Qantas tie up with Malaysian Airlines from 1st April [Archive]

TheWholeEnchilada

2nd Mar 2012, 06:04

or as Jeremy Grantham succinctly put it in his latest newsletter: The Longest Quarter Ever (www.gmo.com/websitecontent/JGLetter_LongestLetterEver_4Q11.pdf)
In the last 20 years, corporate ownership began to look odd. The nominal owners – stockholders – typically traded every few months and took on the part of institutions, with little or no interest in corporate affairs, with the result that corporate officers appeared to own the companies and behaved accordingly. Stock option programs transferred ownership from shareholders to managers in giant dollops and were awarded on short-term results. One consequence of this was a distorted incentive that encouraged leverage and other forms of going for broke with other people’s money. Boards of Directors demonstrated little timely intervention and typically only found their claws in situations of complete disaster, when it was too late. Total remuneration in the U.S. for senior officers, unopposed by typical boards, rose as a percentage of the average worker’s pay from 40 times in Eisenhower’s era to over 600 times today, with no indication of any general improvement in talent. Few rewards were carefully related to long-term results.

Pretax income inequality rose in most countries and was offset by tax adjustments in very few. In the U.S., oddly, the tax changes accentuated the shift. Such an increase in inequality was caused by all of the benefits of the substantial productivity flowing to a few, while the average hour’s pay stayed unprecedentedly unchanged for 40 years!

noip

2nd Mar 2012, 06:59

If my memory serves me correctly, another of their customer's aircraft was written off as a result of damage done during painting ..... I seem to remember it being reported on pprune ...

N

international hog driver

2nd Mar 2012, 07:27

OEC & OED were collectively known as the ugly sisters, OEB came from Asiana about the same time, but being Korean she was not so ugly:E

Tidbinbilla

2nd Mar 2012, 08:02

Let's get back on topic, thanks.

D'pirate

2nd Mar 2012, 08:25

Given Air Asia's apparently growing involvement in MAS's future then this could lead to something very interesting-Tony F "controlling" QF and/or Jet*? :ooh:

Maybe time to "Scoot" :E

DrPepz

2nd Mar 2012, 09:17

Qantas' Asian flight partner weighed down
Andrew Cleary
March 02, 2012
The Australian Financial Review Edition: First
Copyright 2012. Fairfax Media Management Pty Limited.

Qantas Airways' entry into Asia via a new premium carrier could suffer further delays after potential partner Malaysia Airlines said it was "in crisis" following a fourth consecutive quarterly loss.

The Malaysian national carrier reported a net loss of 1.28 billion ringgit ($395 million) in the final three months of 2011, prompting the airline's new management team to step up cost-saving measures. Malaysia Airlines is retiring old aircraft, withdrawing from more long-haul routes and potentially delaying aircraft deliveries to save money.

Qantas has turned to the exact same cost-cutting measures as it looks to trim capital expenditure that has been running ahead of free cash flow. The Australian carrier has been in detailed talks with the airline regarding a joint venture for a premium airline in Kuala Lumpur.

The plan under discussion involves the new airline starting with a fleet of Airbus A330 aircraft coming from scheduled deliveries to Malaysia Airlines, with Qantas's initial investment to be kept to a minimum and the newly created entity to sit off balance sheet.

Malaysian chairman Tan Sri Md Nor Md Yusof said the company was confident it had the right business plan in place to "bring the necessary sacrifices to ensure a turnaround and recovery", while acknowledging the airline's precarious financial position.

"The results make for unpleasant reading. The company is in crisis," he said on Wednesday.

Analysts who have met with Qantas chief executive Alan Joyce since the company's first-half results last month said they were told any new airline could be between six to 18 months away depending on which option the company chooses.

Analysts said Mr Joyce again stressed that whatever form the airline joint venture took, it would be a "capital light" solution requiring minimal start-up investment from Qantas.

"Malaysian is in trouble. Qantas may want a capital-light option, but how is this new airline going to get any capital when the partner also doesn't have any to put in?" asked one of the analysts.

Commonwealth Bank of Australia analyst Matt Crowe said Qantas had to stay focused on a partnership with Malaysia because its options in the region were limited.

"Virgin [Australia] has nabbed the prettiest girl at the dance with Singapore [Airlines]," Mr Crowe said.

"An alliance is the right strategy for Asia, Qantas can't do it on their own. But of course you'd rather have a financially healthy partner."

Qantas is committed to establishing a new airline in Asia from which it can add routes into the booming markets of China, India, and elsewhere in Asia that it is unable to competitively service direct from Australia. While the pace of talks in Kuala Lumpur has slowed in recent months, a deal with Malaysia Airlines remains the company's focus.

How.... How do the words "premium airline" and "Kuala Lumpur" actually come together??!

The Green Goblin

2nd Mar 2012, 09:21

I don't get why Cathay is overlooked?

Unless of course they know the saying of irishmen in suits :p

73to91

2nd Mar 2012, 10:17

Right now, it's worth posting this once again.

Thus Spake Mungo #10 - YouTube

KABOY

2nd Mar 2012, 12:13

I don't get why Cathay is overlooked?

CX is dancing with a girl called Air China, and that my friend is Alan's wildest dream.

Honestly, why would Cathay discuss anything with QF when the world's biggest market is on their doorstep.

empire4

2nd Mar 2012, 12:20

MAS just posted a full year LOSS of $835,000,000 USD. Yes, you read that correct. Eight hundred and thirty five million dollars US. What an absolute joke. I can not believe anyone in their right mind would partner them when their own Chairman says "the airline is in crisis".

TID EDIT

VBPCGUY

3rd Mar 2012, 00:52

Its like Mercedes Benz doing a partnership up with Daewoo

LAME2

3rd Mar 2012, 01:30

Didn't Mercedes Benz do a dance with Sangyong?

Didn't last too long.

chuboy

3rd Mar 2012, 02:14

So who is Mercedes-Benz in this case? :E

ITman

3rd Mar 2012, 02:17

Jack Ranga

3rd Mar 2012, 02:22

I can not believe anyone in their right mind would partner them when their own
Chairman says "the airline is in crisis".

:D lol, well done Joyce (Australian for d!ckhead) love ya work :D That's why you get paid the big dollars?

Toruk Macto

3rd Mar 2012, 02:29

How to make Qantas look good - place it beside an ugly one !

DrPepz

3rd Mar 2012, 03:04

From Today's Straits Times:

Anyway, Qantas has one sham structure in Singapore through Jetstar Asia. Why should they be given another AOC for yet another sham structure?

Plan for Qantas premium carrier still up in the air
Little progress on proposed start-up to be launched in Singapore or KL

Published on Mar 3, 2012

By Karamjit Kaur, Aviation Correspondent
SIX months after Qantas said it intended to launch a new premium carrier in either Singapore or Kuala Lumpur, plans appear to have stalled.

Some industry watchers now say it is unlikely they will ever take off.

The Australian flag carrier had said at the time that the new carrier would boost its ailing international business. It would have its own name and brand but leverage on Qantas' strengths in areas such as aviation safety, customer experience, finance and marketing.

The start-up would operate within the region, and Qantas said then that it was looking to house the new entity possibly in Singapore or KL.

However, sources say, Qantas has not been able to convince the authorities here to give it the go-ahead.

Qantas had gone as far as to engage Ogilvy & Mather for the branding and marketing of the prospective new entity but recently pulled the plug on the project, The Straits Times learnt.

Neither the airline nor Ogilvy & Mather would comment when contacted.

A spokesman for the Civil Aviation Authority of Singapore (CAAS) said there has been 'informal dialogue' with Qantas to discuss Singapore's regulatory framework and general considerations in assessing any proposal to set up a Singapore-based carrier.

She did not divulge more but said that in assessing any application for a licence to start an airline in Singapore, the Transport Ministry and the CAAS will consider the operator's ability to provide safe public air transport 'as well as the extent to which it will bring value to Singapore's air hub'.

Industry watchers said that while Singapore maintains an open air policy, it does not necessarily mean that the more airlines there are, the better.

If a newcomer ends up just taking away existing market share from incumbents without growing the pie, Singapore does not gain.

Mr Shukor Yusof, an aviation analyst at Standard & Poor's Equity Research said: 'What's in it for Singapore to have Qantas based out of Changi? For one thing, the premium airline would compete directly with Singapore Airlines, which has already been experiencing weaker profits in its recent quarters.'

The opportunities are in the low-cost travel segment and not the premium market Qantas is eyeing, he said.

As for launching the start-up in Kuala Lumpur, Qantas does not seem to be interested. Mr Mohamed Yunus Charlie Charrington, director of the air transport division at Malaysia's Department of Civil Aviation, told The Straits Times recently that the Australian carrier has not been in touch with his office.

He said: 'We have not had any discussions with Qantas on this issue. Not even a phone call.'

Getting the green light from the Singapore authorities is not the only challenge for Qantas. The carrier, which is losing more than A$200 million (S$270 million) a year in its international operations, needs to review its business, industry watchers said. One option is to move part of its operations to Asia, where costs are about 20 per cent lower.

Being in the heart of the fastest-growing air travel market in the world will also help Qantas boost its business and bottom line, they said.

But unions back home are stopping the airline from doing this. They worry that an Asian-centred restructuring will result in jobs leaving Australia.

Their unhappiness led to a bitter industrial dispute which culminated in a decision by Qantas to ground its entire fleet last October. The 46-hour shutdown affected nearly 100,000 passengers around the world, including in Singapore.

The Australian Parliament is now considering a Bill put forward by independent Senator Nick Xenophon to tie Qantas to Australia.

The airline's chief, Mr Alan Joyce, has warned that if the Bill - which aims to force Qantas to keep its headquarters and the majority of its maintenance, flight operations and training in Australia - is passed, it will pose a 'major threat' to the airline's business and to jobs.

Even as it continues to battle the opposition, Qantas insists it has not dropped plans for a premium Asian start-up.

A spokesman told The Straits Times that the airline is not able to provide more details at this time because it is still in talks with potential partners.

[email protected]

peuce

3rd Mar 2012, 20:49

The airline's chief, Mr Alan Joyce, has warned that if the Bill - which aims to force Qantas to keep its headquarters and the majority of its maintenance, flight operations and training in Australia - is passed, it will pose a 'major threat' to the airline's business and to jobs.

Hasn't anyone in Qantas ever done a SWOT analysis?

Is it not possible to convert that "Threat", of being "forced to be Australian", into a gazillion Opportunities?

I'm sure even a 1st year MBA would be able to come up with a few :ugh:

Bad Hat Harry

3rd Mar 2012, 22:19

Qantas management have applied this to their employees.

TIMA9X

8th Mar 2012, 18:53

Noticed in the Singapore Straits Times today that the government here can see no advantage in allowing QF to set up a base in Singapore, competition to suffering SQ and the up coming Scoot. Looks like that they had no choice but to go Malaysia........ 3rd Mar 2012 10:14Seems that way.....

