:51

Bula,
I agree, pissing contests achieve nothing.
Nobody knows what will happen in the future!

Ask yourself : if fuel price doubles [again] who will stop flying,
cashed up retirees and businessmen or first time "holiday" travelers?:confused:

I forsee a downturn, who is affected most is the question.

Spikey21

19th Jul 2008, 02:26

Fuel Costs

QF flies a 747 to LA with 350 pax, fuel levy per pax ex SYD is $253.
Total revenue collected from punters is $88550.00

How much fuel does one of those things actually burn to LA ?

Bula

19th Jul 2008, 03:45

Tankengine.. couldn't agree more. But there is still 4.6% growth in the Australasian market and I foresee that the JQ model will reduce domestic capacity but will excel with international travel.

Business travellers will still travel, holiday makers will still travel. I think people need to face the facts that both the JQ and QF markets will result in capacity reduction but no-one factor will throw the other one to the wolves.

At the end of the day are people really doing it that hard that a 30% increase in a JQ domestic fare would rule them out completely?

Capacity management is the key and I think the group is making the right moves, even if its not everyones bitter sweet symphony.

Konehead

19th Jul 2008, 05:47

Fuel Costs

QF flies a 747 to LA with 350 pax, fuel levy per pax ex SYD is $253.
Total revenue collected from punters is $88550.00

How much fuel does one of those things actually burn to LA ?

On another thread, it was claimed it cost $495,000 to fly a B744 empty from SYD to LAX. Not sure if it's true. What's the fuel burn? JET-A1 is around $160/bbl. How many litres/kg in a bbl?

hungry_flygal

19th Jul 2008, 07:15

cruise fuel burn about 10t an hr ....

Mstr Caution

19th Jul 2008, 07:26

As I have stated on other threads, whilst ever QF mainline is recruiting cadets. The prospects for mainline pilots is good.

2009 Cadet recruitment continues thru 2008.

MC:8

4PW's

19th Jul 2008, 07:51

Numbers are rounded, mostly up:

Sydney to LAX is roughly 13.5 hours flying.

Fuel burn of 9 tonnes an hour, averaged out, makes for 120 tonnes burn.

120 tonnes equals 120,000 kilograms.

If a barrel of oil is around 160 litres, and the SG is .80, a barrel of oil equals around 128 kilograms.

How many barrels, at 128 kilos a barrel, do you get from 120,000 kilos, the Sydney to LAX fuel burn?

About 937.5 barrels, which at US$150/barrel equates to around US$141,000.00.

Numbers, numbers, numbers.

Lot of variables, but that's about right.

There are other cost involved in operating a plane from A to B so don't get stuck on $140 grand as a figure, but, if we're comparing apples to apples, I guess the airlines are making bank with the fuel levy's they charge.

Big bank...

teresa green

19th Jul 2008, 07:52

FGD, I am not bitter about QF, frustrated, yes angry, yes but not bitter. Now if you mention 89...................now THATS bitter!

brucek

19th Jul 2008, 09:09

I feel I have a sense as to why 'aviator's_anonymous' made the comment about Geoff Dixon.

It must be remembered however that QF is one of the few airlines world wide that is in good fiscal health. Many are not and, not suprisingly, many of the lemons are directed and managed by people that have little understanding of the industry and market their working in.

Just because you have the letters 'MBA' after your name does not mean you can manage a business. Let's be clear with this. One has to understand the business one is in before one can manage it well. There are no shortage of examples of company directors and managers that come into a business with inapropriate skills, experience and qualifications and turn the business on its head.

I have been in two such situations in my life time and it's no fun. With retrospect it reminds me of a scene from Monty Python. I recall an interview with Dick Smith from the 1980s where he said, in relation to what makes a good manager, that a person has either got what it takes or they haven't, and no ammount of training will ever make a good manager if they don't have the inherent mind set and personality in the first place. Having some experience and qualifications in this area, I concur. I have had the disspleasure over the past 33 years of wittnessing some managers that will never make 'managers' as long as they draw fresh air.

I do however wonder why Geoff is still there post the 'Airline Partners' takeover attempt that he touted the virtues of at the time. Former QF Chairman Margaret Jackson fell on her sword and it beats me why Geoff Dixon did not have to follow suit. It also beats me why the Australian Securities & Investment Commission has not taken him to task over his role during the take over attempt. I guess it has its reasons.

If I was a QF share holder I would be asking some blunt and pointed questions of Mr Dixon at the next QF Annual General Meeting about his stance and advice to shareholders during this period.

The proof of the puding is in the eating however, and this is that QF is profitable and Dixon wishes to keep it that way. He appears to have a good sense as to what the market will do and appears to at all times attempt to position QF in such a way as to be able to ride out storms.

Having had two retrenchments in my life, I do however feel very much for those that will lose their jobs. It isn't pleasent.

Grnd Hog

19th Jul 2008, 10:07

Qantas name will survive but low-cost fares are over | smh.com.au (http://business.smh.com.au/business/qantas-name-will-survive-but-lowcost-fares-are-over-20080718-3hhq.html)

Good Article - I think says it all!

teresa green

20th Jul 2008, 07:12

It does indeed Grndhog, but where to from here? This is reality, and we all suspected this would be the case from the day JQ was born. So what about 2,000 odd QF pilots? What do you do with them? They are not going to take a pay cut, and you can hardly ask a JQ Captain to fly with a QF F/O who is making X amount of dollars more than him/her and expect a happy flight deck. I hope I live long enough to see what happens here, and I am sure as hell glad I flew when I did.

teggun

20th Jul 2008, 07:53

I would imagine for Qantas and Jetstar pilots to fly together it would have to be under the Group Opportunity List, in which case Qantaslink is also meant to be a part of.

Cheers :hmm:

blow.n.gasket

20th Jul 2008, 08:19

Before everyone gets too excited I'd have a read of a little piece of Legislation titled "The Qantas Sale Act". :ok:

(e) prohibit Qantas from taking any action to bring about a change of its company name to a name that does not include the expression “Qantas”; and
(f) prohibit Qantas from conducting scheduled international air transport passenger services under a name other than: (i) its company name; or
(ii) a registered business name that includes the expression “Qantas”;

max autobrakes

20th Jul 2008, 09:35

If Jetstar has to include the expression "Qantas"
and Qantas is known as "the big red rat"
how about :
" Rat Jets" as the new name? It's even an anagram too! :}

Kiwiconehead

20th Jul 2008, 09:59

(ii) a registered business name that includes the expression “Qantas”
Hence the extra words under the PornStar titles?

Photos: Airbus A330-202 Aircraft Pictures | Airliners.net (http://www.airliners.net/photo/Jetstar-Airways/Airbus-A330-202/1190611/M/)

Condition lever

20th Jul 2008, 10:52

As this is a rumour network - i'll pass on what the TL refueller told me the other day-
JQ to pick up a QF 332 in November to possibly facilitate Southern Europe flights - I take no responsability for the veracity of this - see the refueler and ask him yourself.

On another note I agree with Keg.
787s should be introduced by QF to replace the 76 and 734.
The upshot of this would be all 330s to JQ and subsequently the 380s.

-438

20th Jul 2008, 11:54

There is no logical reason for the 787 to go to Jetstar.

As Keg has stated if Jetstar cannot make good money under the LCC model with 767's, the business is too marginal for the capital investment.

If the Jetstar model is profitable using the 767, then logic would suggest you would keep your premium passengers happy by utilising the new aircraft (787) on premium services for reliability, comfort, prestige purposes. Do backpackers really care if they get to the pool bar 1 hour late or if the aircraft looks a bit shabby. They just want cheap fares.

The Qantas brand has been damaged so badly of late with Classic 747s, tired 767's etc. You could fix the image in a very short space of time by introducing quality new product like 787's and a380's enmasse.

It makes sense. Therefore I believe Dixon will do the opposite.

Rabbitwear

20th Jul 2008, 14:36

With over 100 787 on order there should be enough for everybody.

speedbirdhouse

20th Jul 2008, 15:18

Aren't "only" 65 of those 100 firm orders??

Captain Sherm

20th Jul 2008, 21:05

As I understand it all the Qantas Group 787s will be flown by Qantas Group pilots.

I believe that the Qantas Group has tasked a team of pilots, engineers and sim experts to put together the blueprint for the way that 787 operations will be handled within the Qantas Group for the next 25 years.

I personally know several 777 Captains who have been employed by the Qantas Group and I hear there will be a good number more. As the Qantas Group has a significant experience gap in this area these "outside" pilots will be needed to ensure the Qantas Group AOC amendment for the 787 is built on solid foundations.

Those DECs apart, it seems likely then that every Qantas Group pilot who wants to fly a 787 will one day get the chance. I wish them well. Looks like it will be fun.

