Qantas August 23rd announcements [Archive]

Worrals in the wilds

22nd Aug 2012, 21:32

Big day ahead, go forth and rumour it up! AJ announces that he is grounding the fleet until the Twitterati/bloggers stop being mean about the crappy new ad;

Leigh Clifford says that staff are the company's greatest asset and actually means it;

Leigh Clifford then gets dragged off to involuntary care by his fellow board members because they realise the previous statement is so off the beam for him that it's indicative of a psychotic episode;

Peter Cosgrove quits, as he finally realises that being a part of the Qantas Board is doing absolutely nothing for his reputation as a man of integrity;

Mars Rover sends back pictures of the new Heavy Maintenance facility. It's not just off-shored but off-planet cos the Martian amoeba are cheaper to hire; they know jack about aircraft and don't have any arms or legs but hey, they're cheap;

Shareholders get told it's all going great despite the International 'loss' (nothing to see here :suspect:) and what's wrong with $1 a share anyway.
:}
THE BIG ANNOUNCEMENT
Emirates are going to buy Qantas and use the fleet exclusively for live goat freighters, because goats don't care whether the IFE works or not.
:E

DutchRoll

22nd Aug 2012, 21:43

But, only post factual information where possible please.
Isn't "factual information" and "announced by CEO Alan Joyce" somewhat of a contradiction?

ALAEA Fed Sec

22nd Aug 2012, 21:51

I heard that Joyce would be standing aside so I can take his position.

ejectx3

22nd Aug 2012, 21:52

Now that's comedy!

ALAEA Fed Sec

22nd Aug 2012, 21:54

I wouldn't take it. Not enough money.

ejectx3

22nd Aug 2012, 21:56

I agree, especially with his 50% pay cut. Poor 'lil fella'

The The

22nd Aug 2012, 21:58

It has been mentioned that there are restructuring costs of around $370m.

What exactly is that? I know a few more CEO's, nice office furniture for them etc would cost a bit, but $370m? Solid gold taps in the executive dunnies perhaps?

Isn't this restructure supposed to SAVE money?

gobbledock

22nd Aug 2012, 22:13

Shareholders rejoice at the announcement that a dividend will be paid in 2019/2020.

Nudlaug

22nd Aug 2012, 22:48

Where are the "Like" buttons for each of above comments??? :D

ejectx3

22nd Aug 2012, 22:57

Yeah that hasn't really been dissected much , but I agree.

Three
Hundred
And eighty

M I L L I O N

To restructure this company.

Can someone explain that ?

Capt_SNAFU

22nd Aug 2012, 23:04

245 million dollar loss.:*

ejectx3

22nd Aug 2012, 23:09

Why announce qf internationals loss on its own, but combine qf domestic and Jetstar ? Hiding something Alan?

Collando

22nd Aug 2012, 23:12

AJ admits he was wrong, and that aircraft still actually need the same amount of maintenance that they did last year and in fact do not actually tell us when they have a crack in the structure or have a cut in the tyre.

tryhard1

22nd Aug 2012, 23:15

Is there any internet link to watch the presentation?

Capt_SNAFU

22nd Aug 2012, 23:20

35 787-9 cancelled. :mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad: :mad::mad:

gobbledock

22nd Aug 2012, 23:20

Is there any internet link to watch the presentation?
Might be streamed live at gaydar.com, or perhaps on Hansard?

I hope all all the Silvertail cardigan wearing old biddies are there, armed with eggs and loaded colostomy bags ready to throw at those on the stage!
Hopefully Joyce and the Board will be welcomed with a mighty boo and cries for their scalps!

tryhard1

22nd Aug 2012, 23:24

So thats a "No" then Gobbledock?

ejectx3

22nd Aug 2012, 23:24

Thursday 23 August (EST). The
link to the webcast is www.media-server.com/m/p/yrtkydar

tryhard1

22nd Aug 2012, 23:26

Thanks ejectx3

dragon man

22nd Aug 2012, 23:31

Cx the 787-9, its all over, no hang on there getting 777s instead. Im looking out the window and there are pigs flying by!!!