Singapore Changi’s decision to close budget terminal could backfire as need for third runway grows | CAPA (http://www.centreforaviation.com/analysis/singapore-changis-decision-to-close-budget-terminal-could-backfire-as-need-for-third-runway-grows-69323)

Singapore Changi’s decision to close budget terminal could backfire as need for third runway grows

Singapore Changi Airport (http://www.centreforaviation.com/profiles/airports/singapore-changi-airport-sin) has taken the unusual decision to demolish its relatively new low-cost carrier terminal and build a larger hybrid terminal in its place. The closure of Changi’s Budget Terminal in Sep-2012 will result in the airport’s total handling capability shrinking by 10% during what could prove to be a challenging four-year period before the new hybrid Terminal 4 opens. Singapore (http://www.centreforaviation.com/profiles/airports/singapore-changi-airport-sin) also faces a pressing need to decide on the opening of Changi’s third runway, which is now only available to military aircraft, if it wants to stay ahead of the growth curve. Growing LCC operations have seen aircraft movements grow higher than passenger numbers.
A third runway and even a fifth terminal will eventually be needed for Singapore (http://www.centreforaviation.com/profiles/countries/singapore) to maintain its status as a leading hub. Singapore and Changi have always made the investments to ensure there is plenty of space for growth and first class facilities for passengers. But the highly profitable airport has come under scrutiny over the last year: first for its unusual decision to start charging a tax for transit passengers and now for its decision to close its Budget Terminal only six years after it opened.

Changi currently has capacity to handle 73 million passengers p/a. With the Budget Terminal closing, this will drop on 25-Sep-2012 by 7 million passengers p/a to 66 million (although last year the Budget Terminal operated at 66% of capacity, handling 4.6 million). The replacement Terminal 4 will be designed to handle 16 million passengers p/a, boosting total capacity to 82 million passengers by 2017.
...it will have more “passenger amenities,”...
T4 will be built without aerobridges but Changi says it will have more “passenger amenities,” including a wider selection of retail, food and beverage options than the Budget Terminal it replaces. While this will appeal to passengers, Changi will benefit from increased non-aeronautical revenue, which often comprises the largest source of revenue for airports.
The new terminal is also expected to accommodate widebody aircraft, something the current Budget Terminal cannot support and had become an issue because new Singapore Airlines (http://www.centreforaviation.com/profiles/airlines/singapore-airlines-sq) low-cost long-haul carrier Scoot (http://www.centreforaviation.com/profiles/airlines/scoot) is interested in an LCC terminal option but will launch operations in the next few months from T2. More details on T4 will be released in the coming months and construction is expected to start next year.
Meanwhile over in KL, new management for MH... go for it AJ

NBzGa0XQsxY

.

TIMA9X

8th Mar 2012, 21:56

Capt Kremin

8th Mar 2012, 22:09

Sack the people who floated the silly idea in the first place. If ever there was proof positive that Joyce is incompetent...

esreverlluf

8th Mar 2012, 22:26

Absolutely agreed Kremin - the sooner they get rid of this bunch of clowns the better!:ugh::ugh::ugh::ugh::ugh::ugh::ugh::ugh:

dragon man

8th Mar 2012, 22:36

The cupboard is bare the emperor has no clothes:D Will the board sack the goose?

TIMA9X

8th Mar 2012, 22:46

Qantas has conceded that talks with Malaysia Airlines about setting up an ultra-premium airline in Asia have broken down because the two airlines have been unable to agree on the commercial terms.
Qantas shares (http://markets.businessday.com.au/apps/qt/quote.ac;jsessionid=DA2B520AA54A76813B289AD46876E67A?code=qa n&section=summary&submit=) were down 4.5 cents, or 2.6 per cent, in early trading to $1.68, while the broader market was up 0.4 per cent.
In a brief statement today revealing the failure to cement a deal, the chief executive, Alan Joyce, said Asia remained a priority for Qantas and it "continued to explore opportunities in the region, including joint ventures and alliances".

"The transformation of Qantas's international business remains vital," he said.
But he again emphasised that any investment in Asia would be on the basis that Qantas will allocate "minimal capital to such ventures".
The statement today does not give any detail on why the talks have broken down, other than to say the parties airlines were "unable to reach mutually agreeable commercial terms".
But their failure is not a surprise as Mr Joyce emphasised as recently as last month that his plans for a premium airline were "hugely complex", and the hurdles high.
Malaysia Airlines also warned last week that it was "in crisis" following the release of a fourth consecutive quarterly loss.
The plans to set up an ultra-premium carrier were part of a four-pillar strategy aimed at turning around Qantas's international operations.

Read more: Qantas's Asian plans stall after talks fail (http://www.smh.com.au/business/qantass-asian-plans-stall-after-talks-fail-20120309-1uo7y.html#ixzz1oZWhdsF5)

AJ, LC time to go. we need a new team who care about the core product....

73to91

8th Mar 2012, 22:47

In a brief statement today revealing the failure to cement a deal, the chief executive, Alan Joyce, said Asia remained a priority for Qantas and it "continued to explore opportunities in the region, including joint ventures and alliances".

"The transformation of Qantas's international business remains vital," he said.

But he again emphasised that any investment in Asia would be on the basis that Qantas will allocate "minimal capital to such ventures".

Read more: Qantas's Asian plans stall after talks fail (http://www.smh.com.au/business/qantass-asian-plans-stall-after-talks-fail-20120309-1uo7y.html#ixzz1oZWptO42)

But he said the airline would only allocate minimal capital to such ventures - the so called "capital lite" model - because of economic uncertainty and the Qantas focus on disciplined financial management.

Cookies must be enabled. | The Australian (http://www.theaustralian.com.au/business/aviation/asia-remains-priority-says-joyce-as-qantas-calls-off-talks-mas/story-e6frg95x-1226294613401)

vitamin B

8th Mar 2012, 23:00

Has the title/date of this thread any significance??

vB

1A_Please

8th Mar 2012, 23:11

So management has spent thousands of hours and millions of dollars on a pipedream that Blind Freddy could have told them was never going to get anywhere and to add insult to injury they announce they are still keen to pursue this strategy with someone else but only on a capital-light basis.

:ugh:In other words they are looking for a premium Asian airline who is happy to share their profits and not expect any investment in return....tell 'em they're dreaming!!!

The only upside in all of this is that whilst management was wasting their time on this, they couldn't think up any more daft plans that would further $cr*w up the company.

SpannerTwister

8th Mar 2012, 23:19

Qantas and Malaysia Airlines have decided to end talks on a partnership as the parties were unable to reach mutually agreeable commercial terms.
Advertisement: Story continues below
More on that too, shortly.

Read more: Markets Live: Share to gain on Greece deal (http://www.smh.com.au/business/markets/markets-live-share-to-gain-on-greece-deal-20120309-1uo4e.html#ixzz1oZKBqCkX)
10.36am: Actually Qantas now the second-worst performer in top 200 stocks (off 2.6%).On a dead serious note, it must be asked what are Joyces KPI to keep his job / get his bonuses ?

It's not the share price gain.

It's not the dividend returns to investors.

And it appears now that it's not the foresight / planning for an overseas airline tie-up.

Apart from slash and burn, just WHAT has he done that are his "metrics" to deserve to keep his job ?

ST

DirectAnywhere

8th Mar 2012, 23:55

What a bunch of knobs. Seriously.

maggotdriver

9th Mar 2012, 00:12

A board and a CEO who don't trust their own staff, yet trust people like Fernandez and the market so much, they'll tell everyone what they're doing before its done. What a bunch a f...ing lightweights!:yuk:

ohallen

9th Mar 2012, 00:13

So Twiggy Forrest gets hammered by ASIC for announcing a deal that was/wasnt, so where is the scrutiny of this announcement?

Surely it was just a coincidence that company was involved in serious industrial disputes on multiple fronts which could have affected share price and then mysteriously this dream was floated as a diversion.

Maybe now the investment banks will rethink their support for Board and Execs.

DEFCON4

9th Mar 2012, 00:16

One attribute that any decent CEO must have is the ability to create and/or identify opportunities and implement them .Joyce fails miserably in this regard.The whole concept of a " capital lite" venture is laughable.Who in their right mind would contemplate a joint venture with a company whose management is held up to so much ridicule.Qantas has absolutely nothing to offer anyone.They need to be creative and provide their own opportunities.The vaccuum at the top indicates that this is impossible,improbable and unlikely.
The Exco of Qantas is receiving monies under false pretences.

piston broke again

9th Mar 2012, 00:18

The writing is on the wall for Joyce...it spells 'Y.o.u.'r.e. s.a.c.k.e.d.!''

Shark Patrol

9th Mar 2012, 00:58

Stay tuned for the leprechaun's next brainwave. Maybe something like:

"With Europe set to re-emerge from financial problems soon, we are keen to establish a capital-light venture with either Air France/KLM, Olympic or Alitalia to generate the funds necessary to allow us to rebuild our own longhaul mainline operation (which, of course, is our main priority)."

The clowns that run Qantas and sit on the the board must GO!!!

Captain Gidday

9th Mar 2012, 01:19

The writing is on the wall for Joyce...it spells 'Y.o.u.'r.e. s.a.c.k.e.d.!''
Not the way it works in the modern Qantas, AKA 'Disneyland for Consultants'.
Up closer the writing actually says 'You're sacked.... all of you in longhaul'.

[Great party while it lasted, though].

piston broke again

9th Mar 2012, 01:22

Wishful thinking for all concerned in Australian aviation...I'm allowed to dream!

denabol

9th Mar 2012, 01:22

Some strong stuff here:

Qantas Red Q is officially Dead Q as we've known for a while | Plane Talking (http://blogs.crikey.com.au/planetalking/2012/03/09/red-q-is-dead-q-but-weve-know-that-for-a-while/)

I don't know anything about how to fly a jet, leave that to the son-in-law, but I do know how companies work, and I think Joyce will get the heave ho very soon.

Coppabella

9th Mar 2012, 01:32

Unbelievable way to run a great Australian company.
We can only hope there is radical change to the poisionous culture we deal with on a daily basis.

The Green Goblin

9th Mar 2012, 01:47

AJ will come out as clean as Olivia's undies.

It will be the minions below him that will face the blow torch aka management 101.

He was only acting on flawed advice from his 'advisors' who had not done the proper risk analysis nor identified the correct partners to move forward. These advisors will of course no longer be required.

You could also buy into conspiracy theories and EBA negotiation tactics along with sympathetic political interests when outsourcing and Asia are announced.

Not good for politics.

Meanwhile Rome is burning and the equipment to fight the fire has not been provided to the troops.

Cactusjack

9th Mar 2012, 02:05

AJ will come out as clean as Olivia's undies.
mmmmmm yes please. Mamacita! I wish I could buy a pair.

1A_Please

9th Mar 2012, 02:06

I suppose GT is currently sitting up in First Class on a QF freebie penning his latest article about how brilliant this latest twist in QF's strategy is!!

Taildragger67

9th Mar 2012, 02:20

10.36am: Actually Qantas now the second-worst performer in top 200 stocks (off 2.6%).

I'm amazed anyone actually thought this was going to happen seriously enough to put cash on it... :hmm:

moa999

9th Mar 2012, 02:46

Frankly as a Qantas frequent flyer I am disappointed in this, as the logical conclusion of this I expect to be the continued expansion of Jetstar, and the wittling back of Qantas International.

Having a base in Asia would have hopefully supported routes from Perth, Adelaide, Brisbane and more connections. Without it I suspect Qantas will go further down the Sydney, Melbourne only strategy

Lancelot37

9th Mar 2012, 03:12

Latest newspaper reports state "Talks ended, no result".

