Future of Qantas in jeopardy: Joyce (Merged)

[oicur12.again]

"Today I saved the company more money in fuel through proactive planning and inflight flight plan changes than my days' pay"

Wow. How exactly did you manage that?

[TIMA9X]

Flying into trouble

Matt O'sullivan

June 11, 2011


Read more: Flying into trouble (http://www.smh.com.au/national/flying-into-trouble-20110610-1fx09.html#ixzz1OtNnZ867)
It's always tough for an airline to make money, but Qantas finds itself in a particularly bumpy patch, writes Matt O'Sullivan.
Alan Joyce was his jocular self but in no mood to talk about the deal. Flanked by two of his senior executives, the Qantas boss joked that he would limit his views on the strategic alliance Virgin Australia had sewn up with Singapore Airlines hours earlier to a ''full stop''.
The Dubliner might have laughed it off in the foyer of the Marina Bay Sands, Singapore's answer to Dubai's luxurious Burj Al Arab, but it was obviously a big blow - and in full view of airline executives from around the world who had flown in for the annual gathering of the International Air Transport Association.
No doubt adding to the pain was that the Singapore Airlines alliance was secured in super-fast time by Virgin's chief executive, John Borghetti. A 36-year veteran of Qantas, Borghetti lost out on the top job at the national flag carrier three years ago to Joyce. His coup this week overshadowed talk from Joyce about the possibility of Qantas forming closer ties with Malaysia Airlines.

Borghetti, the former third-in-charge at Qantas who spent years grooming its premium product, had already won approval for strategic tie-ups with Air New Zealand, the US carrier Delta Air Lines and the Middle East airline Etihad. The deals are central to the motor-racing fan's plan to take Virgin upmarket and challenge Qantas's hold on the lucrative corporate travel market.
For well-heeled flyers, the prospect of a dogfight between Qantas and Virgin is a win-win. Competition is already intense between the budget airlines for leisure travellers. But looming industrial strife at Qantas also raises the possibility of travel plans thrown into chaos.
For Joyce, who served his apprenticeships at Ireland's national airline, Aer Lingus, Ansett and Jetstar, this is the beginning of a critical juncture for his leadership at the national carrier. The next few months will shape the Irishman's legacy at an airline that has long formed a part of the national identity.
Described as Qantas's worst nightmare, the Singapore Airlines dalliance with Virgin piles even more pressure on the 44-year-old as he grapples with a damaging stalemate with unions representing long-haul pilots and aircraft engineers. Then there are super-high jet fuel prices, Qantas's loss-making premium international operations, the impact of natural disasters, and consumers embracing frugality.
Its mark is plain to see. Qantas's share price slumped to fresh two-year lows this week. It has lost more than a third of its market value - or $2.26 billion - since early November, when it was forced to temporarily ground its A380 fleet after one of the superjumbos narrowly avoided disaster shortly after takeoff from Singapore. The Nancy Bird-Walton remains locked in a hangar at Changi Airport, about 20 minutes' drive from the Marina Bay Sands, awaiting repairs expected to cost well in excess of $100 million.
The confluence of events has led to Qantas's no-nonsense chairman, Leigh Clifford, publicly denying suggestions of a rift with the man he hired in favour of Borghetti and Qantas's former finance boss, Peter Gregg. But situations where a chairman comes out to defend his chief executive often raise the very questions such actions attempt to quash.
Resolving the dispute with the 1700 long-haul pilots and 1600 engineers will be crucial to restoring the faith. Yet both sides are no closer to sorting out their differences.
''They are being hard-nosed,'' says Barry Jackson, the president of the Australian and International Pilots Association. ''The current management has lost focus. We believe that they really haven't concentrated on the [premium] mainline business.'':D
Then there is the Transport Workers Union, which represents baggage and ramp handlers, and catering staff. The union, which has frequently been at blows with Qantas, has already threatened industrial action even before its collective employment contract expires at the end of this month.
Joyce intensified his attack on "rogue unions" on the sidelines of the IATA gathering in Singapore this week, laying most of the blame for the fall in Qantas's share price on them.
He again made clear he would not give in to their demands for pilots and engineers working in offshore subsidiaries such as Jetstar Asia and New Zealand's Jetconnect to be covered by the same conditions as their Australian-based colleagues. To do so would leave Qantas in "huge difficulty", Joyce told reporters.
Qantas's 35,000-strong workforce is one of the country's bastions of trade unionism. Those representing the pilots and engineers retain a big influence over the airline relative to their size.
''This is really heading to '89 territory here,'' says an airline executive, referring to the pilots' strike of that year. ''[Qantas management] will struggle to go forward unless they can find a way to convince everyone that they are not crying wolf. Doing nothing is not an option because they are getting outdone internationally.''
Joyce's predecessor, Geoff Dixon, was well known for regularly accentuating the negatives. But Qantas's management rejects suggestions it is resorting to hyperbole to push the unions into a backdown - the international business is losing bucketloads of cash, it insists.
Joyce emphasised it again this week: "The international losses are just something we can't sustain. We know we can't give into the outrageous demands of some of these rogue unions.''
Few doubt Qantas's premium operations are at a disadvantage to foreign airlines which operate on lower cost bases. Analysts at the Royal Bank of Scotland estimate the cost base of Qantas mainline - the planes with the kangaroo on their tails - is about 50 per cent higher than Virgin's.
But the challenge has always been: how do you lower costs without harming the product?
That is made harder with a showdown just around the corner. Ballots of the long-haul pilots and engineers to vote on taking protected strike action will be completed early next month. They are expected to give their support, which will be the first industrial action by Qantas pilots in 45 years.
The pilots are unlikely to walk off the job, instead resorting to a work-to-rule campaign that includes flying slowly, stopwork meetings and refusing to do overtime. What appears relatively minor, such as not allowing for as much time as usual to travel to airports in preparation for flights or demanding a plane be checked for minor technical issues, can throw an airline's network into chaos.
Strange as it may seem, a work-to-rule can be more costly than a pilots' walkout because Qantas still has to pay their wages. And there is the flow-on effect: grumpy employees making clear to passengers their dissatisfaction, or travellers considering other airlines because of looming industrial action.
In 2008, the engineers' industrial action disrupted the plans of thousands of passengers for 10 weeks.
The dispute seriously dented on-time performance. The airline took months to recover after the dispute because of a large backlog of engineering work. Qantas estimated the dispute cost it $130 million.
there's more
Flying into trouble (http://www.smh.com.au/national/flying-into-trouble-20110610-1fx09.html)
Flying into trouble with everything and everyone.

[Sunfish]

"Analysts at the Royal Bank of Scotland

This wouldn't be the bank that made such bad decisions it sent itself bankrupt and had to be bailed out by the British Government would it?

Why the heck would you believe a word they said? That's as bad as believing Macquarie Bank!

[What The]

Dear Alan,

It is NOT the fault of the workers. Pathetic! Take some responsibility for your actions. Gutless!

Stand up to the Chairman and let him know that this is not a mine site. This is a customer service industry and you need your employees working with you. Then again, via engagement surveys I think you have worked out that you lost most of them already.

It is time to go, Leigh and Alan (YOU are the weakest link!!!)

[TIMA9X]

KTx_6bxveEw
Dear Alan,

It is NOT the fault of the workers. Pathetic!Yep :uhoh:

[Worrals in the wilds]

''This is really heading to '89 territory here,'' says an airline executive, referring to the pilots' strike of that year. ''

Interesting quote to a journo from an executive. It appears to add credence to the theories on here that Qantas management are actually trying to escalate industrial action so they can be the good guys against the Big Bad Unions who are spoiling everyone's travel arrangements. The IR situation in 2011 is so different from 1989 that there is no real basis for comparison and nor is anyone threatening non protected action, so why mention it otherwise?

The more I read and hear, the more I think they are hoping for strikes because they make the heats-and-minds war so much easier.

[FGD135]

It is NOT the fault of the workers.

It is when the workers refuse to take a pay cut!

And yes, the management, and everybody else working for Qantas should take one if the pilots do.

There are times when the workers MUST take a pay cut in order for their company to survive. In IR history, this has been, sadly, not an infrequent occurrence.


So if less than 4% of an aircraft's operating costs (pilot wages) cannot be reduced there is no hope for future profitability eh fgd??
It is way more than 4% - see below.


Pilot salaries cost the airline something like a dollar per ticket. You could halve pilot salaries and it would make little bottom-line difference ...
Wishful thinking in the extreme!

I have been able to put my hand on some research into these figures. The source of the information used in the research is the Qantas Annual report from 2002-2003.

From this research:

Of the airline's total costs, "staff" made up 28% and "aircraft operating" made up 21%.

The staff component wasn't broken down any further but I would conservatively estimate the pilot salaries to be 25% of the total salaries cost. This would make the pilot salaries 33% of the aircraft's operating costs - way more than the 4% figure bandied about in these forums!

As for the statement that "pilot salaries cost the airline something like a dollar per ticket":

Applying this assumption to the above 2002/03 figures (and assuming an average ticket price of $250), we calculate that Qantas would have made 192 billion dollars of ticket revenue that year! Their total costs were 10.8 billion dollars (AUD), so this would suggest a profitability of 1,645%.

Profitability in excess of a thousand percent? Does that sound plausible?

The research also had this to say:

"Qantas' staff costs in the 2002-2003 year were 28% of its total expenses - the highest in the South-East Asian region.

By contrast, airlines such as Singapore Airlines and Hong Kong-based Cathay Pacific are purely international, although they do have some short-haul international routes. In both cases, their labor costs are approx 21% of total costs - much lower than that for Qantas. A factor in the significantly lower staff costs for these airlines is the nature of long-haul operations which tend to be less labor intensive. In addition, both asian based airlines enjoy better productivity from their staff and employ leaner work practices."

[assasin8]

“It is when the workers refuse to take a pay cut!”

Gee, are these the same workers whose union approached Qantas and asked what figure we needed to achieve to make us competitive? And the reply was... (cue sounds of crickets chirping...)

Try again FGD...:rolleyes:

Oh and I particularly liked this one...

