Qantas to Decline as Jetstar Soars

[Gingerbread]

Why Peter Harbison at The Australian says that 'there will be a major generational shift and Jetstar will become much bigger domestically and internationally than Qantas', isn't really answered in his newspaper article: Joyce destined to see Qantas decline as Jetstar soars.

To read what he has to say go to: http://www.theaustralian.news.com.au/story/0,,24107675-23349,00.html?from=public_rss (http://www.theaustralian.news.com.au/story/0,,24107675-23349,00.html?from=public_rss)

Pruners wanting to run a book on how many B787's Qantas will get should start taking bets before the changing of the Qantas Guard in November.:(

[Muff Hunter]

I'll give anyone odds of 10000-1 that they'll see any of em..

[Fatguyinalittlecoat]

Wow, I'll take that bet.

[PlankBlender]

Interesting short summary of the aviation business in the last decades, but when it comes to what he's alluding to in the headline, just a couple of very strong yet totally unsubstantiated statements:

Joyce will undoubtedly be seen as the Qantas chief who allows Qantas to subside even as Jetstar grows.
That is an unavoidable role for any leader in this environment.


If this is a plug to arouse interest for his services, it's not a very good one I'm afraid, the crumbs are a bit meager, and the tone too self-assured bordering on patronising, which is OTT even for a consultant :E if he's trying to scare airline managers into buying his analyses, however, it might just work if the characterisations of this type of manager that abound on pprune are not too far off the mark :}

[max autobrakes]

Harbison has been nothing but a Dixon/Qantas groupie for a long time.
It makes you wonder as to the impartiality or credence of anything that he or The Centre writes.

PS: I wonder what Qantas share holders will make of this revelation.

[Going Boeing]

The attacks coincided with the collapse of Ansett, which, although it theoretically delivered Qantas a free meal in the profitable Australian domestic market, became a major challenge in itself.

Picking up much of Ansett's 35 per cent or so market share overnight was nigh impossible.

In the vacuum, the previously faltering low-cost Virgin Blue took the opportunity to expand quickly, catching Qantas off guard.

Harbison knows Jack Sh!t. Following Ansett's collapse, the Federal Government leant on Dixon and said that Qantas would not be allowed to have more than 70% share of the domestic market. Even though Qantas had the cash to put the screws on Virgin, they had to limit capacity to allow DJ to grow. This was most obvious during the SARS crisis as Qantas had reduced their international services and thus had aircraft & crew available tothrow at the domestic market. They didn't do this because of the instructions from the PM's department. Brett Godfrey can't claim to be a great CEO when he was gifted 30% of the market.

[bushy]

A remarkable set of co-incidences.

Mick Toller told the national press club that casa had done everything right, and the proof was that Ansett had been nominated as the worlds second best airline, ahead of
Qantas
Not long after that he shut Ansett down because he said they were not safe.
One of the favourites (a white knight) turns up with a new airline to take up the slack.
Qantas are told to let the newcomer get 30% of the market.
And we thought we had a free market!!!!
We thought aviation regulation was only for safety.!!!
Silly us.

[Al E. Vator]

Why listen to Wannabes like Harbison?

What's he actually done ever except talk and pretend to be somebody?

[porch monkey]

Spot on Al.

[Keg]

As a wise bloke wrote on Qrewroom ( :ok: :} )...

Those who can, do. Those who haven't and can't, commentate.

[Transition Layer]

Muff Hunter

You are a tool...I'll take those odds thanks very much. Do you really think Jetstar can fill 65 B787s with bogans like yourself going on their trip of a lifetime to Phuket or a bunch of surfers going to Bali to get a wave at Uluwatu....you're dreaming.

[Angle of Attack]

Muff Yes Please I am willing to give you $100 for that bet, PM me and let's get it in writing, hang on that means I would win 1 million! Wow, I seriously doubt if you have anything to do with Jetstar you have or will ever have access to that kind of money , damn! I thought I was on a winner for a minute :p

[Muff Hunter]

Transition Layer and AOA,

geez looks like I have hit a raw nerve.....relax, it was supposed to be a joke....

Now back to watching league and drinking my bundy in my moccos and flanny!!

[Mstr Caution]

Could someone please tell me why the Qantas Growth Vehicle (J*) had 2 A320's parked in the general aviation parking near 25 threshold in Sydney.

Seeings it's a weekend I thought these two aircraft could be out generating some revenue rather then being parked all day?

MC:8

[Wiley]

What's he (Harbison) actually done ever except talk and pretend to be somebody?Ask that question of anyone who worked for Compass One, or get your hands on a copy of "Operation Sewn Up". And if you find an ex-Compass One man, stand well back before asking the question.

[AnQrKa]

Bushy,

"A remarkable set of co-incidences"

Yep, all of a sudden the industry is headed for de unionization only made possible by the demise of one half of the highly unionised duopoly.

But its all just a coincidence, isnt it.

[sthaussiepilot]

I have to say (regarding the first post, about Qantas decreasing, and Jetstar increasing) "I Told You So" (to alot of people) it has been a known thing to happen for around 10 months, maybe longer

From what I was told it is just to get people over to a cheaper airline so the wages arent so high... then later on everything will go back to "normal" apparantly....

[blow.n.gasket]

And just how is that going to be achieved now that the more draconian aspects of WorkChoices are gone? Operational redundancy,gone!
Is Joyce going to ask "pretty please with sugar on top?"
Then there is the Qantas Sale Act, have a read of it, many smart legal minds believe "it" can't be done as the Act now stands.
The Qantas unions are aware of the importance of this act and are lobbying.
So once again just how is Joyce going to progress the Dixon Plan further?

[sthaussiepilot]

From what I am saying, it is only working off of Dixions reign, it was not factoring the new CEO

[blow.n.gasket]

Another nail in the coffin for the Dixon Plan?:}





From the Australian:



Solicitor prosecuted in phoenix trading suit






Michael Pelly | August 08, 2008

THE nation's corporate watchdog has launched proceedings against a solicitor accused of helping eight financially distressed companies revive their fortunes through "phoenix trading", and warned that lawyers and other advisers are on their radar.
Tim Somerville, of Sydney firm Somerville and Co, allegedly advised the directors how they could transfer assets to a new company controlled by the same directors, at negligible cost.
The Australian Securities and Investments Commission says the vendor company was put into liquidation, after its assets were sold for a token fee and the business continued trading under the name of the new company.
This week, ASIC succeeded in joining Mr Somerville with all eight directors, meaning all the cases will be heard as one.
Justice Robert Austin of the NSW Supreme Court said "close case management" could overcome any difficulties and suggested the defendants could agree to a "lead cross-examiner". The court could also intervene to "prevent repetition of lines".
ASIC said it was the first time it had taken action against a solicitor for phoenix activity and that it presented a rare prosecution over legal advice.
"Phoenix activity is a significant issue and ASIC has broadened its focus in relation to misconduct to include not only company directors but also others who are involved in, or help facilitate, such transactions," said ASIC director of enforcement Jan Redfern.
She said ASIC was seeking orders against Mr Somerville and the eight directors of companies engaged in business ranging from furniture and fine art to removals and storage.
Last year, Greg Gaunt, Peter Beekink and Hersch Majteles were all finance company directors and partners of the law firm Phillips Fox when fined between $20,000 and $40,000 over a prospectus, which sought to raise funds for the construction of the Blackrock Caravan Park in South Hedland, Western Australia.
In agreeing to one trial in the Somerville case, Justice Austin said there were common questions of law and fact for all the transactions.
"In each case the (Somerville and Co) letter of advice said that the company might be insolvent and identified the risk of liability for insolvent trading," he said.
"It attributed a significant value to the assets of the company's business, and identified the disadvantages of closing the business down or appointing an administrator, and the difficulties of selling the business on the open market.
"Then the letter suggested that the only viable alternative open to the director was to transfer the business to a newly formed, solvent company, which he would control.
"Since there would be no cash in the new company to pay for the full value of the assets, the letter proposed that the old company would hold shares in the new company carrying the right to receive all the dividends paid by the new company until an amount equal to the value of the business was received.
"That amount, when eventually paid, would be available to pay the creditors of the old company."
He said the agreements "also provided that the vendor would terminate the employment of all current employees with effect from the settlement date.
"The purchaser would offer the employees re-employment on the same terms and conditions, the vendor remaining responsible for all wages and holiday pay up to the settlement date," he said.
Mr Somerville continues to practise at his North Sydney firm, pending the trial.

[Gingerbread]

Have been informed firsthand that pilots attending Qantas EBA briefings are being told that Qantas will get all the B787's and its A330's will be transferred to Jetstar International.

Makes good sense. Would help keep Jetstar distinct from Qantas and lower training costs for both.

[captaintunedog777]

Thats hillarious ginger. I heard most the 787's will be going to Jetstar.
I think you would find a statement to the asx first rather than some desperate pilot talk at a meeting designed to make the troops happy and get the EBA over the line

[Keg]

I haven't been to an EBA briefing but having spoken to an AIPA VP in recent times he's not of the opinion that it's all 787s to QF and A330s to J*. Quite the contrary, the current information I've had from AIPA is consistent with the company information that it's still first 15 787s to J*, next 15 to QF and then where the need is required. This is also consistent with AJ's comments as of last week.

[Wingspar]

Look at the bad press QF are getting at the moment.

Do you think the situation can wait until QF get their 787's? Nah!

QF have to do something soon and it would be a brave man to enter new markets in a climate like this (JQ to US and EU). US are in a very bad state and will be for a while. The rest of the world will be trying hard just to keep their heads above water.
Consolidate is the priority at the moment. JQ will at best be subsituted for some QF services.
The strategy is already in its infancy with QF starting to get rid of their really old stuff. It's just the start!

[Mstr Caution]

Any truth to the rumours going round that Jetstar Flt Ops are choosing to withdraw from the MOU on the exchange of career opportunities for tech crew?

MC:8

[Nunc]

MC, I heard that is the case. Also believe that new hires are being told there will be no job at the completion of their endorsement.

[Mstr Caution]

Also heard some in J* under the MOU from Mainline have been told to return to mainline early.

Also other crew on the A330 are returning to A320 ops.

Was the opinion of those I spoke to that they maybe loosing some A330's?

MC

[Capt Kremin]

There are definitely some of the MOU pilots returning to mainline. I don't know about losing some A330's though. Joyce was demanding one of the new QF ones at a recent Board meeting and was told no.

[Muff Hunter]

The are a few 330's coming up or are in c checks...hence the 320 going to vietnam..hence an overcrewing situation at the moment..

all mou guys have the option of returning to QF or staying at JQ..

mastercaution your contiual hope of the demise of JQ is only a pipe dream..it's here to stay, like it or not!!

[capt.cynical]

Hey "Muff" do you have a brother named "Ted";):E

[stiffwing]

So why would the "fin" state that....
"in these tough times, classic Qantas is holding up the rest of the group"
We all know that the pointy end is where the real profits are made.

[Nunc]

And held up the group in good times also.

[toolish]

Muff is correct but the MOU thing is an absolute disgrace
but that is how the company operates.

[virgindriver]

all mou guys have the option of returning to QF or staying at JQ.

even the guys who got commands?

[Crusty Demon]

From what I have heard all the MOU guys have been told to f%&k off if they have not already resigned from QF.

[Muff Hunter]

true crusty d, but the company reversed it's decision.......from a lot of discontent amoungst the ranks.

the afap where the ones who advised the company to do this!!(get rid of the mou guys that is!)

[The Professor]

Jetstar was never launched to remain in the long term.

It was designed to lower QF's operating cost in a way not achievable at the mainline carrier, as is common with legacy carriers surrounded by decades of industrial fat.

When this has been achieved, it will morph into a modest service carrier taking over QF domestic routes in QF paint but on Jetstar operating costs.

Labor costs solved.

[breakfastburrito]

Professor, perhaps you missed the thread Leigh Clifford and THE QF Boys Club (http://www.pprune.org/d-g-reporting-points/339573-leigh-clifford-qf-boys-club.html).

[sweetpollypurebred]

Who's got the inside running for Joyces' J* job?

[Mstr Caution]

Muff Hunter - Are you still offering the 10,000 to 1 odds that mainline will not get any 787's. I'd be happy to make a wager as Long Haul EBA8 seems to be intentionally written around a 787 operation.