TIMA9X

9th Mar 2012, 04:10

Red Q is Dead Q but we’ve know that for a while

Qantas Red Q is officially Dead Q as we've known for a while | Plane Talking (http://blogs.crikey.com.au/planetalking/2012/03/09/red-q-is-dead-q-but-weve-know-that-for-a-while/)

March 9, 2012 – 11:28 am, by Ben Sandilands (http://blogs.crikey.com.au/planetalking/author/bensandilands/)

Qantas has finally told the ASX what everyone with a finger on the pulse has known for some time, that its proposed premium airline based in Malaysia is dead.

http://blogs.crikey.com.au/planetalking/files/2012/03/QF-ASX-Asia-600x320.jpg (http://blogs.crikey.com.au/planetalking/2012/03/09/red-q-is-dead-q-but-weve-know-that-for-a-while/qf-asx-asia/)

The statement leaves open the possibility of a Resurrected Q occurring somewhere else in Asia, although sources in Singapore were quick to say this was never a serious proposition from late September last year.
The cost of this proposed scheme includes cutting back on flights to London, and the reputation of a chorus line of tame analysts who failed to ask even the most fundamental questions as to how it could be that a Malaysian flag carrier, minority owned by Qantas, could be seriously claimed to be the key to funneling enough profits back to Qantas to allow it to reinvest in the full service long haul brand the current management keeps reducing in scope.
It was very plainly the wrong plan, in the wrong city (Kuala Lumpur) and with the wrong partners (Malaysia Airlines and Air Asia, which is the natural rival to its Jetstar franchise in Asia).

The statements made in support of this scheme were ludicrous. According to Qantas group CEO Alan Joyce in media interviews last year the project would feature sleeper seats bigger than those in its A380s, but in a single aisle A320s and also include a premium economy for sale over route stages that technically could never have been much longer than six hours.
The venture, which was somehow going to be controlled by Qantas, yet enjoy the flag carrier privileges of Singapore, Malaysia, China, or somewhere in Asia, was going to march in and take premium business of the likes of Singapore Airlines or Cathay Pacific.

There was also increasing confusion as to exactly what Qantas was proposing. The plan seemed to flicker back and forth between being a single aisle A320 carrier (which would include some of 110 orders or purchase options Qantas placed for more A320s) to an A330 carrier, and by the time Qantas CEO Alan Joyce announced a pathetic set of figures for the first half year results, was also a plan in which he said Qantas intended to spend as little as possible on new jets.

The first rule of doing business in Asia, which is to keep quiet until you actually have something real to talk about, was broken, as were the usual courtesies of not announcing your intention to take someone’s long established home market in the banner headlines accorded to the concept in the Australian media.

It has been a sorry spectacle, creating a text book case of how not to do business in Asia, and one that is truly astonishing given the access Qantas has enjoyed for decades to wise and experienced counsel in relation to business and governmental relations with the Asia economies.
All the while the farce has been underway, the market share of Qantas on international routes has been shrinking, all while its management has been whinging about the unfairness of competitors who actually fly faster to more places that either Australians want to fly to, or from which more visitor and business travellers want to come to Australia.
In this period the cost advantage to Qantas of a soaring Australian dollar, which has not be unavailable to any of its competitors, has been ignored or downplayed.

The Qantas statement says the airline will continue to look to alliances or joint ventures in Asia, as if this is something new. It is in fact the very least shareholders and employees and prospective travellers would have expected Qantas to be doing in the Asia-Pacific and further abroad.
In that respect the statement seeks to make a virtue from something that Qantas has always done, and in relation to its Jetstar franchise, where it has made some significant advances.

It is not just that Qantas is disadvantaged by geography, but by woeful management and a tiresome addiction to blaming everything that works against it on its employees, its unions, its competitors, and on those Australians who have deserted it.
The company deserves better.

It appears LC and the board have backed to wrong horse.... I just don't think they are up to it... blind leading the blind...

mcgrath50

9th Mar 2012, 04:43

Surely it was just a coincidence that company was involved in serious industrial disputes on multiple fronts which could have affected share price and then mysteriously this dream was floated as a diversion.

I think this is the crux of the issue here.

boocs

9th Mar 2012, 09:23

Hilarious!! Absolutely hilarious!!

b.

Keg

9th Mar 2012, 11:57

It would be even funnier if we weren't watching the demise of a great Aussie icon and the destruction of thousands of jobs. :(

PammyAnderson

9th Mar 2012, 14:06

With the money of ethiad about to come into virgin (wait to see virgin heading more and more into asia with this capital and expansion of more widebodies domestically also i predict) qantas is heading into tough tough winds I think.

TIMA9X

9th Mar 2012, 15:51

Qantas shelves Asia airline plan

QANTAS has finally ditched ambitious plans to set up a new ultra-premium airline in Asia - the centrepiece of efforts by the chief executive, Alan Joyce, to revive its international operations - after talks with Malaysia Airlines on a joint venture broke down.

In a setback to its bold gamble to expand aggressively into Asia, Qantas said the talks with Malaysia Airlines, which had warned last week that it is ''in crisis'', had faltered because they could not agree on the commercial terms for a new premium airline.

Qantas will not revisit earlier plans to set up an ultra-premium airline in Singapore because that would require a significantly larger investment of up to $500 million.

Aviation insiders have been sceptical of Qantas's plans since they were first revealed because the regulatory, political and economic hurdles to launching an airline in Asia were seen as extremely high.

The plans for a new airline - which was to be based in Kuala Lumpur - targeting Asia's fast-growing corporate market, were part of Qantas management's aim of turning around its international operations, which suffered more than $200 million in losses last financial year.

''It is a significant blow to their international strategy,'' said CBA Equities' transport analyst Matt Crowe. ''It sets back the timing of turning around their international business.''

The collapse of talks leaves Qantas desperate to find another partner in Asia to help it meet the ambitious target of turning a profit on its international operations within three years and making them meet their cost of capital within five.

Malaysia Airlines was one of the few available bedfellows in Asia for Qantas, after Virgin Australia snared Singapore Airlines as an alliance partner last year. Cathay Pacific is seen as an ideal alliance partner but the chances of securing it are seen as slim.

''This deal with an Asian carrier has already taken longer than we thought it would, and now it's almost back to square one,'' Mr Crowe said.
But Qantas insists that it can still meet its targets because a new airline would have required it to inject tens of millions of dollars, even under its so-called ''capital light'' option.

Despite the setback, Mr Joyce said Asia remained a priority for the airline and it ''continued to explore opportunities in the region, including joint ventures and alliances''. But he again emphasised that any investment in Asia would be on the basis that Qantas will allocate ''minimal capital to such ventures''.
The failure of the talks was not a complete surprise because Mr Joyce emphasised as recently as last month that his plans for a premium airline were ''hugely complex'', and the hurdles high.

Shares in Qantas slumped as much as 4 per cent yesterday before closing down 4.5¢ at $1.68.

Read more: Qantas shelves Asia airline plan (http://www.smh.com.au/business/qantas-shelves-asia-airline-plan-20120309-1uppu.html#ixzz1odds9aGt)

The collapse of talks leaves Qantas desperate to find another partner in Asia to help it meet the ambitious target of turning a profit on its international operations within three years and making them meet their cost of capital within five.Hmm, possible they need to approach what friends they have left with a little less noise ... :ouch:

.

peuce

9th Mar 2012, 20:45

And now they'll be negotiating from the position of a "desperate".

To quote a great philosopher ... "they don't have any hand"

C441

9th Mar 2012, 22:10

Unlike the employees of Qantas, this highly remunerated board and executive has little to lose should their plans for the future of the airline fail.

Until they do, incredibly risky or plain ludicrous decisions will continue to be made. It is simply "gambling with other people's money". Unfortunately there's a significant difference between gambling and investing.

How do you change this situation? I don't know.

The Green Goblin

9th Mar 2012, 23:24

The Asian culture is very homophobic.

Unleashing AJ on them is certainly not going to win them any friends.

Whilst our society is very accepting of sexual preference and lifestyle choices, it's not a good look for a CEO of an international business trying to do business in highly traditional markets like Asia.

You need an alpha male like John Borghetti who is respected by his peers and doing business with would elevate ones prestige.

Sad but true.

simsalabim

9th Mar 2012, 23:54

Quite a few years ago (when Tubby Ward was around ?) QF was considering some type of tie in with Malaysian it was decided that "cultural" differences meant it was not going to work and a 19.9% share of QF went to TE.Well nothing has changed culturally since that idea was floated . Yet Al persists in this dream and has obviously learnt nothing from history.

Jackneville

9th Mar 2012, 23:59

What the Company needs is Herb Kelleher, the antithesis of what they have.

DEFCON4

10th Mar 2012, 00:33

Its ironic that Qantas was instrumental in establishing both Sing air and MAS.
Keith Hamilton was a director on both boards.

DrPepz

10th Mar 2012, 03:09

AJ's sexuality had nothing to do with this. If an alpha male like JB went to MAS and said:

1. We want to set up an ultra premium carrier, and you have to share your allocated international rights to us

2. We will not inject most of the capital. You will do it (never mind you don't have any money) and we will hold an "in principle" 49% stake, but actually control the entire venture and you'll share half the profits with us

Would he get anywhere?

As a Singaporean working for a European company trying to get business all over Asia, I find it very difficult navigating this continent, and it's frustrating trying to figure out who's behind who in Malaysia, who actually makes the decisions, and who needs what favours and when. (Usually after favours are given, the venture is no longer profitable!)

This is a very vile continent. The sane, straightforward markets are practically just SIN and HKG with English common law, English as a working language of business and generally very straightforward ways of doing things. For my industry, as it would be for the airline industry, the problem with SIN and HKG is because they are relatively easy cities to navigate, all our competitors pile into the market and drive the cost of doing business there too high. Plus, both have a small domestic population.

In the rest of the markets in China and South East Asia, they're very complex, with different power bases, cultures, religions, languages and ways of doing things. The sphere of influence in Vietnam doesn't get you to Cambodia. That in Thailand doesn't get you anywhere in Malaysia.

I'm a born and bred Singaporean and find it so difficult to understand my South East Asian neighbours. Even Malaysia, where I have many close relatives and friends, has a very foreign way of doing business compared to Singapore - and we were once upon a time one country. If the Irish Alan Joyce could have navigated them successfully, it would have been truly amazing. Indonesia's just impossible, and China is another story altogether.

So many Singaporean companies have gone into South East Asia and China and gotten screwed big time. As a result, many Singaporean companies have diversified into the easiest nearby country to put money into, which is Australia - sometimes overpaying heavily for the privilege too!

Qantas already has a well established airline in Asia called Jetstar Asia. They've invested heavily into this airline, and it carries more passengers to and through Singapore than Tiger Airways. Jetstar Asia is profitable, Tiger isn't. Qantas in effect controls 100% of Jetstar Asia, with the local silent partner just their proxy. The Singapore government supports this structure, and has facilitated their growth through Singapore and will not be screwing them over anytime soon. SIA's marketshare through SIN is declining gradually, but the govt doesn't care so long as overall traffic grows. They should focus on growing their SIN hub than trying to establish more hubs all over the place in risky countries.

porch monkey

10th Mar 2012, 03:39

Dr's right. It wouldn't matter who came to the party and outlined a plan like that, (in someone else's backyard no less), the answer would have been the same! Fortunately for VA, Borghetti's been around the block a few times and is a lot smarter than that other ****. Not that I just blame AJ. The board let him do this ****. They are equally culpable. :mad:

DrPepz

10th Mar 2012, 03:52

And remember - when SQ in the early 2000s went screaming to the Australian media like a spoilt child on why they were being unfairly denied the SYD-LAX rights, it got them no where. QF lobbied its support in Canberra and blocked SQ's wishes year after year. At least SQ has stopped doing that.