“I would conservatively estimate the pilot salaries to be 25% of the total salaries cost.”

Wow, did you pull that one from your...:}

[Short_Circuit]

First mistake believing the Qantas Annual report :=

[What The]

Manpower and Staff Related

and

Aircraft Operating - Variable

are mutually exclusive which is why they both appear in the P & L.

['holic]

The staff component wasn't broken down any further but I would conservatively estimate the pilot salaries to be 25% of the total salaries cost. This would make the pilot salaries 33% of the aircraft's operating costs - way more than the 4% figure bandied about in these forums!
Lol, you are a dead set genius. Did you borrow Alan's calculator to figure all that out?

Let's look at one small part of the operating cost - fuel. The 767 burns about 5000 kg per hour. Assume QF pay 70c/litre, so that's about $4500 per hour in fuel. So assuming the FO earns 60% of a Captains wage, and our wages combined are 33% of operating costs, a QF Captain must earn at least $1406 an hour. Of course, we haven't included all the other costs such as maintenance, catering, cabin crew etc etc - so a Capt must actually be on even more than this.

Hey, I've got an idea to reduce staff costs. Why don't you go and find another job that's more suited to your capabilities, because I don't think Qantas is really getting value for money from you. And give yourself an uppercut on the way out.

"Qantas' staff costs in the 2002-2003 year were 28% of its total expenses - the highest in the South-East Asian region.

By contrast, airlines such as Singapore Airlines and Hong Kong-based Cathay Pacific are purely international, although they do have some short-haul international routes. In both cases, their labor costs are approx 21% of total costs - much lower than that for Qantas.So how much of that 7% gap is the result of having duplicate sets of infrastructure for different parts of the group? 2 Flight Ops, 2 Safety departments, 2 training departments etc etc. And the additional layers of management to oversee both sets of infrastructure. Why don't you start looking there before demanding staff take a paycut?

[Worrals in the wilds]

For the sake of discussion, let's assume for a moment that FGD135's assertion is correct, i.e. the only way Qantas can remain viable is to reduce wages. There are still two stumbling blocks.

Firstly, the executives are not offering to take a pay cut. They have never offered to take a pay cut and they are not even hinting at it now, despite being well rewarded by both Aussie and aviation standards. This just makes everyone smell a very large rat whenever they start up with the 'we can't afford to pay' rhetoric, particularly when the share price has gone bungee jumping. If the company's in such a terrible state that they have to cut wages, wtf are the exec getting paid so well?

Secondly, there have been numerous posts on here and stories in real life about how Qantas management has repeatedly reneged on handshake deals. This has resulted in Qantas staff (not just pilots, either) automatically disbelieving everything management says. If management were untrustworthy then, why would they be any different now? They have demonstrated a complete lack of integrity in the past, which fuels further suspicion that the whole thing is crap. I get the feeling that AJ could make a media announcement that the sky is blue and the majority of Qantas frontline workers would all chorus 'bull****e'. This is not normal for a company. People who've been with Qantas a long time may feel it's normal, but it isn't. Most people have at least a grudging respect for their employer and vice versa.

In this way, even if the argument were correct and management were actually being honest and up front for a change, there is no way the average Qantas employee or interested bystander is going to believe them. Once bitten and all that, which is why smart companies aim to retain at least a degree of integrity with their staff. Come belt tightening time, it's a lot easier to sell the 'lean times' argument to the serfs if they don't automatically assume you and your team are incapable of telling the truth based on previous behaviour, and they aren't looking askance at your own massive salaries.

[airbus_galley_girl]

Nothing but trouble checking in

Matt O'Sullivan
June 11, 2011 .

Alan Joyce

The next few months will be vital in shaping the legacy of beleaguered Qantas boss Alan Joyce.

ALAN Joyce was his jocular self but in no mood to talk about the deal. Flanked by two of his senior executives, Qantas's boss quipped that he would limit his views on the strategic alliance Virgin Australia had sewn up with Singapore Airlines hours earlier to a ''full stop''.

The Dubliner might have laughed it off in the foyer of the Marina Bay Sands, Singapore's answer to Dubai's luxurious Burj Al Arab, but it was obviously a big blow - and he was in full view of airline executives from around the world who had flown in for the annual gathering of the International Air Transport Association.

No doubt adding to the pain was the fact that the Singapore Airlines alliance was secured in super-fast time by Virgin's chief executive, John Borghetti.

Advertisement: Story continues below

A 36-year veteran of Qantas, Borghetti lost out on the top job at the national flag carrier three years ago to Joyce. His coup this week overshadowed talk from Joyce about the possibility of Qantas forming closer ties with Malaysia Airlines.

Borghetti, the former third-in-charge at Qantas who spent years grooming its premium product, had already won approval for strategic tie-ups with Air New Zealand, US carrier Delta Air Lines and Middle Eastern airline Etihad. The deals are central to the motor racing fan's plan to take Virgin upmarket and challenge Qantas's stranglehold on the lucrative corporate travel market.

For Joyce, who served his apprenticeship at Ireland's national airline, Aer Lingus, Ansett and Jetstar, it signals the beginning of a critical period for his leadership at the national carrier. The next few months will shape the Irishman's legacy at an airline that has long formed part of the national identity.

Described as Qantas's worst nightmare, Singapore Airline's dalliance with Virgin piles even more pressure on the 44-year-old as he grapples with a damaging stalemate with key unions representing long-haul pilots and licensed aircraft engineers. Then there are the high jet fuel prices, Qantas's loss-making premium international operations, the effect of natural disasters and consumers embracing frugality.

Their mark is plain to see. Qantas's share price slumped to fresh two-year lows this week. Qantas has lost more than a third of its market value - or $2.26 billion - since early November, when it was forced to temporarily ground its A380 fleet after one of the planes narrowly avoided disaster soon after takeoff from Singapore. The Nancy Bird-Walton remains locked in a hangar at Changi Airport, about 20 minutes' drive from the Marina Bay Sands, awaiting repairs expected to cost well in excess of $100 million.

The confluence of events has led to Qantas's no-nonsense chairman, Leigh Clifford, publicly denying suggestions of a rift with the man he hired in favour of Borghetti and Qantas's former finance boss, Peter Gregg. But often when a chairman comes out to defend his chief executive, it raises the very questions such statements attempt to quash.

Resolving the dispute with the 1700 long-haul pilots and 1600 engineers will be crucial to restoring the faith. Yet both sides are no closer to sorting out their differences.

Then there is the Transport Workers Union, which represents baggage and ramp handlers, and catering staff. The union, which has frequently been at loggerheads with Qantas, has already threatened industrial action even before its collective employment contract expires at the end of this month.

Joyce intensified his attack on the "rogue unions" on the sidelines of the IATA gathering in Singapore this week, laying most of the blame for the fall in Qantas's share price on them.

Qantas's 35,000-strong workforce is one of the country's major bastions of trade unionism. The unions representing the pilots and engineers retain a big influence over the airline relative to their size.

''This is really heading to '89 territory here,'' says an airline executive, referring to the pilots' strike in 1989.

''[Qantas management] will struggle to go forward unless they can find a way to convince everyone that they are not crying wolf. Doing nothing is not an option because they are getting outdone internationally.''

Few doubt Qantas's premium operations are at a disadvantage to foreign airlines, which operate on lower-cost bases. Analysts at Royal Bank of Scotland estimate the cost base of Qantas mainline - the planes with the Flying Kangaroo on their tails - is about 50 per cent higher than Virgin's. But the challenge has always been: how do you lower costs without adversely affecting the product? That is made harder with a showdown just around the corner.

Ballots of the long-haul pilots and engineers over taking protected strike action will be completed early next month. They are expected to give their support, which will be the Qantas pilots' first industrial action in 45 years.

The pilots are unlikely to walk off the job, instead resorting to a work-to-rule campaign that includes stop-work meetings and refusing to do overtime. What appears relatively minor - such as not allowing as much time as usual to travel to airports in preparation for flights, or demanding a plane be checked for minor technical issues - can throw the airline's network into chaos.

Strange as it may seem, work-to-rule can be more costly than if the pilots did walk out because Qantas still has to pay their wages. And there's the flow-on effect: grumpy employees making clear to passengers their dissatisfaction, or travellers considering other airlines because of looming industrial action.

With both sides playing hardball, Qantas desperately needs what Joyce's predecessor, Geoff Dixon, often referred to as a ''circuit-breaker''. But it was not evident this week in Singapore, where Joyce said he would not pump any more funds into the international operations - the division dominated by the long-haul pilots - until they returned their cost of capital. Aiming directly at the pilots and engineers, he said Jetstar and the Frequent Flyer division "could just not continue to subsidise" the international operations.

Qantas has had a taskforce led by a senior executive, Lesley Grant, reviewing the options for the international business since January. It could include setting up a full-service subsidiary in Asia or adjusting aircraft orders (though it will not apply to the A380s or Boeing's long-delayed 787 Dreamliner).

Meanwhile, Borghetti has been quietly reinvigorating Virgin. He has won over Singapore Airlines under the nose of Qantas and has some time to prove to investors that his strategy is right. It is obvious why he wants more of Qantas's prized customers: business-class flyers make up less than 10 per cent of a plane's total passengers but can contribute about 40 per cent of the revenue.

Borghetti even claimed that Virgin's product was now ''better than our competitor's''. And not content with snaring more passengers in the domestic market, he wants to boost Virgin's international market share.

Qantas's share of international traffic to and from Australia has fallen from about 42 per cent when it was floated in 1993 to 27 per cent (about 8 per cent of which is Jetstar) today. But it would be unwise to underestimate the dominance of Qantas.

It is still one of the most profitable airlines and boasts an investment-grade credit rating that allows it to borrow more cheaply than its competitors.

Paul Fiani, managing director of Integrity Investment Management, says while Qantas needs to stay on the ball, he believes the threat from Virgin is overstated. ''Their ability to attract the business market is going to take a long, long, time. Virgin needs to spend a fortune to replicate what Qantas has in the business market and they don't have the money to do it,'' he says.

Despite Borghetti's new friend in Singapore Airlines, Virgin is still flying towards a second-half loss of up to $150 million because of fuel prices and a decline in yields from leisure travellers on domestic flights.