As I understand it neither AIPA nor the J* pilot council may withdraw from the MOU alone. The termination of the MOU must be agreed to by BOTH parties, then put to a vote to relevant members & agreed to by a majority of BOTH.

[lowerlobe]

as is common with legacy carriers surrounded by decades of industrial fat.
....As opposed to decades of ever increasing upper managerial and corporate fat with legacy carriers.
Labor costs solved.
Not significantly Professor until you have changed the entire mentality that pervades with the inverted pyramid.When you have reduced the over load of management and the almost absurd level of remuneration that exists at the corporate level will you have tackled the cost issue.

[Ken Borough]

the almost absurd level of remuneration that exists at the corporate level will you have tackled the cost issue.

What utter nonsense. Slashing the salaries etc. of those at the top will have minimal impact on the bottom line but if you let the scalpel loose where there is critical mass, you will have quite an impact. The cost levels in ALL parts of Qantas are on the high side however I would put the view that the main reason for Jetstar's creation was to tackle what are/were, in the main, extravagent terms/conditions enjoyed by Mainline crew.

[Mstr Caution]

Ken,

If as you stated Jetstars creation was to tackle the " extravagant" terms/conditions enjoyed by mainline. What happens once that objective is achieved?

MC:8

[Lookleft]

You end up with the Freedom Air/ANZ solution.

[Lowkoon]

Lookleft, that is my observation exactly. The Leprechaun cries, "Business is too tough, we have to merge the operations and keep the jetstar T&Cs". The velvet bulldozer. Remember Dixon in his letter to pilots put his hand on his heart and said "QF a/c will never be painted silver", because that was never his intention. He never said he would never paint silver aircraft red and white.

Lets just hope the brand hold some value after the never ending cost cutting slowly becomes obvious to the consumers.

[lowerlobe]

Ken Borough....You must be in management because you selectively choose what you want to hear ....

IF you read what I said instead of what you want others to hear then you will see I said that BOTH the level of management (that is compared to other business) and the absurd (and almost immoral) is a huge cost issue.

When you have reduced the over load of management and the almost absurd level of remuneration that exists at the corporate level will you have tackled the cost issue.

As I said the cliché about an inverted pyramid exists today more than at any time.Too many chiefs and not enough Indians is a huge problem unless of course you are one of the chiefs and if you are asking the indians to show restraint and you are giving yourself a big bonus it compounds the problem.

[What-ho Squiffy!]

Why is it that this forum never seems to rise above the juvenile rantings of one airline vs another?

You can go away from here and come back years later, and the same BS is flying around.

Pathetic.

PS
Of course this doesn't apply to ALL who post in this forum, however the juveniles tend to dominate and overcome any rational discussion that may be attempted.

[Mstr Caution]

It seems that times are a changing.

If my sources are correct, the parent company is about to appoint one of their own to run the Jetstar accounts department.

It seems the parents accounts department has had enough of the free reign that Jetstar has had regarding the apportioning of costs to the parent company.

It also seems the appointment is to clean up the issues surrounding the Jetstar Accounting department & to bring it into line with that of the parents accounting standards.

MC

[captaintunedog777]

Rumours from within Qantas engineering. Jetstar to get the first 25 787's.

[Mud Skipper]

tunedog,

If you are right then we may as well just wind up Qantas Mainline as the old fleet will not last long enough for us to survive. Clifford can not be stupid enough to think the public will put up with the rapidly declining service we currently offer with derelict 767's and quickly ageing 744's not to mention the dinosaur 747 classics trying to service Perth. Does anyone honestly believe this could go on for another 5 years..... A few A380's will not touch the sides of our dire straits.

Some how I think there must still be a lot of water to go under the bridge on this one.

Lots of scare tack ticks running around also with regards to EBA8 - don't believe everything you hear.

Heck I've heard some pilots might even have Political aspirations, perhaps even at the L...... Party federal level, guess if you can have a teacher as premier in Victoria then anything is possible. :O

[virgindriver]

Maybe then Jetstar will get the first 25 787s but just with the roo painted on the tail. Same as jetconnect?

[Mud Skipper]

Perhaps they will try that VD,

One wonders how far Mainline drivers can be pushed before they react. Up to now we have had all the spine of a jellyfish and are paying for that in spades.
Once the EBA is signed the company behaves as though they can do and get away with anything as industrial action become very difficult.

Also, I believe, one biggest problem is the association is still run by and for the 744 Captains and until events hurt them then the company will get away with what ever it wants........ I hear the cries of indignation but you would be hard pressed to prove otherwise.

Mud.

[Mstr Caution]

Maybe then Jetstar will get the first 25 787s but just with the roo painted on the tail.


Doesnt EBA8 cover that any 787 in Roo livery will be flown by AIPA pilots

[Keg]

Mstr Caution is close. EBA8 says that mainline 787s are flown under EBA8 terms and conditions. You don't have to be an AIPA pilot but the terms and conditions are EBA8.

tunedog's information about the deliveries is old news. J* was always getting the first 25 787s. However, aircraft 15-25 are 938 and when J* start taking delivery of these aircraft, they release 10 838s to be repainted into QF colours. All this is on the aircraft delivery schedule on the QF web site and has been there since 24 Oct 07. That same schedule then shows aircraft 26-41 going to QF. QF fleet of 25, J* fleet of 15 as of that time. Alan Joyce's comments as of a week ago were 15 to J*, next 15 to QF and then they'd see after that. Broadly consistent with the delivery schedule.

J* are scheduled to start getting the 938 from Mar 11 and the schedule shows that QF will have 25 787s (10 from J* and the 15 direct entries) from Mar 11 to Oct 12.

Given that the 767s need to be retired it'll be interesting to see whether QF just gift that capacity to J* and move out of that market segment in their own right completely or whether they replace that 767 capacity with the 787. I reckon it's going to be red tail 787s replacing the 767 and if EBA8 gets up that means that whoever drives them are going to be on half decent pay and conditions.

Of course all of this may be old news and next weeks 5 year plan could change it all.

[Tester Call 121.5]

Rightly or wrongly, this whole situation is due to Qantas not having to compete with any other full service carrier in Oz. So Qf have time on their side and as long as there is "some" full service flights they can wind back upto a point. That point is yet to be seen, but I would suggest it will be peak time services remain and the off peak flights will slowly be shifted to LCCs.

Pro: There will always be a Qantas domestic
Con: It will be a shadow of its former self.

[ghw78]

From Mr Boeing

EVERETT, Wash., April 09, 2008 -- Boeing [NYSE: BA] today announced a revised plan for first flight and initial deliveries of the 787 Dreamliner that includes additional schedule margin to reduce risk of further delays on the program.

First flight of the all-new airplane will move into the fourth quarter of this year rather than the end of the second quarter, and first delivery is now planned for the third quarter of 2009 instead of first quarter.

Pat Shanahan, 787 vice president and program manager, also said the program has changed the timing of the introduction of two 787 derivatives. The 787-9, a larger variant of the airplane, will be the first derivative of the baseline 787 with delivery planned for early 2012. The 787-3, a shorter-range model previously slated to deliver in 2010, will now become the second derivative of the airplane family.

Perhaps the 5 year plan needs an update to the schedule as it appears that the 787-9s wont be arriving in Mar 11

[Mstr Caution]

I wouldnt expect too much gifted capacity when the punters want a premium city flyer service.

As is, the 767's fly around full at peak times earning premium revenue.

Why would you gift that away?

[Muff Hunter]

Whats stopping JQ having star class seats on it's 787's flying domestically in non-peak times??? becoming a city flyer service...

JQ are already doing trunk routes, mel-adl, syd-bris, and mel-syd as a tag flight for international.

Mast Caut, JQ will not go away, even with you constant moaning about it..it's only going to grow rapidly in the present climate.

Also I hardly call the beaten up old 76 a "premium" product

and.... I did hear that the first 25 going to JQ..

[Tester Call 121.5]

master caution, I wish people would read posts carefully before responding with their heart and not their head.
If I have to explain, then doesn't matter...sigh...

[neville_nobody]

.it's only going to grow rapidly in the present climate.

Not necessarily. The corporate accounts fly QF and QF only and get very pissed if they are thrown onto a Jetstar flight. Additional to that was the amusing comment by Geoff Dixon who said he was surprised by the performance of the QF product and it was holding up very well in the current climate. (because its high yield, and people who have to fly not just optional travel) Meanwhile Jetstar were losing revenue and not looking so solid.

Dixon spent most of the press conference going on about Jetstar yet it was QF mainline that has done well by his own admission. Now why the hell he doesn't spend some money on mainline to try and keep it where it's at is beyond me.

I often wonder which airline he is CEO of. He spends all the money on Jetstar, gives it a free ride, bags out QF, pressures the staff, talks up doom and gloom.

Meanwhile QF soldiers on while Jetstar declines and the CEO is suprised??:mad:

[captaintunedog777]

Mud what in the hell will mainline union be abe to do anyway. Q has always had the trump card and I can't ever see any widespread industrial action. By the way why does Mainline have any more right to crew the 78 than Jetstar?

[Ka.Boom]

...because mainline is the parent comapany and Jet* is the subsidiary.Without mainline Jet* doesn't exist

[Tester Call 121.5]

Well thank god for mainline!!!
So if J*was to fold tomorrow there would be a big sigh of relief from.........who?

[packrat]

No one wants Jet*to fold nor will it fold ...it plays a role in domestic aviation.
Its requirement in the international arena is yet to be proven.
It has been said ad infinitum that LCCs survive in an environment of comparatively low fuel cost.The model is predicated on that and lower wages than legacy carriers.
When the fuel cost changes so does the business model..ie they are no longer LCCs.
There is a place for the business model but only in a particular economic environment.
That environment is shifting

[Mstr Caution]

Muff Hunter.

Jetstar are not making money independantly.

I repeat they are not making money independantly.

I dont wish for the demise of Jetstar, let them be profitable by their own accord & not by piggybacking the Qantas mainline brand. In that regard best wishes.

From the sources I have spoken to today, they told me that the ONLY reason that "Jetstar still exists" (there quote) is that they are propped up by the parents Accounting department.

Hence my statement that the parent company are sending in their own to sort out the accounting practices that are inconsistant with the parents own standards.

Its not about cost base its about brand, the QANTAS mainline brand is a successful product. The Jetstar brand is successful but only because it's cost base is propped up by some clever in house accounting. Of which the transfer of costs to the parent is starting to agitate those responsible for the parents cost base.

Tester - You dont need to explain. But there will always be a premium service available. Even in non peak times by Qantas Mainline.

The other rumour going around is Jetstar have until 25-05-09 to make it independantly profitable. That's 5 years since the launch date.

MC:8

[VH-JJW]

Nice try Mstr.

The old 'Jetstar is internally subsidised' line is getting a little tiring. Like it or not JQ are independant.

If your sources are the same ones Keg was using to garner 'senior' management predictions of Jetstar's demise then perhaps you need to fish in deeper ponds.

Alan Joyce was not appointed to the CEO position of Qantas because he was running a sham.

Jetstar will get as many 787's as is justifiable, likewise with mainline.

The sooner that we can just get the 787 salivation over and done with the sooner these sorts of divisive arguments can be disposed of.

IMHO what QF AND JQ pilots need to understand is that we work for flight operations departments, not brands. Who dictates what 'brand' is on the tail?

Having said that I fail to see how EBA 8 will secure QF pilots 787 flying by ensuring they are one of, if not THE most expensive 787 pilots in THE WORLD.........

[Mstr Caution]

JJW, it's not a stir it's fact.


The old 'Jetstar is internally subsidised' line is getting a little tiring. Like it or not JQ are independant.



Jetstar is being subsidised HEAVILY by the parent company. Jetstar are independant in select areas but with regard to covering the cost of the business they are most definately not. To the point the parents acccounting department are becomming quite vocal as to the accounts they recieve to cover the cost of Jetstars operation.


Alan Joyce was not appointed to the CEO position of Qantas because he was running a sham.



I never said the operation as Jetstar is a sham. Your words not mine. However, Alan Joyce has intimate knowledge as to how HEAVILY the Jetstar operation in DEPENDANT on the subsidies provided by the parent company. AJ beat JB & PG to the job because his vision for the way forward for the Qantas Group outgunned his rivals.