Keg

20th Jul 2008, 23:19

lol. Of course they will be 'group' pilots Sherm. An excerpt from LH EBA8 says that 787s flown in QF livery will be flown under EBA8. It doesn't say 'who' but at least they'll be appropriately remunerated.

I'm not sure what the 'experience gap' is that you're talking about though!?! Boeing twins? Nope, lots of experience with those. Introduction of new aircraft? Nope, A330 and A380 in recent times. ETOPS? Nope, one of the early proponents of it. Not saying that the 777 experience isn't welcome or needed but that's a very different thing to QF not having the experience.

Rabbitwear, of course there are enough to go around and I'm sure that both J* and QF need the airframes. The question is where should they go first. It appears insane to leave old, clapped out (but highly loveable for the drivers) 767s on the 'premium' service whilst the low cost carrier upgrades from a relatively new and efficient type in the A330 to an even newer and more efficient type. Surely the return on the airframe is better by replacing the fuel guzzlers first on the premium service. As I said earlier, if the A330 isn't making money on the international services with J* but the 787 will then it'll still be a wafer thin profit. Imagine the increased profit if they replaces the 767 instead with the significantly lower costs of the 787.

What would I know though. I'm just a pilot.

Bypass ratio

21st Jul 2008, 00:23

What ceases to amaze me is that you Qantas pilots cannot see the writing on the wall!! Jetstar will be doing all the expansion at the expense of mainline pilots. Get with the times you guys (and gals). I flew with a Qantas DEC the other day who has been with you guys for 20 years, and even he said that its time to move on. Once the expansion is complete they will just repaint the airframes in Qantas colours!!

Bypass ratio

21st Jul 2008, 00:30

I am not trying to be an assh0le either. It is very frustrating to watch my mates who have been with you for many years pulling there hair out with the expansion of Jetstar.

noip

21st Jul 2008, 00:55

BR

This wall ... er is that like the mythical Big Picture?

or

The 5 year plan that is issued every Wednesday?

:eek:

What may seem obvious to you today could just as obviously be totally wrong in 10 years time .......

N

RAD_ALT_ALIVE

21st Jul 2008, 00:59

Bypass Ratio, I too flew with a QF DEC the other day.

And because we flew with him, everyone now knows who you and I fly for. That being the case, I think it would do no harm - in the interests of 'Group' goodwill - for you to think a little more carefully and sensitively about how you word your posts.

Whether or not what you wrote comes true, there are many people in both QF and JQ who have staked their careers on the choice they've made. In a perfect world, none of us will ever suffer a slowdown in progression because of the fleet/flying plans made by the Executive. But it's not a perfect world.

Rightfully, pilots and other operational staff in both camps feel a degree of nervousness about who will get what and where it will ultimately take them. This forum and it's members' inputs will have NO bearing on the end result.

Why then don't we just continue to post rumours we've heard and hypotheses that we think others might be interested to know about, and leave off with the smugness/anger/vindictiveness?

I'd like to think that we can, one day, be a cohesive 'Group' pilot group if we start/continue to show one-another the respect that should stem from not only our professional standing, but because of the common employer we all work under. :)

teresa green

21st Jul 2008, 01:11

Excellent letter in the Australian today, well worth a read.

Mstr Caution

21st Jul 2008, 01:45

The Qantas brand has been damaged so badly of late with Classic 747s, tired 767's etc. You could fix the image in a very short space of time by introducing quality new product like 787's and a380's enmasse.

I believe the trigger mechanism will be longhaul EBA8. Until certainty existed as to the cost structure of introducing the 787 to mainline, managament has held back on such announcments.

JB made it a requirement of EBA8 to have the 787 pay structure included. Add reducing training costs associated with promotion in mainline & a simplified agreement & an avenue for mainline growth exists.

There will be no slowing in the recruitment requirements for mainline & this will be an indicator as to where the growth in the future will be.

MC:8

max autobrakes

21st Jul 2008, 02:58

I think Mstr Caution has hit the nail on the head.
This management mantra about Qantas pilots being 30% more expensive than Jetstar pilots is in essence a myth.
A myth perpetuated by management as an industrial tool to keep the Jetstar bretherin champhing at the bit for the dangled carrot and the Qantas pilots purpetually on edge.
It's the 787 we're talking about here so lets compare apples with apples shall we. What exactly is the average take home pay of a 767 Qantas pilot compared to a A330 Jetstar pilot ? I bet the difference isn't anywhere near 30% and if this new EBA gets up it will be narrowed even further by the time the first 787 start arriving.
This 30% difference that is touted may exist between Qantas 737 and JetStar A320 drivers and B747 drivers and JetStar A330 drivers but where the bulk of pilots in the future will be is on the 787 essentially a 767 replacement and the difference isn't that great.
PS the 737 shorthaul award wasn't even construed by Qantas so I wonder if it was done today what would Qantas 737 drivers be earning , 30% more than JetStar?

max autobrakes

21st Jul 2008, 03:06

KiwiconeheadQuote:
(ii) a registered business name that includes the expression “Qantas”
Hence the extra words under the PornStar titles?

Kiwi re-read your own post.
"A registered business name that includes the expression "Qantas"
I don't see Qantas anywhere in the registered business name "JetStar Airways"
Just plastering "A part of the Qantas Group" down the side of an aircraft I am informed ,probably does not satisfy the intent of the ACT.

Mstr Caution

21st Jul 2008, 06:54

What ceases to amaze me is that you Qantas pilots cannot see the writing on the wall!! Jetstar will be doing all the expansion at the expense of mainline pilots.

I hope your not listening to the ex Ansett guys floating around J*. The same guys in Ansett management who were spruiking to the line guys that all will be ok, once the airline works things thru whilst under business administration.

This forum and it's members' inputs will have NO bearing on the end result.

So true, Dixon has repeatedly said in the past that the pilot body will not determine the way foreward for any part of the qantas group. This includes how much or otherwise the pilots are renumerated.

blackguard

21st Jul 2008, 08:03

Jetstar domestic will most likely stay.
Jetstar International....well...its day are numbered.
How many destinations does Jetstar Int. have and how many more can it have?
The LCC Model has been undone by the cost of fuel.
Jet* cannot stand on its own financially
Jet* in japan is generally seen as insulting by the Japanese market.
If an LCC was viable in Japan it would have been done by the Japanese carriers.
787s would be a waste of technology domestically.
Once Dixon goes the attitude toward Jet* Int. will change.
The whole exercise has been about driving mainline costs.
To this end it has been reasonably successful.
A coat of paint and Jet* Int disappears
These may be simple observations but they do have some merit.
As with most circumstances time willl clarify all.

genex

21st Jul 2008, 09:35

If the JQ drivers don't get paid much less than their mainline cousins....why all the venom over the recent JQ EBA? Don't sign....don't sign....don't sign....was the mantra from AIPA. Yet AIPA seems to have signed up it's own deal a.s.a.p. and no public debate!

Fuel a growing % of costs? Hmmmmm.....thinking don't let pilots near the books. If JQ's costs....or anyone elses....were so refined that toothpicks were 65% of variable costs.....would that be a threat or an opportunity? Maybe best to stick to flying planes I think. What if JQ's overheads grew to QF mainline levels....God forbid....then fuel would be a lower portion of costs....would that be good?

And...I think history will show the B787 family to be an asset on routes from 1 hour to 16 hours.

Anyway....as a humble...and I excel at that....former pilot....what would I know?

brucek

21st Jul 2008, 10:30

Genex, or anyone else: What are the current published salaries for QF, JQ, VB and TR/TG captains and FOs?

I'm intersted for at least two reasons.

The curent debate re QF Vs JQ, and
pilot and GA instructor salaries compared to the airlines, other industries, and the risks Vs costs given the time and funding required to get an ATPL/MECIR, etc, along with the regulatory regime, check rides, sim sessions, et al hassles associated with aviation when compared to the salaries and relativley lower risks and hassles associated with other professions these days.

aulglarse

21st Jul 2008, 10:59

Brucek there is a thread on floating around on something similar to "what did you earn?" Yes, I did earn approx 30% less than a QF 737 skipper!

Angle of Attack

21st Jul 2008, 11:11

Genex
Yet AIPA seems to have signed up it's own deal a.s.a.p. and no public debate!

Let the debate begin! Of course now that both parties have agreed to sign up now the crew can debate it! And reject or accept it, Quite simple really! If it gets voted up then there was not enough debate, if not well then I am sure it will happen! :ok:

And I think your right about the 787 and also what do I know too? :}

Keg

21st Jul 2008, 12:38

Once again genex distorts reality.

If the JQ drivers don't get paid much less than their mainline cousins....why all the venom over the recent JQ EBA? Don't sign....don't sign....don't sign....was the mantra from AIPA.