QF though, seems to conduct its business and strategic development brain storming sessions through the media.

stubby jumbo

10th Mar 2012, 04:41

This latest announcement -hardly comes as a :mad: surprise.

As soon as it was announced -what 18 months ago-everyone, I mean everyone in this industry ( except AJ and the buffoons-masquerading as a Board) knew it was a total STUPID :mad: IDEA.

BUT NO..... persist, roll on with the game of lies, deceit, justification for bullying, threats and intimidation.

This gem posted early this month on this thread says it all really:

MAS just posted a full year LOSS of $835,000,000 USD. Yes, you read that correct. Eight hundred and thirty five million dollars US. What an absolute joke. I can not believe anyone in their right mind would partner them when their own Chairman says "the airline is in crisis".

How long can this go on for -without someone ???? doing something about this mess.

The Board is clueless, Joyce has no FCKUIN idea .....about anything other than the size of his payout when he gets punted:ugh:

Get out the lot of you and don't come back.

For Christ sake -please.......Get some people in who value the airline's proud history, who care about their hard working, proud staff and who will look after their once loyal , now long suffering customers.

As the old Whitlam slogan went:

IT'S TIME !

Popgun

10th Mar 2012, 07:39

They should focus on growing their SIN hub than trying to establish more hubs all over the place in risky countries.

DrPepz speaks the truth!

A very astute analysis...and a simple path forward.

I'm not usually one for conspiracy theories...but this continued bizarre behaviour by QF senior management and the Board just beggars belief!

gobbledock

10th Mar 2012, 09:24

Stubby Jumbo :ok:. Worded perfectly. The 'wee man' is a poor excuse for a businessman. He, his executive posse and the board filled with his mates, lawyers and fat bloated Generals are not fit to be used as toilet paper.
They are the weakest link, time to go goodby.
These parasites have fed off the host to the point that the host is now dead and the parasites need to go find a new host.

I would dearly love to attend the next shareholder meeting in the distant future (if the little fool is still around) and see how he justifies the next outrageous payrise! I suggest the Ma and Pa investors out there note some of this foolish executive and board behavior and take it to them.
Unfortunately I wont be attending as I have my precious money invested in tangible assetts, something QF once was.

AJ, Leigh, Jimmy Bowtie and friends - you are an embarrassment to the words 'business', 'capable', 'intellectual', and 'worthy'. Qantas is a rotting carcas of a company, it is rotting from all of you clowns down.

moa999

10th Mar 2012, 10:47

They should focus on growing their SIN hub than trying to establish more hubs all over the place in risky countries.

I suspect you will find that:

Plan A was SIN base, but SQ lobbied against it, and unlike 3K where they were creating a new market, QF would just be taking share from SQ.

Plan B was KUL, also failed.

So Dr Pepz, you would have no problem with a 100% owned SIN pilot and cabin crew base, paid local salaries and flying to Europe, Asia (and of course to Oz as well)

CaptCloudbuster

10th Mar 2012, 11:22

I suggest the Ma and Pa investors out there note some of this foolish executive and board behavior and take it to them.

They already did, old Jack stuck it right up 'em, made us feel good, didn't achieve anything though..

http://images.smh.com.au/2011/10/28/2736531/Qantas-AGM-16x9-408x264.jpg

DrPepz

10th Mar 2012, 12:30

moa999: First I'd like to make a disclaimer that I am not Australian, I only had the privilege of pursuing my higher education there, and in the process made many Australian friends and take a keen interest in what goes on there.

The existing QF SIN hub where they dump everyone from the major cities into Australia then send them to LHR and FRA with BA/QF, CDG with AF and Helsinki with AY also takes existing share from SQ.

In the days I used to work in CAAS/Changi Airport Group we actually prepared very comprehensive proposals for QF to base in SIN, and also responded very aggressively to an RFP from Qantas in 2007 for a proposed Jetstar International hub in Asia. In fact one of the proposals was for QF to consolidate its entire Asian hub in SIN - none of us ever thought it would fly, but they actually did it.

Singapore is clever not to have put all its eggs in the SQ basket. If we did, our pax growth would have been stagnant for 10 years. This year, Changi will handle 50 million pax. And this is DESPITE SIA, not BECAUSE of SIA.

Why a QF premium airline wouldn't work in SIN primarily is:

1. QF already has Jetstar Asia and Valuair - 2 AOCs. They would need to demonstrate the need for a 3rd. The Singapore government treats Jetstar Asia as a Singaporean carrier, and represents Jetstar Asia in air talks with foreign governments. With Singapore's very liberal Air Services Agreements with other countries, it means that QF can decide which AOC to use when sending aircraft to/through SIN.

SIN-Australia: It doesn't matter because there is unlimited 3rd and 4th freedoms between two countries, so QF uses 3K to Perth and JQ to MEL. Both are done with the SIN crew base

SIN-Beijing: For some reason JQ is used and not 3K. However it is the SIN crew base

SIN-AKL: Australian carriers do not have the right to fly between SIN and NZ. So they use 3K instead, with a "wet-leased" aircraft from JQ.

SIN-Europe: 3K could fly as many times as it wished to most countries in Europe, except Germany, France and Italy.

2. There are no more prime time slots at peak morning and evening periods. The new premium airline would have to fly at off peak periods

3. Can Singapore realistically support that many home base airlines?

4. Would a low density A320 flying at off peak hours actually work and grow traffic through Singapore? Is there a better use of landing slots?

Does ANYONE besides AJ and his friends think that a low density premium A320 would work in SIN, KUL, BKK, HKG, CGK or anywhere in Asia? How would it compete against SIA's daily A380 to HKG, 5 daily 777s to BKK, 8 daily 777s to Jakarta?

I do not have the scoop on the latest developments of QF in SIN, but can a population of 5 million people actually support 3K, VF, TR, SQ, MI and Scoot, PLUS another carrier?

QF already has 3K and VF. They should make that work.

So Dr Pepz, you would have no problem with a 100% owned SIN pilot and cabin crew base, paid local salaries and flying to Europe, Asia (and of course to Oz as well)

Singapore is not exactly a cheap place with slave labour wages (unless you're a domestic maid or a construction worker from the subcontinent) and the vast majority of 3K's staff are Singaporeans, while most of the pilots are expats. SQ cabin crew are paid very well - SGD 4to $7k per month for the junior crew. So the other airlines would have to match that, or well, what kind of quality of staff would they get?

Singapore is not a cheap place for expats to live in as they are denied access to much of the local housing market, the local school system and the local health system at subsidised rates. The cost of employing an expat pilot must be astronomical.

Nearly all the Singaporean pilots would inevitably be with SQ, since only SQ offers a proper cadet scheme, and after which they are bonded for 7-10 years, by which time they reach a comfortable salary level and do not tend to leave. As such, there is no ready local pool of pilots for other SIN-based airlines to tap on.

If QF thinks it is still cheaper to employ an expat pilot in SIN than pay an equivalent salary in Australia, then good for them.

Of course, I would personally have no problem with QF setting up a 100% owned SIN pilot and cabin crew base, since any foreign investment in my country is to our benefit, much like Tiger's investment ( or Rex, or Singtel or any other Singaporean companies) in Australia is to your benefit. Though - Tiger Australia is not used as a vehicle to evade Singaporean taxes and Tiger Australia is run completely separately from Tiger SIN, without a swap of TR and TT aircraft, TR and TT cabin crew etc.

moa999

10th Mar 2012, 12:33

and to prove a point, MH takes red off the tail of its new A380

Malaysia Airlines unveils new A380 livery | ATWOnline (http://atwonline.com/aircraft-engines-components/news/malaysia-unveils-new-a380-livery-0309)
New Livery – Malaysia Airlines A380 (Video) at Flightstory.net - Aviation Blog, News & Stories (http://www.flightstory.net/20120308/new-livery-malaysia-airlines-a380-video)

Looks good

jetjockey696

10th Mar 2012, 13:00

Qantas has failed to strike a deal with Malaysia Airlines (MAS) in its bid to set up a new premium airline Friday.

Qantas is now expected to look to other Asian hubs after saying it was unable to reach mutually agreeable commercial terms on a partnership with MAS.

Qantas Chief Executive Alan Joyce however said Asia remained a priority for the airline and would continue to explore opportunities in the region.

"The transformation of Qantas' international business remains vital, with plans to return the international business to profitability in the short-term on track," he said in a statement.

"In the medium-term, Qantas' flying businesses, both domestic and international combined, will exceed the capital cost on a sustainable basis.

Bersama 9th March 2012

Skystar320

10th Mar 2012, 13:30

Jetstar Asia is profitable, Tiger isn't.

FFS - Do your homework! Tiger IS profitable asa group.

http://www.tigerairways.com/news/Annual_Report_2011.pdf

DrPepz

10th Mar 2012, 13:39

Well, their 2011 annual report would have reflected their 2010 performance From their latest quarterly announcement, they have made 3 consecutive quarters of losses, PLUS Tiger Singapore is loss making too:

Singapore's Tiger Air reports Q3 loss on Australia, fuel costs | Reuters (http://www.reuters.com/article/2012/01/30/tigerairways-idUSL4E8CU4IB20120130)

SINGAPORE | Mon Jan 30, 2012 6:50am EST
Jan 30 (Reuters) - Singapore's low cost carrier Tiger Airways Holdings Ltd reported its third consecutive quarterly loss and warned of a possible "significant" annual loss mainly due to problems with its Australian operation and soaring fuel prices.

Asian low-cost carriers have benefited from strong demand, but rising input costs, intense competition and a spate of natural disasters in the region has hit some airlines.

Tiger Air, which is about a third owned by Singapore Airlines Ltd, posted a net loss of S$17.4 million ($13.9 million) for October-December compared with a profit of S$22.5 million a year ago.

"The group expects to report a significant net loss for the financial year largely as a result of the Civil Aviation Safety Authority suspension in Australia, the under-utilisation of the group's aircraft fleet and exposire to high and volatile jet fuel prices," Tiger Air said in a statement on Monday.

Shares in Tiger Air plunged more than 60 percent last year. Tiger competes with Indonesia's Lion Air, Malaysia's AirAsia Bhd as well as Australia's JetStar, the budget carrier arm of Qantas Airways Ltd.

Tiger Air's Oct-Dec revenue was flat at S$168.4 million. Last year, Australia's aviation regulator imposed a five-week flight ban on Tiger Air's operation in Australia due to safety issue.

Tiger Air's Australian operations booked an operating loss of S$8.6 million compared with a profit of S$5.9 million a year ago, while its Singapore operations reported an operating loss of S$4.8 million compared to a profit of S$19.4 million.