Some short-term relief for Australia's dominant airlines has come from Tiger, the Singapore ultra-budget carrier that last month shelved its ambitious growth plans in Australia because of mounting losses. Tiger has been a big irritant to Qantas offshoot Jetstar and Virgin since entering the market three years ago.

Its decision to drop some domestic routes raises speculation about whether it will eventually pull out of Australia. This would help ease the pain for Joyce and Borghetti.

The demands of Joyce's high-profile job are unrelenting. His time steering Qantas has been tough from the outset: he took over from Dixon in the aftermath of the global financial crisis.

And the short-term outlook is not rosy. Investment bank Goldman Sachs this week increased its forecasts for jet fuel - an airline's single-biggest bill - to $US136 a barrel this year, from $US117. And next year is worse - $US139.

''There are many things that impact on the airline business that are beyond the control of management - fuel prices, currency, the global economy. You just have to continue to manage the things you can manage,'' says Sir Rod Eddington, a former boss of British Airways and former chairman of Ansett.

Joyce, the maths whiz from the outer-Dublin suburb of Tallaght, now faces his biggest test managing the industrial relations headwinds buffeting the Flying Kangaroo.

The reporter travelled to Singapore courtesy of IATA.


Nothing but trouble checking in (http://www.smh.com.au/business/nothing-but-trouble-checking-in-20110610-1fwwz.html#ixzz1Ox4HHAyd)

[airbus_galley_girl]

APPROVED: Virgin Australia and Delta's Pacific joint venture challenging Qantas' US-Australia dominance - Flights | hotels | frequent flyer | business class - Australian Business Traveller (http://www.ausbt.com.au/approved-virgin-australia-and-delta-alliance-to-challenge-qantas)

Virgin Australia is gearing up to challenge Qantas for a larger slice of the
lucrative US travel market, following final US government approval overnight for its alliance with US carrier Delta Airlines.

The partnership will see the Virgin Australia and Delta share bookings, routes, lounges and frequent flyer programs, similar to Virgin Australia's current arrangements with Etihad and Air New Zealand and the recently-inked agreement with Singapore Airlines.

Virgin Australia CEO John Borghetti has already spoken of his desire to see Los Angeles become the airline's "second international hub" (alongside Etihad's Abu Dhabi base) and says he plans to have the Virgin Australia-Delta alliance "up and running by the end of the year."

The scheme not only taps Delta’s reach into the North American market but also paves the way for Virgin Australia to open new routes into the US, with a direct service to San Francisco - abandoned earlier this year by Qantas – said to be on the shortlist.

Travellers will also have access to connections through to Canada, Mexico and New Zealand, beyond the primary Australia-USA trunk route.

Both Virgin Australia and Delta have pledged not to reduce flights below their current levels of a joint 22 weekly flights for six months of the year during the high season and 17 flights during the off-peak seasons.

The combined market share of Virgin Australia and Delta of the ANZ-US market is estimated at 21%, well behind both Qantas (at 40%) and the Star Alliance carriers United and Air NZ share (39%).

Impact analysis

The Virgin Australia-Delta alliance will likely mean changes to both flight times and destinations, with the airlines flagging their intent "to fully cooperate on network planning and distribution to deliver a more attractive and competitive service for customers".

In other words: look for the removal of duplicated routes and timetables. It's the clearest sign yet that a Virgin Australia route to San Francisco and other destinations outside Los Angeles is on the cards.

Expect also to see further codeshared flights -- Virgin Australia flights with Delta's DL code, and vice versa. The next slate of codeshares starts on May 21.

Virgin Australia's flight codes -- either the old Virgin Blue DJ code or the old V Australia VA code -- will be added to Delta's flights from LAX to San Francisco, Las Vegas, Detroit, New York JFK and Orlando.

Delta's DL flight codes will appear on Virgin Australia flights from Sydney to Brisbane, Melbourne, Perth, Adelaide, Canberra, Auckland and Christchurch.

A notable omission from the codeshares on this side of the Pacific is flights to New Zealand's capital, Wellington. Virgin Australia and its trans-Tasman partner Air New Zealand promised the Australian and New Zealand governments they would increase flights to Wellington as part of their trans-Tasman joint venture agreement.

For a clue to other possible Virgin Australia codeshares, take a look at Delta's route map from Los Angeles:



Also hidden in the ruling is a clue to the joint Virgin Australia and Delta strategy: flights across the Pacific on large Boeing 777 aircraft, rather than following Strategic Airlines' plans to fly smaller Airbus A330s across the Pacific (the same type that Virgin is using on its Sydney to Perth Coast-to-Coast service).

It would also appear to nix the likelihood of moving one of Delta's larger ex-Northwest Boeing 747-400 planes to the Australian routes.

[FGD135]

Let's look at one small part of the operating cost - fuel.

'holic, the "aircraft operating" figures I was quoting did not include fuel and oil so your assertion is invalid. The "fuel and oil" component of the total costs for Qantas in 2002/03, if you are interested, was 14%.


So how much of that 7% gap is the result of having duplicate sets of infrastructure for different parts of the group?
These figures were from 2002/2003 - Jetstar did not exist then.


Wow, did you pull that one from your...
Yes, that is a figure I came up with myself, but I did state that in the post. What percentage do you reckon the pilot salaries would be of the total staff costs? It would not be less than 20%.

I have found some more research related to airline economics - and the ludicrous claim that "Pilot salaries cost the airline something like a dollar per ticket".

This research again draws on the Qantas annual report from 2002/03 but also something titled "Airline fare October 2003" and details the components of the typical Syd/Mel return airfare (then costing $221).

Of this $221 fare, $4.43 goes to "profit", $17.71 goes to "fuel and oil" and $35.42 goes to "staff".

This indicates that the true figure for pilot salary per ticket is closer to $10. Note again that I am assuming that pilot's salaries are 25% of the total staff costs (my estimate).

[QFinsider]

What a load of unadulterated bs.

The heavy case per hour 4% of direct operating COST per hour for flight crew.
The low case between 2.5% to 3%. Qantas is somewhere in between.
(Source QF- until labour costs became the new bonus driven doctrine)

Most aircraft cost is fixed.

Unless of course you back load all sorts of 'operating costs', to the "flight operation", whether it be duty travel, loadings so FF appear profitable for every person "sold" a seat. Engineering costs can be loaded too..How many you want to add on, so everything becomes a "profit centre" competing for Capital?

The definition applied definitely is subjective to suit the agenda of the day..As stated these days staff are the enemies.

[Ngineer]

Joyce said he would not pump any more funds into the international operations - the division dominated by the long-haul pilots - until they returned their cost of capital.

If Qantas goes under, Jetstar will follow suit not long after. One cannot live without the other, make no mistake about it!!!:ok:

[Xcel]

What maths school did you go to fgd??

35.42/221

= 16% far from your 30% which changed to 24% which went to 20% and using your figures plucked frm space...

second to that staff would include - cabin crew - tech crew - baggage handlers - check in staff cleaners etc etc - we are talking 2.5%-4% and that IS from qf themselves...

[FGD135]

What maths school did you go to fgd??


I suggest you have another read of my posts. I have been addressing two separate figures.

The first is the percentage that pilot salaries are of aircraft operating costs. I have found that, in the case of Qantas, the figure (from 2002/2003) is about 33% - which is contrary to the 4% figure being bandied about these forums. If "fuel and oil" are included in the operating costs then the figure becomes 20%.

The second is the number of dollars from each ticket sale that goes to pilot salaries. I have found that the figure is almost $10 - again contrary to the $1 figure that is popular on these forums.


35.42/221

= 16% far from ...
If you had read my post properly you would see that the correct math is in fact (25% x $35.42) / $221 = $9. Why 25% of? Because the $35.42 represents all staff but we are only interested in the pilot's component. If you had read my post you would know this.

[Xcel]

Which way do you want me to divide that??

16%/4= 4%

9/221=4%

yeap must be 20% hey aj... These are you figures dude... QF themselves agree 4% is a high average on there costs.

Using your awesome math how about you work out the average for say - management - Hr - accounting - I'm sure I could skew a few of those for you. Your arguement is nonexistant!!

[What The]

The reality is that you have no idea what you are talking about.

Move along people, nothing to see here.

['holic]

For starters, let's use numbers from the right decade.

Quote:
Let's look at one small part of the operating cost - fuel. 'holic, the "aircraft operating" figures I was quoting did not include fuel and oil so your assertion is invalid. The "fuel and oil" component of the total costs for Qantas in 2002/03, if you are interested, was 14%.
Ok, from the 2010 Annual Report, pg 47
Expenditure
Manpower and staff related ... $3405m
Fuel ........................................ $3283m

So now based on my previous calculations, at 33% of operating costs a QF Capt is earning $1458 an hour. Thanks for pointing that out.


Quote:
So how much of that 7% gap is the result of having duplicate sets of infrastructure for different parts of the group? These figures were from 2002/2003 - Jetstar did not exist then.(sigh) It's my own stupid fault for attempting to engage in a meaningful discussion with a manager. Firstly, if you look at the page above from the 2010 report, "Manpower and Staff related" account for 25% of expenditure. So I could ask you "So how much of that 4% gap is the result of having duplicate sets of infrastructure for different parts of the group?". But how about you think of a number, any number at all, substitute it in the above question, and then try and answer it.

[jaded boiler]

Your toy abacus will give more accurate results fgd if you try to keep it level.

[FGD135]

'holic,


So now based on my previous calculations, at 33% of operating costs a QF Capt is earning $1458 an hour.

Your calculations are invalid because they take no account of the number of pilots employed by Qantas. Your calculation would yield $1458 per hour irrespective of whether Qantas employed one pilot or one million, for example.

I would be happy to work out for you (based on those 02/03 figures) what the "average" Qantas captain is making per "average" hour, but first, you would have to tell me:

1. What percentage of the pilot group are captains? And,
2. What was the total hours flown for the year for all captains?

No need for precise figures. Ballpark will do.