Collando

22nd Aug 2012, 23:41

Still getting 787-8 for Jetstar, plans for expansion next year for Jet star, The wind down of mainline continues !!!!

Capt_SNAFU

22nd Aug 2012, 23:46

Would one of these Journo's ask how much J* international is making?

John Citizen

23rd Aug 2012, 00:43

Cookies must be enabled. | The Australian (http://www.theaustralian.com.au/business/profit-loss/qantas-makes-254m-net-loss-in-fy/story-fn91vch7-1226456360477)

QANTAS Airways, reporting its first annual loss in nearly two decades, has cancelled orders for 35 of Boeing's more fuel-efficient 787-9 aircraft in a bid to save $US8.5 billion.

Australia's flag carrier is fighting to hold on to its coveted investment-grade credit rating as a robust performance from its domestic flights operation is offset by heavy losses at its international division. Based deep in the southern hemisphere, Qantas is an end-of-line carrier that's more exposed to soaring jet fuel costs.

The long-delayed arrival of Boeing's 787 class of aircraft has lumbered it with fuel-guzzling 747s longer than it expected.

Qantas said today that it had retained options and purchase rights for 50 of the 787-9 aircraft. There has been no changes for the group's plans for the 787-8 version, 15 of which will be delivered as planned from the second half of next year.

..."However, firm commitments for 35 787-9s will be cancelled. The restructure means a two-year delay in the group's first 787-9 delivery," the company said in a statement.

The changes will result in a reduction in capital expenditure that would equal $US8.5 billion at list prices, Qantas said.

The Sydney-based company booked a net loss for the year to June 30 of $245 million, compared to a $250 million profit a year earlier.

Underlying pre-tax profit of $95 million was at the top end of company guidance of $50 million to $100 million and beat the $65.9 million average of seven analysts' forecasts compiled by Dow Jones Newswires.

Qantas had indicated to investors in June that it would report its first statutory loss since privatisation in 1995, sending its shares to an historical low below $1.

The group's embattled international operations have been under siege as new carriers flying to Australia in recent years from the Middle East and China have been ramping up capacity.

It has also been under attack on the domestic front from a rebranded and restructured Virgin Australia under former Qantas executive John Borghetti.

Earlier this week Mr Joyce revealed that the board had accepted his decision to forgo any short-term and long-term incentive payments that would have been awarded for the 2012 financial year because of the airline’s poor share price and profit performance

gobbledock

23rd Aug 2012, 00:50

Earlier this week Mr Joyce revealed that the board had accepted his decision to forgo any short-term and long-term incentive payments that would have been awarded for the 2012 financial year because of the airline’s poor share price and profit performance

Desperate move by a desperate man. Enough is enough, it is time for those steering the Titanic to be removed the bridge.
Forgoing a bonus still does not justify a $2.5 mil salary, nor does it justify his or the Board remaining with the company, nor shgould it invoke investor confidence, the confidence of the public,the regulator or anybody else.
These chumps have murdered the airline. Well done.

http://www.jesus-is-savior.com/Basics/titanic-doomed.jpg

denabol

23rd Aug 2012, 00:58

I'm shocked by this report. Is it right.
Qantas drops firm Dreamliner 787 orders in huge shakeup | Plane Talking (http://blogs.crikey.com.au/planetalking/2012/08/23/qantas-ceo-joyce-soft-talks-a-plan-that-risks-a-managed-death-for-qantas-international/)

This seems like the ultimate betrayal of all Australians. It says the changes mean a 'managed death' for Qantas long haul.

1A_Please

23rd Aug 2012, 00:59

Qantas is a very profitable loyalty scheme business. Its airline subsidiary appears to be a real drain on its results:sad:

The whole results presentation is incredibly confusing. There is talk of underlying profit but some of the things excluded would appear to be a normal part of a business such as the need to rejig fleet etc. The cost of the shutdown continues to increase. I assume it has become a convenient dumping ground for costs that the directors don't want to talk about. It is very unclear as to where JQ makes it money. Sometimes JQ domestic is lumped in with QF domestic and other times JQ is talked about as a separate entity.