I don't know if the gap between QF drivers and J* drivers is 30% or not. However if it's 15% then it's too much. J* drivers do not deserve anything less than their QF colleagues. They do not deserve to work with worse conditions. J* drivers said 'no' to the first deal and wanted more. The goal posts were moved and they didn't get it. It'd be nice if there were no difference and they paid the same as QF drivers.

Yet AIPA seems to have signed up it's own deal a.s.a.p. and no public debate!

ROFLMAO. This is just plain ignorance. There is significant public debate. No doubt after the deal leaks out to the J* crew that debate will continue here on PPRUNE. Given that there was little contribution from the J* crew on the thread about their EBA then I don't expect you'll get much traffic from the QF crew on ours. Of course there is already much robust discussion- and misinformation similar to what you tend to peddle genex- on Qrewroom.

And...I think history will show the B787 family to be an asset on routes from 1 hour to 16 hours.

I think you're right. I suspect the 787 (and A350) is going to be a 'game changer'. The question is where to get the best return for that investment. Is it going to make more money for the group flogging around on highly elastic international low cost routes where relatively efficient machinery is already deployed but is struggling to break even or will it make more money flogging around on the premium network where quite inefficient machinery is currently being utilised but still making good money.

Mstr Caution

21st Jul 2008, 12:46

J* drivers do not deserve anything less than their QF colleagues

I agree whole heartedly with this statement.

However the two will only co-exist while a cost differential exists.

MC:8

jet.jackson

21st Jul 2008, 13:48

What would be the ideal airframe to run up and down the east of Australia.
Conversely what would be the ideal airframe to replace the 744 on thinner routes ex Oz?.
Wouldnt yield on an international route be higher than say SYD/MEL?
What about comparative utilization?
Sorry..just being the Devils Advocate for the purpose of gaining informed opinion.

Angle of Attack

21st Jul 2008, 16:24

Mstr Caution

However the two will only co-exist while a cost differential exists

If it was an Airline on its own fair enough compare the costs but this is the problem, its not, its being heavily subsidised with mainline services all over the place. In fact mainline aircraft are being used for Jetstar services frequently. Case in point couple I knew recently flew Jetstar from FUKUOKA - SYDNEY and they got a flight JAL to Tokyo then QF to Syd WTF? This is not a true airline on its own feet! Break the umbilical cord and then lets see what happens! Bring it on!

Without bias anyone knows what will happen and it IS happening...
:ugh:

genex

21st Jul 2008, 19:15

As they say...."be very careful what you ask for because you might get it..."

Without JQ, Qantas would have been gutted by now. Virgin, Tiger and anyone else would only have needed to steal a few % of QF's traffic to leave your airline dead in the water.

If you really want to know I'll explain it to you one day. Right now there's about 40 aircraft in JQ livery working night and day carrying a lot of traffic. Do you in your wildest dreams believe that many of them would be flying QF today if Jetstar didn't exist?

genex

21st Jul 2008, 19:40

And Keg....you are right about the 787 being a great Cityflier machine. I was surprised the Group didn't order the 787-3 just for that. Maybe one day.

But the strategy I guess would be that the 767s are there and the market is captive. The 787 won't expand QF's domestic base, simply do it more efficiently. Whereas, and I guess you've been in Qantas long enough to see the QF route map shrink like a snowman in the sun....the 787 will allow Qantas to expand overseas, something that hasn't happened for a very long time. The 15 787-8s will make an enormous difference in their first couple of years til the -9 aircraft come and replaces the -8s.

Otherwise, by say 2013, by the time the -9 aircraft come, you'd have a profitable domestic 787 operation but at the price of an international route map consisting of A380 routes from SYD/MEL to LAX, FRA, SIN and LHR. Full stop. The gas guzzling 744 fleet would all be saucepans and the number of jobs halved.

Mind you....nothing to say that a new CEO wouldn't try the above...so don't push the idea too hard!!!....but few airlines have ever really shrunk themselves into profitability. Win, lose or draw, from the moment Dixon drew that famous 65% line in the sand and started JQ's overseas expansion...Qantas has been growing markets not giving them up.

If...and its a big if....the Group now had 230 X B777 variants in service right now...we wouldn't need to have this discussion at all. Sigh....

Condition lever

21st Jul 2008, 22:29

AoA,

Yeah..... WTF????
In fact mainline aircraft are being used for Jetstar services frequently. Case in point couple I knew recently flew Jetstar from FUKUOKA - SYDNEY and they got a flight JAL to Tokyo then QF to Syd WTF?
I knew someone who knew someone who knew nothing!!!
What a load of absolute crap.
If their intention was to fly out of Japan with Jetstar, they would have positioned to KIX or NGO - not NRT.
Perhaps you should be spending your time studying rather than posting on this site.

lowerlobe

21st Jul 2008, 22:59

Do you in your wildest dreams believe that many of them would be flying QF today if Jetstar didn't exist?
genex.....If you are talking about the back packer/coach bus market ....then you are probably right but as VB are finding out there are other groups that want to fly than the just forementioned group.

However,if QF had put the money spent on the J* start up into their own product they would have satisfied or appealed to other segments of the market who want a full service flight.

There is also the valid point that J* has a definite financial advantage in being the offspring of an established parent with not inconsiderable resources.

The bottom line is though that you cannot deny that the use of the LCC is used or has been effective in lowering pay and conditions of existing and potential employees in aviation jobs in Australia.That is the most basic premise of an LCC..a lower cost base..and we all know what that means.

Mstr Caution

21st Jul 2008, 23:25

AofA

I agree, why have an airline within an airline?

Industrially J* has achieved what it may have been established to achieve. An EBA8 which sees the required efficiencies established within mainline.

In my opinion J* international will go the same way as Australian Airlines.

MC:8

Mstr Caution

21st Jul 2008, 23:28

If you really want to know I'll explain it to you one day. Right now there's about 40 aircraft in JQ livery working night and day carrying a lot of traffic.

But what profit contribution are they providing to the group?

May be 40 jets burning expensive oil with only marginal yield.

teresa green

22nd Jul 2008, 05:45

In the business section of the Australian today, in a article, it is recorded as saying QF profits may fall by two-thirds this financial year. I won't bore you with the rest but it finishes up by saying, as quoted from two financial analysts "The transferring of capacity from Qantas to Jetstar may of benefit, longer term". This of course is not lost on QF and JQ beancounters, and has to be considered to be very much a threat down the track. (Not surprising to many of us), but it the first time I have actually seen it written In bold black letters in a major newpaper.:sad:

flyer_18-737

22nd Jul 2008, 05:52

What are your estimates for Jetstar's profit this time round 250mil?

Bolty McBolt

22nd Jul 2008, 06:21

What are your estimates for Jetstar's profit this time round 250mil?

If I remember correctly,(Which I did not) last years JQ profit as per below.
Here are figures...
Jetstar Brands
Jetstar A320 operations, which include domestic Australia, Trans-Tasman and short-haul
international, achieved a PBT of $112 million or a four-fold increase on the comparative year result of
$23 million. Date June 2007

Some (not me :rolleyes:) may argue that JQ is heavily subsidised in its foundation there fore making profit figures even more rubbery.

Without JQ, Qantas would have been gutted by now. Virgin, Tiger and anyone else would only have needed to steal a few % of QF's traffic to leave your airline dead in the water.

If you really want to know I'll explain it to you one day. Right now there's about 40 aircraft in JQ livery working night and day carrying a lot of traffic. Do you in your wildest dreams believe that many of them would be flying QF today if Jetstar didn't exist?

Agree totally. J* fill a hole in the market that would have otherwise generated profit for someone else. :ok:

flyer_18-737

22nd Jul 2008, 06:25

JQ posted like a 120mil profit last time round (whole financail year)

jet.jackson

22nd Jul 2008, 06:30

Jet* appeals to the lower end of the market.The passengers who use JetStar would normally use a bus or have never flown before.
Start putting Jet* on routes where passengers are used to a full service carrier and passenger numbers will decline.
Rather than use Jet* many Japanese who wish to travel to Australia are now flying to Singapore and KL,transitting and then continuing on.
Jet * has limited appeal .You will not get high yield J Class pax using the orange star carrier.
There are too many downsides to Jet* for the experienced traveller.
It exists on price alone...the cost of fuel has all but destroyed any cost advantage it may have had.Anything above $85 a barrell and LCCs are bleeding red ink.Virgin has seen that and has changed its model accordingly.
Full service carriers have more leeway in what they can charge for a seat.Not a lot of leeway but enough
Jet * is being propped up by the Qantas Groups Resources...thats a fact

Mstr Caution

22nd Jul 2008, 06:35

Teresa Green, here's the quote from the rest of the article.

Deutsche also had a long list of risks, including rises in crude prices and jet fuel refiner margins, execution of the Jetstar growth strategy, worse than expected capacity growth and yield dilution.