($1 = 1.2534 Singapore dollars) (Reporting by Harry Suhartono; Editing by Anshuman Daga)

TIMA9X

10th Mar 2012, 14:40

Thanks DrPepz for your contribution to this thread you make some great points, I am sure everyone on here are grateful...

Back at post 29 you posted a story that stood out in my mind,

As for launching the start-up in Kuala Lumpur, Qantas does not seem to be interested. Mr Mohamed Yunus Charlie Charrington, director of the air transport division at Malaysia's Department of Civil Aviation, told The Straits Times recently that the Australian carrier has not been in touch with his office.

He said: 'We have not had any discussions with Qantas on this issue. Not even a phone call.'
My contacts in Asia believe this situation true as well, some saying Joyce was never really serious about the MH deal but needed to announce something to win support from government, the media and the "big end of town" here in Australia as a leverage to bolster his fight against the unions who opposed job losses last year... other words, turn Q mainline working conditions into a Jetstar situation... lifting the share price at the same time...

:suspect:

DrPepz

10th Mar 2012, 15:04

CAAS ain't giving out more AOCs. If QF didn't muse to the media about their longhaul plans for Jetstar, they wouldn't have made SQ wake up and start their own longhaul LCC, thus snapping up what is possibly the last AOC CAAS will ever issue for a long, long, long time.

If QF wanted to they could convert the Valuair AOC into their Red Q or whatever on earth it is they wanted. Why they haven't thought of that is quite laughable.

I don't think any other country is waiting to give QF an AOC for their capital light venture. Maybe Laos!

Oh anyone see that 3K is down to 4 weekly to Auckland from end March?

By the way, I am a big user of 3K to KUL from SIN. Typically the base fare is 0 or $10, and the rest is just taxes to Changi Airport and KLIA. Even if booked 2 days out. SGD58 return. How on earth do they make money on that?!

TIMA9X

10th Mar 2012, 15:16

If QF wanted to they could convert the Valuair AOC into their Red Q or whatever on earth it is they wanted. Why they haven't thought of that is quite laughable.
Jee Pepz, don't give em any ideas, they will claim they thought of it...... Dr Pepz for CEO at Qantas...:)

meanwhile up in your neck of the woods I noted this little story

Singapore Airlines offers no-pay leave to pilots (http://www.pprune.org/Singapore%20Airlines%20offers%20no-pay%20leave%20to%20pilots)

Singapore Airlines has offered no-pay leave to its pilots for as long as two years amid a slowdown in its business.
The move comes just weeks after the carrier reported a 53% drop in net profit during the last three month of 2011 compared to a year earlier.
The carrier said that its growth had been slower-than-expected, resulting in a "surplus pilot situation".

The pilots who opt for the scheme will be allowed to work for other carriers during the period.

"This scheme will enable us to address the short-term surplus, while at the same time provide staff with the opportunity to take leave for personal reasons, should they wish to do so," Singapore Airlines said in a statement.
'Very challenging' Airlines across the globe have been facing a tough time as several economic factors have hurt their fortunes.

The debt crisis in the eurozone and a slow economic recovery in the United States has hurt demand in those regions, which are both key markets for Singapore Airlines.
At the same time, volatile fuel prices have also dented the earnings of carriers.
Analysts said these uncertainties had especially hurt premium carriers such as Singapore Airlines.

"The outlook for the firm is very challenging. They are seeing a significant erosion of their margins especially in Europe where things haven't been looking good," Shukor Yusof of Standard & Poor's told the BBC.
"When you reach a position that you have to ask your pilots to take voluntary leave, all the indications are that things are pretty rough.

A bit more positive than what Joyce would offer..

Going Boeing

10th Mar 2012, 22:21

By the way, I am a big user of 3K to KUL from SIN. Typically the base fare is 0 or $10, and the rest is just taxes to Changi Airport and KLIA. Even if booked 2 days out. SGD58 return. How on earth do they make money on that?!

The answer to that is simple:- you send the bills for fuel and engineering to Qantas International (possibly the aircraft leasing costs as well). They cannot make a profit on those fares so there has to be some dodgy accounting done to allow Jetstar Asia to declare that it is profitable.

busdriver007

11th Mar 2012, 16:16

How come Jetstar Asia doesn't operate from the Low-Cost Terminal? Who pays.

DrPepz

11th Mar 2012, 16:58

The Budget Terminal in SIN is located about 2km from the main terminals. No airside transfer is possible. Jetstar Asia depends on a lot of transfer traffic from QF, 3K and other airlines. As such Jetstar Asia has always opted to operate from T1 together with QF, BA and partners.

The Budget Terminal in its current form cannot support airside transfers in any way - even TR's pax have to clear immigration and re-check in for their flights. This does not suit Jetstar's business model.

The new Terminal 4 (which will be some sort of a revamped LCC terminal) will have no aerobridges, and I doubt that Jetstar Asia will operate from there, because they will always operate in the same terminal as QF Group Airlines plus their partners.

The Bungeyed Bandit

11th Mar 2012, 20:57

Thanks Dr Pepz. Still doesn't answer the question who pays.

clark y

11th Mar 2012, 21:32

58 SGD for SIN-KUL-SIN has to be subsidised. A quick look at Jetstar.com shows that it is quite a common airfare, not the exception. Also what I'd like to know- a quick look at the month view for this pairing shows that you could be paying different amounts depending on what currency you chose to pay. i.e. the cheaper/dearer days change depending on whether you pay in AUD or SGD.

PPRuNeUser0198

11th Mar 2012, 22:17

By the way, I am a big user of 3K to KUL from SIN. Typically the base fare is 0 or $10, and the rest is just taxes to Changi Airport and KLIA. Even if booked 2 days out. SGD58 return. How on earth do they make money on that?!

LCC's make their money typically by way of ancillary revenue. Ryan Air is a classic example of an LCC that offers next-to-nix fares to stimulate demand and bring customers to their airline. They then take advantage through various fee and sales opportunities to extract revenue from their customer.

Low cost, but high return. The same would apply for 3K. Low yield on fares but strong returns on ancillary revenue streams.

If you remember last year with Bruce's interview on JQ's performance, he mentioned that on revenue from fares alone, JQ would not have been profitable. AR is what kept JQ in the black.

I think the average is around $20 per passenger in AR these days on most LCC's...

Taildragger67

12th Mar 2012, 02:30

LCC's make their money typically by way of ancillary revenue. Ryan Air is a classic example of an LCC that offers next-to-nix fares to stimulate demand and bring customers to their airline. They then take advantage through various fee and sales opportunities to extract revenue from their customer.

Ryan also manage to get zero landing fee deals at many of the airports they operate to, the local authorities wanting to stimulate their regional economies. Indeed there are cases of local authorities paying Ryan to operate to their little airports (to the extent that some have attracted scrutiny from EU competition authorities).

I can't see either of Changi or KLIA paying Jetstar to show up.

Well, maybe KLIA...

Capt_SNAFU

12th Mar 2012, 02:47

I wonder what AR you get on a 30 minute flight from SIN-KUL? No much I gather. Like asking who would by Ancillary stuff on SYD-CBR? No muffins, no blankets, no bags in the hold. I wonder what they sell? I'm sure they make AR from the longer sectors but not SIN-KUL.

moa999

12th Mar 2012, 03:36

AR includes baggage fees, baggage overweight fees, select seat fees,
so a lot more than just meals and drinks

DrPepz

12th Mar 2012, 04:00

Both KLIA and Changi offer generous incentives to all airlines for starting new routes, or hubbing in/through SIN. Changi gives rental rebates, co-shares marketing and advertising fees to launch new routes etc. Can't imagine KLIA doesn't do likewise.

I haven't seen many pax purchase ancilary services on SINKUL - there just isn't too much time. However I usually purchase the miles add on for SGD30, which gives me 1000 QF points (for a 184mile flight) plus a meal. Having done heaps of SIN-KUL and SIN-CGK on Jetstar, I'm nearly QF silver!

(Note: Never use the AU site when booking jetstar asia flights because it costs A$30 for the add-on on the AU site and S$30 for the add-on on the SG site. So you get a 20% saving booking in SGD!)

PPRuNeUser0198

12th Mar 2012, 11:03

There are a number of AR streams for the LCC's that are not limited to just on-board sales.

The advantage to the airlines is that most of these streams have little cost or overhead - so they're high margin solutions e.g. change fees, select seating, pre-boarding, car | hotel bookings etc.

Multiply these revenue streams by the millions of passenger carried and you have millions of dollars in turnover.

EWP

12th Mar 2012, 13:56

I wonder if the 6 'deferred' A380's will now make an appearance sooner than 2019 now that the 320 NEO's will probably disappear into thin air. Something is going on with Melbourne International - the cabin crew build up there plus Onboard Manager roles open for application indicate something is happening...I gues just watch this space, could be wrong...

TIMA9X

12th Mar 2012, 14:04

http://images.smh.com.au/2012/03/12/3121241/DB_20120312202426687321-420x0.jpg

Salvage job ... there is a way out for Joyce. Photo: Alex Ellinghausen

Could that solitary figure rummaging through the used parachutes at Sydney Airport really be our very own Qantas boss Alan Joyce?

After his spectacular flame-out over Kuala Lumpur last week, the airline tentatively under his command has been left rudderless while those running it seem desperately short of ideas on how to repair the damage.

That has placed Joyce in an extremely vulnerable position, and the obvious victim should institutional investors demand retribution for a much-vaunted policy and plan that seemed, at best, fanciful and has now been abandoned altogether.

Since June last year, Joyce and his senior executives have spent every spare minute banging on about setting up a new premium Asian-based airline, all of which was endorsed by the Qantas board and chairman Leigh Clifford.
But it was a plan that was never going to fly. For it was first and foremost a threat - and a hollow one at that - to its own workforce rather than a legitimate blueprint to turn around the company's fortunes.

If there was any strategy involved in the plan, it was purely as part of an ideological battle over trade unionism in general and Fair Work Australia in particular, which culminated in management shutting down operations for almost three days last November.

There is no denying the challenges confronting Qantas.
Soaring fuel prices, competition from subsidised government-owned carriers, global economic upheaval, topped off by natural disasters in key markets Queensland, New Zealand and Japan.

But the Asian option addressed none of those factors and Joyce now presides over an organisation where industrial relations could best be described as toxic while his customers, disillusioned and jaded, have begun walking across the terminal to rival Virgin Australia.

Qantas has also had to embark on an expensive campaign to compensate those inconvenienced by the grounding of its fleet last year. Sadly, shareholders are footing the bill.

It would be unfair to label the abandoned Asian plan as half-baked for it never reached that stage. There was no oven, no cake tin and certainly no ingredients.

You don't need to be an aviation expert to realise the problem facing the industry is overcapacity. So how on earth does establishing a new airline solve that? And wouldn't it merely cannibalise your existing business?
Initially it was to be based in Singapore, then Kuala Lumpur, except there were no agreements with anyone in those centres.

The original plan was to employ 11 Airbus A320s, a small aircraft that does not lend itself easily to upscale service. And with such a small fleet, it could never provide the frequency business travellers require.

And what about the years of losses involved in establishing a new brand? Even Jetstar, the discount tail that now wags the Qantas dog, took years to turn a buck.

But all is not lost. There is a way out for Joyce, a means by which he could salvage something from the wreckage. Rather than partner an Asian carrier such as Malaysia Airlines or Singapore Airlines, perhaps the Irishman could convince the board to go it alone, and establish its own premium international carrier.