Yield appears to be a problem. Cents/RPK is basically flat. They blame currency though I think the domestic wars are starting to hurt. No wonder they won't give profit guidance!!!!!

ohallen

23rd Aug 2012, 01:05

Noticed they snuck in almost a 100% increase in costs re industrial action and downplayed Grounding element of that which was their decision. Assuming the numbers are correct, which I don't, in my books that makes AJ just as culpable as the unions in the cost of HIS decision. When is someone going to ask how could this go up in this way????

This has to be the most uninspiring, confusing and vague performance when the place needed inspiration.

gobbledock

23rd Aug 2012, 01:08

Don't forget............

Trans-Tasman costs hurt Jetconnect (http://www.smh.com.au/business/transtasman-costs-hurt-jetconnect-20120819-24ghk.html#ixzz245c7QHP4)

TIMA9X

23rd Aug 2012, 02:09

T9_0znxKr30

News 24 summary

crystalballwannabe

23rd Aug 2012, 02:11

The formal loss has been announced - worse than forecast....

787-9 Planes cancelled.

Refurbishing the 767 must be tax effective? These must be wholly owned and not leased????

Will be interesting to read the annual report.

600ft-lb

23rd Aug 2012, 02:19

http://img846.imageshack.us/img846/6498/no787foryou.jpg

http://imageshack.us/photo/my-images/846/no787foryou.jpg/

QF94

23rd Aug 2012, 02:51

Why announce qf internationals loss on its own, but combine qf domestic and Jetstar ? Hiding something Alan?

Because the international arm of the company will be made to look like it's making a loss every year over the coming years, so that they can justify closing down QANTAS International as a loss-making basket case, and replace it with JQ services. Notice how QANTAS aren't getting the 787 but JQ is? The shutting down of QANTAS last year, cost INTERNATIONAL over $200 million, including the shutdown of Domestic. Anything loss-making is put against QF International, while anything profitable is put against Domestic and JQ.

Refurbing the 767's? As much as I like the aircraft, they are averaging 20 years of age, and a new paint job and new interior does not make it more efficient to fly. Anyone recall the 743 refurbishment to 744 status.

Alan Joyce not taking his bonus this year? What a con-job. That's why he was paid his bonus and more last year, effectively doubling his paypacket.

Bagus

23rd Aug 2012, 03:07

What happen to the 747 retirement,

QF94

23rd Aug 2012, 03:07

About Qantas - Media Room - Media Releases - Qantas Group Restructures Fleet Plan (http://www.qantas.com.au/travel/airlines/media-releases/aug-2012/5440/global/en)

The quotes below are from the QANTAS News Release website.

Deliveries of 15 B787-8s to Jetstar will continue as planned, with the first aircraft to arrive in the second half of 2013. This will enable the transfer of Airbus A330 aircraft from Jetstar to Qantas Domestic, and the eventual retirement of Qantas’ Boeing 767 fleet.

Why is money being spent on refurbing 767 aircraft if they're going to start retiring them within 18 months?

“We have 12 A380s in service across our long-haul network and the reconfiguration of nine B747s will be
complete by late 2012. Boeing 737-800s will continue to enter the Qantas Domestic fleet as part of the Group’s existing fleet plan, while Airbus A330s will transfer from Jetstar as B787s are delivered. And Jetstar’s domestic and pan-Asian fleet requirements will be met over the long-term by our existing A320 order book and the arrival of B787-8s.

How is International expected to turn around when fleet numbers aren't increased, no new aircraft introduced, no new destinations added or exisiting destinations culled?

QF94

23rd Aug 2012, 03:08

What happen to the 747 retirement,

It won't happen overnight, but it will happen.