The sooner that we can just get the 787 salivation over and done with the sooner these sorts of divisive arguments can be disposed of.


The thread is titled Qantas to decline as Jetstar soars. My issue is that the reason Jetstar enjoys such favourable operating environment is the HEAVY subsidisation from the parent company.


Who dictates what 'brand' is on the tail?


Not the pilots.

MC:8

[Keg]

JJW, I just love being verballed. :rolleyes: I've got a mate in the NSW coppers who could do with someone of your skills. If you are going to refer to my comments then at least do me the courtesy of quoting me in context rather than the blather you've gone on with in your last post. :ugh:

[OhSpareMe]

Having said that I fail to see how EBA 8 will secure QF pilots 787 flying by ensuring they are one of, if not THE most expensive 787 pilots in THE WORLD.........

That is probably because you, like a lot of others, either haven't read or are unable to comprehend the document.

It specifically states that if the 787 is flown in QANTAS livery then it will be done so under EBA8 conditions.

Do you reckon they are all going to be painted silver?

[newsensation]

do you think EBA8 will get up....... not likely in its present form

[OhSpareMe]

Yes. I do think it will 'get up'

When it comes down to it pilots are just all talk.

I am still trying to meet someone who voted YES to EBA 7! (for the record I did)

[Capt Kremin]

If and when the QF fleets are rationalised, and even before then, EBA8 will give the company large savings in type transfers as well flying 20 heavy crewed A380's at 744 rates. EBA 8 also gives most pilots a pay rise. The bleating on Qrewroom is a political exercise from a select few who criticise the current AIPA administration no matter what they do. Most pilots when faced with the choice will vote yes.
Those of you who believe that the rate that pilots are paid to fly an aircraft like the 787 will be the ultimate determinant of which brand flies the aircraft are simply falling for a well worn lie.

[Mstr Caution]

EBA8 will get up, not because of selective terms & conditions.

More the fact any payrise is better than none.

[cokecropduster]

If they aren't subsidised then why don't they have OLD aircraft that QF don't need?

[newsensation]

EBA 8 might not get passed the SGM September 1 in its current form...

[genex]

Does anyone know the size of the direct subsidy that QF receives from JQ (via QF Corporate) to have it's yields and high cost base protected? One can only speculate on what QF would be worth with its yields in tatters (i.e. without JQ) but it couldn't be much. I would have thought, as somewhat of an amateur at this.....that if QF make say at best 8% of sales as a margin, then if yields fell 9%, they'd be below the Plimsoll line.

Anyway, if anyone knows how much JQ subsidises mainline, love to hear. Might win some bets.

[Ka.Boom]

Send Peter Gregg an email.
He might just be pissed off enough to supply you with some details.
Other than that those figures will surely remain another corporate mystery.

[Keg]

newsensation, it doesn't matter what happens at the SGM, the EBA is going to the vote and may get up. The only thing the SGM may do is provide some more info upon which crew can base their decision and provide some form of direction in the event of a 'no' vote. Kremin may be close to the mark though. Many 767 crew I speak to are trending toward 'yes'. Me? I'm still undecided.

[Wingspar]

Most of the 76 guys I speak to are junior and are not too happy about the slot restrictions!
In addition QF are now giving 'get out of jail free' cards to those with short haul slots.
All up I'd say the prognosis is grim.

[Muff Hunter]

Mst Ctn..glad to see you have had a very good look at the QF accounts....we should all be pleased that we have looking after the finanicial viabilty of our company.....(sounds like you are a fraustrated FO)

JQ domestic are doing very well....(most if not all ground ops and the like are tendered to company's other than QF, look at the CG,DN and others, JQ have all moved away from QF services as they are too expensive)

International still finding their place but are becoming more viable...

Open your eyes, the future of the group is JQ, in it's present form or something else.....

With high fuel costs and ever increasing comp do you really belive they will grow mainline with the cost base the way it is?

I doubt it.....

[speedbirdhouse]

Muff Hunter,

ever heard of "yield"?

[Mstr Caution]

Muff Hunter

Wrong there, not a frustrated FO.

I never said I have looked at the financial accounts, I have spoken to those who have though.

And to repeat what they said "J* would not exist without the financial support of Qantas". So to extrapilate that I agree with your statement that J* are doing well domestically, that is, with the financial support of Qantas. Without which they would not be doing well.

Sorry to disspoint you muff, but yes Qantas is here to stay. Do you suggest J* should go head to head with other premium carriers like Singapore, Cathay & Emarites?

MC:8

[mrpaxing]

gents, Qf has a very competetive cost base on an international level when compared to european/american/middle eastern and most but not all asian carriers. you have to distingish between LCC and premium. as mentioned earlier corporates will not fly LCC internationally and i cant see many CEO's going J* between Syd& Mel as e.g. there short term thinking strategies of GD/PG have failed. now its up to LC/AJ to go forward and grow both carriers in their respective markets. hard decisions have to be made and they will be announced once GD is gone. bit by bit there will be change(as always never a dull moment).the only difference i can see is there is going to be very little communications from the top. LC/AJ will keep everyone at arms length and just get on with it.:*

[Mstr Caution]

Qf has a very competetive cost base on an international level when compared to european/american/middle eastern and most but not all asian carriers.


QF international pilots are paid around the mid range & fly around the mid range of hours per annum. Those figures came from the company during EBA7 negotiations. Additionally, the fact they dont heavy crew is also an efficiency gain.

i cant see many CEO's going J* between Syd& Mel


Correct, the Jetstar CEO chooses to fly Qantas. In fact he went out of his way recently to stick round after all the pax de-planed & spoke with the tech & cabin crew & gave them the opportunity to provide him some direct feedback.

[flyer_18-737]

i cant see many CEO's going J* between Syd& Mel

Wrong..
I have seen Alan Joyce Twice on SYD-AVV. Last time was 2nd July he was on my flight back to Avalon, followed by one in May. He was also with Westaway on the first sighting.

You have got to see it to believe it:)

[sthaussiepilot]

but he said,

"I cant see many CEO's"

Well there is one, and obviously he has to travel with "his" own company a few times.... wouldnt look to good if he didnt... more of a PR problem for J* if that happened....

It would be pretty amazing to see a CEO flying J* though....

Wonder if Geoff might have a fly? (as a passenger lol)

[VH-Cheer Up]

A CEO I know flew with J* recently because there was no choice over the sector. The experience was diabolical for him.

He told me neither he, nor any of his employees, will ever travel with J* again.

Bit extreme, but that's his prerogative.

I imagine the CEO of a firm based near AVV might well feel exactly the opposite.

[mrpaxing]

travels to Sin/Hkg,etc. on QF (First Class as CL, must go category)not J*. any way i dont have a problem who he travels with. the point i was making is that many corporate heavy weights will not travel on LCC now or in the future.:O

[Captain Sherm]

I would be interested to hear a little more in detail of why Jetstar turned off the CEO (s)

If they were folks who ordinarily were going to travel domestic on QF Business then I could see that their comfort level would have been diluted. Why then would they have been on JQ? But if they were regular QF Y class travellers, then exactly what is it that you get on a QF 737-400 that is as old as the hills, or a clapped 767 or geriatric 747-300, that you don't get on JQ. Surely oh surely not the food or the smiles? I travelled up to Sydney and back a few days ago on JQ and it was fine. Clean, punctual, friendly and a new airplane, most of all very affordable.

So the next few posters who have anecdotes to relate, please fill us in with some detail of what went wrong. Simply making "CEOs" sound like a precious group of Toorak matrons having the vapours because they were served domestic champagne at a soiree hardly helps the debate does it?

Just thinking......I use Low Cost supermarkets (ALDI), low cost brands (e.g. black and gold soap pwder, I use the 'net to get the best deals on last minute hotels and rental cars, I travel off peak on the train, I search Dan Murphy for great wine deals and I always get several quotes for work around the home or beach house. Why shouldn't an airline offer me a kindred product? I think we can all understand the difference b/w good value and "cheap".

[packrat]

You left out the word expectation.
Travellers have an expectation that there aircraft will turn up.You are not guaranteed of that with Jet*.
Nor that another will turn up as a replacement.
No accommodation is provided in this situation
With everything you quoted you can see what you are buying before you pay for it...the same can not be said of Jet*.
What you expect and what you get from Jet* is never what you receive.
Plus the terms and conditions of travel are far more stringent at Jet*
With Jet* expect nothing and you may be surprised....but its doubtful.
Its a bit like staff travel...do you want to save a few bucks and go through all the drama or pay full fare and be teated like a human being?

[sthaussiepilot]

Many, Many, Many people have had major problems with J*

Myself included when I was the operations manager for an airline down in Adelaide...

I booked the flight online

Confirmed for a Thursday, all done printed a copy out, got there from melbourne to avalon,
"oh sorry you dont have a booking"
-"Yes I do heres the form"
"Oh may I have a look sir?"
-*hands form*
Oh this is for Fridays flight... :ugh:
"but it clearly says thursday, oh that must be a mistake, see your booked in for fridays flight..."


Thanks J*!!!!!!!!!:ugh::mad:


Lucky QF & VB were more than happy to offer flights, when I drove back to Melbourne........

J* is crappy, and many people have had problems worse, the same, or smaller with J*, Australia has 2 low cost carriers, that have not had anywhere near as many problems...

there is VB and now Tiger!!!!!!!!! :D:ok: Flown both and am quite happy to go Tiger if needed, or VB, or QF if thats an option...

Would never go J* again, nor offer it or recommend it to anyone, to work or fly with them...

Just my little rant

[sthaussiepilot]

(I agree packrat, entirely, no substitue for comfort and ease in travel....)

[Wingspar]

Simply JQ is not set up for the corporate traveller.

It is set up for the 'price sensitive' traveller ( i.e. tourist).

QF have the product and services for the ones with the cash to spend. JQ does not and the difference is made clear to all so the brands don't collide.

[lowerlobe]

difference is made clear to all so the brands don't collide.
..Except for the destinations like OOl where the punter is not given any real choice regardless of their intent.

[captaintunedog777]

sthaussiepilot (http://www.pprune.org/members/254248-sthaussiepilot)

Even Jetstar can't be held resposable for idiots who can't book online properly or F%$# it up. Whats do you expect them to do. I am sure Jetstar knows the clowns who say they won't fly or even those big shots like yourself who don't recommend it will fly again if given the right price.

And go fly your Tiger or Virgin. You will be back as like all Australian you are cheap.

[sthaussiepilot]

Actually the flight was booked correctly, it had the correct date (of the thursday) and said thursday on it!

for somereason on their computer it was moved the Friday!!!!!!!!!! :mad:

I know full well how to book a flight, and am in no way a big shot! :rolleyes:

[captaintunedog777]

Sorry Aussie I don't buy it. They would have moved it or booked you on the next available flight.

Now you start telling the real story or has the computer solely stuffed up your booking. Come on Bro!

[sthaussiepilot]

Id presume their computer mucked up...

They offered to move me onto the flight that day, however, with a further cost of $100.00, so it was easier to be refunded and go with QF or VB

and I flew with cheaper airlines (usually VB) on shorter trips eg: Adelaide-Melbourne or Adelaide-Sydney, becuase I worked out a deal with the CEO at the time for a work car, and the compromise was to fly cheaper on trips smaller than 2hrs, on larger trips was my choice..

[pussy.galore]

You are not suggesting that Jet* is perfect?
There is a bridge for sale shaped like a coathanger...you must be interested.
Like most of the Qantas Group Jet* is under resourced and many of its staff undertrained...Stuff ups will.... and do occur...often.
You cannot defend the indefensible.

[RaverFlaver]

Many, Many, Many people have had major problems with J*

And likewise with QF.

Aside from the business model, one is really no better than the other really.

Paying more for your QF flight doesn't garantee an on time departure, catering, your in flight entertianment will work, your flight wont be cancelled.

So as some of the posts imply that they wont ever fly jetstar because of all the problems, well a full service airline is not immune from those problems either and have it happen just as frequently.

You loose in the end because you have paid more for your flight and lost out.

Just my thoughts on it.

Raverflaver:O

[pussy.galore]

Legacy carriers will provide compensation if the stuff up is their fault.
Jet* won't.
Try buying travel insurance if your carrier of choice is Jet *

[Mstr Caution]

Captaintunedog777

I certainly buy it, heres a cut & paste of a post I made last year

Monday 16-04-07

Creative Holiday's booked & ticketed passengers arrive at Sydney International terminal to fly on the JQ27 to Phuket.