[ferris]

Forget all the obfuscation FGD, here are your words....This indicates that the true figure for pilot salary per ticket is closer to $10 So you are saying if pilots take a pay cut of, say, 10%, this is what the future of the company swings on?

Seriously? Your words..... $1 dollar per fu$king ticket? The pilots could receive a pay increase of 10% and I would wager that QF would save more than the $1 a ticket in goodwill, consultants fees, wasted management time etc. etc. But then what would the dolts do with their time? They would be forced to actually add value. What a concept!

[FGD135]

So you are saying if pilots take a pay cut of, say, 10%, this is what the future of the company swings on?

The future of Qantas absolutely, definitely swings on them being able to reduce their wages bill. Whether 10% is enough of a reduction, I don't know - but would suspect not.


Your words..... $1 dollar per fu$king ticket?
I have spent about 20 minutes looking at this statement and cannot work out what you are saying - or what it is you think I have said.


The pilots could receive a pay increase of 10% and I would wager that QF would save more than the $1 a ticket in goodwill, consultants fees ...I would take you up on that wager. Sure, there would be great goodwill from the pilots but this would only last for a few weeks. Goodbye Qantas.

[FGD135]

I have spent the afternoon reading and researching airline economics and found some interesting stuff that I would like to share with you.

First, a few quotes to set the tone:

"I'm flying high and couldn't be more confident about the future."
- Freddy Laker, Laker Airways, 3 days before the collapse of Laker Airways, 3 Feb 1982.

"These days no one can make money on the goddam airline business. The economics represent sheer hell."
- C.R. Smith, President of American Airlines.


The following text is not my work, but I have bolded certain bits that are relevant to the current Qantas situation:


It may be hard to believe but the airline industry is actually the world's least profitable industry. In 2000, the airlines had a good year with a turnover of $328 billion but a net profit of just $3.7 billion or just 1.1%. The industry's best year was in 1966, when it made 6.1% net profit, but in the past 30 years, most airline balance sheets have revealed losses of about 1.5% or profits of about the same order.

In fact, from 1947 to 2001 (54 years), the world scheduled airline industry has made a cumulative (and combined) net profit of $27 million. In comparison, Microsoft made a profit of $7.4 billion in 2001 alone.

Being a service industry, airlines are labor intensive. This is true, although to a lesser extent, even for low-cost carriers. Each airline employs armies of pilots, flight attendants, mechanics, baggage handlers, reservation agents, check-in staff, security personnel, catering staff, cleaners, administration staff, accountants, lawyers and the list goes on.

The cost of staffing an airline is related to the region in which it operates and the general level of wages in that region, whether it is a short-haul or long-haul airline operation and whether it is a full-service or a "no frills" operation.

Qantas' staff costs in the 2002-03 year were 28% of its total expenses - the highest in the South-East Asian region.

By contrast, airlines such as Singapore Airlines and Hong Kong-based Cathay Pacific are purely international, although they do have some short-haul international routes. In both cases, their labor costs are approximately 21% of total costs - much lower than that for Qantas.

A factor in the significantly lower staff costs for these airlines is the nature of long-haul operations which tend to be less labor-intensive. In addition, both Asian-based airlines overall enjoy better productivity from their staff and employ leaner work practices.

American Airlines, the world's biggest airline and considered by many as the most successful of the past century, has been tragically affected by the events of September 11 and has also felt the impact of the upsurge in low-cost airlines. Table 14.7 lists its costs for the year 2002.

These figures reflect the generally much higher staff costs for many US full-service airlines which in some cases reach 49% of total costs. High staff costs put such airlines at a serious disadvantage on the international front where they have to compete overseas with operators like Singapore Airlines, and on the domestic front, with Southwest Airlines and JetBlue, all of which operate with a much lower cost base.

The high labor costs are a legacy of heavily unionized workforces combined with short-haul operations. Airlines such as Eastern and US Air were badly affected by high labor costs which was a significant factor in their eventual demise.

The cost of running American Airlines and its regional subsidiary American Eagle in 2002 was $20.63 billion. Combined, the airlines flew 178.7 billion Available Seat Miles (ASM) for a cost of $0.115/ASM or $0.071/ASK.

Southwest Airlines, however, with its one aircraft type and a more simplified operation, produced impressive figures for 2002 amounting to just $0.074/ASM or $0.043/ASK.

Despite Southwest Airlines being a short-haul airline with an average sector length of just 720 miles (1,199km), its staff costs are only 35% of operating costs - 7% below that of American Airlines. US Airways, prior to entering Chapter 11 (bankruptcy protection) in 2002, was similar to Southwest. It was essentially a short-haul airline with a few longer sectors but had much higher labor costs which was a major factor initiating its filing for bankruptcy protection. US Airways costs were $0.124 cents/ASM - 68% higher than Southwest's.

In taking a closer look at the cost of labor to airlines, the Association of European Airlines provides a pertinent look at the break-down of staffing costs for European airlines in 2000. Graph 14.8 illustrates the split of staff by workgroup as well as the salary percentages for each workgroup.

This provides an interesting perspective into the relationship between the volume of staff within each workgroup and the cost burden associated with the salaries of each workgroup. Note that the pilot workgroup represents 8% of the staff but commands 21% of the staff salary costs.

The fact remains that costs per employee are among the highest of any industry, according to the US Air Transport Association. The ATA provides some intriguing labor cost figures for US airlines at August 2002.

Remembering that US national average earnings are $17.13 an hour for a 39.6 hour week, it is interesting to note that pilots ranked the highest paid workforce in the US with hourly earnings of $107.22 and an average working week of just 21.9 hours. The survey included regional and commuter pilots who are typically paid much lower wages than their mainline colleagues.

Flight attendants who ranked 45th, had hourly earnings of $32.73 but they only worked 20.7 hours a week. As a comparison, waiters and waitresses in the hospitality field earned $3.95 an hour during a 36.7-hour week. However, they receive tips to supplement their wage.

Another of the airline sector employees are airline engine mechanics who earn $22.04 an hour and work 40 hours.

Discontent between the various airline employee groups has evolved due to the starkly different pay increases granted over the five years to the end of 2002. During this time, pilots' wages have soared by 57% while flight attendants' salaries have increased by 44%. Check-in agents' incomes have risen by 17% but engine mechanics' salaries have barely moved.

One of the starkest examples of the efficiencies of low-cost airlines is the comparison between the defunct Ansett Australia and low-cost operator Virgin Blue's passenger uplift/staff ratio. According to Virgin Blue figures the airline will carry more passengers than Ansett on major Australian domestic truck routes for the year ending 31 March 2004, with only a third of the staff. The two airlines' RPM/RPK figures are almost identical, however Virgin Blue only has 3,300 staff compared with the 10,000 staff that Ansett employed for its domestic trunk route division.

[FGD135]

No wonder Ansett went under.

Now, 10 years later, the writing is on the wall for Qantas ...

[skybed]

the true picture of costs amongst various airlines have changed since 2002.:=
Let's not forget QF now has the most expensive airline management in the world (up around 50% from last year). Add various management consultants and in-house secondments(the costs being attributed to the labour costs) and a truely distorted figure is presented.:ugh:
modern airline management= :ugh::yuk::ugh:

[packrat]

Skybed is right on the button.
True labour costs(read non management employees) of Qantas is more like 18%.
The cost of management inflates the wages bill and allows execs to claim that labour is more expensive than competitors.
Nice ploy:increase your own remuneration.Include in it labour/manpower costs and then claim that employees are paid too much...what a bunch?

[noip]

it is interesting to note that pilots ranked the highest paid workforce in the US with hourly earnings of $107.22 and an average working week of just 21.9 hours.

FGD

That figure sounds that they have an easy life, but translates to what would be the legal maximum block hours a year. You imply they are underworked whereas that is not the case - I look at the figure and see that they are being worked pretty hard.

True working week would be about double the figure quoted, perhaps more for a shorthaul operation, as your source only states the block hours rather than working hours (Pilots are generally only paid from pushback to on the gate, unlike almost every other part of society).

There are lies, damn lies, and spreadsheets.

N

[Xcel]

Who is the author? Where are the research notes and notations that derive your figures...

I could write the same drivel and pass it off as gospel too.

I would have thought there was a more interesting statement in there, how abot this one:

According to Virgin Blue figures the airline will carry more passengers than Ansett on major Australian domestic truck routes for the year ending 31 March 2004, with only a third of the staff. The two airlines' RPM/RPK figures are almost identical, however Virgin Blue only has 3,300 staff compared with the 10,000 staff that Ansett employed for its domestic trunk route division.

So The hact is the aircraft NEEDS pilots and cabin crew and engineers and ground crew. It doesn't need the 300% higher staff numbers that Ansett and now Qantas employ. Hmmmm I wonder where these additional jobs can be cut? We need pilots etc or the plane can't fly... Oh I know it's the leeches of management, consulting and any other fictispus job to get me mate working next to me. How about Qantas increase productivity and effeciencies by making VR for management - oh that's right their severances and golden handshakes would sink the company alone.

Cut the bull****e this is not a problem caused by crew!!

[QFinsider]

You just don't get it.

Short haul flying is actually more costly than long haul...H. Kelleher South west airlines.

Crew costs per hour are less than 4% of operating cost of a shiny jet.

Defined costs including, enroute costs, landing charges and even handling charges are determined vary little from airline to airline. Maintenance is a given. Fuel accounts for 40% of the cost. Hedging reduces the variation.

You can then as Qantas do, tell pilots they can't compete and that Jetstar are 30% cheaper..blah blah. So they save maybe 1%..

To further cloud the gullible, add back costs for engineering (so engineering is a profit centre) Add back the "sale" from FF of a seat. Stack on an accounting charge, for services rendered (Hey presto, accounting is a profit centre). Commercial charge a premium price (to maximise their revenue and "profit") when needing seat to position pilots to operate, qantas commercial slug flight operations (profit again) Of course without pilots to operate the service, ALL revenue would be severely curtailed.

The summary is really simple, every cost gets duck shoved. The responsible "manager" will protect budget and hit those KPI. As the genius Dixon said all segments have to compete for capital..The problem is that some centres are cost centres, some profit. In the end the business bears the cost, irrespective of where the accountants put it.