And a brand? Why not call it Qantas? You could promote it to business travellers throughout the region, offering an upscale service, with an impeccable safety record and employing the most highly skilled staff, the kind of pilots who can safely navigate an A380 back to earth with a Rolls-Royce engine spewing flames.

Passengers may even pay a premium for it. Use fuel-efficient jets and you could cut down on the cost.

Joyce certainly needs to come up with something. For the momentum is building at Virgin, the once-deflated rival now headed by the very person Joyce beat for the top spot at Qantas. At every turn, the Qantas chief has been outsmarted and outmanoeuvred by John Borghetti. Where Joyce has focused on cost cutting and discount service, Borghetti has targeted a premium offering, moving Virgin up the scale.

Discount airlines are a commoditised business. Borghetti, realising its limitations as a business model, has focused on yield. In a nutshell, that means business travellers.
Australian corporations spend up to $6 billion annually on air travel. And every corporate dollar Borghetti attracts to Virgin, comes straight from the revenue at Qantas.

Virgin now has around 17 per cent of the local corporate market, well above the target Borghetti set when he was appointed to Virgin.
Joyce aided that quest last November, when Virgin leapt in to pick up the slack, conveying thousands of stranded Qantas passengers on the weekend before the Melbourne Cup, allowing Borghetti to showcase his new offering to a wider audience.

But his biggest coup has been in building an international offering through codeshare arrangements. With Etihad, Singapore Airlines, Air New Zealand and Delta in tow, Virgin now offers a vast international network, built at minimum cost.

Qantas, meanwhile, continues to shrink its international service. Its European destinations have been whittled back to London and Frankfurt and it recently dropped half its European flights from Singapore and Bangkok, offloading customers on to British Airways. The Mumbai service was dropped altogether.

That shrinkage has made it less attractive to customers and to potential partners. The good news at least is with the Asian option now consigned to the dustbin, Qantas management can focus on running Qantas.

Read more: Back to basics for Joyce & Co (http://www.smh.com.au/business/back-to-basics-for-joyce-amp-co-20120312-1uwgb.html#ixzz1ouVcGusj)

It's not rocket science.....

Worrals in the wilds

12th Mar 2012, 14:23

What, selling tickets to Aussies who want to travel to/from Australia at a reasonable price (not necessarily the best price) on a service provided by Aussies? Far too boring...let's leave that to the virginal opposition while we concentrate on having very public domestic disputes with our frontline staff, conducting our strategic planning via media release (with apologies to Dr Pepz) and blundering into markets where even the local angels fear to tread.:bored:

Some girls wander by mistake...:E

P.S. Where's Olivia these days? Doin' stuff?

denabol

12th Mar 2012, 18:50

Ian Verrender has put back the missing mongrel into the SMH business pages.

It would be unfair to label the abandoned Asian plan as half-baked for it never reached that stage. There was no oven, no cake tin and certainly no ingredients.

Read more: Back to basics for Joyce & Co (http://www.smh.com.au/business/back-to-basics-for-joyce-amp-co-20120312-1uwgb.html#ixzz1oviYemtK)

hotnhigh

12th Mar 2012, 21:46

The best line of the article and sums up precisely what Clifford and Joyce's motives were and truly are. Nothing about running an airline.........

If there was any strategy involved in the plan, it was purely as part of an ideological battle over trade unionism in general and Fair Work Australia in particular, which culminated in management shutting down operations for almost three days last November.

:D

hotnhigh

12th Mar 2012, 23:58

Moving on, what odds are the bookies running for a joyceless June?

1A_Please

13th Mar 2012, 01:26

Joyce will survive as long as Clifford is there. Clifford would have to resign at the same time as he fired Joyce given he has led the board that has overseen the debacle of the last couple of years.

V-Jet

13th Mar 2012, 02:39

Indeed - it would be as hard to extricate these proven incompetents from Qantas as it was to rid the Nazi's from Germany. They have it too good where they are.

Nuremburg anyone?

IsDon

13th Mar 2012, 03:02

I believe Clifford has to go at the end of the year.

Not because of incompetence unfortunately, but because of his age. Apparently he'll be too old to act as Chairman.

Does this mean SLIC will no longer have protection?

The The

13th Mar 2012, 03:24

It is the institutional investors who will tap Joyce and Clifford on the shoulder and ask them to move on.

These investors publicly supported Joyce's Asian foray and will themselves look pretty incompetent if they continue to support his next #$&% up!

busdriver007

13th Mar 2012, 04:18

Leigh is 64..THe maximum age for directors in Australia was 70 but in 2007 this limit was removed.....bad luck...

bangbounceboeing

13th Mar 2012, 05:25

So the Malaysian deal is off, how the hell are they going to pull out of the current deep stall ?, is it already to late or is Qantas set for a make over :sad:?

IsDon

13th Mar 2012, 05:32

Leigh is 64..THe maximum age for directors in Australia was 70 but in 2007 this limit was removed.....bad luck...

This may be true. I was told it was the QANTAS constitution that was more limiting.

TIMA9X

13th Mar 2012, 08:16

Stockmarket rises sharply as banks rebound, aviation strengthens
support

Cookies must be enabled. | The Australian (http://www.theaustralian.com.au/business/markets/stockmarket-rises-sharply-as-banks-rebound-aviation-strengthens/story-e6frg916-1226298086618)

THE sharemarket rose sharply this afternoon after broker upgrades for Qantas and Virgin, while banks rebounded off yesterday's losses.

The benchmark S&P/ASX 200 index jumped 1.2 per cent to 4246.50, pulling the index to a 0.8 per cent gain so far this week.

“I don’t think there’s anything specific (driving the market) other than it’s been disappointing in recent weeks,” said Jamie Spiteri at Shaw Stockbroking.

“I think that most of our leading stocks have faltered because of poorer general sentiment. Uncertainty has filtered across our market (recently),” he added.
Sentiment brightened today after US stocks ended mostly higher overnight ahead of a two-day meeting on monetary policy at the US Federal Reserve.
Investors are looking for any hint of forthcoming changes to the central bank’s ultra-loose monetary policy, given recent data showing a strengthening economy. The Fed has pledged to keep its key rate on hold until late 2014.

http://resources1.news.com.au/images/2012/02/28/1226283/551381-top-50-tech-rec-coverage.jpg (http://www.theaustralian.com.au/top50?utm_medium=marketing_placements&utm_source=TA&utm_campaign=50_med&utm_content=mp_story_free_seealso&creative_id=ta_50_medl149x181_gen1a&sourceCode=TAWEB_MPL120A)

Michael Derks, chief strategist at FxPro, noted: “The recent run of favourable data allows policy makers some breathing room. Some Fed officials have recently expressed reservations about how durable these green shoots of recovery will prove to be.”

Airlines were among the best performers in Australia today, spurred on by broker action.

Qantas shares rose 3.6 per cent after the company was upgraded to ‘outperform’ from ‘neutral’ by Macquarie. A similar Macquarie upgrade for Virgin Australia saw its shares climb 2.7 per cent.

Banks took back the previous session’s losses to notch weekly gains, as Westpac shares climbed 1 per cent and NAB gained 1.7 per cent.
ANZ shares were up 1.5 per cent and Commonwealth Bank shares climbed 0.9 per cent.
Metal firms were broadly higher as well after metal futures advanced in Asian electronic trading.

Rio Tinto climbed 0.9 per cent and BHP Billiton climbed 1.2 per cent. Steelmakers gained, with BlueScope Steel up 3 per cent while OneSteel shares were up 1.8 per cent.
Insurance group QBE jumped 4.1 per cent with Spiteri noting the firm’s shares “have been hit hard in recent times.”

“We’ve obviously got a bit of solid support across other Asian markets -- that’s coming across here today as well,” Spiteri added.
The Hang Seng Index gained 1.1 per cent in Hong Kong while the Nikkei Stock Average rose 0.9 per cent in Tokyo

Qantas Press apologists, (with link to that story, again) Murdoch's Australian newspaper and Macquarie, owners of Sydney Airport team up late in the day....... What a coincidence after the Asian deal collapsed for Clifford & Joyce coupled with that smh story this morning. :rolleyes:..:suspect:

.

PPRuNeUser0198

13th Mar 2012, 08:27

Ummmm - institutional investors continue to support Alan and the board...

He nor or anyone else is going anywhere...

ejectx3

13th Mar 2012, 12:26

But why for gods sake?

TIMA9X

13th Mar 2012, 15:28

But why for gods sake?

A message to Alan and Leigh

qQNh2JSaSM4

Yamma

13th Mar 2012, 15:42

TIMA9X (http://www.pprune.org/members/297667-tima9x)

Well that was a waste of 4 mins and 42 seconds of our time, and what sober background music:8

TIMA9X

13th Mar 2012, 16:32

Well that was a waste of 4 mins and 42 seconds of our time, and what sober background musicProbably would have been a long 4.42 for you Yamma,

you said once,

http://www.pprune.org/dg-p-reporting-points/468048-senate-inquiry-hearing-program-4th-nov-2011-a-10.html#post6796853

Interesting to sit back and watch the question time in the senate hearing. I think AJ answers the questions well, but the senators on the other hand seem to get so wound up and end up making some very poor "personal" remarks in response. I would be very surprised if it is a negative outcome for the Qantas management, and the poor sportsmanship from the senators will only help AJ's team.http://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/embarass.gif :hmm:

fair enough comment, you are entitled to your view as well.... I respect that.. I think we all do on here..

ampclamp

14th Mar 2012, 00:20

Whenever any large broking house puts out a "BUY" on anything it does not mean they are buying, it is often a message to their retail clients. Volume increases and large holders can unload into that volume without destroying the price. A Buy call does not mean the insto's are buying for themselves or large corporate accounts.
Joyce and Clifford will likely survive. AJ less so as he is more vulnerable being the public face and CEO driving this plan. Big holders imho will still like the anti union all round cost lowering plans.
EDIT. I sincerely hope I am wrong.

SpannerTwister

14th Mar 2012, 01:18

....Joyce and Clifford will likely survive.....Big holders imho will still like the anti union all round cost lowering plans.
EDIT. I sincerely hope I am wrong.

I fear you're not :ugh:

ST

dragon man

14th Mar 2012, 01:19

With due acknowledgement to the author at Air Canada could this also apply to Qantas pilots.

I am an army of One - A Captain in the Air Canada army.
For years I was a loyal soldier in Air Canada army. Use to fight for the
big red - Now I fight my own war.
I used to feel valued and respected. Now I know I am mere fodder.
They used to exhibit labour leadership. Now they exploit legal loopholes.
They used to enjoy my maximum. Now they will suffer my minimum.
I am an army of One.

I used to save Air Canada a thousand pounds of fuel per leg; finding the
best altitude, getting direct routing, throttling back when on-time was
made, skimping during ground ops, adjusting for winds, being smart and
giving the company every effort I could conjure. Now, it's "burn baby,
burn!".
I used to call maintenance while airborne, so the part would be ready at
the gate. Now, they'll find the write-up when they look in the book.
I used to try to fix problems in the system, now I sit and watch as the
miscues pile up.
I used to fly sick. Now I use my sick days, on short notice, on the worst
day of the month.
I am an army of One.