Seems some analysts see the J* growth stategy as a possible risk.

MC:8

flyer_18-737

22nd Jul 2008, 08:55

jet.jackson or anyone else, do you think this whole new Japan scheme is going to work(as in NRT coming intp the equation)

Jetstar should just do 3 weekly ex Sydney to NRT and thats it, nothing else. Just one port. D7 does well out of OOL because they have a very well developed and known International and domestic operation in and out of KL. Where is Jetstar is not known in and out of Toyko. "What is a Jetstar" is what they will be asking!

Send you A330's to places like Europe, USA. Somewhere a long long away were we can all go to visit on cheap prices

I still cant see this Japan operation working, especially KIK-OOL

blackguard

22nd Jul 2008, 09:19

Jetstar does not work in Japan.
It is generally perceived as an insult by the Japanese.
Qantas sends an unknown second rate airline into Japan and it is not well received by the travelling public.
The Japanese are very savvy globetrotters.
Jetstar doesn't cut it

brucek

22nd Jul 2008, 09:23

jet.jackson, I agree with you re J* in as much as we flew MEL-SYD-HNL with QF last Easter. At the time of booking (September-October 2007) QF were about A$100/sector more expensive the the JQ flights.

For the extra money we were fed, watered, entertained, earnt QFF points, and did not have the hassle of having to pick up and recheck our bagage through from domestic to international, and vica versa on the return legs.

Nor did we have to make our own way from the domestic to international, and international to the domestic treminals in SYD. Something that the JQ pax did have to do.

We find JQ, and VB OK for shortish trips, but I'm not going sit stuck in a seat for some 10 hours with screaming kids all arround me whan I can get full service if one books early enough and shops arround for fares. This, admitedly, is not always possible.

Cheers

-438

22nd Jul 2008, 10:43

This from another pprune thread today, reportedly from Dixon,

JETSTAR IS NOW WELL ON THE WAY TO BECOMING A TRUE PAN-ASIAN BRAND. THIS IS A HUGE OPPORTUNITY, BECAUSE INTRA-ASIAN PASSENGER AND FREIGHT GROWTH RATES ARE LIKELY TO BE HIGHER THAN IN ANY OTHER REGION2.
AND THEN THERE IS THE QANTAS BRAND. THE GROUP ANTICIPATES ANNOUNCING A STRONG PROFIT RESULT FOR 2007/08 AND THE KEY CONTRIBUTOR TO THIS OUTCOME WILL BE THE SUPERB PERFORMANCE OF QANTAS MAINLINE.

Who's generating the profits??

Firecat

22nd Jul 2008, 12:30

How many destinations does Jet Star International have?
PAN! PAN! PAN!
What a load of turtle ****e.Who writes this twaddle?

genex

22nd Jul 2008, 19:11

Dear Jetstar haters,

It will, by my reckoning, be spring soon. Somewhere near you, perhaps in your own garden, there will be roses blooming.

Take in their delicious scent. That's the real world.

For all the rest.....A sheer waste of cyber-space. I have never seen such venomous loathing of other people, employed by the same Group and so brutal an attack on a business strategy. That is unprofessional, cruel and demeaning to both the writer and the recipients.

Just wait for spring......

kotoyebe

22nd Jul 2008, 23:29

Genex must be swahili for "the problem is always mainline, and the solution is always jetstar"

Keg

22nd Jul 2008, 23:48

Once again genex you mistake criticism of a business model and future plans for that model with criticism of the individuals employed by the business model. I have no beef with J* crew who are probably from the same widespread backgrounds as QF drivers.

Then again, you creating a straw man to attack is a familiar tactic. Shame really given that we agree on some issues.

packrat

23rd Jul 2008, 01:14

Succinctly put.
Dixon was advised against the AO model and went ahead anyway.
Jet* is mark II...the domestic version was necessary and still is.
The international version is a failure and is only being maintained to satisfy dixon's ego.
All this rubbish about what it contributes to the Qantas Group's bottom line is what annoys most commentators.
Where does it fly to?
Where has it flown to and withdrawn from?
Look at the schedule changes to Japan.....gee this hasnt worked...lets try this...no market research done.Ask John Menadue about Japan...he knows whats what.
Dixon goes...Jet* Asia goes.It has been used to drive down mainline costs....mission accomplished...time for a paint job

RAD_ALT_ALIVE

23rd Jul 2008, 02:01

packrat...'kegmiester', as you spelt it, would be pronounced kegmeester were it pronounced by a blond-haired, blue-eyed, uber-human! I think you'll find that if it was a pronunciation of kegmeyester you wanted, then the spelling should be kegmeister.

Next point; where have you read that JQ international is a failure and losing money? The only official feedback that I've ever been privy to is the announcement last year that JQ international had achieved profitability far sooner than planned. Is your (and others on this forum - shouldn't be surprised really) more a case of cockpit talk/rumour blossoming into perceived reality? I'd like to see the official quotes of massive loss-making.

And, please, don't confuse JQ Int, with JQ Asia - journalists do that all the time, so I'd expect better from those within our own industry. JQ Int is based here, JQ Asia in SIN, and JQ Pac in SGN.

Hasta la vista. :)

Ejector

23rd Jul 2008, 02:11

I'd say long haul flight attendants would be a certainty to be offered redundancy as they can easily be replaced by the SO's at a much lower cost.:D:D:D:p

Little Lady

23rd Jul 2008, 02:36

As interesting as the knife throwing is, I'd like to read posts relevant to the thread topic. Ta. :ugh:

Firecat

23rd Jul 2008, 05:43

16 posts in 7 years?...thats about 18 too many from an anal retentive untermeister.
No one has yet to see figures that support your assertion that Jet* international has made any profit at all.
Further the Jet* based in SIN has distanced itself from Qantas recently indicating some dissatisfaction from the singaporean majority shareholder.
The fact that Jet* has three faces is a further indication of the confusion that surrounds the brand...it is many things to no one in particular

Jetstarpilot

23rd Jul 2008, 06:56

The fact that Jet* has three faces is a further indication of the confusion that surrounds the brand

Shouldn't that be spelt FAECES??:}

JetstarPilot - we're s#it hot

lowerlobe

23rd Jul 2008, 07:00

'kegmiester', as you spelt it, would be pronounced kegmeester were it pronounced by a blond-haired, blue-eyed, uber-human! I think you'll find that if it was a pronunciation of kegmeyester you wanted, then the spelling should be kegmeister.
RAD_ALT_ALIVE....You have got to be kidding....if the best you can do to support the argument with regards to the profitability of J* International is a half baked lesson in German then J* International is in real trouble....

I agree though that there is a distinct market for J* International and that is the segment of the population that would normally fly to Bali each year or would have taken a cruise on the Oriana or Fairstar....:E

3 Holer

23rd Jul 2008, 07:11

Getting back to the subject - shedding jobs. To be a good & successful Company Qantas must grow. Job shedding is for the accountants to improve the bottom line. There has been too much job shedding at Qantas and sadly until management start looking at ways to grow the business it will implode.

As we saw with Ansett, it doesn't matter how big you are/were, if you are badly managed you're dead.

TMAK

23rd Jul 2008, 09:04

3 holer..you are correct in reference to growth, if we look at the Group (2 brands) and then look at the best full service & LCC they are conintually growing (Emirate, Singapore in the full service and Southwest as LCC). There is still plenty of potential out there. But its probably fair to say QF is a bit fat staff wise, especially head office and management and it should come out of the next 6 months stronger by maintaining now profitability and cash flow.

Firecat...have you in turn seen figures which show JQI is losing money? Indeed there has been many change since its start up, but many of these have been in groups interest to best compete with other airlines or put capacity where QF can no longer afford to lose money. Better JQ (lower cost base) operates low yield routes than mainline. Leave to the routes where people are prepared to pay for full service. I.e recent changes of JQI in Japan are more due to QF wanting to pull out due losses and as JQI have no additional a/c they have to move them from other routes so as to serve NRT. Sort of makes sense doesnt it?

rammel

23rd Jul 2008, 10:02

I don't know about all of JQ Int flights, but the 3 times I have flown MEL-BKK it has only been about 60% full. TG on the same days has been 80% plus.

If you look at package deals you can get at Flight Centre for Thailand, they are only a few hundred more than JQ (JQ about $1000 return, TG to Phuket via BKK or BKK with 4 nights accom about $1300) and include 4 nights accom, and are full service. I've flown both using staff travel, but if someone I know is travelling full fare, I recommend they check all airlines. As most of the time, you can get something that is better value than JQ for about the same price.

So going on my limited experience with JQ Int, if a lot of flights are like this outside the holiday periods, I do wonder how they make a profit.