Problem is the tickets were for a 14:40 departure, whereas the scheduled departure time was 13:30.

Additionally, Jetstar had no information about the ticketed passengers travelling on the flight in the system.

Nice start to an overseas holiday, the Travel agent stating that all normal processes were followed in the ticketing at booking process.


Follow up with the travel agent was the Jetstar had incorrectly stated the departure time to the travel agents & a jetstar system failure "dumped" the booked passengers.

MC

[RaverFlaver]

Legacy carriers will provide compensation if the stuff up is their fault.

Not always....I have worked a QF flight, we had no catering whatsoever. No compensation. An apologgy over the p.a was all they got.

[sthaussiepilot]

Didnt even get an appology from J*

And usually QF usually the crew is very appologetic...

Just out of morbid curiosity raver, how booked was the flight, where was it from/ going, and what time, if you can recall?

[Mstr Caution]

An apologgy over the p.a was all they got.


RaverFlaver: Here's an apology for an engineering delay. Nicely handled by the crew, however with a crew to pax ratio of 1:1 they could have briefed the passengers about the delay individually.

YouTube - Jetstar Flight Attendant apology for ground turnback (http://www.youtube.com/watch?v=3OVsbK6cBkQ&feature=related)

YouTube - Jetstar Australia captain's delay PA (http://www.youtube.com/watch?v=t9igHC9WSi4&feature=related)

[sthaussiepilot]

http://www.pprune.org/rumours-news/341257-qantas-passengers-furious-after-latest-incident.html#post4363177

[RaverFlaver]

Was a fully booked 738 morning service BNE/CBR.

[sthaussiepilot]

Ahh :bored: in that case, I'm rather shocked....

Would have expected more...

but oh well... how did the PAX take it? :bored:

[rustypliers]

For what it is worth, my better half and I were on a QF flight out of Darwin for Brisbane on the usual el cheapo ticket, in May this year, and the inflight entertainment system failed to start. No great problem, had a good book to read, and thought no more of it.
Some weeks later a voucher from QF for $150 arrived in the mail, with an apology. We were stunned and amazed, and very appreciative. :ok:
Does this happen very often?

[RaverFlaver]

Some took it ok, some didn't.

I like to think we are very apologetic and accommodating where we can be when no compensation is given.

Just because we are a full service airline doesn't mean we always compensate. You all know the tight dictatorship we have been run by these past years.......we do our best though.

[sthaussiepilot]

Rusty, were you very nice and fine about it?

when you are I herd cabin crews, usually put in the good word.... dont know if thats true...

and I would have no idea in Qantas about how common it is, but throughout 2 of the 3 Airlines I have worked for, they like to compensate passengers when ever possible...

I know someone who sent her kids un-accompanied to Melbourne, and No member of the crew took the kids off and waited for the other people to be collecting them on the other side, they just let the kids go, they were apparantly last off the plane, and the woman later rang Qantas and got a $2,000.00 Voucher for Qantas flights...

Nice amount of Hush money, from what she told me, they were very sorry, and delt with it within 2 days... is that a record?

(BTW, this was all happening when there was that big thing about kids getting taken, etc around 4 or 5 years ago)

[packrat]

RaverFlaver perhaps you would care to elaborate....?
Would loading catering caused a further delay?
What do you usually serve on that leg?
Any mitigating circumstances?
Who made the catering check?

[captaintunedog777]

Master Caution

Creative Holidays followed thee right channels. Blah blah. I would love to see any company admit a f%$k up straight up. Book the friggin ticket yourself and get someone to cross check it if you are an idiot or can't read and understand.:D

[Mstr Caution]

Captaintunedog.

Jetstar did finally admit that they were in error.

So on this ocassion the travel agents were not at fault, pretty hard for a travel agent to get it right if an airline cant provide them with the correct departure time. So no matter how many times the agent or pax check the details it's still gunna be wrong.

[Muff Hunter]

Mstr ctn, et al...

when will you fools get....JQ is like a bus or train service...you do not get compensated for these services being late, cancelled etc and nor do you on JQ....however they will do their very best to get you on to another flight asap.

As we all know LCC's such as JQ, TGR, VB have very small margins for profit so if they were to roll the red carpet out as you would like, they would not exist..and we would return to the days of paying $600 bucks just to fly a trunk route!!

Like it or not they are here to stay and with the econemy heading the way it is, even more emphasis will be placed onto JQ to reduce costs throughout the group....

Mst Ctn, make no mistake...if the ****e hits the fan the JQ drivers will be the last to lose their jobs!!

[Mstr Caution]

Muff,

If the "****e does hit the fan" there will be massive redundancy payouts for mainline pilots for say some 3000 mainline drivers. How does that compare to J*?

Are J* still recruiting like mainline?

And muff, if people want to catch a bus or a train they will. If people book tickets by air they expect an airline service even with J*.

"the fool" MC

[newsensation]

Mst Ctn, make no mistake...if the ****e hits the fan the JQ drivers will be the last to lose their jobs!!
JQ would be sold to the highest bidder!

[captaintunedog777]

You clowns really do not know about costs. Costs you clowns. This will determine the future of Q and Jetstar. Q have to reduce and Jetstar must maintain costs from going up. As long as Jetstar is cheaper they are here to stay.

One day boys you will learn how to handle the big jets. On ya frggin PC.:p

[speedbirdhouse]

You clowns really don't know about yields. Yield you clowns. This will determine the future of Q and Jetstar.

As fuel prices rise so will fares.

The Jetstar international model only works in an environment where fuel is cheap as those who fly it are highly price sensitive.

The top end of town who fly first and business class are not so.

That, clearly is where the profits are.

Will Leigh Clifford continue to allow this market to drift to Emirates, Singapore Airlines, Cathay, Etihad etc ??

I doubt it.

[RAD_ALT_ALIVE]

Well, doggonit, I guess I'm one of the heavily made up, big nosed, big feet brigade, coz last time I looked, all the carriers (with the exception of SQ's A345 services) you listed had a predominance of Y class seats in their shiny toys.

Maybe you should become a yield manager and convince the Executive to piff those pesky economy seats and fill them entirely with F and J class ones.

Oddly enough, even when times are tough, people always want to travel. And those who have to pay for the privelege themselves (ie the VFR customers) always look for the cheapest fare.

Hmmmm....now who might they choose in these tough times? I reckon Air Asia X and JQ might get a hit or two on their website from just those kinds of pax.

Those wealthy (or more probably, sponsored) types will travel whether goods times, or bad. I've never quite understood the logic that says as spending habits become tighter, so those who want to fly choose to do so on premium fares.

Another one to jot down for a look in five years.:(

[speedbirdhouse]

And right you are.

Those premium carriers [Qantas included] with their large "economy class" cabins are ALSO able to leverage a premium for their full service offerings.

First and Business class are the cream.

From a passenger's perspective why would you, if you were seeking the lowest longhaul fare, choose to fly the Jetstar international model when there will be competing carriers from developing countries who offer full service for the same cost????

You wouldn't. Unless you were a complete f@#king dope.


"Onya Jetstar" :ok:

[019360]

Yields have been declining since passenger revenues were first collected. One of those great truths of life like death and taxes.

Business death, or at least trauma awaits those who rely solely on high yields in a way that takes the mind off the other great aviation concepts: average sector length, aircraft utilisation, competitor behaviour, cost per ASK overall and by class, yield variation across the market segments, Load Factor by aircraft and by market segment and barriers to entry.

This particular table has well over 4 legs under it, not just yield, and good management will understand and balance all of them. The high yield ends of the QF mainline fleet are doing well and JQ is carrying close a lot of passengers (4.5 million in the first 6 months of 2007/8-guessing over 10 million for 2007/8) so I would guess that someone's getting the mix near right, at least for now.

Mr Speedbirdhouse, a while ago maverick US writer H.L. Mencken looked ahead, no doubt foresaw internet boards such as this and as put together that unforgettable quote, which applies today as it did then, to simplistic posts such as yours on yield:

"For every complex problem, there is a solution that is simple, neat, and wrong."

[captaintunedog777]

Hey speedhouse why the hatred you need to chill out a little. Jetstar are here to stay and wil be eveloping new routes into Europe very soon. Hopefully the price will be competitive and will be supported by Australians rather than your want to see cheaper Asian Airlines with lower costs succeed over an Australian product.

I guess this hatred was spawn through cheaper airfares at the cost of a so called premium product. Whats a joke.

I smell a traitor:yuk:

[speedbirdhouse]

019360,

Is that the best you can do?

It doesn't matter how many people fly Jetstar if there is no profit left after carrying them. ie YIELD.

Even scrotum face himself [incredulously :rolleyes:] conceded that it was the mainline profits that were underpinning the groups excellent results.

Which reminds me.

How are our friends at Jetstar doing on the Japan run :rolleyes:

Only dickson would have the blind arrogance and stupidity to impose a business model on a market that [culturally] sees it as an insult.

Those who know more of the market in Japan than I do suggest passengers are being booked on bullet trains to NRT to avoid Jetstar.

"Onya Jetstar" :ok:

______________________________

Captaintunedog,

who would you choose to fly return to Europe????

Full service on an Asian carrier or Jetstar for the same fare??

Don't tell me you're a dope:=

"Onya Jetstar" :ok:

[packrat]

I will be surprised if they materialize.
You need landing slots.
They are pretty scarce in Europe...particularly at major airports.
Ryanair and other LCCs seem to have all the satellite airport slots tied up.
Slots would only be avaialble from mainline.
This has occurred in Japan where a lot of other airlines waiting for landing slots into NRT are not happy about Jet * Q jumping.
Qantas was in danger of losing these slots after it reduced services.
The Japanese government,JAL and those airlines in waiting are not happy.
The new Aviation Agreement with the European Union and Australia may also put a dent in Jet* European expansion plans.
With Dixon almost gone and Leigh Clifford exercsing more control over the Qantas Group Operation...Jet* may be restricted to the domestic market.
The next two years will be interesting...Qantas mainline needs to expand its network or merge.A partner may also have some influence over Jet* expansion particulalrly if it(Jet*) flies routes in competition with Qantas' Partner Airline

[Muff Hunter]

ahh speedhouse......another fraustrated S/O shooting his mouth off with very little substance...you sure your not mastercaution in disguise?? fool

[pondoklabu]

Packrat you have hit the nail on the head. I was at a meeting regarding code share agreements last month, and the talk around the table was Jet* International has been told already by the Italian government they wont be giving them any landing slots into Rome unless they have a dedicated business class, and no I don’t think * class is what they have in mind.

They reason for such a move was they already have enough low cost carriers servicing Rome, they wanted premium passengers because they bring in the money and with slots becoming harder to find they can be choosy.

[DutchRoll]

Mst Ctn, make no mistake...if the ****e hits the fan the JQ drivers will be the last to lose their jobs!!
Yep, right, well that confirms it for me. You're definitely not living on planet earth.

Still, I admire your unfettered optimism that JQ's leisure and budget-conscious travellers will still be packing its jets to the rafters if the economy stalls and rates rise. It's certainly a unique point of view, and we should encourage such lateral thinking.

The only way you won't lose your jobs in such a scenario is if QF mainline syphon huge amounts of cash over to you to prop you up and absorb your costs. Wait....hang on......don't we do that already?

[Captain Marvel]

From the latest annual results:

Jetstar made $80.1m profit on revenues of $1564.4m or 5.12%

Qantas made $653.6m profit on revenues or $12717.0m or 5.13%

The return on revenue is a useful tool to show how well costs are being contained. So it appears both entities performed very similarly.

The question is what strategic direction the group will take moving forward.

Jetstar should have its cost base near minimum so it will concentrate on increasing revenues (fares up or expansion), though expansion may not necessarily change returns on revenue much as the economic benefits of scale begin to decrease.

Qantas can also try to increase revenues in the same manner but probably has more ability to decrease its cost base (ie think sustainable future ongoing initiative!). The problem is that it appears the cracks are showing in Qantas' efforts to reduce costs (maintenance, service levels etc).

Fleet replacement would benefit Qantas far more than Jetstar as it has a much older fleet.