I used to start the air conditioning at the last possible moment. Now my
customers enjoy extreme comfort.
I used to let the price of fuel affect my fuel loads. I still do.
I used to cover mistakes by operations. Now I watch them unfold.
I used to hustle to ensure an on-time arrival, to make us the best. Now I
don’t share my success.
I used to call dispatch for rerouting, to head off ground delays for bad
weather. Now I collect paid minutes, number 35 in line for takeoff.

I am on a new mission - to demonstrate that misguided leadership of
indifference and disrespect has a cost. It's about character, not
contracts. It's about leading by taking care of your people instead of
leadership by bean counters (an oxymoron). With acts of omission, not
commission, I am a one-man wrecking crew - an army of One. My mission used
to be to make Air Canada rich. Now it's to make Air Canada pay.

When they manipulate summer vacation to save their understaffed airline – I
will make them pay
When they force my FO to sit in economy while dead-heading with Jazz pilots
sitting in first class– I will make them pay
When they provide me with a sub-standard hotel for me to rest- I will make
them pay.
When over-booked customers are denied boarding system wide because of their
lack of planning - I will make them pay.
When they force pilots, who have waited 12 years to become Captains, to be
FOs again - I will make them pay.
When they try to manipulate my schedule to fix their lack of planning - I
will make them pay.
When they trick my FO into flying over his duty day – I will make them pay
When the CEO reveries his 5 million dollars bonus on April 1st while I am
still 20% below - I will make them pay
When they constantly violate the letter and spirit of our contract - a
contract that's a bargain by any measure, and force us to fight lengthy
grievances - I will make them pay.

My negotiating committee speaks for me, but I act on my own. I am a walking
nightmare to the bean counters that made me. Are you listening? This
mercenary has a lot of years left with this company; how long can you
afford to keep me bitter? I'm not looking for clauses in a contract, I'm
looking for a culture of commitment and caring. When I see it, I'll be a
soldier for Air Canada again. Until then, I am an Army of One…And I'm not
alone!

:D:D:D:D

Jabawocky

14th Mar 2012, 01:49

Interesting comparison, last night I booked a return flight from Hobart to Brisbane for an employees wife. So I looked at all threed as schedule and price were considerations.

JQ $766
QF $528
DJ $568

Now schedules were far better with VA, the price only $40.....so without taking the cheapest, VA was a winner, and I bet she will have a more plesant journey.

Makes you wonder :hmm:

Capt_SNAFU

14th Mar 2012, 01:51

Someone should write the army of one in the engagement survey. Alas I'm one of the 15% who have filled it out so I can't do it again.

ALAEA Fed Sec

14th Mar 2012, 02:26

Is there an engagement survey on again?

If so I would like somebody to write out the questions and then our union will run the same questions so we can publish the results.

dragon man

14th Mar 2012, 03:32

Thanks for the idea Capt SNAFU, changed the name from Air Canada to Qantas and put it in. Il bet it wont come out in the washup!!!

Keg

14th Mar 2012, 04:56

It was originally Continental rather than Air Canda. Jeez I feel old now! :{

Bagus

14th Mar 2012, 05:24

Lost of Australian jobs,means jobs gain in AsiaHome*\*Media*\*Press Release
Media
In the News
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Press Release

10 February 2012
Opening of new A380 maintenance hangar at Lufthansa Technik Philippines

Third widebody hangar in Manila
Up to 400 new jobs

Lufthansa Technik Philippines (LTP), one of the largest providers of aircraft maintenance services in Asia, has opened a third hangar in Manila for work on widebody aircraft. With this step, the company is preparing for the technical support of the world’s largest commercial aircraft. Lufthansa Technik Philippines, an Airbus specialist, will start cabin modifications for the Airbus A380 in April 2012.

The company, a joint venture between Lufthansa Technik (51%) and the Philippine MacroAsia Corporation (49%), invested USD 30 million in the construction of the new hangar, which is 8,500 square meters large and 35 meters in height. The new hangar offers space to work simultaneously on one widebody and two narrowbody aircraft.
“With the new hangar, we’ll be able to keep up with the increasing demand for technical services for long-haul Airbus aircraft, particularly in the Asian market,” said Lufthansa Technik AG’s Chairman of the Executive Board, August Wilhelm Henningsen. “By adding A380 capability, it underscores Lufthansa Technik Philippines’ role as global competence center for Airbus overhauls.” *

Operating the new hangar will also mean adding 400 high-technology and high-skills jobs to the existing 2,700 jobs in LTP.

“The opening of the new hangar serves to reaffirm the Filipino aviation workers’ place among the world’s best and underscores LTP ‘s long-term plans of operating in the Philippines,” said Washington SyCip, Chairman of Lufthansa Technik Philippines. *

In preparation for the capability expansion, LufthansaTechnik Philippines employees have completed trainings which consisted of A380-specific course in Lufthansa Technical Training Philippines, the on-site training center in Manila, and several months of on-the-job training performing A380 C-checks at Lufthansa Technik in Frankfurt. In these exposures, Filipino engineers and mechanics yet again benefited from the exchange of knowledge and skills within the Lufthansa Technik Group.

Eleven years after its founding, Lufthansa Technik Philippines, located at Manila’s Ninoy Aquino International Airport, offers comprehensive technical services including lease return checks and cabin modification for the Airbus A330/A340 and A320 families and now also for the Airbus A380. It has 30 overhaul customers including Philippine Airlines, Lufthansa, Qantas, Virgin Atlantic, LAN Chile and AirAsia X. Lufthansa Technik Philippines has about 20 approvals from aviation authorities including the American

73to91

15th Mar 2012, 02:53

Further to the Ian Verrender article:
Back to basics for Joyce & Co (http://www.smh.com.au/business/back-to-basics-for-joyce-amp-co-20120312-1uwgb.html)

Here was the response in the SMH on Wed March 14th by OW
Qantas committed

Ian Verrender's article contains a number of claims that are either sensationalist or wrong (''Back to basics for Joyce & Co (http://www.smh.com.au/business/back-to-basics-for-joyce-amp-co-20120312-1uwgb.html)'', March 13).

He states the decision to explore establishing a new premium carrier based in Asia was a ''threat'' to the Qantas workforce and part of an ''ideological battle over trade unionism''. This is a bizarre theory.

The Asia-based carrier strategy targets the rapidly growing premium travel market in the region. It recognises that Qantas, with an Australian cost base and regulatory restrictions, cannot effectively serve this market with the frequencies needed to be competitive.

Such a carrier would not ''cannibalise'' Qantas but complement its existing network.

Substantive discussions took place in both Singapore and Malaysia. Ultimately, we could not reach an appropriate agreement. We remain committed to expanding our presence in Asia.

Industrial relations uncertainty is over for Qantas. We have moved on. It's a shame others can't.

Olivia Wirth Group executive, government and corporate affairs, Qantas Airways

Read more: To stay means more deaths, yet inevitable defeat (http://www.smh.com.au/national/letters/to-stay-means-more-deaths-yet-inevitable-defeat-20120313-1uyeb.html#ixzz1p9LziJI2)

Today, there was a response to the above.
Remarks don't fly

Predictably Qantas spokeswoman Olivia Wirth (Letters, March 14) has criticised Herald columnist Ian Verrender who simply pointed out the obvious: that Alan Joyce's reign as chief executive has been a disaster for this once-great airline. The Qantas board would do well to study the article and start looking for someone who can restore the faith of Australians and overseas visitors in our national carrier.

Ian Stevenson Gladesville

Read more: Overwhelming evidence, now let's face the facts (http://www.smh.com.au/national/letters/overwhelming-evidence-now-lets-face-the-facts-20120314-1v3q2.html#ixzz1p9MkD5B7)

neville_nobody

15th Mar 2012, 03:08

Industrial relations uncertainty is over for Qantas. We have moved on. It's a shame others can't.

Huge call from Oliver given the FWA hasn't even ruled.

hotnhigh

15th Mar 2012, 03:37

Ian Verrender's article contains a number of claims that are either sensationalist or wrong

Unlike any of Olivia's press conferences.

TIMA9X

15th Mar 2012, 04:45

Such a carrier would not ''cannibalise'' Qantas but complement its existing network.add shrinking between "existing _ _ _ _ _ _ _ _ _ network" and we are closer to the truth..
OW causes more problems than she fix's with her shallow approach towards the media in my view, when things are going her way she gloats, when its not, she whinges like a spoilt brat, people in the press can see through it now more than ever, own goal..

a blast from the past

p4s4foQgGNQ

She always comes over as agro

https://lh5.googleusercontent.com/-Xz6aUWq_nB8/T2F4RahKvTI/AAAAAAAABsA/cA9I09kBJD8/w377-h405-k/01-the-muppets-animal-small.jpg

Taildragger67

15th Mar 2012, 06:36

Such a carrier would not ''cannibalise'' Qantas but complement its existing network.

Livvy may have a fair point.

'Cannibalising' connotes QF stops today, JQ / 3K picks it up tomorrow.

However if QF stops today, and then tomorrow JQ / 3K says "Look! We've identified a gap in the market! We'll fill it next month!", then that's not really canibalisation, now is it... :hmm:

So JQ flying say SIN-FCO (as QF used to to) would not be 'cannibalisation' of the QF network, but rather be complementary to QF's existing European network (ie. LHR and FRA)!

Brilliant! :ok:

TIMA9X

15th Mar 2012, 07:55

"Look! We've identified a gap in the market! We'll fill it next month!"Spot on, sounds exactly how it would be written up in a future press release...
The question is, will the long haul LCC model work in place of the Q product? Currently Air Asia X don't think so, they are chopping routes..
Oh anyone see that 3K is down to 4 weekly to Auckland from end March?
Seems to me AJ & Co are relying too heavily on the LCC long haul model working. There is growing evidence that this may not be working in the region for flights over 6 hours. 3K/JQ SIN/ALK v SQ daily and still going strong by all reports.

blow.n.gasket

15th Mar 2012, 08:26

Recieved an e-mail that suggests the following with regards to what Tony Fernandes and the present rejigging of his Air Asia are.

Remember not so long ago Joyce and Boston Bruce crowing about Jetstars and Air Asia's alignment, the synergy's etc to be gleaned.

Apparently there may have been more to "operation Darwin" than meets the eye.

Wouldn't be too hard to imagine an almost unassailable market presence if these two "married".

Only the rumour is, once Tony was shown the grand pan-Asian plan, he pocketed it and started implementing it ,without Joyce or Boston Bruce.

Another case of Joycey and Boston Bruce counting their eggs before they hatch? Red-Q in Asia, A320's, the smell of rat is rife.

Does this explain what's occuring in Japan with Jetstar rushing plans to beat Air Asia for start up ?

Will be interesting to see what occurs and if there is any truth to the rumours floating around.:E

DrPepz

15th Mar 2012, 09:25

Seems to me AJ & Co are relying too heavily on the LCC long haul model working. There is growing evidence that this may not be working in the region for flights over 6 hours. 3K/JQ SIN/ALK v SQ daily and still going strong by all reports.

SQ is double daily to AKL and daily to CHC actually! Don't know how SQ is the only airline that has flown longhaul directly into CHC for decades, while many have tried and failed. Even Air Asia X tried and failed. I suspect cargo's the better yielding market here!