DraggieDriver

23rd Aug 2012, 03:20

Still blaming high price of fuel... This link seems to refute that: Jet Fuel - Daily Price - Commodity Prices - Price Charts, Data, and News - IndexMundi (http://www.indexmundi.com/commodities/?commodity=jet-fuel&months=60)

Couldn't find a comparison of fuel surcharge that passengers are being slugged with, as unfortunately this blog didn't get updated after 2008: Airline Ticket Fuel Surcharge Watch (http://rickseaney.com/airline-ticket-fuel-surcharge-watch/)

It is interesting to note that oil price per barrel is currently $97 per barrel, a price at which airlines like WestJet removed fuel surcharges totally back in 08.

The Green Goblin

23rd Aug 2012, 03:27

Quote:
Deliveries of 15 B787-8s to Jetstar will continue as planned, with the first aircraft to arrive in the second half of 2013. This will enable the transfer of Airbus A330 aircraft from Jetstar to Qantas Domestic, and the eventual retirement of Qantas’ Boeing 767 fleet.
Why is money being spent on refurbing 767 aircraft if they're going to start retiring them within 18 months?

I'd hazard a guess because they don't want the A330s back.

The A330s will stay at Jetstar.

QF94

23rd Aug 2012, 03:28

It is interesting to not that oil price per barrel is currently $97 per barrel, a price at which airlines like WestJet removed fuel surcharges totally back in 08.

QANTAS doesn't use the US fuel prices, it uses the Singapore fuel price index, which mind you, are still way down when US fuel prices were at USD150/barrel a few years ago.

1A_Please

23rd Aug 2012, 03:40

QF also has the advantage of a very strong AUD that, as well as offsetting increases in fuel prices, also lowers costs for aircraft purchases, leases, foreign bases etc.

Livs Hairdresser

23rd Aug 2012, 03:42

Even if these clowns get the sack tomorrow it will take a decade to recover from this.

TIMA9X

23rd Aug 2012, 03:44

zga4rqsDDIw
An interresting piece here from Tony Webber
An airline has a problem when its non-flying segments are more profitable than its flying segments because the flying segments are at the core of its business, and the non-flying segment performance depends heavily over a long term on the strong performance of the flying segments.
It is unlikely that the Qantas frequent flyer program can hold the ship upright for a long period if the flying segment of the business continues to perform poorly.

Read more: Slow learners at Qantas (http://www.smh.com.au/business/earnings-season/slow-learners-at-the-flying-roo-20120823-24npr.html#ixzz24Ky93YPC)

QF94

23rd Aug 2012, 03:50

QF also has the advantage of a very strong AUD that, as well as offsetting increases in fuel prices, also lowers costs for aircraft purchases, leases, foreign bases etc.

Exactly, but they sure as hell in Coward St AREN'T taking advantage of those advantages.

1A_Please

23rd Aug 2012, 04:06

QF94

23rd Aug 2012, 04:12

it wasn't stated anywhere in the presentation but Slide 15 seems to suggest that HNL will no longer be a QF Int'l route going forward. This probably makes sense given JQ can handle a leisure route such as this...funny they didn't announce it though.

It won't be around for much longer with QANTAS, but I fail to see how you think it makes sense to drop HNL given that the three weekly flights on QANTAS are full, and sometimes cheaper than JQ, and yet QANTAS are operating the 767's against the A330's.

The decision to drop HNL will be the same as dropping the Gold Coast a few years ago, and then return to it.

Stalins ugly Brother

23rd Aug 2012, 04:21

How is International expected to turn around when fleet numbers aren't increased, no new aircraft introduced, no new destinations added or exisiting destinations culled?

By setting up more Lounges!! :rolleyes: Everyone knows you only go to an airport to sit in a Lounge. You don't need more aircraft, Just more Lounges, more Lounges for everyone I say!!!!!! :ugh::ugh:

CaptCloudbuster

23rd Aug 2012, 04:22

Over on QREWROOM it has been reported the High AU $ is being trotted out in the list of management excuses.

One crewmember with a long memory posted the following blast from the past authored by Margaret Jackson

27 August 2001

Dear Shareholder, I am writing to inform you of our trading results for the year ended 30 June 2001.