So as it relates to Qantas flight operations we get loaded all sorts of ancillary costs, probably ranging from uniform to duty travel...Of course the flying operation can be made to struggle. Selective definition of "cost" by management clouds it further for the gullible.

The camel is carrying too much straw with all these ancillary charges, but it isn't related to the damn salary a pilot earns..

Go read up on the damage business segmentation causes the firm engaged in it..Geez

Further have a look at the ratio of operationally related staff to administrative staff. Any public holiday sees many thousands of staff enjoying a long weekend, whilst the operational people keep doing what airlines do. That is put people on planes, with a meal, a cabin and flight crew, engineers fuel and a flight plan,their bags...

[ejectx3]

Re hours worked per week ....
My credit hours, ie the hours I am paid for are usually about half my "duty" hours ....ie the hours from sign on to sign off...

So every time one of our esteemed bosses bleats on about how little we
work for our pay they are distorting the truth by half.

Fact

[stubby jumbo]

......with thanks to Tail Wheels investigation :D

Here you go Alan........a piece of work for you that matches your Skills and Capabilities.

Irish, Leprechaun and St. Patty Coloring Pages - Free Color Pages - Printable Pages - Holiday Printables - ColoringBookFun.com (http://coloringbookfun.com/pat/)
:E

[teresa green]

I tried that Stubby but it was too :mad: hard, perhaps something a little simpler?

[Worrals in the wilds]

The following text is not my work, but I have bolded certain bits that are relevant to the current Qantas situation:

So why not cite the author? Not doing so is plagiarism, or at least very bad manners (given this is an internet forum rather than an academic paper).

Could you confirm that the passage is from 'Flightpaths', a book by Geoffrey Thomas and Christine Forbes Smith? It appears to be.

[gordonfvckingramsay]

Nothing but trouble checking in (http://www.smh.com.au/business/nothing-but-trouble-checking-in-20110610-1fwwz.html)

Read it weep AJ :ok:

[Capt Kremin]

FGD, you are proposing that QF pilots take a PAY cut in order to save Qantas.

You have quoted figures there about COSTS; most of which are fixed and have nothing to do with what a pilot gets PAID.

Disregarding pay for a second, most COSTS would be the same no matter what the pilots were being PAID. Simulators, Hotels, crewing departments, allowances etc are costs to the Company, a cost of doing business and have no bearing on what a pilot gets in their pocket no matter what airline they fly for.

Now I know what a 4 man A380 crew gets paid to do a London return. So it is very easy to work out what the cost per passenger is on a London return ticket for the entire crew. Guess what Qantas could offer as a reduced fare to the punters per ticket if pilots did it for free?

$40.

[The Green Goblin]

http://images.smh.com.au/2011/06/10/2422148/joyce-420x0.jpg

Notice the green poison surrounding AJ?

Coincidence?

Any one still have the 747 tail with Dixon giving the bird? It might be time to roll out mark 2 :p

[SkyScanner]

It is obvious FGD is not a QF pilot otherwise they would have known there was a forum on Qrewroom dedicated to how much pilots cost the company per hour. Capt Kremin is correct in that if the pilots worked for free the customer would save around $40.

[FGD135]

So why not cite the author?

I have no idea which book that stuff came from. What I have is photocopies of several of the chapters from that book. None of the pages shows the name of the book.

The section I was quoting from has a title page which says "Chapter 14 - Dollars and Sense of Airlines".


Could you confirm that the passage is from 'Flightpaths', a book by Geoffrey Thomas and Christine Forbes Smith? It appears to be.
You say "appears to be". Can you please be definite about this as I have found this material to be extremely interesting and informative and would like to purchase a copy of this book. Hopefully there is a more recent edition!


You have quoted figures there about COSTS; most of which are fixed and have nothing to do with what a pilot gets PAID.

Capt Kremin,
I am puzzled at why you say "have nothing to do with what a pilot gets paid". The principal figure I was working from was the "staff" component of the total costs for the 2002/03. That figure was 3 billion AUD and represented 28% of all costs to Qantas for that year.

That figure is, in effect, the sum total of all money (including super) paid to all employees for that year so I would have thought that that figure had EVERYTHING to do with what the staff got paid.

I bring this up as an admission that when I'm puzzled, it usually means that I've misunderstood something.


So it is very easy to work out what the cost per passenger is on a London return ticket for the entire crew.
Yes, and that is true for the crew that share the aeroplane with those passengers. But, the passengers, through their tickets, are paying the salaries for ALL Qantas pilots - not just the crew flying them at the time.

As a long time PPRUNE reader I have learned to be wary of these "calculations" that pilots do between themselves whilst sitting in the cruise whiling the hours away. Apart from assuming 100% load factors, these calculations never seem to look at the full picture.

For the philosophical "proof" of my assertion above - that passenger tickets pay for ALL pilots, not just those on the same plane - consider this:

If Qantas were to plan to do only ONE flight for the 2011/12 year, they would need to build into the ticket price enough dollars to cover the salaries for all the pilots for the whole year.

If the A380 return trip to London was that only flight then the tickets would cost almost one million dollars each (based on the 02/03 figures).

So, what I am saying is that this "$40 saving" is misleading in the extreme. It does not indicate what you think it does.

To make that calculation much more meaningful, however, please do it again, but this time with ALL the Qantas pilots working for FREE for the WHOLE YEAR. That result will be far more enlightening.

Which brings me to my next point:


there was a forum on Qrewroom dedicated to how much pilots cost the company per hour
Why do these pilots insist on working things out on a "per hour" basis? The pilots are not paid on a per hour basis. Please work everything out on an annual basis. Only then would it be possible to do meaningful calculations and comparisons.

[Xcel]

I would actually love a system in which we are paid zero.

However everytime we save fuel, costs, or actually work to increase the efficiencies and productivity of the staff around us we get a bonus paid automatically.

Then everytime management cost the company in fines, fear campaigns, damage to brand etc they would have to pay back to the company.

KPI's for pilots and penalties and punishment for management for wrong/poor/conflicting decisions.

I would be a squillionaire and poor old AJ would be on the dole.

[noip]

FGD

Yes, and that is true for the crew that share the aeroplane with those passengers. But, the passengers, through their tickets, are paying the salaries for ALL Qantas pilots - not just the crew flying them at the time.Wrong. Your logic is faulty. You are correct in so far as there are pilot costs from those on Blank lines and reserve and training courses who do not do full line flying, however that would result in, at most an additional 50% cost (snap estimate - and I'm being REALLY generous to you here). The other Pilots earn their money on the trips THEY fly passengers on.

So, I'll concede you $60 instead of the $40.

Your problem is that you do not understand the way Pilots get paid.

The pilots are not paid on a per hour basis... er news to me! What did I just say above?


N

Just to be really pessimistic, I did my own calculation on a London trip, being as generous as I could, using maximum pilots, 80% load factor 50% allowance for non-line pilots etc etc and could still only get just over $100 per passenger for the return trip for Pilot costs.

[FGD135]

The other Pilots earn their money on the trips THEY fly passengers on.


But they are still "earning" money when not flying are they not?

What if a pilot only does one flight for the year? According to you, he wouldn't make too much money that year.

As I understand it, there is a base salary, then various allowances and additions on top of that - and some of those allowances and additions may be on a "per hour" basis.

I will try saying it a different way:

The total money a pilot makes for the year has come from every ticket sold by the airline. It is only a small percentage from each ticket (about 0.001% - see below) but it all adds up to make the total annual income for the individual.

Using figures I have quoted in previous posts we can arrive at the following. Note that these figures are not necessarily applicable to Qantas:

$35 of the $221 ticket revenue for the Melb/Syd flight of 2002/03 goes to paying staff. Assuming the pilots are on the receiving end of 25% of the staff pay, then the pilots get 9$ of the $221.

For this particular trip and fee structure, this equates to 4%. But this 4% must then be divided up amongst ALL pilots. If there are 4,000 pilots, for example, then each individual pilot gets 0.001% of the ticket revenue.

Please could a Qantas pilot do a rough calculation to see if this figure is in the ballpark.

Assume an average ticket price, multiply it by your best guess for the total number of tickets sold for a year. Then take 0.001% of that figure. Is the result somewhere near your annual income?

[Tankengine]

I am a Qantas pilot, I get paid by the hour, to fly aeroplanes.
If you want me to do maths for you, will you pay me my hourly rate?:rolleyes:

[noip]

FGD,

I understand you are genuinely trying to get your head around this, however it is obvious that you simply don't understand how our system works. I covered your question in my post above (re pilots who are training, running the simulator etc) but perhaps in a way that you missed, when I added a premium to the base flying cost of a ticket.

Yes, in most operations, the Pilots are guaranteed a minimum number of flying hours pay whether they fly them or not, but I covered that above. Most people fly the minimum or above in a normal operation and so the safety net is not needed. You only get paid for the trips you do.

If there are a significant number of Pilots sitting round not flying then there is something wrong with the management of the company. (Google Qantas).

Oh and with the exception of the safety net, no, you are not earning money when you are not flying.

N

[Capt Kremin]

FGD, this is the problem... you have no idea about how pilots are paid.

The only time QF pilots are paid for doing nothing is if they are not utilised on a reserve line.

We are paid the greater of 5.5 hours credited hours a day or flight hours flown. In the A380 example I quoted you the crew was on a 9 day trip. They were paid 50.3 hours credit, were on duty for 49 hours and logged 42.6 hours flying, about 2/3 of it at night. They got 6.4 hours overtime. Add to that ODTA and super.

A roster for an A380 pilot is currently 160 Credited hours but they can be rostered to 175 credited hours. You only get paid for the credited hours you do.

Therefore the PAY that each pilot receives for each flight is very easily calculated and accounted for. Therefore the cost to a passenger is also very easily calculated.

Now if you wish to talk about COSTS, that is another matter. As I said before, pilot COSTS are a COST of doing business and would not vary substantially from airline to airline. A J* pilot has to be checked and trained, accommodated and fed whilst on duty, flights have to be crewed etc etc same as a VOZ, Cathay QF etc etc.