It is surprising that the group is continuing with the plan to deploy the 787's initially with Jetstar. There is a very strong argument that they would generate a much bigger return with QF by being able to significantly reduce the cost base. With a softening economy, increasing fares and expansion may not be a viable option.

Just my thoughts.

[cjam]

"It is surprising that the group is continuing with the plan to deploy the 787's initially with Jetstar. There is a very strong argument that they would generate a much bigger return with QF by being able to significantly reduce the cost base"

They are looking at it, they are looking at the entire group and seeing where the biggest gains can be made and where equipment is best suited. No brainer really, QF need the new kit, they can reduce costs while still bringing in the higher revenue and at the same time repair their public image. If on the other hand the new frames went to J* they still have the same public perception problem to battle and the operating costs are reduced to a lessor degree.ie less savings.

[captaintunedog777]

Maybe little AJ knows just a little more about running an airline than maybe all of you put together multiplied by a factor of 3000. I reckon Jetstar will get at least the first 25 and prob have red tails on some of them.

[packrat]

Where will these 25 hulls fly to?

[kotoyebe]

I'm guessing that tunedog is a JQ employee, not by the way he supports them, but by the way he spells and constructs his thoughts on this board!
Onya Jetstar!

[Going Boeing]

My understanding of Airline Economics 101 is that new aircraft are allocated to routes that have high yield which offsets their aquisition costs. Low yield routes normally are allocated aircraft that are fully paid off.

Therefore, as posted by Captain Marvel:
Fleet replacement would benefit Qantas far more than Jetstar as it has a much older fleet.

It is surprising that the group is continuing with the plan to deploy the 787's initially with Jetstar. There is a very strong argument that they would generate a much bigger return with QF by being able to significantly reduce the cost base. With a softening economy, increasing fares and expansion may not be a viable option.

I worry about Tunedog's handle. His posts indicate that he doesn't have the maturity to be a Captain.

Muff Hunter, I believe that you missed your mark with your attack on Speedbirdhouse - he's a very experienced cabin crew member and if he actually stayed in Speedbird House in the days that Qantas flew B707's to London via Karachi, then he may even be retired.

[packrat]

A Dinghy Captain perhaps?

[packrat]

Well TuneDog dude has well and truly displayed his credentials.
Now...where is that ignore button?...aaah yes...click!

[Keg]

Interesting. Tunedog accuses Going Boeing of taking things too seriously but then resorts to uneducated and rude taunts. Interesting to see tunedog has taken such offense. Perhaps you need to take your own advice and not take the board seriously. That way you can perhaps learn to discuss the issues rationally without resorting to insults. To think that you operate aircraft for a living! :eek: :rolleyes:

[blow.n.gasket]

What's happened to all of tunedogs rabid comments?
Did someone take the dog out the back and neuter him?

[LetsGoRated]

No more tunedog.....your comments are becoming rather....well....embarrassing. Not helping the cause if you know what i mean. I've been guilty of it in the past, no doubt, however, this QF vs JQ pilot crap is NOT working. Think about it.

It is surprising that the group is continuing with the plan to deploy the 787's initially with Jetstar. There is a very strong argument that they would generate a much bigger return with QF by being able to significantly reduce the cost base. With a softening economy, increasing fares and expansion may not be a viable option.

Spot on Capt Marvel....this coming from the wrong side of the tracks! Go figure....we're not all a$@$holes! :)

[RAD_ALT_ALIVE]

Going Boeing,

I'd re-visit your Airline Economics 101 course notes for the BIG bit you missed. Or, if it wasn't in your course, I'd suggest you ask for your money back!

JetBlue, Ryanair, Southwest, Tiger, Easyjet, VirginBlue, Jetstar and AirAsia (and they're just the ones that come readily to mind) are all low(ish) cost airlines that have either started with, or rapidly transitioned to, brand new equipment for the reasons of greater efficiency, lower operating costs and greater profit potential (and actual strong bottom-line results in most cases).

High yield operators can leverage that high yield to continue to operate older, less efficient equipment (and by that I mean cost-efficient, as opposed to unreliable). High yield operators have to exercise greater caution and be better forecasters of type end-of-life, because those very high yield passengers don't cope well when the older types become unreliable. Until an operator's equipment does lose it's high reliability, passengers couldn't care less how old it is (contrary to what so many say here) so long as it's clean on the inside, punctual, and provides the 'value-added' service that they crave.

Low yield operators, on the other hand, are far more focused on costs - and new equipment is a lower cost proposition than those older, more maintenance-intensive, higher fuel burning types.

Most of you here (or at least the more vocal, regular posters to this thread) - most likely QF crew (and I say that with all the respect that it deserves) would love to see QF get the B787 first - and that's fully understandable when you consider what pilots and cabin crew see as a high priority; shiny new toys to play with. Make no mistake, the average passenger couldn't care less if they flew the first B787 to where they're going, or good-old 20 year old OJA!

The bean counters, on the other hand, care alot whether a low-cost subsidiary like JQ has to operate slightly older, not-quite-right-for-the-job A330's any longer than they have to. The B787 will come to JQ first for that very reason. It has to go there to (a) allow the expansion east and west of the current network and (b) continue to ensure that JQ's costs are kept to the minimum necessary to permit it to compete against AirAsiaX and the like.

Pondoklabu,

If you seriously believe that the regulatory authorities in Italy care a squat about the nature of the slot applicant's aircraft configuration/class, then you're an even greater fool than you have us believe by trying to spruik that kind of twaddle. It's all about size of aircraft, pax numbers, ETA/ETDs, time on the ground, services needed while on the ground, etc.

Packrat,

It's on the record that JQ's expansion plans include a European foray starting with Athens and Rome. There has also been mention of US/Canadian west coast ops as well. It takes three aircraft to do daily to either Europe or US mainland, so it's easy to see how 25 aircraft could be usefully employed on daily services to those markets. Not necessarily daily services to one particular city, but to the geographic area.

lastly,

Captain Marvel,

I'd think that had JQ not taken delivery of 10 aircraft in the fiscal year under consideration (ie, had it had the whole fleet the entire year), then it's profit v. rev's would have been considerable higher. So looking ahead to when JQ have their end-game fleet size, it is easy to extrapolate that its position would be meaningfully better than QFs. The growth phase of an airline is never a good time to compare it's ultimate perceived performance. The bigger the fleet, the lower the detrimental effect on the company's balance sheet, when introducing more aircraft into that fleet. That's the reason why obtaining more aircraft (either for growth or replacement) doesn't have any substantial negative impact on QF's bottom line. So I don't think JQ are doing too badly to have a current return, on a percentage basis, that's already line-ball with mainline.

Now if y'all'd be so kind as to excuse any spelling/syntax/grammar errors - I've spent so long typing that I can't be bothered re-reading for editorial accuracy.:)

[QFinsider]

A fully audited set of accounts(forJ*) will put the arguement to bed..one way or the other. That is not to villify the wonderful people who persue a dream in jetstar or anywhere else. However given the fact that little infrastructure has been devleoped at full cost, be it operations support in the guise of flight planning/ engineering/catering etc a meaningful "like with like" comparison would help those of us "legacy" people understand how it can be done so much more efficiently........

[Wizofoz]

RAD ALT ALIVE,

Very insightful and valid post, with one (important) point on which I must dis-agree-

The growth phase of an airline is never a good time to compare it's ultimate perceived performance.

In fact, the traditional Low Cost Carrier model ONLY WORKS whilst the operation is expanding.

Why?

1) New aircraft meaning low maintenance, good operating economics and high on-sale value.

2) Constant recruiting of staff meaning a high percentage of the workforce is relatively new, willing to work for lower wages (which keeps wage demands from longer serving staff in check) and is still in the "Honeymoon" phase when it comes to enthusiasm and dedication.

3) Ability to pioneer new routes not recognized by the competition.

It is in fact when a LoCo starts to mature that reality starts to set in in the form of older, out of warranty aircraft, staff wanting a better deal and increased competition on routes they used to have a monopoly on and things get tough.

This is certainly what has happened at Jetblue and Southwest, and is starting to eat into easyJet and Ryanairs long-term feasibility.

The moral is, if J* ISN'T making a decent ROI in this initial phase, there are probably storm clouds ahead as to its' potential for long term growth and survival.

[ebt]

Ah the audited accounts for each part of the business - that old chestnut. At the end of the day, if QF pay for something on JQ (or vice versa), it will show on the accounts for the whole Qantas Group. Conversely, the group benefits from the strength of both flying businesses, as well as all the other businesses which don't seem to cop as much flack on these boards.

Yes, QF mainline get great yields, but with the operating cost reductions from the 787, it makes good sense for JQto get the aircraft first, as it will then give them a greater yield. Remember that yield is revenue-cost, so if the cost is lower, you get a bigger slice of revenue.

At the end of the day, both QF and JQ will get 787s and it'll all be apples. :ok:

[nomorecatering]

I think the truth is that no one will ever be abe to guage the profitablity of a LCC that is a sunsidiary of a main carrier because many of the LCC fixed costs come out of the mainline budget, admin, maint, crewing admin, IT etc etc.

How much prifit will jetstar make, its at the whim of an accountants pencil.

That said. i like the concept, different level of service/product according to my taste at the time. Just like should I buy a Ford or a Jaguar........they are the same company.

[kotoyebe]

Ah the audited accounts for each part of the business - that old chestnut.

Ah, the old "the group benefits from the strength of both flying businesses" - that old chestnut.......


Just like should I buy a Ford or a Jaguar........they are the same company.

Those idiots at Ford. They should have poached good old d*ckson and he could have started up a Low Cost Car (manufacturer) so that they could put pressure on the main Ford employees T&C's.

[genex]

Maybe QFInsider has hit on something,

If an independant outfit audited the whole QF Group and determined (by analysis or maybe even with an e-bay like auction) the appropriate level of intra-Group subsidies then we'd all be wiser.

For example, it is well known that the bulk of the Group subsidizes the lifestyles on Long Haul 744 S/Os who are paid exorbitantly and treated way above their worth. So there could be a case to open up their slots to thhose willing to work for the much lower market rate. Similarly, say that the current Jetstar EBA was a little under the market rate. That would mean that Jetstar pilots were subsidizing the rest of the Group's employees and should get a pay rise in return for QF/AIPA drivers being able to bid to fly the new shiny jets at the "market rate". If that de-subsidizing process were done...and done across the whole Group...then maybe you'd see real transparency to everyone's benefit.

Thanks for the suggestion...maybe someone will pick it up.

[RAD_ALT_ALIVE]

Wiz, you're quite right. The model could only continue in its purest form, if equipment and staff continue to be replaced at intervals not exceeding their efficiency 'use-by' date! Don't know how that's going to pan out in relation to either equipment OR staff!!

Nomorecatering,

A little research would show that Jaguar are actually owned by Tata cars of India. So your choice would, in fact, be a valid two-company based choice and not relevant to this topic. Nice try though.

[blow.n.gasket]

Haven't there been new accounting standards mandated worldwide recently?
Will this put a damper on JetStar's parade reference the so called hidden cross subsidisation.

All this International expansion of JetStar's, how exactly does this ride with the Qantas Sale Act?
I'm sure we'll find out soon enough!:ok:

[Mstr Caution]

The model could only continue in its purest form, if equipment and staff continue to be replaced at intervals not exceeding their efficiency 'use-by' date! Don't know how that's going to pan out in relation to either equipment OR staff!!


Rad Alt.

As I strolled thru the Sydney International Terminal the other day. I saw QF staff checking in the J*27 pax to Phuket.

Walked past the said A330 going to Phuket & saw QF mainline engineers working on dispatching the Jet whilst a QF ground power unit was hooked up to it.

Whilst J* has contracts with QF mainline to provide services to it, for other than "normal" commercial type agreements then they'll continue to do ok.

Ask a QF engineer what the financial penalties to the "contractor" is in the event they fail to provide a serviceable aircraft for a J* operation.

MC:8

[WhoFlungDung]

Genex. Are you a simple f%^&wit or have you got 2 dicks? You seem to be having a problem working out which one to play with. :ugh:

[Keg]

The other related question is 'what do QF charge J* for an aircraft dispatch out of SYD and what do they charge other 'customer' airlines?'. The answer is that J* is charged significantly less than any other customer airline @ SYD. In fact, the 'cost' to J* is the same 'cost' to QF of dispatching one of our own.