2000/2001 Full Year Results
The year ended 30 June was a challenging year for Qantas, with significant price discounting in the Australian domestic market, a weak Australian dollar, an overall slowing in the Australian and international economies and continued high jet fuel prices.

In this difficult environment, Qantas achieved a profit before tax of $597.1 million, 21.7 per cent lower than last year’s result. Profit after tax was $415.4 million, down 19.7 per cent.

This significant profit was a considerable achievement at a time when the global aviation industry is experiencing unprecedented change and many airlines around the world are reporting losses or small profits.

Dividends
The Directors declared a fully franked final dividend of 9 cents per share, bringing total fully franked dividends for the year to 20 cents per share. The total ordinary dividend was 2 cents lower than last year, however the payout ratio of 60 per cent was maintained.

Revenue
Revenue for the year totalled almost $10.2 billion, a record for Qantas and an increase of $1.1 billion or 11.9 per cent on last year. This growth was driven by a 9.3 per cent increase in flying.

Expenditure
Total expenditure, including interest, rose by 14.9 per cent due mainly to costs associated with capacity increases and higher fuel costs. Total fuel expenditure increased by $466.6 million.

Business Segments
International operations continued to make a strong contribution to Qantas’ performance during the year, with earnings before interest and tax (EBIT) rising 22.4 percent to $458.7 million.

Domestic operations contributed $127.4 million in EBIT, down 53.2 per cent, with two new domestic entrants resulting in significant price discounting and pressure on fares across all routes.

Subsidiary operations – which include the regional airlines, Qantas Holidays and Qantas Flight Catering – contributed $109.7 million to the Group’s EBIT, a reduction of 35.2 percent.

Outlook
Qantas faces a very challenging external environment with slow global and domestic economies, intense domestic competition, continuing weakness of the Australian dollar and high fuel prices.
Global pressures are causing airlines around the world, including Qantas, to restructure so they are in a position to participate successfully in this rapidly changing industry.

Qantas Airways Limited ACN 009 661 901 Qantas Centre 203 Coward Street Mascot New South Wales 2020 Australia Telephone 61 (2) 9691 3635
This year’s performance confirms that Qantas is a disciplined and robust airline, ready to meet the myriad challenges that it must face while maintaining a clear focus on safety and reliability, efficiency, productivity and customer service.

Annual General Meeting
The Qantas Annual General Meeting will be held at the Melbourne Concert Hall, Victorian Arts Centre on Thursday 18 October 2001 at 2pm. As shareholders, each of you will receive advance notification along with details of key items to be considered at the meeting. This information will be mailed to you in mid-September with the Annual Report, which will give you a comprehensive outline of the company’s financial, operational and commercial performance.

I hope this brief outline of the 2000/2001 year has given you further insight into the activities of Qantas in which you, as one of our valued shareholders, play an essential role.

Yours sincerely,

Margaret Jackson Chairman
:rolleyes:

empire4

23rd Aug 2012, 04:38

The only people to blame here are the incompetent Board and CEO. First loss in QF's 17 year floated history. They can blame the price of fuel.......blah blah.....Australian Unions ......blah blah......Australian public choosing other carriers.......blah blah. Can people not seeing that little Irishman is destroying the roo.?

going postal

23rd Aug 2012, 04:47

They could've saved 200 mil by trying not to shaft their staff. But I guess thats part of the .... transformation... :mad:

cart_elevator

23rd Aug 2012, 04:47

So new aircraft for QF international all cancelled... Jumbos being retired .. no aircraft to explore new route possibilities ... What is the future for International ?? There seems to be none in the current management's plans

wilcoleaks

23rd Aug 2012, 04:54

How come things "external" can be blamed?

The "external" things are what MGMT are supposed to MANAGE as well as the internal.

This mentality will not wash with institutional investors for much longer.

AJ is the captain of this ship - I remember when AGL had to oust its CEO a few years ago. Share price dropped, then powered upwards.