None of those COSTS bear any relation to what the pilots are being paid, nor do pilots have any significant input into them.

If you wish to have your aircraft flown however, a business must pay those costs.

The fact remains however, that of the $2000 most people pay to go to London and back, $40 of that ends up in the pockets of the flight crew. It works out at less than a dollar an hour/per passenger for a 15000 hour Captain, a 10000 hour F/O with an A380 command endorsement and two S/O's who are guaranteed to be experienced.

The figures will vary of course over different fleets and patterns with differing amounts of seats on the aircraft/hours flown/crew compliment etc but if you are telling me that we are expensive and need to take a pay cut to save the airline.... sorry I beg to differ.

The other flaw in your argument of course is that, despite all its troubles, Qantas is still making a profit. A lot of that profit comes from LH pilots flying domestically on the 767, A330 and 747.

[Pukka]

Source: Royal Bank of Scotland


The news broke on Friday, but was quite widely reported over the weekend was the news that EasyJet's pilots have agreed a new pay and scheduling pact following a recommendation from cockpit union British Airline Pilots Association. The deal comprises a 4% salary increase and a 5% rise in sector pay, but the union flags that crucially the agreement also goes some way to resolving some of EasyJet pilots' long-term concerns about rostering and scheduling. The union credits chief executive Carolyn McCall will a "brave" decision to take on the operational difficulties and discuss a "gamechanging" partnership. The two sides will work under an independent chairman to resolve any outstanding problems. The ballot resulted in 85% voting in favour of the deal, on a turnout of 76%.

Obviously the 4-5% pay deal is not cheap but will, we imagine, have been factored into company guidance. The good cop bad cop partnership of CEO McCall and ops Director Warwick Brady looks to have worked well.
Plainly the market will be very focused on revenue development through the summer and on whether bad cop Warwick and CFO Chris Kennedy can manage crew costs going forward after this not inexpensive settlement. But this episode looks to earned the CEO some kudos and should have
bought the company a good dose of goodwill from the cockpit crew that should help secure the operation through whatever ATC strikes, storms, volcanoes, bean sprout pandemics or other challenges the world throws at the business this summer.

[600ft-lb]

The Word - The Business End - The Colbert Report - 6/9/11 - Video Clip | Comedy Central (http://www.colbertnation.com/the-colbert-report-videos/389132/june-09-2011/the-word---the-business-end)

Even though this isn't Qantas as such, its very relevant, especially the person this is the subject of.

Bain & Company is an entirely separate company from Bain Capital (http://en.wikipedia.org/wiki/Bain_Capital), a private equity (http://en.wikipedia.org/wiki/Private_equity) firm founded in 1984 by former Bain & Company Partners that included Mitt Romney (http://en.wikipedia.org/wiki/Mitt_Romney)Fast forward to about 55 seconds in that video and its about leveraged buyouts, massive profits for the companies (bain and co) and companies going bankrupt as soon as they're sold off..

Essentially what the APA bid was all about.

Some other interesting easily accessible facts;

Clifford, is a senior advisor to Kohlberg Kravis Roberts & Co.
KKR & Co. L.P. (formerly known as Kohlberg Kravis Roberts & Co.) (NYSE (http://en.wikipedia.org/wiki/New_York_Stock_Exchange): KKR (http://www.nyse.com/about/listed/quickquote.html?ticker=kkr)) is a global private equity (http://en.wikipedia.org/wiki/Private_equity) firm, specializing in leveraged buyouts (http://en.wikipedia.org/wiki/Leveraged_buyout), based in New York (http://en.wikipedia.org/wiki/New_York_City), New York (http://en.wikipedia.org/wiki/New_York). The firm sponsors and manages private equity investment funds. Jayne Hrdlicka - Group Executive Strategy and Technology, has just joined from Bain and Co.
1970s Bain & Company was established in 1973 by seven former partners (http://en.wikipedia.org/wiki/Partner_%28business_rank%29) from the Boston Consulting Group (http://en.wikipedia.org/wiki/Boston_Consulting_Group) headed by Bill Bain (http://en.wikipedia.org/wiki/Bill_Bain_%28consultant%29).
Where appropriate, we work with clients to make it happen - which may mean fundamentally changing the company.Barbara Ward - Independent Non Executive Director, member of Allco (APA)... and is on the Advisory Board of LEK Consulting.
L.E.K. Consulting is an international strategy consulting firm (http://en.wikipedia.org/wiki/Consulting_firm), with headquarters in London (http://en.wikipedia.org/wiki/London).
Started in 1983 by three partners from Bain & Company (http://en.wikipedia.org/wiki/Bain_%26_Company), James Lawrence, Iain Evans and Richard Koch (http://en.wikipedia.org/wiki/Richard_Koch), L.E.K. has since grown to over 850 consultants and 20 offices worldwide. Gary Hounsell - Independent Non Executive Director... He is Chairman of Investec Global Aircraft Fund, a Director of Ingeus Limited and a Board Member of law firm Freehills
Key private equity transactions announced in 2006 in which Freehills has played a lead advisory role include the Airline Partners of Australia consortium’s bid for QantasI'm sure theres many more interesting connections.

I'm actually very interested in what the term 'independent director' means.

[Short_Circuit]

^^^^^
Holy Cr@p, talk about conflict of interest :eek:

[The Green Goblin]

To borrow a quote from our Kiwi neighbours - the whole Qantas, Jetstar management spin on every front, cadets, workers, off-shoring, maintenance and cost cutting, is a:

"carefully orchestrated litany of lies".

[Sunfish]

Holy crap! They are going to try to take the Qantas brand and leave the shareholders with the carcass that is Jetstar!

That must be why they are running down the airline - to make it a cheaper purchase!

[The Black Panther]

Looks like an ambush, smells like an ambush walks like an ambush.

It's ambush

[rodchucker]

Surely it is time for some regulatory scrutiny of governance and decision making and possible breaches of corps law if the acts so far don't stand up to scrutiny? There are so many conflicts of interest there would only have been the Joyce left to vote save for the good general.

I have little faith in the corporate poodle (rather than watchdog) BUT when this hits the fan everyone will be running for cover so the public pressure for heads on poles will be enormous so they just MIGHT be stirred into action with their new Chairman looking to make a name from himself.

[The Black Panther]

The information below was found on Bechtel - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Bechtel_Corporation)

Qantas website Corporate information:
Mr Clifford is a Director of Bechtel Group Inc. He is Chairman of Bechtel Australia Pty LtdWikipedia:
Bechtel Corporation (Bechtel Group) is the largest engineering (http://en.wikipedia.org/wiki/Engineering) company in the United States (http://en.wikipedia.org/wiki/Economy_of_the_United_States), ranking as the 3rd-largest privately owned company in the U.S.The 1980s were not kind to Bechtel. Employee headcount plunged from 44,000 in 1982 to 16,000 in 1995; one of the 1995 layoffs ultimately resulted in a landmark 2000 employment law (http://en.wikipedia.org/wiki/Employment_law) decision of the Supreme Court of California (http://en.wikipedia.org/wiki/Supreme_Court_of_California), which noted that it was Bechtel who had presented evidence of its massive layoffs to the trial court.[4] (http://en.wikipedia.org/wiki/Bechtel_Corporation#cite_note-3)In 1981, Bechtel constructed the Ok Tedi Mine (http://en.wikipedia.org/wiki/Ok_Tedi_Mine), the largest mine in Papua New Guinea at the time. ...... Broken Hill Proprietary (BHP), which is now known as BHP Billiton (http://en.wikipedia.org/wiki/BHP_Billiton), when it allowed mine waste to be dumped directly in the Ok Tedi River after a tailings dam built by Bechtel was destroyed in a landslide. The Ok Tedi Environmental Disaster (http://en.wikipedia.org/wiki/Ok_Tedi_Environmental_Disaster) resulted from the riverine dumping of pollution.[5] (http://en.wikipedia.org/wiki/Bechtel_Corporation#cite_note-4)
.......In 1988, just after Saddam Hussein (http://en.wikipedia.org/wiki/Saddam_Hussein) had earned international condemnation for using poisonous gas against thousands of Kurds (http://en.wikipedia.org/wiki/Kurd), Bechtel signed contracts with Iraq (http://en.wikipedia.org/wiki/Iraq) to build a chemical plant. Bechtel never completed the project due to the onset of the first Gulf War (http://en.wikipedia.org/wiki/Gulf_War) in 1990.According to the Wall Street Journal, Bechtel established a strong relationship with the rebel leader Laurent Kabila (http://en.wikipedia.org/wiki/Laurent_Kabila) during the First Congo War (http://en.wikipedia.org/wiki/First_Congo_War) of 1996-7 in central Africa, compiling "the most complete mineralogical and geographical data of the former Zaire ever assembled, information worth a fortune to any prospective mining or oil firm" and commissioning and paying for "U.S. National Aeronautics and Space Administration (http://en.wikipedia.org/wiki/National_Aeronautics_and_Space_Administration) satellite studies of the country and for infrared maps of its mineral potential." According to government officials, some of the satellite data provided to Kabila by Bechtel was "militarily useful information." [6] (http://en.wikipedia.org/wiki/Bechtel_Corporation#cite_note-5)In September 1999, Bechtel signed a contract with Hugo Banzer (http://en.wikipedia.org/wiki/Hugo_Banzer), the elected president and former dictator of Bolivia (http://en.wikipedia.org/wiki/Bolivia), to privatize the water supply in Bolivia's 3rd-largest city, Cochabamba (http://en.wikipedia.org/wiki/Cochabamba). The contract was officially awarded to a company named Aguas del Tunari, a consortium (http://en.wikipedia.org/wiki/Consortium) in which Bechtel held a 27.5 percent interest. Shortly thereafter, claims surfaced that water rates in that city went up an average of about 50 percent.[7] (http://en.wikipedia.org/wiki/Bechtel_Corporation#cite_note-6) Both of these actions resulted in the Cochabamba protests of 2000 (http://en.wikipedia.org/wiki/Cochabamba_protests_of_2000). Many had to withdraw their children from school and stop using doctors because of higher costs for water.Leigh Clifford shows as an "Outside Director" on the Bechtel annual report 2011. I have no idea how long Mr Clifford has been with Bechtel. It appears to be a company not shy of making hard decisions. I'll let you be the judge.