RAD ALT ALIVE, interesting post. You sum up the issue as it currently exists with QF with this statement:

Until an operator's equipment does lose it's high reliability, passengers couldn't care less how old it is (contrary to what so many say here) so long as it's clean on the inside, punctual, and provides the 'value-added' service that they crave.

QF's mainline domestic operation is nowhere near as punctual as it used to be and it's looking and feeling quite 'tired' on the inside. This is the crux of most QF drivers comments. Why persist hacking off the high yield customers with sub-standard, late, tired aircraft whilst the those who can't afford to travel anything but the LCC get the new equipment. If the LCC model is so marginal that a 787 makes a difference to the route compared to an A330 then we really aren't making much money on the route at all. I wonder how much money we lose every time a 767 breaks down on the premium service and we massively disrupt hundreds of premium punters who have the dollars to choose to fly with someone else.

[Wingspar]

JQ exists because QF want it to exist!

It is not a stand alone company. It is a segment of the Qantas business.

It is the growth vehicle for QF because it is not restricted by legacy issues the parent has. In time it will have to deal with similar issues but for the moment it is getting all the goodies.

I still believe it is utter stupidity to expand any airline in the current climate. Even the sale of the FF business is looking shaky. Not a good time for JQ to expand services to EU and US.

[Mstr Caution]

The other related question is 'what do QF charge J* for an aircraft dispatch out of SYD and what do they charge other 'customer' airlines?'.


Keg, Do you think other airlines have the costs of an unscheduled overnight in Sydney paid by QF engineering. If engineering fail to provide a "serviceable" aircraft by curfew. Hence, the statement the contracted services provided by mainline are not at "commercial" rates.

MC

[captaintunedog777]

Lets go rated

Q versus Jetstar. Well you are um.... rather stupid if that's your conclusion....... if you know what i mean. Read my posts I back both Q and Jetstar equally. Both are essential.

[Mud Skipper]

Wingsapr,

Just to clarify, QF is effectively Qantas Flight operations as distinct from the umbrella company Qantas which set up and owns Jetstar. QF and JQ are two supposedly independent companies owned by the company Qantas.

Pedantic perhaps, but central to understanding why JQ as a business unit must account for its costs.

I believe the new Chairman has been having a very close look at the real figures and as with any other company we will never know or have any right to know what is in confidential accounting books. Speculate all you like but that sought of stuff is truly commercial in confidence.

We may get an indication of JQ's true worth to the company over the next year with the Chairman and CEO seemingly reversing the balance of power which existed with the previous duo. This combined with events in the world economy I think all in Oz aviation are set for interesting times.

[Wingspar]

Mudman

I totally agree.

JQ may be separate and there is a strong argument that it could not exist on its own (which I'm positive it couldn't). In no way could it get the 330's or 78's at the costs it does without QF but that is not important to QF. It is doing business that QF couldn't. That is the reason for it's existence. Other factors take a back seat. It is doing what they mean't it to do.

As a side comment, AO was a half hearted attempt at the same objective.

[captaintunedog777]

which I'm positive it couldn't says Wingspar. Blah blah blah. Maybe theres more to it. But at the end of the day. Cost cost cost.

Maybe one day you people will understand.

[hotnhigh]

Make no mistake, the average passenger couldn't care less if they flew the first B787 to where they're going, or good-old 20 year old OJA!


Ontime performance figures...
Qantas Domestic @ 16/09/08
Departure 54% vs 86% previous week
Arrivals 58% vs 86% previous week
Qantas International @ 16/09/08
54% vs 72% previous week

Yeah right! Tell me why QF doesn't require new aircraft again?:ugh:

[air doris]

from what I have heard from this guy never eventuates, and he calls himself an aviation pro, analysts, thats all they are.

[packrat]

Air Doris...could you translate your last post please...it makes no sense

[RAD_ALT_ALIVE]

hotnhigh,

If you're going to quote me, then do it in context. If you re-read my post, you'll see that I don't argue with the concept that aircraft at the end of their reliable life must be replaced.

And it would be easy to take the stats you've produced and deduce that it was all due to maintenance - but life isn't easy and nor should statistical analysis be.

There'd be far more reasons for that kind of poor on-time performance than unserviceable aircraft/maintenance actions alone - Jetstar/Virgin have bad weeks too (losing out to QF), and their fleets are much younger and - so we're led to believe - more reliable. All these technical issues (MNL diversion aside - a unique event) seemed to have occurred since the LAMEs dispute started (and have continued since it ended), so I'm of the opinion that it's still a backlog issue, if it's an issue at all. Maybe it's just as simple as co-incidental occurrences.

There are many airlines around the world flying similar aged B744s and B767s who don't share the spotlight that QF has been unfortunate enough to enjoy recently, so I don't think it's type/age related.

So go off and find the reasons for delays you've informed us of, and post them here so that we might all benefit from USEFUL information.

Keg,

Just saw your reply - should've looked back before I wrote the first one:uhoh:

I hear what you say, but I have to say this; (god...I sounded just like a politician then) I've been subloading ALOT on QF cityflyer services to SYD in the past 7 years and haven't yet experienced other than the usual 5 - 10 minute delays that are caused by everything but maintenance. The longest delay was a 60 minute thunderstorm gate hold prior to pushback one evening. As for the appearance of the aircraft (and as I predominantly fly on the B767s, it's these that I'm referring to), I've noticed that most have been refurbished (can't say I like the new seat fabrics, but that's personal taste. At least they're fresh/new looking seats). Haven't had many IFE U/S flights - in fact I can think of only one where we were forced to read for our entertainment.

And sitting in J class more often than not, I like to sit back, watch and listen to the comments around me - and until it reached the media frenzy of late, I hadn't heard many bleats from the high yielders I was sharing the cabin with.

I guess what I'm trying to say is that although they're not the newest types around, the 76s are still a nice, comfortable aircraft from the passengers' point of view. No doubt they have to be replaced. And they will be from 2011 or so, which is only a couple years away. The 400s? Dunno, but they're not all really old, so maybe as the 380s come in, the older ones will go, while the newer ones stay until the B789s/B773s start arriving.

I have no doubt that the media-interpreted maintenance 'woes' will disappear in the near term.

[desmotronic]

QAN has released its July traffic statistics:


Qantas Domestic (including QantasLink): Capacity +1.5%, traffic -2.4%, load factor 80.9% (-3.3pts on pcp).

Qantas International: Capacity -4.4%, traffic -4.6%, load factor 84.3% (-0.2pts on pcp).

Jetstar Domestic: Capacity +20.1%, traffic +13.9%, load factor 80.2% (-4,4pts on pcp).

Jetstar International: Capacity +44.0%, traffic +46.6%, load factor 75.3% (+1.3pts on pcp).

Yields: Domestic yields in July fell 3% on pcp, and total international yields (ex-currency) were 6.3% higher in July on pcp.

[Sunstar320]

Jetstar International certianly has had quite a nice boost there. Besides the CHC, DPS runs, what other routes have now become profitable for JQ international?, anyone know?

[max autobrakes]

The ones that are propped up through code sharing perhaps?:eek:

[dodgybrothers]

......and of course no other airline in the world code shares do they max?

Just let it go you blokes, jetstar may actually be doing OK.

[Keg]

How much freight do they bring out of CHC? :E

[max autobrakes]

Well Dodgy you tell me, since you're apparently the self appointed champion of Jetstar's virtue,when does "code sharing " remain just a standard commercial agreement and when does it become an accounting method to distort stats? :ooh:

[captaintunedog777]

Max go see a bloody psychiatrist.

[GUARD]

Its all about choice for passengers and for us pilot types its all about allegiance to our current employer and route network because none of us want to only fly to a couple of boring destinations and have s&%t slips or earn any less than we do at the moment.

Thats certainly how it is for me anyway.

I really believe there is enough flying out there for all of us and its important that pax have a choice. Its been the same deal on ships and trains forever that some people want the lowest fare possible( because thats all they can afford ) whereas others want a bit of luxury and to be treated like royalty ( because they can afford it ) and then you've got people in between who think economy on a premium airline is a good compromise between the two.

Our respective employers know this. Where the waters get muddied is when the hierarchy threaten the pilots with swapping routes because one group will do it cheaper. This is just industrial bulls&%t because its the paying public who will ultimately decide how they want to be transported. Like the Japanese and also a lot of Australians. F/J class is pretty full on the majority of sectors currently operated and there is a lot of buzz out in the market for Jetstar by people who want a cheap holiday ( versus no holiday at all ) to one of these traditional holiday destinations. If an airline doesn't have the vehicle ( Jetstar ) to meet that need then they miss out on the business. So in my view it makes good sense to have that option within your business.

I also believe that CEO's are more aligned to their current role than screwing us over. Joyce now has a resposibility to the Qantas group ( which includes Jetstar ) and to provide a service that the fare paying public want. Jetstar was his baby because he was given that role. I reckon Qantas will become his baby now because thats who pays his food bill.

Its been said so many times before on this post that Qantas will send the aeroplanes where they're needed and that has f*#k all to do with who is flying them.

I work for Qantas and I want things to stay that way. I have my own reasons for this desire and so do pax.

You might have noticed that the A380 is in Qantas colours and has a substantial first/business and premium economy section. Thats what the market demanded. It was not based on pilots wages.

Why don't we all just enjoy our flying and give each other a bit of a break.

GUARD:ok:

[rescue 1]

Why don't we all just enjoy our flying and give each other a bit of a break

Here, here!! :ok:

[max autobrakes]

Well tunedog,
judging by the standards of your contributions ,I'm sure you could recommend one!:8

[TMAK]

Max...Im not sure I get what you are saying?? Are you suggesting the accounting of codeshare pax on JQ or QF is not done?

[Ken Borough]

How much freight do they bring out of CHC?

Not much!! Latest Aust Govt figures are for month of June 2008: they carried 14.1 tonnes NZ to Aus and 26.5 tonnes Aus/NZ.

[Keg]

G'day Ken, sorry but I should have explained more. When J* replaced QF on the CHC services they couldn't take the offered freight. QF now run a dedicated freighter service AKL-CHC-SYD a few nights a week to carry it.

[wessex19]

KEGWhen J* replaced QF on the CHC services they couldn't take the offered freight. QF now run a dedicated freighter service AKL-CHC-SYD a few nights a week to carry it.

Keg. who and in what is flying that run and is it Monday to Thursday night?? DHL run the B727F VH-DHE AKL-SYD-AKL 4 nights a week plus usually on a saturday morning. Do QF chuck their bags onto this aircraft. From what i hear getting space on this aircraft is tight

[Keg]

Wessex, there is a QF 767 'freighter' (mainline aircraft with just underfloor cargo) that runs SYD-AKL-CHC-SYD on certain nights of the week. I don't know if it's daily or not. Crew fly AKL-CHC-SYD arriving SYD at 0605 local.

[Jetbest]

Wessex, there is a QF 767 'freighter' (mainline aircraft with just underfloor
cargo) that runs SYD-AKL-CHC-SYD on certain nights of the week. I don't know if it's daily or not. Crew fly AKL-CHC-SYD arriving SYD at 0605 local.

Did you Know!!!

Our QF colleagues have a flight attendant for this freighter as part of EBA 7.1 Flight attendant for 2 pilots, better ratio than first class.Obviously to busy to work the galley!!!!

[prunezeuss]

Fuel is at an 18 month low,the Austraian dollar has slumped and the world is headed for recession.
Looks like the LCC business model is about to be resuscitated.
Inbound tourism should improve and outbound will soften.
Talk about a state of flux.(or should that be fux?)

[Sunstar320]

But, If demand goes up, so will fuel. It will be back up there in the hundreds before you know it...

[Wingspar]

Also unemployment goes up!

That gives a whole new perspective on discretionary income???

[aulglarse]

Interest rates have decreased by nearly 1% which reduces downward pressure on discretionary income. :D

[Wingspar]

Interest rates are coming down because the world is about to go into recession!

I'd be more worried about keeping my job in the next 18 months and saving some cash than planning that trip to Phuket!

[TMAK]

Wing spar...probably a sensible suggestion....however we must account for Gen Y! The spending generation...luxuries first...save later..

[Wingspar]

I just went over what I wrote.

Geez I must be getting old!

I better check if I'm shinking!