Ngineer

23rd Aug 2012, 05:12

Our brand has been damaged and those responsible refuse to accept this. Years of under-investing in advertising the main brand (which is a no-brainer), selling out on Australian jobs and offshoring, poor staff morale, poor choice of fleet, etc etc etc...........

I mean really!! What would one expect. They failed to recognise the brand and nuture it. Now it is suffering.

The only thing I would expect is for things to get worse, a round of fat whopping bonuses for our head honchos, and more job cuts.

Archer2002

23rd Aug 2012, 05:29

The head start that Qantas had as Australia's own airline was invaluable, yet that advantage has been squandered and the reputation of the brand trashed by incompetence. Overseas carriers have made a meal of Qantas and left it withering, with Qantas management blaming everyone and everything else for the decline.

The Green Goblin

23rd Aug 2012, 06:37

Just a thought.

As Qantas has split mainline into two and from all accounts the QSA only applies to the international division, what is to stop domestic from flying internationally bypassing the QSA?

What is to stop domestic from being the new golden child?

I noticed domestic carries all the assets while international the liabilities.

Can they simply wind up international, transfer the assets to domestic and play happy days with new agreements?

I don't think the public will be happy flying Jetstar internationally as a replacement to mainline no matter what. The only thing I can see sense in is what I just mentioned?

It's what I'd do if my millions of dollars worth of bonuses were tied to it.

Food for thought?

crystalballwannabe

23rd Aug 2012, 06:56

The only thing keeping QF international from extinction is the Dugong.

Jetstar will be given the rest.

If current management could dump London and the States to wind up international they would.

Such is the mess the dual brand strategy has created.

blow.n.gasket

23rd Aug 2012, 07:15

Maybe It's time the Unions of Qantas chipped in and hired the likes of Kordamentha to do a forensic investigation into what Qantas management trot out all the time.

Ï wonder what, if anything, Kordamentha's "Interrogate" programme would reveal if let loose on Qantas' books????

KordaMentha InterrogateTM

http://www.kminterrogate.com/assets/images/forensic_accounting.jpg
The KordaMentha InterrogateTM was developed to assist organisation analyse high volumes of transaction data to identify suspicious activity and financial loss. The suite utilises a broad range of tests and data analysis techniques to identify suspicious vendor and/or employee activity as well as opportunities to recover leakage within the transaction data.
The suite has been developed based on more than 30 years of combined experience in investigations and data analysis. The suite evolves based on every positive incident identified and continues to evolve with regular input from our investigations team. This ensures the suite keeps up with current issues and risks which also helps to minimise false positives.

The suite considers the following:

relationships between vendors, and employees;
validity of key fields and records, as well as against external data sources; and
duplication and unusual transactions, including trends and behaviour.
The suite attempts to cut through high volumes of data to return a manageable list of items for investigation and follow up. Appreciating the limited amount of time available to organisations, our team have incorporated the learning from consulting and commercial experience into the suite to ensure that only high risk items are brought forward for immediate attention.
All content copyright © 2008 KordaMentha, all rights reserved.

Ka.Boom

23rd Aug 2012, 07:19

Traffic to HNL has increased 45% in the last 12 months
Hawaiian Airlines are flying daily out of Sydney full
Hawaiian will start flying out of BNE to HNL and then look at MEL
Joyce has said on several occasions that he is surprised that Qantas makes money flying to HNL.
There are the problems with the airline encapsulated in one route
They make money so they are pulling out and leaving it to Jetstar
BTW Jetstar is hardly ever full because pax dont like travelling with them

The Green Goblin

23rd Aug 2012, 07:26

I think the problem with Jetstar is you are seen as not flying with Qantas.

People like to feel 'upper middle class' and flying Jetstar doesn't give you that.

Look at Melbourne. You walk past all the nice Qantas gates down to the dungeon to the dirty lounge where the floor looks like it's never cleaned and the seats are covered in stains.