I'm not a big fan of JQ from a QF employee point of view. But I have to admit that domestically it was probably a good move. Internationally though I'm not convinced.

Captain Sherm

23rd Jul 2008, 10:59

I have always believed that numbers matter. I know their limitations and I know that costs and profits can be shifted within a multi-enterprise group. But in the end numbers do tell a story and it worth investing some time in analysis vs emotion.

I really don’t have the time now, nor access to all the data that some of Jetstar’s and Qantas’ critics apparently have.

But as a useful research project, as distinct from just posting anger on Prune….here’s some thoughts.

Have a look for each of the last five years at:

1. The amount of total airline-business related revenue (nominal and real) generated per Qantas mainline employee

2. The total airline-business related costs (nominal and real) generated per Qantas employee

3. The number of seats in the air, flying hours, ASK and RPK per Qantas mainline employee

4. The average domestic passenger yield (nominal and real)

5. Then derive or estimate the same figures for JQ and VB

6. With the JQ figures you can probably have a rough guess at the Tiger figures

You’ll need to look at QF and VB’s (or VB various owners over the years) annual reports and also at research done by some of the better analysts. Have a look too at any published stuff on Easyjet and Ryanair too. This will take some time but now you will have numbers that will give the ability to look at what the Qantas mainline operation would be like if JQ was on the outside of the Group, alongside VB and Tiger, or what if there was no JQ and VB and Tiger were bigger by a Jetstar sized market amount. You should also now see the size and performance of the Qantas group with and without JQ.

The key is whether it was worth QF using its considerable strengths (those things some call subsidies) to ensure it has a piece of the action, covering its back with JQ….or whether it was ever possible to stay out of the low yield blood-bath and try and internally quarantine its own traffic. If, in the end, mainline could protect its traffic and yields, then the "do nothing" strategy might well have been the right one. If it couldn't.....draw your own conclusions.

When you’ve had a go at this, publish the figures on the web somewhere, maybe on Prune…so there’s some analysis behind the emotion. You will find it worthwhile. Might help me decide whether or not to sell the QF shares that are part of my retirement funding.

RAD_ALT_ALIVE

23rd Jul 2008, 12:08

Okay then Firecat, I'll play your silly game, and packrat's too (and, in fact, all those of you who should obviously be inhabiting GD's office at QCC, judging by your knowledge of 'the facts').

http://www.jetstar.com/~/media/files/pdf/news/2007/sep/20070909_kl.pdf

Not that it proves that it has yet been a record-breaker, (and of course, there will be those who have in the past, and will in the very near future say that it's all made up; a littany of lies to deceive the ignorant.) but I'm guessing it meets the standards of book-keeping as laid down by various corporate and accounting acts of parliament.

And what confusion surrounds the brand??? None as far as the average passenger is concerned; the punter only has to go to the JQ website; he doesn't need to worry about which arm of the company flies him where - they all have the big star on the tail. It's the back-office guys and other employees who should know. You guys, by being interested enough to troll this forum, should know too. I guess you're all too busy changing the face of the Qantas Group with your erstwhile posts to worry about details.

It comes as quite a surprise to me that JQI is a failure! But what do I know? I only operate their equipment on their routes. Oh, yes...and then there's those pesky routes. How have they changed? We started with two destinations in Japan. We will still have two destinations in Japan. We're dropping KUL, and sending the narrow-body a/c to SGN. So...one dropped destination. Hmmmmm...that's never happened at Qantas/BA/JAL/ANA/Lufthansa (an uberairline if ever there was one)/et al, has it?

Wouldn't losing one aircraft for six months play a big part in the decision and the timing? Four A330s going in for C checks mean JQ are down to 5 A330s until early next year. Something in the schedule had to give - the original plan called for B787s to be here already to pick up the slack, but the production delay has put paid to that.

Mainline is hurting, with old aircraft - particularly the B743 - becoming costly, unreliable and getting a bad rep. So any chance of JQ getting a replacement or two A332's doesn't seem to be a reasonable expectation - they're needed at mainline.

If, as some here have suggested, JQ has spoiled or ruined a market that some here say should've stayed with mainline, I ask this; if it was so profitable, why did mainline do away with it? Probably the same reason JQ change some routes - profitability enhancement! And even though that might not mean making an actual profit, it may well mean reducing the losses (which is acceptable if continued Group exposure to the particular market is deemed important).

And lastly, if JQI is doing so woefully, why is it that lately flight crew are being asked if the jumpseats are available? Don't tell me! Yield management, no doubt, is also something we don't know about!

WhoFlungDung

23rd Jul 2008, 13:02

So, what's the difference between JQ and every other startup in Australia - Compass (every version), OzJet etc? QANTAS. If JQ didn't have the backing of Qantas, JQ would be where the others are now - consigned to the Australian aviation scrap heap. And everyone knows it. Why do QF staff feel so pissed off? Because they all know that JQ has been morphed on the reputation and at the expense of Qantas. Thankfully, some are beginning to realise that the baby is still on the breast. Strangle the mother and the baby will perish. :ugh:

DEFCON4

23rd Jul 2008, 13:26

We have....Jetstar Airways...based in Melbourne
Jetstar Asia.......based in Singapore
Jetstar Pacific....Based in Saigon
Jetstar Airways is owned by Qantas and flies domestically.The other two are owned by Qantas in conjunction with Tomasek and Vietnam Air.Both are minority holdings.
The domestic brand was necessary to protect the line in the sand against virgin and whoever else might like to enter Australian skies.
JetStar Asia has a limited network and has recently distanced itself from Qantas.
Likewise JetStar Pacific has a limited network and is seen as an attempt to capitalize on the growing Vietnamese economy.
Jetstar Airways is tapping into a market of passengers who previously had never flown or could only afford to fly rarely.It has the mantle of LCC to itself as Virgin Airlines has changed its model and moved toward higher yield passengers.
There is little co ordination between the three varieties of Jetstar.The two international varieties seem to have little direction although the Temasek Singapore based brand seems to be gaining some traction.
The Australian based Jetstar has been used by Qantas mainline to drive down its labour costs.It has been successful in this endeavour.
Profitability of the two overseas brands have yet to contribute much to the Qantas Group.
Jetstar Airways uses a great deal of Qantas Group Resources at either reduced cost or no cost.If it stood alone it would be profitable...just.The LCC model Jetstar uses was initially based around $US85/barrel.Without the benefit of hedged fuel from its parent it would be struggling.
How much profit it makes is difficult to determine...costs and revenue are disguised or hidden amongst the financial data of its parent.
Most if not all of the anger displayed in forums such as PPrune relates to Jetstar forcing mainline employees to reduce their terms and conditions...the so called race to the bottom.
Many hope that Jetstar in all its forms will fail.The domestic Jetstar will likely stay the distance.The other two will have their futures determined by their majority shareholders and the competition of other LCCs in Asia.Some of that competition is already very successful.
Only time will tell...the rest is mainly angry speculation

blackguard

23rd Jul 2008, 13:37

Which one of the three illegitimate sisters do you work for and on which routes are the jumpseats being requested and by whom?
It may have also escaped your notice but with the recent chaos surrounding the Qantas timetable many passengers were transferred to other airlines.The seat load factor on your airline would no doubt have benefited enormously from these transfers.
Dont worry it wont last.
You will soon have your Star class seat back when traveling home to see your mum.

desmotronic

23rd Jul 2008, 14:08

qantas pilot wages have been falling for a lot longer than jetstar has been around

Muff Hunter

23rd Jul 2008, 23:13

RAA,

Well said, there alot of people here that dispise JQ, especially some of the parents flight crew (understandable i suppose as we have taken alot of their commands)

Whether they like it or not JQ will be here for a long time to come and I think what they fail to see it we all work for the same company...

Who cares is QF provides support, and saying that JQ would fail without it is utter crap...meaning that, the two live side by side and QF are supporting their own airline...seems to make sense to me..

I don't like the way that management of both airlines are dividing the group with rumors and inuendo, using JQ to lower the bar around the Group in regard to T&C's, lets hope one day we call all work together and have well paid jobs for life!!

Dragun

24th Jul 2008, 00:27

I do however don't like the way that management of both airlines are dividing the group with rumors and inuendo, using JQ to lower the bar around the Group in regard to T&C's, lets hope one day we call all work together and have well paid jobs for life!!

You do however don't?

I wouldn't say management divide the group with rumours. In the end it's really up to YOU whether you choose to work there or and accept lower pay and conditions. I considered applying once - until I found out that it's $30 for them to process your intial application!! :eek: To me that was just the tip of the iceberg and my application never eventuated. If people want to work there, good on them! That's the beauty of having a choice in this country. If enough people didn't apply on those grounds, it could be a very different story.