[Teal]

Looks like Qantas/Jetstar may have to wait a little longer for their new jets...

From today's Age newspaper:

Boeing delays first 787 Dreamliner flight - News - Travel - theage.com.au (http://www.theage.com.au/news/news/first-dreamliner-flight-delayed/2008/11/05/1225560891312.html)

And crikey.com.au:

Dreamliner screws Qantas

Ben Sandilands writes:

Some very bad news about the Boeing 787 Dreamliner project has been let slip under the radar of the US election day.

It has been improperly riveted or "screwed" in about 3% of the metal fasteners used to link some sections of the four incomplete test flight jets and two static test units at Everett near Seattle.

And they will have to be "unscrewed", which is not something easily done to a composite jet comprising many criscrossing layers of glued and oven baked reinforced carbon fibre.

Removing the "fasteners" as Boeing calls them involves drilling them out of the structure. They are supposed to stay in place forever. The process can damage and weaken the panels involved.

This means the original Dreamliner 1, that Boeing falsely claimed could fly as early at late September 2007, will now be unscrewed and rescrewed at least twice, the first time being after the sham rollout on 8 July 2007, where it had been deliberately cobbled together with the wrong screws to meet a public relations deadline.

Boeing now has no first flight date, nor first customer delivery date, for the 787, pending what is described as a full assessment of the program.

Qantas was supposed to have received its first 787s, for Jetstar, by the end of this year. In the original hype, they were going to be capable of non-stop services to America.

Then it was promised 15 would be delivered by the end of 2009, and now it is pretty clear Qantas, with 65 on firm order and options or purchase rights for a further 50, mightn’t get any until 2011.

And there are no performance figures for the jet anymore, other than the guarded concession that it won’t fly non-stop to the US. The jet is heavy, late, and looks uncompetitive beside its nearest Airbus equivalent currently in service, the A330-200. Jetstar was supposed to have been able to use its 787s to develop much needed Qantas coverage to
European cities, such as Rome, Athens and Amsterdam, that are no longer viable for the full service multi class Qantas product.

But not if the Dreamliner has to stop twice instead of once to carry its intended payload of 330 passengers all the way.

Qantas trusted Boeing and has been left in the lurch, although compensated so far by $291 million in liquidated damages which assisted its record profitability in the year to 30 June.

There are some really serious issues here that Boeing keeps ducking. Why was all the hype about the Dreamliner so far removed from the actual realities of the design? Where did the performance figures come from? Will it have to scrap the prototypes and start again with jets that have been correctly manufactured and assembled? Is it a victim of the same culture of lying that pervades the behaviour of other and failed major American corporations like Enron or in the finance sector?

Is there a parallel in the so far disastrously late and costly Wedgetail project which is supposed to deliver a sci-fi like radar and surveillance capability to the ADF?

As has become its habit, Boeing has chosen to publicly reveal the latest bad news about the biggest selling airliner in history firstly to a plane spotting blogger, John Ostrower (http://redirect.cmailer.com.au/LinkRedirector.aspx?clid=01069df1-c9e6-405f-af18-a7d06ba21e2b&rid=70ac6a9f-9f82-4748-a87c-e55bbfe757f1), rather than face up to its responsibility to make detailed and timely disclosure all to its shareholders and customers.

Doing so on election day is especially insulting.

Oh and there is a problem with some 737s too...

[Muff Hunter]

we've heard it all before, they were saying the same about the A380...

[max autobrakes]

I believe Qantas will indeed decline as jetStar soars.
Why?
Well I believe senior Management will gain more from the way JetStar has been set up than they can out of Qantas particularly after the APA fiasco.
Plus the termination clauses on many of the JetStar aircraft leases would more than likely be quite onerous. It will be cheaper for the group to get rid of the fully amortized (read ,clapped out) airframes in Mainline to reduce capacity in Qantas and push passengers JetStar's way to prop up the fantastic business model there.

[fearcampaign]

Have to agree with you.
LCC'S are reliant on a higher load factor.
Full service airlines on premier routes are a higher yielding operation due to J and P class.Look at Syd-Cbr with 24 full fare J class seats.
Easier to write off the old QF aircraft that help make the paper every few weeks and supply Jetstar with artificially higher load factors where QF no longer fly or have the capacity.
Jetstar have the newest and most fuel efficient aircraft to boot. Isolate the costs as well and Jetstar looks great on the books.The institutional imperative at its finest.
Perhaps Alan Joyce should have a chat with Eddy Groves.Sure we could make the figures look even better.

[Mstr Caution]

Qantas AGM

Profit before tax
Qantas in excess of 900 million
Jetstar 116 million

and this from Dixon


this large and complex Qantas group enterprise is surprisingly nimble and agile. If something is working it can be expanded very rapidly, or if it's not then the group can also do something else very quickly.

[blow.n.gasket]

Yeh, get the board to approve another pay rise to themselves!:mad:

[BGQ]

I've only just taken an interest in this thread and am not surprised at the depth of feeling and passion in the arguments put through by both sides in this debate. To address some of the main issues raised in this thread:

(1) QF had to start Jetstar to exploit a new market which was prepared to sacrifice comfort and service for low fares.

This might have some merit but it was never necessary for this reason alone as it could have been done within QF mainline by establishing another brand which could have been "Jetstar" using existing employees and resources. All you do is rebrand some of the aircraft and change the internal configuration.

"Ah ha" you say but the existing staff and resources cost more than setting up with a greenfields approach. Maybe so but if you look at other LCC that only applies for the first few years of a new LCC because it doesn't take long for new employees in the LCC to demand industry standard wages and conditions. Just look at Virgin salaries now compared to when they started. Guess where Jetstar salaries will go.

"Ah ha" again you say...."What about staff flexibility?" Yep you might have me there but then again, if you asked QF staff now whether they would rather give more flexibility and have the job opportunities that Jetstar has provided in QF rather than a separate company what would the answer be? It just takes a bit more convincing (blackmail) prior to rebranding.

(2) Qantas will decine as Jetstar expands

Possibly but possibly not. What both factions have to understand is that unless the management teams wish to venture into one anothers market (which probably require board approval) then the relative size of the two airlines will reflect the size of their natural market. The employees of both outfits ought to watch out for such moves. There is a lot of potential for the Board to use one outfit to whip the other with if either steps out of line. This is probably the main reason Jetstar was set up rather that a new brand created.

(3) Jetstar is lower cost than QF

This is "BULL****" or QF managemnt is failing. It is the sort of crap that management and the clueless put out to camouflage what is really going on. The first thing you have to do making these comparisons when serving two or more different markets is factor out costs that exist because you are serving a different market. After having done this any board worth its salt demands that costs in any business are kept as low as is possible and unnecessary costs are removed.

For a QF manager to say that costs in Jetstar are lower is a QF Manager who is saying "I have failed in my job of keeping costs low or eliminating unnecessary costs because some guy in Jetstar can do it better"

Finally there are better alternatives for a legacy carrier than setting up a subsidiary LCC. They generally require a much better relationship between staff and management than you lot in QF appear to have but I guess that will lead to a chicken and egg discussion:):)

[Wingspar]

There is a lot of potential for the Board to use one outfit to whip the other with if either steps out of line

Bingo!

Historically Qantas was seen as a typical large bureaucracy. Inflexible with a large union presence. Some would argue that this is still the case however QF have worked hard to reduce this influence.

Enter Jetstar.

I still believe the issue is primarily one of segmentation but....
There is a lot of potential for the Board to use one outfit to whip the other with if either steps out of line

It's nice for management to have that option now, isn't it?

[blow.n.gasket]

That wouldn't lead to a form of "reverse Pattern Bargaining" would it?:}

[Mstr Caution]

Any comments as to the ramifications of Manager Group Flight Training now reporting to the QF Mainline Chief Pilot.

Looks like LS is starting to get issues back on track.

[max autobrakes]

Don't tell me that this is the end of the Queensland Mafia in Flight ops management eh?:ok:

[Transition Layer]

Hallejulah! We don't have to listen to Manning's bullsh1t Cane Toad State of Origin rants each year.

Coates Hire is dead and buried!!!

[blow.n.gasket]

you gotta love that "GPS old school tie" thingy!:eek:

[Short_Circuit]

A snip-it from Aviation Week Feb 2009


As a consequence of a slump in long-haul premium traffic, Qantas is “deliberately growing” its Jetstar low-cost subsidiary which is still profitable. But while the Jetstar fleet is increased, Joyce rules out shifting part of its Airbus A380 order to the affiliate.



But later quoted as being a 800 seat config...


“In Jetstar lay-out, it would have more than 800 seats and that’s too big. That will never happen,” says Joyce, who headed Jetstar until taking over the group CEO position last December.



So, is that the Qantas never? :yuk:

[high talker]

Maybe a new order!:eek:

[Wod]

I think AJ is a bit out with his 800 on a Jetstar A380.

Two Class QF 747-300 had 450 seats, if you change J to super Economy, maybe 475; if you then add 25% (my working number for A380 v 744) you get about 600 seats in a two-class config. And I'm convinced Jetstar will be two class Internationally.

Certainly Jetstar have to deliver some significant new market growth to places like Southern Europe using the 787, if it ever arrives, before thinking about A380.

But if you contemplate old QF two class 747 markets, like Bali, Fiji, Secondary city Japan, and Southern Europe, then a Jetstar A380 might make sense longterm. Lack of freight might be the killer.

On the rest of it, I haven't changed my mind; the market will decide the relative growth rates of QF and Jetstar; not any management bias for one over the other.

FWIW

Afterthought. If Freight is the killer, can you cheaply put seats in the lowest deck in lieu of freight containers. That might get you to 800.

[DutchRoll]

On the rest of it, I haven't changed my mind; the market will decide the relative growth rates of QF and Jetstar; not any management bias for one over the other.
Well, sort of.......

It is indisputable that JQ are a protected species in some respects and that this protection comes via the highest levels of QF Group management.

For example, JQ charge exhorbitant rates to Qantas Mainline for the use of a particular domestic bay in BNE - owned by Qantas. This is why one day we were not allowed to park a 767 on it even though it was vacant and we were waiting for a bay! Yet they get so many things for free from the "Qantas Group" (including occasional engineering labour). This sort of shennanigans also goes on in Darwin with certain ground support equipment. An engineer told me that JQ posess some of Qantas's own equipment which they got for nothing and lease it back to Qantas as required, invoice and all! Apparently it's just standard procedure, and raised eyebrows are dismissed with the wave of a hand.

In fact there has been all sorts of book-fudging going on since the beginning. A HNL manager quite some time ago told us he was ordered to bill Qantas, rather than Jetstar, for particular A330 support services from other companies. When he queried this as a bit unusual he was told in no uncertain terms to wind his neck in.

There is no doubt in my mind that we have some very senior chefs in the Qantas Group who are quite proficient at cooking the books. Just par for the course in modern corporate Australia, apparently. What is clear is that if you're a junior Qantas Manager, you don't question any of it.

[Ken Borough]

I think AJ is a bit out with his 800 on a Jetstar A380

To be sure, he had leprechauns on his mind at the time! :p

[NZScion]

Stuff.co.nz (http://www.stuff.co.nz) is speculating that Jet* will be announcing NZ domestic services shortly.

Australia's Jetstar is tipped to announce plans within days to enter the New Zealand domestic airline market, sparking an all-out price war on the main trunk route.

Travel industry insiders expect the budget airline to reinstate some of the off-peak services between Auckland, Wellington and Christchurch that were abandoned by its parent airline, Qantas, last month.

Story (http://www.stuff.co.nz/4848698a13.html)

[hotnhigh]

Careful dutchroll, you will earn the wrath of genex and his mates shortly.
How much was the charge for a 330 turnround in brisbane again?

[ebt]

It works both ways. QF charge exhorbitant rates to JQ for certain things too, but at the end of the day it all netts out in the QF Group profit figure. I guess it's like how with duty travel, they put you on the highest fare bracket to make the yield look good, but at the end of the day it's still paid for by the company.

Also, all A330 support is done by QF Engineering (I think on a power-by-the-hour arrangement), so it would make sense to charge QF Engineering for work done on them.

[Keg]

QF charge exhorbitant rates to JQ for certain things too...

Perhaps.....or perhaps not.