[QFinsider]

Oh Clifford is one neo-conservative stooge...

H. R. Nicholls Society - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/H._R._Nicholls_Society)

Most of the "liberals" buy this strategy, it is IR in focus and Clifford is in it up to his neck. As Fraser remarked, this does not resemble the Liberal Party of old.

Don't let his membership of Essendon Football club fool you, this "industry chieftain nearly killed Rio.It is him and his acquiescent board and senior yes men or all of us.....

[rodchucker]

Love that photo with the "green" surrounds.

Isn't there a kids television award show where the recipients of the awards get "Slimed" by some strange green mess as part the award ceremony? This is absolutely true in Oz.

Seems entirely appropriate for a nomination.

[600ft-lb]

What an amazing, again, suprise;

Jayne Hrdlicka's Experience


Group Executive Strategy

Qantas (http://au.linkedin.com/company/qantas?trk=ppro_cprof)


Privately Held; Airlines/Aviation industry
August 2010 – Present (11 months)

Non Executive Board Director

Woolworths Limited (http://au.linkedin.com/company/woolworths-limited?trk=ppro_cprof)


Public Company; Consumer Goods industry
August 2010 – Present (11 months)

Don't Qantas and Woolworth's deep business ties ?

She must've been headhunted by James Strong, Chairman of woolies and 'independent' director of Qantas

EDIT

This is getting a bit depressing now.

James Strong - National Chairman of Partners of Corrs Chambers Westgarth

Corrs Chambers Westgarth | Private Equity (http://www.corrs.com.au/corrs/website/web.nsf/Content/Svc_PrivateEquity)

Our Private Equity Group includes lawyers who have many years experience advising leading UK and US as well as Australian private equity houses on transactions in Europe, the US and Australia. Corrs' Private Equity Group is headed by Richard Lewis, who is recognised as one of Australia's most experienced and accomplished private equity lawyers.

[standard unit]

Just one big daisy chain :}

[600ft-lb]

Barbara Ward - She was Chairman of NorthPower and a Board Member of Allens Arthur Robinson.

Allens Arthur Robinson: Services: Private equity law (http://www.aar.com.au/services/pe/index.htm)

Our experienced Private Equity team provides legal services across Asia to leading private equity firms, venture capital investors, underwriters and financiers across the full range of private equity transactions.
Experience includes:


asset and company acquisitions;
management buy-outs and buy-ins; <----- HAHA it sure does!

[The Black Panther]

Independent Non-Executive Director

Barbara Ward was appointed to the Qantas Board in June 2008.
Ms Ward is on the Advisory Board of LEK Consulting. She was formerly a Director of Allco Finance Group Limited.

What a fine company Allco was, as stated earlier Allco was part of the APA Partners including Texas pacific Group, Macquarie Bak, Onex Corporation that failed in their equity buy out of Qantas

Shareholders in Allco received no capital return as stated on the web site reference.
reports the group is under investigation over $1.2 billion in transactions it conducted with its subsidiaries, joint venture partners and directors, including directors, Gordon Fell and David Coe 12/03/2009ALLCO FINANCE GROUP LIMITED - Company Profile and Status at deListed (http://www.delisted.com.au/Company/10428)

Allco has over A$ (http://en.wikipedia.org/wiki/A$)4.3 billion in assets, and has financed over A$60 billion of transactions. In its most visible public transaction Allco was a part of Airline Partners Australia (http://en.wikipedia.org/wiki/Airline_Partners_Australia), the consortium that unsuccessfully attempted to buy Qantas (http://en.wikipedia.org/wiki/Qantas). The company is now in liquidation, after previously being in administrative receivership (http://en.wikipedia.org/wiki/Administrative_receivership), following difficulties in refinancing debt and a share price fall of 99% since the beginning of the subprime mortgage crisis (http://en.wikipedia.org/wiki/Subprime_mortgage_crisis).[1] (http://en.wikipedia.org/wiki/Allco_Finance_Group#cite_note-bankrupt-0)Allco Finance Group - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Allco_Finance_Group)

Barbara has chosen not to mention Allco or APA on her CV at L.E.K. Consulting.
Advisory Board - Australia/New Zealand | L.E.K. Consulting (http://www.lek.com/advisory-board/australia)

[600ft-lb]

These interesting connections just about deserve their own thread

[The Black Panther]

Independent Non-Executive Director


Garry Hounsell was appointed to the Qantas Board in January 2005.
He is Chairman of the Audit Committee and a Member of the Nominations Committee.
Mr Hounsell is Chairman of Investec Global Aircraft Fund.

Investec Bank Australia Ltd has launched a global fund to lease aircraft to airlines around the world.
The Australian arm of Investec Group, a specialist banking group operating mainly in South Africa and the United Kingdom, says the Investec Global Aircraft Fund would tap into long-term growth in commercial travel to generate returns for investors.....the fund's initial assets, three Airbus A321s, will be leased by Qantas Airways Ltd for use by its offshoot, Jetstar.Investec launches global aircraft fund (http://news.smh.com.au/business/investec-launches-global-aircraft-fund-20080401-22xj.html)

All these coincidences remind me of something

"What a coincidence, Dierdre Chambers!"
YouTube - &#x202a;muriels wedding deirdre chambers&#x202c;&rlm;

[The Black Panther]

Independent Non-Executive Director

Richard Goodmanson was appointed to the Qantas Board in June 2008.
Previous to 1999, he was President and Chief Executive Officer of America West Airlines.

America West was one of the first airlines to use extensive "cross-utilization", in which employees were trained in a variety of airline jobs, such as pilots trained in dispatch, and both baggage handlers and flight attendants being trained as gate agents. America West also started as a "full service" airline, in contrast with Southwest Airlines (http://en.wikipedia.org/wiki/Southwest_Airlines), the discount air carrier competing in many of the same markets. America West also utilized an aggressive employee stock ownership program, in which new employees were required to invest 20% of their salary in company stock, providing a steady flow of cash as the company grew.America West operated in bankruptcy from 1991 to 1994. As part of its restructuring, the employee stock became worthlessAmerica West's flight attendants also unionized in 1993, a move which ended the cross-utilization between customer service agents (http://en.wikipedia.org/wiki/Customer_service_representative), flight attendants, and ground agents. Many maintenance and training functions that were previously operated by America West in-house were also outsourced during the bankruptcy.

[Oldmate]

Having looked through the connections of the board members above, and through some google searches, I am wondering whether General Cosgrove might be the man to petition. Also wondering if he may already be behind the rumoured dissension amongst the Qantas board.

A proud Australian, with a distinguished military career, a history of showing courage and leadership, and no obvious connections to the vultures that are circling our national icon.

I am sure the General is not naive to the impact Qantas' failure would have on the Australian economy, the 35000 loyal staff, and our national pride.

I am happy to be corrected if he is not the man for the job, but in the meantime I think I will draft him a letter.

[gobbledock]

Allco has over A$ (http://en.wikipedia.org/wiki/A$)4.3 billion in assets, and has financed over A$60 billion of transactions. In its most visible public transaction Allco was a part of Airline Partners Australia (http://en.wikipedia.org/wiki/Airline_Partners_Australia), the consortium that unsuccessfully attempted to buy Qantas (http://en.wikipedia.org/wiki/Qantas). The company is now in liquidation, after previously being in administrative receivership (http://en.wikipedia.org/wiki/Administrative_receivership), following difficulties in refinancing debt and a share price fall of 99% since the beginning of the subprime mortgage crisis (http://en.wikipedia.org/wiki/Subprime_mortgage_crisis).[1] (http://en.wikipedia.org/wiki/Allco_Finance_Group#cite_note-bankrupt-0)

And here lays the problem. These clowns and their zealous desire to fill each others pockets with ludicrous amounts of wealth at any cost and recklessly are one of the driving forces behind the current economic disaster swallowing the globe. If the same mentality and mindset is driving QF then folks the Rat is doomed....

[QFinsider]

And Jimmy Bowtie has a very artistic son. who just happens to be an Industrial lawyer at....

FREEHILLS

Didn't Dixon retain them as QF lawyers and his own personal mouthpieces?
The very same firm Gary Hounsell works for....

these clowns think we are silly.

[QFinsider]

Mods!

This does deserve its own thread..

QF board and its self serving failure to act in a fiduciary capacity..

[600ft-lb]

The smartest people in the room have just caused an Australian company thats 140 years old to go broke.

MORE than 1000 people are set to lose their jobs as 140 outlets in the Colorado clothing group close in a major restructure.

The debt-ridden Colorado Group was placed in administration in March after lenders rejected a proposal to allow it to continue trading.
Colorado, which owes about $400 million to a syndicate of 18 financiers, has 434 stores across Australia and New Zealand and 3800 staff.

Read more: Colorado restructure leaves 1042 people without jobs after restructure | News.com.au (http://www.news.com.au/business/plus-jobs-to-go-in-colorado-closures/story-e6frfm1i-1226075156829#ixzz1PFSuOmNc)




And where did the owing of $400 million come from to the syndicate of 18 financiers ?

2006
ARH Investments (Australia) Pty Ltd becomes majority shareholder


2007
Colorado de-lists


Who is ARH ?



ARH Holdings (Australia) Pty Ltd is an Australian foreign-owned proprietary company which wholesales and retails footwear and apparel. The company employs over 3,600 people in Australia and New Zealand, and is administrated from its head office in South Brisbane. The company is a wholly-owned subsidiary of Affinity Equity Partners, a Hong Kong-based private equity group.
At the end of March 2011, the company entered voluntary administration when its lenders rejected the company's restructuring proposal. ARH's lenders appointed Ferrier Hodgson as Receiver.


Who are they owned by ?