Two separate companies, two separate EBA's. Why don't people compare Virgin to Jetstar in the same way? In the end, it'd be doing the same thing.

westausatc

24th Jul 2008, 00:29

Muff,

Couple of points.

Firstly, from what I have read on here, what p1sses QF people off is mainline providing things to JQ at little or no cost, thereby improving JQ result and reducing mainline's result and then having JQ held up as being the future of aviation by certain people called Geoff and Alan in an effort to justify the whole exercise. Basically 'JQ did so well this year that we think we need to continue our efforts to drive down worker's T's and C's as it obviously pays off - as evidenced by JQ wonderful result - just don't mention the millions in support given to JQ by mainline.' Kinda like Basil's 'Don't mention the war - I mentioned it once, but I think I got away with it.'

As to whether JQ would fail without that support - don't know - but it is relevant. If you are going to push for this LCC model and use it to reform your mainline operation, then you should have the courage of your convictions (if JQ is such a wonderful thing) to have it stand on its own two feet in the organisation. Anything else is management tampering to suit their own, possibly nefarious, means. I imagine that it is also probably dodgy from an accounting and possibly tax point of view as well but being a humble ATC, don't know.

Finally, Geoff and Alan are fairly blunt in their opinions that the mainline cost base needs to be reduced to the JQ one as much as possible as the JQ cost base is the preferred one. Never mind that the mainline revenue is (probably) higher as a percentage of the cost base.....:hmm: Anyway, because of this, there is no chance of them allowing you to all work together - the divide and conquer mentality is alive and well! And as for having well paid jobs for life, unless mainline pilots are willing to take a pay cut to JQ wages, don't expect to be on the same money as them any time soon.

surfside6

24th Jul 2008, 05:46

The concept of LCC is no longer relevant as the price of fuel has eroded the cost advantage.
The airfare differential has narrowed and the downside of flying with a LCC has become a significant consideration when travelling.
JetStar domestic has a place in Australian Aviation.The International Arm may soon become irrelevant on the sole basis of price.The model will need to change to survive.Virgin Airlines have changed their model to reflect the realities of the market.
Jobs may go as the economic downturn intrudes on individual s travel plans.
If the price of fuel continues its downward trend International LCCs may still have place in aviation.
Interesting times ahead.

Bolty McBolt

24th Jul 2008, 13:12

To get back on Topic

The word is 5% layoff/redundancy across the board including engineering.

I can see an over subscribed VR list. :ugh:

Bula

24th Jul 2008, 20:42

I think people are forgetting that a low cost carrier will now become a "reasonable" cost carrier. The model still works. But with spiraling fuel prices does a LARGE full service airline work or is there going to be a capacity decrease of the full service component, and an increase in the economy component albeit at a lower cost base, hence the use of JQ.

There are allot of mythes floating around about JQ using QF staff/facilities to stay profitable. I'm sorry ladies and gents it just ain't true. The main component JQ uses is the security section, a little bit of finance but thats it.

Ground handling and the like have been tendered out and surprising QF was the lowest bidder. Personally if we could bypass QF ground staff on the International stuff it would save a lot of headaches. Just to much low moral and new contract people dragging everything down. Its a darn shame.

WhoFlungDung

24th Jul 2008, 22:46

Bula, bula, bula and all the others that just don't get it. Do you really think that if the irishman had set out on his own ie. JetStar, not a Qantas group airline, that JQ would even be still in living memory?

I mean really. When are you guys going to get it? Jetstar does not and would not exist without the mother company. If I were you, I would be praying that the mother survives. And on that note, it seems the new doctor is a specilaist and is taking a far greater interest in the mothers well being than the previous charge sister.

Bula

24th Jul 2008, 23:38

Considering Jetstar was formed by the Qantas Group......... well all I can say is DDIIIIRRRR!!!!!! :D... we have some rocket scientists amongst us I think. No one has ever said JQ would exist without mainline. For my money I dare say your will be seeing alot more cat food around the sky if that were the case.

My point is simple. The "mothership" will always exist, but will become more so the premium carrier. To do this capacity must be adjusted for the business market. Whether thats up or down only time will tell. Jetstar will take on the economy fares and leisure runs more so now and into the future.

For any company to maintain their yield in a more demanding market, cost bases will have to be lower to ensure competitive fares otherwise people will just not fly. It will become to "elitist" once again. As we all know this is not going to happen with the likes of Tiger and Virgin in the market place because its simply called competition. We have seen Aviation from the days of Ansett, TAA, Australian and Compass. Its fragility has been well observed. To be naive to think that the QF cost base will be sustainable in a high fuel cost world does show a lack of knowledge regarding yield management with its current capacity hence the withdrawing of the 747-300 earlier, older 737 and 767's. Mark my words, the mainline will not shink, its yields will be high, but its growth in the near future will be well below last month growth of 4.6% until capacity return to a more even playing field.

To place it into prospective as the belt buckles tighten around our fair land its amazing to see the cost restructuring already coming into play. Both QLink and mainline pax numbers plummeted last month, while JQ had a 15% growth in pax number as well as load factors. By the looks of it, the group is definitely tightening its belt with capacity going to JQ and it will be the vehicle of growth for the next year or so. Mark my words.

Mstr Caution

25th Jul 2008, 00:00

Bula,

I think the passenger numbers over the last month have been affected by the engineering industrial action.

Dixon recognised the fact that whilst the action was taking place, mainline was loosing pax to Virgin Blue (and I assume J* as well)

So I dont think that the recent figures are a good example of mainline in general.

MC:8

Bula

25th Jul 2008, 05:49

fair enough

genex

25th Jul 2008, 22:34

WhoFlungDung et al.....

Empires have been lost in the past because the generals kept fighting the way they did in the last war, rather than adapting to the best way to fight the next one. I wouldn't want your way of thinking to be in the mind of any general I was following into battle.

The world started changing 30-ish years ago with Freddie Laker on one side of the Atlantic, Southwest on the other and the Airline Deregulation Act presented to Congress in Washington in the middle. Price driven markets, low fares, secondary airports, removal of barriers to entry, low costs, outsourcing etc etc started to become the watchwords of the industry. many player just "never got it" to use your anti-Jetstar words Mr WhoFlungDung.

Braniff, TWA, Eastern, Northeast, Reno Air, People Express, Western, Republic, PanAm.....didn't get it somehow or another. Some didn't manage the full service model, some didn't manage the low cost model. Doesn't matter whether their management were cruel, evil or wonderful...they're gone. And probably one of United, Delta, USAir or America West will yet go down the tubes.

If there was even one chance in 20 that someone other than Qantas would start a Jetstar style operation here then the Qantas Board had no choice but to be pro-active and do it themselves, to get their share of the expanding low fare market and to fend off other trying to do the same thing.

If the likes of the Jet Blue founder had started a Jetstar operation here, independent of Qantas and as a competitor, then Qantas would by now have folded up its domestic operation except for maybe MEL-SYD-BNE and if SIA ever got onto the Pacific, it would have folded a large chunk of their international operation as well.

Your future rests on the fact that the Group has managed that most difficult of balancing acts in the two brand strategy. It matters not that in being the repository of QF's loss making routes and defender of mainline yields, Jetstar is subsidizing mainline. That's just a normal part of business. JQ's reward is very rapid growth, quick promotions and of course the 787.

To even contemplate the "Do nothing" option for mainline would be to invite in the receivers. There was one and one only viable battle plan and it has worked.

Thumbs up

25th Jul 2008, 22:56

Well said Genex !!.
:ok:

kotoyebe

25th Jul 2008, 23:29

So when is Coles re-introducing Bi-Lo?

genex

26th Jul 2008, 00:28

Don't know......they didn't manage it properly did they? But you'll note that the DFOs go from strength to strength, Target and K mart seem to work still?

Plenty of airlines tried a 2 brand strategy and it didn't work. Shuttle by United,Ted by United, Delta's Song etc.

But your main point is, and it is a good one, that Qantas is fortunate that it managed to put in the right team to run JQ properly and that has saved mainline's bacon.

breakfastburrito

26th Jul 2008, 01:27

genex, two brands is not what people are complaining about.
You mentioned Southwest, the contrasts in management style and practice could not be starker.
Do they f#ckover their staff AS the strategy?
I think you will find Southwest view their people as the soultion, not the problem.
How does Southwests management's compare to QF's (currently over 1000 executives)?

packrat

26th Jul 2008, 05:16

You sound very much like a managemnt troll.
Qantas needs JetStar domestic...Jetstar domestic needs Qantas mainline.
Fine....
Lets just be clear that Jetstar domestic is being propped up by Mainline....not vice versa
Jet Star international with all its faces is not viable in its current forms

mmmbop

26th Jul 2008, 05:46

Genex,

You fall under the same definition of hypocrite as Dixon.

On the one hand the argument is rationalization of the airline industry - MEGA mergers of airlines into very few carriers.