A colleague of mine put in a suggestion at one of the international terminals about how they could make an extra $100K per annum from customer airlines. His manager was very excited and asked how. Colleague informed him that they should be charging J* the same as they charged other customer airlines for an aircraft dispatch. The idea was quashed very quickly and consequently that segment of the business- customer airlines- wasn't producing the revenue it could have been otherwise. Looks bad for QF's numbers and J* get their maintenance significantly cheaper than they would have otherwise.

That time and effort for J* aircraft was being diverted from other possible customers which would have brought in greater revenue so a double whammy for QF. :ugh:

[Wod]

I think ebt is on the right track, and I think Keg has missed a point.

You would expect QF to charge JQ what it charges itself - cost.

You would expect QF to charge a customer cost plus something to generate some profit. Profit on which income tax is ultimately payable.

I'm no accounting type, but give QF/JQ credit for organising things to achieve the best, legal tax outcome for the Group.

FWIW cos I really don't understand things financial.

[UPPERLOBE]

Gee you people are so cynical, how else would poor little J survive in the big bad world if mummy didn't wipe her bottom line?

[Keg]

I think ebt is on the right track, and I think Keg has missed a point.

No WOD, I haven't missed the point. I just gave you one example of how QF treats J*. There are examples of how J* treat QF- that is, take the equipment that QF gave to them or sold to them 'at cost' and lease it back to QF at rates well above the 'at cost' rate.

This happens so that the J* numbers look great and the QF numbers look ordinary.

[AnQrKa]

Kinda how QF leached off the Government for the majority of its history. Wouldnt be here without such support.

[Keg]

Probably. Given that you think it wasn't right back then anQrka I'll be looking forward to you condemning it now. Or did you think it was OK back then and think that it should always continue?

So are you being inconsistent or do you actually support dodgy accounting? Your choice I guess.

[AnQrKa]

KEG,

My point is to show the inconsistency displayed by others. Do I support dodgy accounting? You bet. Its how big business works. EVERY big company uses some sort of creative book work / tax arrangement / offshore shelf company etc.

Jetstar is supported by QF for a reason. To force through labor rationalization that cannot be achieved on the bargaining table.

It will become more obvious when the 787 arrives operating out of NZ by a new Jetstar airline over there.

[VH-JJW]

QF charges JQ less than cost.

JQ charges QF extortionist rates.

blah blah blah.

What a load of garbage.

Maybe some of you guys should write a book.

JQ and QF are about profit, pure and simple.

If you think you have proof of these accusations, then post it here. Not anecdotes but real hard evidence.

If not then you are holding nothing more than thin air.

:ugh:

[Capt_SNAFU]

Cross subsidies and creative accounting is part of big business, pretty much always has been always will be. For the market JQ must been seen to be making a profit, it cannot make a loss (I don't think that it does) as investors in QF would then be calling for it to be shut down and those voices would be louder the larger the loss or smaller the profit is.

JQ is designed to do a job, primarily strategic. In squeezing DJ in the middle of JQ and QF, it has done that very successfully, it is a worthwhile option even if it were to make a small loss or a steady but small profit, the overall gain is better for the group. However as mentioned above it is very unpalatable for the market for a section of a business to be seen to make a loss, or a non growing profit. So it benefits the group if JQ shows a small but growing profit, if it does it on its own then that is great (most likely the situation domestically) if it needs a little help it from the accountants to show that, then that has to be done from a group view.

So if that means that JQ get brand new A330s that will not need heavy maint ($$$$$) until they are transferred back to the mainline (hasn't happened due delays to 787) then so be it. This is how it has to be from the group perspective.

The problem and herein lies the rub, the secondary purpose, or lucky opportunity of JQ is seemingly industrial, and what gets to most employees of QF (red tail) is that JQ is perceived as the golden child that can do no wrong and seems to get preferred treatment. Whether that is new equipment at a time when QF equipment is ageing, or the amount of advertising. JQ is seen as being a shining light of the future of how things should be done. The perception of subsidisation real or imagined, has led in some ways to a disengagement of mainline staff which is extremely bad for the group because the reality is that mainline make most of profit. It is a fine balancing act for management and one that they have rarely if ever succeeded in. It is however an area that they must succeed in or the group suffers.

Could JQ survive without QF, most likely yes though it would not be without it challenges. Would QF survive without JQ, most likely yes and it would be not without its challenges. Are they stronger together most definitely. Will JQ ever overtake the QF? NO it has neither the size or the resources to.

As an example. Lots of mainline pilots fear that JQ would do the flying if they ever took industrial action. There is absolutely no chance of that happening. JQ probably has enough problem crewing its own aircraft let alone trying to crew 100 mainline aircraft, 450 JQ pilots trying to pick up the slack of 2500 QF pilots is plain laughable. But the perception within mainline pilot ranks exist.

[apacau]

Jetconnect are gone from NZ domestic, with the QF brand replaced entirely by Jetstar by mid-year.

Also some changes to int'l services, with Beijing gone, MEL-PVG cut (but SYD up to daily), BNE-WLG gone, and India operated via Singapore.

[mohikan]

Snafu.

Excellent post. It neatly captures just about every aspect of the the current situation with JQ.

The problem is that a small number of JQ pilots, mostly from the old impulse days, continue to actively look for ways to industrially screw the mainline pilots.

Doing this for no other reasons but spite is counter productive to everyone. QF pilots are not the enemies of the JQ pilot body.

The senior management of both airlineshave nothing but contempt for the operational staff in general and for the pilots specifically.

A very senior manager referring to Mainline pilots as 'pollution' is but one example.

The only answer is for all pilots involved to put aside their past predujices and egos and accept that the only way forward is for a common union. Given the inability or unwillingness of the feds to do anything these days this has to happen through AIPA.

A JQ division of AIPA would be autonomous in terms of contract negotiations but would have the resources of the parent organisation to call upon should it be needed. By legal definition QF pilots could not vote on the JQ EBA and vica versa.

Thats the answer. The australian and NZ pilot body has not shown industrial smarts on any issue for a long long time. Until it does the downward spiral will continue

[genex]

OK.....lets just say this once and for all....every part of the Qantas Group should be contracted at the current market rate for the services on offer. Wouldn't take long for each employee and business unit to compare what they now cost to the "world standard".

For example, JQ puts out a tender requirement for its ground handling and it picks the lowest price. The fact that QF can offer the lowest price because it is already in the business is a strength, not a weakness. That's one of the ways to fend off the competition, by charging additional services at marginal cost.

As far as pilots go, the pilot workforce group could be divided up into segments by seat, by type, by route etc and then put together a bid for the price at which they would do their job for say 3 years at a time. If theirs was the lowest price then they'd get the contract.

If the Qantas pilots wanted to they could bid for all the JQ flying and if they put together a competitive bid then they'd get it. Or conversely the JQ pilots could bid for the Qantas flying.

All figures could be published internally and there'd be no "cross-subsidies"....just costs and contracts.

In this new world there'd be no more arguments....just rule by the "going rate"

Or......some of you "Jetstar is sucking Qantas dry" group could go out into the real world for a bit and see that if it weren't for JQ the mothership would have gone the way of the battleship.....elegant, formidable, expensive and doomed

Best wishes

[Capt Kremin]

Genex, what colour is the sky in your planet?

[denabol]

Looks like it is bash the Kiwis time at Qantas again.

Qantas ‘invades’ NZ with Jetstar - Plane Talking (http://blogs.crikey.com.au/planetalking/2009/02/17/qantas-invades-nz-with-jetstar/)

[lowerlobe]

every part of the Qantas Group should be contracted at the current market rate for the services on offer.
genex..So why then is J* not charged market rates by QF ......?????
see that if it weren't for JQ the mothership would have gone the way of the battleship.....elegant, formidable, expensive and doomed
Yet again another speculative hypothesis from genex which as usual is unverified,untested and funnily enough only suggested by those who work for J*.

[Captain Sherm]

A much much younger Sherm for his sins studied economics at some length. And depth. So much beer undrunk, so many hours alone with but a 100 watt globe and many books to keep said Sherm company in his lonely hotel room.

It seemed to this young Sherm then, from those studies, that an entrenched operator, in any business, had an advantage in that it could extend its business by say 10% much more cheaply than could a competitor (wanting to start up a business equal to that 10%) starting from scratch.

That is, properly used, a powerful competitive advantage.

Qantas, (and I am but a lowly shareholder licking my wounds but thankful its not worse) seems to have used this paradigm well. A stand alone Jetstar, completely independent, might have costs per ASK 10% higher. Enough to sink it. But in the process of going under it could, and would (a la Compass Mk1) wound the parent QF by yield reductions an amount way, way more than the cost of starting up a wholly owned LCC subsidiary. The directors of QF would be liable if they chose not to use this sound business option simply to keep current QF employees in their comfort zone.

Then again, Sherm did study those economics a looooooooooooong time ago. On the other hand, so did Keynes.....and Sherm can remember enough of his "General Theory" to reflect that perhaps old economics is not necessarily bad economics. Keynes did after all make a pot of money for the Kings College endowment fund.

[teresa green]

It would appear (according to the ABC) that QF is really suffering loss of PAX in P and J classes and job losses will be announced today. It would appear to most, that QF is set to become more a "boutique" airline, as its rough and tumble joey ofspring takes over slowly but surely and is now basically unstopable, "across the pond" now in its clutches as well, interesting times ahead for aviation as a whole.

[breakfastburrito]

is now basically unstopableI wonder how the Qantas Sale act figures in this equation?

[Pedota]

Here's what Moodys are saying about QF . . .


Moody's lowers Qantas' rating status

February 20, 2009

Ratings agency Moody's Investor Service has downgraded its outlook for Qantas Airways Ltd due the carrier's high debt and strained profitability.

Moody's downgraded the long-term senior unsecured rating of Qantas from Baa1 to Baa2.

It said Qantas had about $US1.5 billion ($A2.33 billion) in debt securities outstanding.

The agency also affirmed Qantas' Prime-2 short-term rating.

"The downgrade reflects deterioration in Qantas' credit profile over a period of time, which has significantly diminished the available cushion within the previous Baa1 rating," Moody's senior analyst Ian Lewis said.

"Qantas' credit profile has been adversely impacted by relatively high debt and strained profitability and cash flow, putting pressure on the rating at a time of worsening industry fundamentals."

Moody's said Qantas had taken a number of measures to mitigate these pressures including capacity reductions, reallocation of routes between Qantas and Jetstar, and the recent equity raising of $500 million.

"However, the sharp fall-off in consumer demand for air travel, as a result of the global economic crisis and which is to a large extent beyond Qantas' control, has outweighed the beneficial effect of these actions, placing material challenges that are more manageable at the Baa2 rating."

The agency said the outlook for the rating was stable.

[blackguard]

These so called ratings agencies have so little credibility as to be irrelevant.
Qantas is one of the more profitable airlines.
The market in general is falling and is very risk averse.
Airlines are capital intensive and are usually the first stocks to get hammered when the market is spooked.
All companies are being caught in the downdraft so why should QF be any different?
Dont forget QF is still profitable and is travelling a lot better than JAL or BA and certainly a lot better than all the American Carriers.
So a little perspective folks.
Dont be members of the same sheep herd

[Q300]

Media spin... don't listen to it.
Media can't be trusted.
They spread Fear, Uncertainty and Doubt about things they know nothing or very little.
Suggest you draw your own conclusions and not listen to mass media or Moodys.

[Bo777]

Nonsensical propaganda.......and who's behind it all??? :hmm:

[DutchRoll]

If you think you have proof of these accusations, then post it here. Not anecdotes but real hard evidence.
Yeah right.

Post the "proof" on a pilot rumour mill message board. That will really achieve something won't it? And I'm sure the HNL and BNE Managers have standby jobs to go to in these tough times.

Or......some of you "Jetstar is sucking Qantas dry" group could go out into the real world for a bit and see that if it weren't for JQ the mothership would have gone the way of the battleship.....elegant, formidable, expensive and doomed
Yeah right. Again.

Well, apart from the minor....oh....half billion dollar (plus or minus a couple of hundred million depending on good times or bad times) profit QF mainline makes. But let's not get into that. How about we just ignore it in the hope it will go away?

[UPPERLOBE]

Found this old thread... worth a re read.

[Uncashed Pilot]

Thankfully the MOU Will keep most QF guys employed not to mention the cream of the 787 jobs, thanks to their boeing exp.