Affinity Equity Partners is one of the largest dedicated Asian private equity (http://en.wikipedia.org/wiki/Private_equity) firms and focuses on leveraged buyout (http://en.wikipedia.org/wiki/Leveraged_buyout) and growth capital (http://en.wikipedia.org/wiki/Growth_capital) transactions. Affinity invests primarily in companies that produce consumer-related goods and services as well value-added manufacturing, healthcare, financial services, and business services companies.
Among Affinity's notable investments are the following:


Colorado Group Limited (http://en.wikipedia.org/wiki/Colorado_Group_Limited) – an Australian company that operates a chain of clothing retailers acquired by Affinity in a hostile takeover (http://en.wikipedia.org/wiki/Hostile_takeover) in 2006 (http://en.wikipedia.org/wiki/2006).[3] (http://en.wikipedia.org/wiki/Affinity_Equity_Partners#cite_note-2)



And why did Colorado go broke ?

At the time, Affinity director Brett Sutton argued the unusually aggressive approach in the $430 million deal was needed following four profit downgrades and a massacred share price.
Today, lenders to Colorado, who are owed a total of $440m, are contemplating whether a similar approach is called for once again. In the next 48 hours, the senior lending group, led by National Australia Bank, Mizuho and Rabobank, are expected to make a decision on the future of the company, following the expiry yesterday of an extension on debt covenants.


And there you have it, a company bought with loans that the buyer used the assets of the company they were trying to buy to back it up... All the while exorbitant "fees" would've been paid, by Colorado, to facilitate its own takeover by some private equity vultures.

I can assure everyone that the private equity fund isn't left high and dry by bleeding this company's money.

This is how the people who come from these fancy financial 'service'... more like 'leech' backgrounds think. A successful company is there to make them rich. It will make them rich, it will make the consultants rich, it will make the management involved in the buyout rich.

It's a (somehow) legal form of asset stripping of a public company.

I think the Colorado story is VERY VERY relevant to Qantas. Especially seeing who is 'running' the company.

[FlareArmed]

One of the starkest examples of the efficiencies of low-cost airlines is the comparison between the defunct Ansett Australia and low-cost operator Virgin Blue's passenger uplift/staff ratio. According to Virgin Blue figures the airline will carry more passengers than Ansett on major Australian domestic truck routes for the year ending 31 March 2004, with only a third of the staff. The two airlines' RPM/RPK figures are almost identical, however Virgin Blue only has 3,300 staff compared with the 10,000 staff that Ansett employed for its domestic trunk route division.

To be fair, Ansett had mostly in-house what Virgin Blue outsources. Ansett had massive engineering facilities, in-house IT, their own simulator centre (not shared), call centre, walk-in travel agencies and so on. Saying that Virgin Blue does the same job with a third of the staff is stretching the truth.

[600ft-lb]

Barbara Ward - Board Member of Allens Arthur Robinson.

Examples of leveraged acquisition finance work in which Allens Arthur Robinson have recently been involved include:

Qantas
Acted for the independent directors of Qantas in reviewing and analysing the acquisition funding of the A$11.1 billion takeover bid of Qantas by Airline Partners Australia.

Colorado Group
Acted for Credit Suisse and Mizuho, the arrangers and underwriters of Affinity Equity Partners' A$430 million leveraged buyout of Australian clothing retailer, Colorado Group.

[hadagutfull]

:yuk::yuk::yuk::yuk:

DISGUSTING!!!

for :mad: sake!!!!! :ugh::ugh::ugh:

[Sunfish]

But wait, there is more, and it gets better:...............


Garry Hounsell was appointed to the Qantas Board in January 2005.

He is Chairman of the Audit Committee and a Member of the Nominations Committee.

Mr Hounsell is Chairman of Investec Global Aircraft Fund.

"Investec Bank Australia Ltd has launched a global fund to lease aircraft to airlines around the world.

The Australian arm of Investec Group, a specialist banking group operating mainly in South Africa and the United Kingdom, says the Investec Global Aircraft Fund would tap into long-term growth in commercial travel to generate returns for investors.....the fund's initial assets, three Airbus A321s, will be leased by Qantas Airways Ltd for use by its offshoot, Jetstar.


And the CEO of Investec in Australia is.... (drum roll)....David Clarke, former CEO of ALLCO.


The Mayne Report - Members Update (http://www.maynereport.com/articles/2009/04/21-1234-6826.html)



My, we are a tight little group, aren't we?

[Sunfish]

Then we have Global Aviation Asset Management - GAAM


........and it has Geoff Dixon, Peter Gregg and David Coe (formerly Allco) on its advisory Board.


...and Qantas is a customer.

[The Black Panther]

in·de·pend·ent

–adjective
1. not influenced or controlled by others in matters of opinion, conduct, etc.; thinking or acting for oneself: an independent thinker.
2.not subject to another's authority or jurisdiction; autonomous; free (http://dictionary.reference.com/browse/free): an independent businessman.
3.not influenced by the (http://dictionary.reference.com/browse/the) thought or action of others: independent research.

Independent | Define Independent at Dictionary.com (http://dictionary.reference.com/browse/independent)

[Sunfish]

Barbara Ward is/was on the advisory Board of LEK consulting.

..And what do we find?


Airline Consolidation: L.E.K. was the only strategic advisor on the world’s largest airline merger. In fact, our pedigree in airline mergers and acquisitions (M&A) goes back nearly 20 years with the highly successful merger between Qantas and Australian Airlines. Since then we have been called upon to assess most airline M&A opportunities.


Airlines - L.E.K. Consulting, a Global Business Strategy Consulting Firm | L.E.K. Consulting (http://www.lek.com/industries/airlines)

[Sunfish]

What do you reckon? When Singo and Dixon have finished stitching up Sydney Ferries, the time will be right for QF to sell the international and domestic operations (sorry, the business speak is "divestiture of non performing assets") and leave the punters owning just Jetstar and not much else.

The banker boyz are in the drivers seat and everyone had better get out of the way.

APA - the zombie rises again. They are either going to franchise the Qantas name using the model they are working up for the Sydney Ferries takeover or split the business and sell the brand to private equity.

Whatever they do, I'm sure it will all be perfectly legal and above board, I'm just speculating.

[ejectx3]

Can someone please put this in a flowchart it's gettting hard to follow. Would make an interesting picture.

[stewser89]

As interesting as it may be. Isn't this what happens with most companies or is it just limited to Qantas.

Gooddamm they are all in the bed with each other.

[Sunfish]

Directors are supposed to act in the best interests of all shareholders.

While I am sure what Qantas is doing is perfectly legal, one wonders at the links to potential service providers.

I may be wrong, but I thought that Corporate Governance standards required that conflicts of interest were to be avoided, however, I'm sure that QF has gold plated legal advice to justify everything it has done.

To put it another way, I get the impression, perhaps wrongly, that we are looking at a very exclusive little private club.

[speeeedy]

AAP 13th Sept 2010:

Former Qantas Airways Ltd chief financial officer Colin Storrie has joined the investment committee of Investec's Australian-based global aircraft fund (IGAF).

Mr Storrie spent 13 years at Qantas but left in March after 18 months as chief financial officer, citing personal and health reasons.

His appointment to IGAF, announced on Monday, coincided with Investec's launch of a third capital raising for its aircraft fund.

IGAF executive David Phillips said Mr Storrie's experience in aircraft financing would bring significant expertise to the group when it considered investment opportunities with airlines around the world.

Funds raised by Investec, a specialist bank and asset manager, would be used to invest in "high-demand, new-generation commercial aircraft on lease to tier-one and tier-two airlines", Investec said.

"IGAF is currently executing a number of new aircraft acquisitions, aiming to have a portfolio of aircraft of up to $US1 billion ($A1.08 billion) within the next 12 months," it said.

[assasin8]

Did someone say "Hungry Beast"?

[stewser89]

Its finished for the year assasin

[FGD135]

The fact remains however, that of the $2000 most people pay to go to London and back, $40 of that ends up in the pockets of the flight crew.

Yes, but how much has to go to those pilots back home that are standing around the BBQ?

It could not be an insignificant amount. If it were insignificant, there would be no issues with the offshoring and concerns about future profitability.

Some here are insisting that Qantas pilots are only paid for the flight hours they do, but it has come to light that they are also paid when:


... on Blank lines and reserve and training courses ...


and


... if they are not utilised on a reserve line.



How about when sick, or on annual leave?

The proof of the pudding would come from the following calculation:

Multiply actual flying hours for the past year by hourly rate. Call the result "flight pay".

Subtract flight pay from gross income for the year. Call the result "extra income".

How much "extra income" did you get? I would particularly like to see this figure for a captain.

No need to give actual figures on this public forum - just express the extra as a percentage of the gross - or PM me with the actual figures.

Thanks in advance.

[Keg]

Working a 'normal' year, $1.30 per pax, per hour for a 767 captain. If you include the fact I get paid to do my checks, $1.33.

Given that we've had a couple of quiet years, it works out to $1.41 per pax, per hour.

I don't think the pilots should be held accountable that they're not flying 'normal' hours at the moment. The stuff ups in establishments are a function of crap management. Yes, that would be costing Qantas a bit extra at the moment- hard to say how much- but none of us particularly like being unproductive.

FGD, you're trying to build a straw man. Our hourly rate isn't a stick hour rate. It's a 'credit hour' which is a completely different thing. The 'premium' that you're trying to grasp not really relevant in a credit hour system. Colleagues of mine have done less stick hours than me but they've done more standby duties protecting the operation and thus have been paid more.

[The Black Panther]

Extract from The Qantas business practices document.
http://www.qantas.com.au/infodetail/about/corporateGovernance/BusinessPracticesDocument.pdf

Managing conflicts of interest
Employees must not directly or indirectly have an
equity interest in, or a significant beneficial
connection with, any business or individual which
competes with or is a supplier to the Qantas Group
without the prior consent of the CEO or his nominee.
Employees must not engage directly or indirectly in
any outside business activity involving commercial
contact with, or work for the benefit of, Qantas Group
commercial customers, suppliers or competitors
without the prior consent of the CEO or his nominee.What's their out? "Prior consent of the CEO"

[noip]

FGD,

Give it a rest. You just do not understand what you are talking about. There is no hidden pot of gold. Pretty well all you have brought up there I have covered before in my answers.

N