I would have thought 3K could make SINAKL work. 6 years ago, SIA sent a 747 and 777 daily there, plus we had an Air NZ daily flight. When NZ pulled out, soon after, SQ downgraded the 747 to 77W and combined this took out around 400 seats a day. SQ then increased its SINAKL fares to whatever it felt like charging.

One would have thought 3K/JQ could easily fill the void left behind 6 years ago of 400 seats taken out of the route per day.

You can't even book a through ticket LHR-AKL vv on the QF website even though the QF/3K schedules on that route match very very well. Further, the AKL-SIN flight arrives in at about 6pm, which is too late for many departures from 3K's SIN hub.

SQ's 3 daily flights from NZ feed into their entire Group network of around 100 cities. 3K's 4 weekly flights barely feed into the QF Group flights in SIN (and they won't even let you book a through flight on QF's services to Europe)

Maybe that's why SQ hasn't kicked up a fuss about QF's large presence in SIN. The real threats are in Dubai and Doha.

DrPepz

15th Mar 2012, 09:39

Only the rumour is, once Tony was shown the grand pan-Asian plan, he pocketed it and started implementing it ,without Joyce or Boston Bruce.

Another case of Joycey and Boston Bruce counting their eggs before they hatch? Red-Q in Asia, A320's, the smell of rat is rife.

Does this explain what's occuring in Japan with Jetstar rushing plans to beat Air Asia for start up ?

I meant to reply to this too. Well did Joyce have to show Tony a grand pan-Asian plan? Didn't Air Asia already have one? Today they have bases in:

KUL
BKK
CGK
Manila Clark
New startup in Japan

Air Asia eventually aims to have bases in every ASEAN capital. He has the right partners in every market he has ventured into so far to ensure he succeeds.

Air Asia also flies to every ASEAN capital today, plus China, Hong Kong, Taiwan. Now what does QF have to offer him that he doesn't already know? ?????

The Green Goblin

15th Mar 2012, 10:54

Air Asia also flies to every ASEAN capital today, plus China, Hong Kong, Taiwan. Now what does QF have to offer him that he doesn't already know? ?????

How to manage it :cool:

maggot

15th Mar 2012, 11:09

How to manage it

yep, and we know just the people he can have!

blow.n.gasket

15th Mar 2012, 11:32

Sorry Dr Pepz,
the inference from what I was sent was that this so called meeting occured some time ago.
Hence Joyce and Boston Bruce playing catch up once again.
As my mate's e-mail said ,poor old Joycey, always the bridesmaid never the bride.:}

gobbledock

15th Mar 2012, 11:47

Touché Green Goblin and amen.
Doesn't the Lord Joyce live an amazing life? Running around the globe meeting potential business and synergy partners, fantasizing out loud about leading the faithful flock of Qantas into a worldwide ministry, all the while Pastor Bruce champions Lord Joyces winsome words and adds his own layer of pulpit spin to the dream!
Meanwhile back in Australia Lord Joyces flock have never been more disengaged from the tabernacle, and never before has the donation boxes been so empty, empty to the tune of an 81% hit.
Sister Wirthless too has been sneaking out of the monastery and yet again publicly denouncing certain members of the Qantas flock. Of concern was her rumored appearance around Sydney this week wearing the traditional no make-up and disheveled habit.
Brethren I urge you to continue your prayers that our Lord finally be removed and sent on some other sojourn up to a higher plain, perhaps in Vatican city or Ireland and never to be heard from again.
Amen and god bless.

blow.n.gasket

15th Mar 2012, 11:55

If crew have to undergo random drug testing ,why not management?
Looking at most of their decisions of late, they must be on something.

As a someone close said recently, is that why some managers shave their heads, no hair samples available to test?:}

EWP

18th Mar 2012, 11:20

All it takes for evil to succeed is for good people to say 'it's a business'...

division1

18th Mar 2012, 13:29

Qantas Airways - Airline Review. Australia's declining flag carrier. (http://www.destinationtravel.info/reviews/qantasairways.html)

Especially this piece,

irish-born Alan Joyce, one of corporate Australia's few openly gay CEO's has been progressively de-Australianising 'the flying kangaroo' since he took over from the unloved Geoff Dixon in 2008. The airline has progressively shifted operations offshore, reduced wages and conditions for staff and outsourced anything its able to, to cheaper suppliers. This strategy has failed to produce benefits as the airlines market share has declined dramatically while its share price has halved in two years.

And this one,

The upper echelon of the company is an old boys club, devoid of ideas, initiative or talent where promotion is based on ‘brown nosing’ and knowing the right people. Corruption and incompetence thrive within the company at all levels. Senior management despise the airline’s unionised staff and the airline suffers from an upstairs/downstairs culture.

This guy sure knows his stuff,

The Australian flag carrier once boasted an extensive international and domestic network flying to many exotic destinations; however the airline has been in rapid retreat for over a decade. One by one, the airline has withdrawn from location after location often replacing itself with its inferior subsidiary Jetstar and then codesharing on these flights.

Qantas Airways - Airline Review. Australia's declining flag carrier. (http://www.destinationtravel.info/reviews/qantasairways.html)

Capt Kremin

18th Mar 2012, 22:01

Ken? Managers Perspective? Your thoughts please?

Capt_SNAFU

18th Mar 2012, 22:55

I mostly agree with the writers view on management but that website is mainly rubbish.

Emirates gets five stars for history. Started in 1985 QF 1920 yet QF gets less stars. Joke.

Safety Air France 4 stars QF 3.5 LMFAO

DrPepz

20th Mar 2012, 13:25

Malaysia Airlines Looks to Delay AirAsia Deal - Southeast Asia Real Time - WSJ (http://blogs.wsj.com/searealtime/2012/03/19/malaysia-airlines-looks-to-delay-airasia-deal/)

Malaysia Airlines’ management is pleading for more time to enable a share-swap deal with the founders of budget airline AirAsia Bhd. to help stabilize the finances and operations of the state-controlled flag carrier.

Malaysian Airline System Bhd., as Malaysian Airlines is formally known, posted a record loss in 2011, losing 2.5 billion ringgit, or around $824 million, thanks to soaring fuel costs and one-time provisions, just a few months after the share-swap agreement with AirAsia’s founders, Tony Fernandes and Kamarudin Meranun.

Under the terms of the deal, Mr. Fernandes’s and Mr. Kamarudin’s holding company, Tune Air, will take a 20.5% stake in Malaysian Airline System and two board seats. State-investment agency Khazanah Nasional, the largest shareholder in Malaysia Airlines, will in turn take a 10% stake in AirAsia.

Some analysts have said the arrangement could introduce a more market-oriented mindset at Malaysia Airlines, which they say in the past has existed as much to serve government policy as to generate revenue. But some Malaysia Airlines employees have opposed the deal. Its employees’ union is especially fearful about the impact that AirAsia’s successful cost-cutting philosophy might have on Malaysia Airlines’ operations, including the possibility that the state-controlled carrier might have to lay off workers. AirAsia’s budget model has helped create a burgeoning demand for air travel across Southeast Asia, but without the frills—and higher ticket prices—of older airlines such as Malaysia Airlines. AirAsia is planning initial public offerings for its Thai and Indonesian affiliates in the coming months.

Malaysia Airlines union Secretary-General Abdul Malek Ariff said last week that Prime Minister Najib Razak had promised to review the $364 million share-swap agreement, which is close to being concluded, in a meeting in February, but added that they haven’t yet heard back from Mr. Najib. Government officials have acknowledged there was a meeting, but a government spokesman had no immediate comment on the matter Monday. AirAsia officials couldn’t immediately be reached for comment.

Either way, since February the dispute has become increasingly political in tone. The Malaysian political opposition alliance led by Anwar Ibrahim has pledged to look again at the share-swap if it is elected to power in general elections due by March 2013, and market speculation has increased that the deal could be under pressure.

In an unusual written statement issued Friday, Malaysia Airlines’ top management said the share-swap agreement with AirAsia’s founders will help the airline get back on a more stable footing, stating that the two rivals can cooperate in several key areas to reduce costs.

“Already, we are in the process of setting up joint-venture companies for procurement and training and potential maintenance services provided by Malaysia Airlines Engineering for the AirAsia fleet,” Malaysia Airlines Chairman Nor Yusof said, while asserting the company’s support for Chief Executive Ahmad Jauhari Yahya.

“I am writing in such a forthright manner because I have noted that our business plan has not been accepted by all of our stakeholders and has in fact met with turbulence in some sectors,” Mr. Nor said. “This turbulence has the potential to distract the attention of Malaysia Airlines’ management team and its 20,000 staff from the very crucial task at hand. That task is our top priority. It is the economic recovery and sustained future performance of Malaysia Airlines.”

Malaysia Airlines’ recovery plan, devised separately from the share-swap agreement, is ambitious. It hopes to launch a new regional, short-haul premium airline to complement AirAsia’s low-cost model and plans to introduce the Airbus A380 to its fleet.

In his statement, Mr. Nor said airlines around the world are facing a challenging business environment, and that “the market is punitive for those on a weak footing.”

After announcing its 2011 losses, the airline said it would raise funds to help strengthen its balance sheet. “Malaysia Airlines is a very sick patient, and its condition is quite critical,” the chairman said. “There are a full range of prescriptions available. Judge us by the result, not the choice of prescription.”

DEFCON4

20th Mar 2012, 22:32

Maybe QF could make MAS an offer.
$A10 for the lot and benefit them with their expertise.... ROFLMAO
Gee I amuse myself sometimes

DrPepz

21st Mar 2012, 06:11

Hahaha this is hilarious

TODAYonline | Business | Qantas plans for Asian hub put on hold (http://www.todayonline.com/Business/EDC120321-0000081/Qantas-plans-for-Asian-hub-put-on-hold)

Qantas plans for Asian hub put on hold
Updated 08:36 AM Mar 21, 2012
BERLIN - Qantas Airways chief executive Alan Joyce said plans to set up a full-service carrier in Asia have been put back by "a year or two, or three" after the carrier failed to secure a deal to build a hub there.

"We are still in dialogue with both the Singaporeans and Malaysians but nothing is happening in the short term," Mr Joyce said in Berlin. "It's more of a long-term issue."

Qantas said in August it planned to build a base in Malaysia or Singapore in order to hire workers at a lower cost and offer a greater choice of connecting flights in the fastest growing aviation market. Talks with Malaysian Airlines collapsed after the companies could not agree commercial terms, Qantas said in a statement on March 9.

The project failed because the requisite traffic rights could not be secured in Singapore, while Malaysian Air is going through a restructuring plan of its own, so that reaching an accord with Qantas proved too "complex", Mr Joyce said last night in Germany, where Air Berlin joined the Oneworld alliance.

"We both agreed mutually that we would delay it for a while and then start the dialogue again in the future," he said.

The Asian carrier would have lost money in the first few years of operation, and was aimed more at recovering market share than delivering on current earnings targets, Mr Joyce said.

"We'll eventually do it but the time wasn't right today," he said. Qantas and Malaysian are both Oneworld members.

While Qantas has about 65 per cent of Australia's domestic air market, less than 20 per cent of international passengers choose to fly on its planes after customers switched to rivals such as Singapore Airlines and Dubai-based Emirates. BLOOMBERG

Is it a year, two years or three years?