But in another argument Qantas needs to have Jet* around (and every other crappy offshoot they have through Asia) to survive.

Jet* domestic will survive and thrive. (because it is protected by QF, which is in turn protected by Jet*) It will grow to include the shorter international routes to SE Asia but that is all. (like QF Mainline SH operates)

Jet* Intl will be dead and buried as soon as Dixon leaves.

M

brucek

26th Jul 2008, 08:33

Our Mexican breakfast friend has a point. May I humbly suggest you all take a look at the article at this link:

ISA | Top-heavy management drains companies (http://www.isa.org/InTechTemplate.cfm?Section=ViewPoint1&template=/ContentManagement/ContentDisplay.cfm&ContentID=69084)

Hans Bauman is the founder of the Bauman control valve company that is known today as Fisher-Bauman, or just Fisher Controls. His qualifications are at the bottom of the article. (NB: And he doesn't have a MBA! Shock, horor. :ok:) They are owned these days by Emerson Process Automation, one of the worlds leading and largest process control instrumentation manaufacturers.

Another good article appears in the March (?) 2008 edition of Australian Aviation. An interview with the new CEO of Air NZ. In the third para graph, from memory, he makes a prophetic statement to the affect that 'he looks after his staff, and his staff take care of the share holder's value'. The guy should be stuffed and mounted he is so rare!

flyer_18-737

26th Jul 2008, 09:10

I think we would just see JQ international scalled back 70%. They shoud just keep:
-Christchurch
-Bali
-Bangkok/Phuket

Thats it, no japan, no nothing

AirAsiaX are going to beat JQ in the MEL-KL-London. They will have better and newer aircraft(IE-good IFE, nice cabin!, nice mood-lighting and you can order in your seat) Beats just sitting in a leather seat looking at a wall in the brightness of JQ's Lights!

genex

26th Jul 2008, 10:15

mmmbop,

I'm not a stooge of any sort for anyone. Sorry. Just a humble pilot and currently out of work but considering a few options.

Spoke to a few mates who work for JQ in the last couple of days. Funny....they don't specially feel F@#$ed over by anyone except attempts by some rabid AIPA stooges on Prune who dress up the argument "I want to fly the 787 and I'll hold my breath until I get to" as "There's something wrong with the Jetstar business model".

Are you projecting or do you know something no-one else does? If you are constantly feeling put upon or threatened by people you don't know without any factual evidence then you should talk to someone. Paranoia is dangerous, especially in the cockpit.

As for facts.....best estimates would probably put the Qantas cost of operating the 787 at about 20-ish% more than the same operation by JQ , year on year per any measure you like. Per hour, per available seat, per $ of revenue, per passenger, per ASK, per trip, per year, per sunset, whatever.

That would just about negate the fuel and engineering efficiencies of the 787 leaving QF no better off for having bought the Dreamliner.

Well, that's the Legacy Way I suppose. Add on the overheads and running costs so that every efficiency is matched by increased costs. Would love to see that case being argued to the QF Board.

The whole point about economies of scope is symbiosis....that the two parties together are better than as disparate entities, separately owned. apart. They rest on each other. Qantas has managed that better than most.
I have never met Mr. Dixon, never will. Neither like him nor dislike him. But he's done it.

I can imagine a JQ sized airline wreaking havoc in Australia without necessarily having Qantas Group as a parent. Any number of people could start that. Tiger for example with the vast resources of SIA behind it....could be 50 a/c by now if JQ weren't there. But I can't imagine Qantas mainline surviving if it had no defence mechanism against falling yields except a small bunch of AIPA members wishing it were so.

If it doesn't suit you then either sue the Board or leave. But stop complaining about a subject you are monumentally ill-equipped to contemplate and make pronouncements on. Failure to look beyond prejudice, superstition and bias to see the facts is NOT the mark of a professional pilot.

breakfastburrito

26th Jul 2008, 11:54

genex, I call your bluff
As for facts.....best estimates would probably put the Qantas cost of operating the 787 at about 20-ish% more than the same operation by JQ , year on year per any measure you like. Per hour, per available seat, per $ of revenue, per passenger, per ASK, per trip, per year, per sunset, whatever.Can you please enlighten us with ANY publicly verifiable independent financials for JQ to allow us to compare.
No, therefore your statement has no basis in fact, unless there is some special information you would like to share.

genex

26th Jul 2008, 21:00

Ah...I'm beaten. Yes indeed I made up the figures. Qantas will fly the 787 far more efficiently than Jetstar. Qantas is indeed the most efficient airline in the world. Jetstar is but an abscess on its behind and without JQ, Qantas would be even more profitable. In fact Qantas would become galactically profitable and life just peachy for all its pilots if it weren't for Jetstar, VB, Tiger, Geoff Dixon and another 100 executives, journalists, bogan and backpacker travellers and anyone else not paying full fare, the AFAP, politicians of all sorts, lesser pilots who don't preface their flight number callsign with "the", and indeed everyone who doesn't understand that "we've always done it this way". They should all go. Soon.

And yes...Jetstar's raison d'etre is but an evil strategy just to upset the true Owners of the Sky and their seniority and pensions and gold braid.

I apologize. In mitigation I can only plea that it wasn't all my fault and since my dad was a humble Lancaster pilot, not a Qantas Captain, I didn't know better. I even compounded that by never getting any sort of degree in aviation! I know, its sad.

If....on the other hand, outside of the world of daydreams, you really want to know the facts....I suggest that as per the agenda in a previous post of mine you do some of the legwork yourself and publish your results here. If you aren't willing to do that then keep quiet and stop trying to get other people to do your work for you.

Muff Hunter

26th Jul 2008, 23:13

Genex,

They (qf drivers) are living in hope of getting the 787......they will not..!!
I suppose you really cant blame them having to fly around in dated a/c whilst the LCC has the new shiny equipment..

I would like to see the comparison of JQ vs QF flying the 787 with JQ's cost base vs how much money they make flying it compared to QF flying the 787 with their "premium" customers and the huge cost base they work from.....I don't think there would be too much differernce..

Anyway...I guess the JQ lads will prosper from this at the expense of the gold braided rolls royce driving mates..

TMAK

26th Jul 2008, 23:36

Muff...the QF guys will be driving it and not too long after JQ ( a year or two) as only the first 15 787-8 go to JQ and remaining go direct to QF, then 2 years in (assuming timeline sticks) JQ then get the better suited 787-9 for their operation (15 also) and the initial 15 x 787-8 goes to mainlin for domestic ops I think??

Breakfast...I understand its accepted by most with access to these figures, that the cost to operate JQ flight of the same type as QF (ie 787 or 332) that it is approx 20-30% less depending on who you talk to. Sure the fuel is a much bigger percentage for JQ....which in itself shows you that their total costs are still much lower...or else percentage would be the same. This would work for any form of measuring cost's that you like as Genex stated above. Its fairly simple...pilots are 20-30%less paid, FA are at least 30% less paid and do 16 hour duties without bunks etc...(i.e MEL-DPS overnight returns), JQ take lowest contract price, have fewer head office staff for each area...etc etc.

In saying all that, cost of course doesnt alone determine profitability and one would reasonably expect on most business or higher yielding VFR routes that QF would be able to demand higher yield than JQ (i.e the great cityflyer domestic product and OZ-UK/USA traffic. But on routes that Ma & Pa Kettle want to visit the kids or the local B grade footy team wants a end of season trip (i.e. no big demand for First, business, prem econ and all the trimmings), well then JQ get more seats in and can take higher numbers of lower yielding pax. Where as QF Int a/c would not carry as many low payers....and hence lose a lot of money. Not because there is anything wrong with QF, the crew or the aircraft...just there is not a product/cost/yield match up...

So as Muff hinted at not lot in it, should be more about making the 2 brands benefit the GROUP rather than hurt each other. But I do think QF should by now have had a fleet of B777-200/300ER etc doing mainline domestic flying (SYD-MEL/PER etc and Longhaul to replace early 744's). At 2-3,000kg of fuel less per hour, newer product, better IFE....think how the longhaul and cityflyer would be going now...

TMAK

26th Jul 2008, 23:46

Mstr Caution

27th Jul 2008, 00:56

QF guys will be driving it and not too long after JQ ( a year or two) as only the first 15 787-8 go to JQ and remaining go direct to QF, then 2 years in (assuming timeline sticks) JQ then get the better suited 787-9 for their operation (15 also) and the initial 15 x 787-8 goes to mainlin for domestic ops I think??

TMAK, I have to agree with the statement "assuming the timeline sticks", also with the assumption if the "old" flying plan is also to stick.

Whilst I dont admit knowing exactly what the flying plan is for the larger Qantas Group. I do know that the flying plan is continually being reassesed & what was the case at 10th July 2008 is again under review.

So to trust a delivery schedule for the 787 & where they will go to, dated prior to 10th July 2008 may no longer be the case. Hey, we all know things change in aviation at an ever increasing & acclerating rate.

I did however have the opportunity to meet with JB some time ago, he reiterated the reason mainline pulled out of some of the international ops was QF mainline was unable to operate daily services due unavailability of aircraft at that time. Hence being unprofitable on those routes. With more airframes & newer, more fuel efficient aircraft, wouldn't the reverse be true?

MC:8

TMAK

27th Jul 2008, 02:00

absolutely...frequency for full service is often the key to making it viable and Im sure this will be the case for QF once the new aircraft are online. Not only frequency, but more fuel efficient will work wonders.

To the right markets, JQI will continue to work...its not going to make big money, but it keeps market share where its not viable for QF to go and this allows QF to go after the big dollar routes and fend of the likes of SQ & EK on UK traffic.

MC...you are likely to be right, Im sure now that all plans are "tentative" from this point on...It would make sense that the first 20 or so planes (787) go to mainline for Asia and main trunk domestic. If not at least QF will get back the A330's one for one from when JQ 787 #7 trhu #12 delivered...or so the plan was anyway. I wonder now that QF will pull off double daily CNS-NRT if that provides sufficient a/c to do the routes mentioned by JB??

Capt Kremin

27th Jul 2008, 02:07

My bet is that all the A330's will go to J* and the all the 787's will go to mainline. That was a recent rumour from the top of QF flt operations from a couple of weeks ago.

Not a beat up, just a strong rumour from someone a lot more in the know than I am.

TMAK

27th Jul 2008, 02:27

That would probably also work, the total of the A330-200 fleet including JQ current 6 (if they take the 4 on offer late next year) probably gives them similar size fleet, with not quite the same range but close...

The concern was more on the 332 ability to reach Europe and parts of North America...which the 787 overcame.

The other downside to the 330 for low frequency ops like that of JQI is the crappy reliability.

Capt Kremin

27th Jul 2008, 02:38

The reliability of the A330, in my experience, is excellent.

TMAK

27th Jul 2008, 02:45

Its a good plane...if its not painted silver! One has to wonder why the JQ aircraft go tech so often...barely 48 hours goes by without a tech delay on one of the 6 aircraft...its bad. But dont hear of the same problems at QF...wonder why?? Same engineering dept do both...

Friends that have worked for EK say theirs have the worst reliability in the fleet also.

Capt Kremin

27th Jul 2008, 02:54

The QF ones work fine. If all the QF A330's went to J* they would have a fleet mix of 12 X -200's and 10 X -300's. The -200's have ample range to go BKK or HKG-Europe.
With CCQ, and the fact that Jetstar are already operating the type, it seems to me to make a lot of sense. Mind you, I don't have my ego invested in getting my new intenational LCC to work as it should.

shazza26

27th Jul 2008, 08:28

I tend to disagree with Capt Kremin, the A330 has its moments as a Airplane. The A320 and A340 are probably the best aircraft in the Airbus fleet that i am aware off. I used to work for an airline that had 30 A330 200 and 300 and they gave us heaps of problems. They do the most weirdest things. But Airlines luv them as they are so efficient to run.

brucek

27th Jul 2008, 12:16

Brucek, you cant always take single quotes on their own....keep in mind the same Air NZ CEO only two years ago told all is his airports staff (about 2000 of them) to sign a new EBA or they would be outsourced...and in fact even appointed a company (Swissport) which was only overturned after the staff signed a new deal and some accepted VR.

TMAK, I agree with your comment, From a general management perspective however, the sentiment behind his statement is all too true. These days it is common for bean counters that don't understand the business they are managing to be so share holder (read: botton line) focused that they sometimes shoot themselves in the foot by forgetting what actualy generates 'share holder value'.

I have had the disspleasure on two occasions in my life of being a senior manager for companies that considered they had products that 'sold themselves' (nothing short of sex, and water in a drought comes close!), forgot about the people that actualy added value by providing the customer service, and promptly went into liquidation in the process. The anals of corporate failures are littered with such examples, as are the anals of once great airlines that are now unfortunatley no longer.

The link to the article by Bauman is probably more applicable to most of this debate and I would implore fellow rumor-rats to read it.

Cheers

What The

27th Jul 2008, 18:02

I'm cheaper you're cheaper.

Don't want to get into that debate, but isn't there a maths problem somewhere in there?

If fuel and landing\enroute charges is 50% of your costs then to say that another operator is 20% cheaper to run means that you have to be 40% more efficient with the remaining 50%.

Is one 40% lower than the other in the other remaining cost areas?

At the end of the day, who cares.

genex

27th Jul 2008, 22:33

Don't confuse Direct Operating Costs (or variable cost) with the fully allocated costs (which includes all relevant overheads.

Second, remember that if JQ put in 25% more seats than Qantas and use the aircraft 15% more then that has a direct effect on year-in, year out costs that spreads JQs already lower overheads even thinner. If JQs average journey length is longer then the proportion of costs for landings and of course all cycle-related engineering costs will fall. As a result of these factors yields will of course be lower and it may be that the actual profit margin (in the varying ways it can be measured) would be the same.

No doubt at all though that if Qantas Group had 50 787s right now, then some (say 20) would be used on the Cityflyer routes and 30 on JQI routes with a higher proportion of price sensitive to less price sensitive traffic , leaving the 380 to do the remaining "core" of QF's mainline routes from SYD/MEL to LHR and LAX.

Condition lever

28th Jul 2008, 03:35

TMAK

If not at least QF will get back the A330's one for one from when JQ 787 #7 trhu #12 delivered...or so the plan was anyway.
Your maths are off mate.
If JQ are getting 15 787s then the first 330 to return to QF won't be until the receipt of 787 #10.
Be prepared however for 40 787s to go to JQ.
Just ask the new CEO.

max autobrakes

28th Jul 2008, 07:03

Ok Condition Lever,
I'll ask ,
those 40 787 going to Jetstar, how are they going to be branded?
How exactly will the Qantas Sale Act affect this business plan?:confused:

TMAK

28th Jul 2008, 09:48

Very true...as a rule it is correct...just ironic the example.

Cheers

TMAK

28th Jul 2008, 09:57

You could be right my maths is often off! But I was refering back to the last plan I heard which was:

JQ first step was to get 12 widebody jets in service and then grow to 15.

So the first 6 x 787 would make the fleet 12, then next 6 would be replacements to get the A330 back to QF, then I "assumed" the last 3 would be growth again to 15. A straight jump 6 to 15 is huge in the space of 6-12 months....

In saying that it was a few months since I have heard the latest goss...which seems to be very much up in the air now days...

I wouldnt think of seeing 40 787 go to JQ, unless of course was to do what NZ did with the A320 and paint them in mainline colours and operate them with cheaper subsidary. Keep in mind Joyce will have QF interests as much at heart now as he did JQ before!

Whilst I have no say in this...I still would like to see a dozen 777-300ER flying lower end capacity long haul routes for QF...to replace older 744 and fill gap between A380 and 787-9.

TMAK

28th Jul 2008, 10:05

I share your furstration at all the figures...but a short answer to "Is one 40% lower than the other in the other remaining cost areas?" would be...yes. Once you remove those major costs, JQ is very much lower cost than QF...the entire head office has less than 200 people including all of, marketing, HR, PR, Operations, Crewing, Airports, finance, you name it...

At an airport with say 20 flights daily, JQ might have 3-4 duty managers revolving thru a shift pattern sharing a small office with a few CSO's, where as QF would have 15-20 managers and a suite of offices....the mind boggles...

As for who cares...not me so much...but Mr Joyce might do come Nov...

Keg

28th Jul 2008, 12:52

TMAK, perhaps the small head office is part of the reason that the QF IOC is forever trying to work out how to assist and 'save' the J* operation when it falls over. I wonder if J* are ever billed for the work that QF does in that area? Probably not. Of course though, QF is big and inefficient.

TMAK

28th Jul 2008, 20:09

Keg, are you refering to recovery for Int disrupts? the ones caused by somewhat unreliable A330 fleet? Yes JQ have to pay charter rates for QF to operate for them (if that is the solution), or they raise a FIM if its transfer of pax to QF...which will cost more normally than what JQ have taken from the pax. Same applies in reverse of course, when JQ has to operate for QF, like MEL-CNS vv recently. Nothing is for free, despite what many on here think.

Yes of course QF are much bigger and I would never expect it to be anywhere near as lean as JQ (it wouldnt support the full service operation), but do you think the staff/crew and the operation get bang for their buck considering the number of managers everywhere?

The problem at JQ is probably not the size of head office, its experience level (and maybe size) of the Ops centre...IMO anyway.