Ollie Onion

23rd Aug 2012, 07:29

Qantas International will be wound up, the 787-900's will be deployed from 2016 onwards painted in Qantas colours and crewed by pilots on EBA's way below the current Qantas longhaul award. There is nothing to stop this being Jetstar pilots except that by 2016 they may be viewed at to expensive.

This gives AJ and his team 3 years to effectively finish Qantas International.

Mstr Caution

23rd Aug 2012, 07:32

The problem with Qantas is the management have been tinkering around the edges for too long & have taken their eyes off the main game.

Pre GFC, making money & big bonuses was easy, those days are over.

Because they have tinkered for too long, now the airline has put itself in a position that it must take a big hit in short term pain, (shedding staff, deferring aircraft deliveries, upgrading 767 interiors) in the hope it will prosper in the future.

Management alone have positioned the brand & the airline to the predicament it currently sees itself, they are the ones to blame.

They have managed the airline into the current state of play & are now attempting to manage their way out of it.

1. Distracted during setting up & expanding the LCC enterprise.

2. Attempting to replace the mainline product with that of the LCC & expecting passengers not to walk to the competition.

3. Taking their customers and staff for granted.

4. Not fixing the structural changes within International (that they claim now exist) until such point at is threatens the very existence of international. ie: How the F&$# has it taken Joyce 4 years at the helm to realise he needed to split the DOM & INTL business & now commence a "transformation" process?

5. Not looking after staff hence the current engagement levels.

6. No product offering in Europe.

7. Not recognising that International is an important feeder to the Domestic business & resourcing the international business appropriately. ie: B744 IFE has been stuffed for 10 years. Not replacing the ageing 744 earlier.

8. People value safety, safety incidents have allowed the reputation to be tarnished.

9. Public punch ups with their staff every 3 years.

10. Tired domestic product, aged 767 with 1980's style video projection systems.

11. Poor premium network offering, both domestically & internationally.

12. Grounding the airline, alienating staff & loyal passengers.

13. Brand confusion - Pax buying what they thought was a premium flight & getting the LCC.

14. KPI's which rewarded individual managers for cost reductions in their own department, which in turn was less efficient for the business as a whole.

15. Not listening to frontline staff, who see the issues & problems first hand.

16. Poor leadership.

For tens of Millions of dollars "Bain & CO" should be able to tell management thats how they got here.

Captain Dart

23rd Aug 2012, 07:42

The truth will out. Interesting article on ninemsn finance

Qantas denies managers to blame for losses (http://finance.ninemsn.com.au/newsbusiness/aap/8520757/pilots-attack-qantas-h-over-loss)

SOPS

23rd Aug 2012, 07:53

Does 20 odd aircraft in International actually consitute a "fleet"? Im not sure it does. You can see the end coming over the horizon.
And I repeat my earlier prediction. Anytime soon Jetstar is going to become "expensive" and "not doing well"...and up will step the Network EBA, just wait for it.

Saying "it wont happen"?. If I said 15 years ago, QF international will be almost gone by 2012..and Jetstar will be doing almost all of the international flying and getting the 787s ISO mainline, you would have told me I was deluded.

I hope I'm wrong, I really do,.....but lets see...

Romulus

23rd Aug 2012, 08:05

ButFli

23rd Aug 2012, 08:13

As Qantas has split mainline into two and from all accounts the QSA only applies to the international division, what is to stop domestic from flying internationally bypassing the QSA?

Not quite sure where that comes from? Maybe you're thinking about the Air Navigation Act 1990 (Cth) and how it applies to Virgin?

Mstr Caution

23rd Aug 2012, 08:13

Capt Dart.

There is already evidence of mismanagement

After the APA fiasco John Borghetti stated that the executives were so consumed with the private equity bid that no one was managing the business.

Nothing has changed since.

Alan Joyce has been jet setting around talking to Malaysian Airlines, air Asia X, Emirates and anyone willing to listen.

Meantime he's also distracted whilst Chairing ICAO & setting up Jetstar Enterprises thru Asia.

Qantas needs a new CEO and fast.

Ngineer

23rd Aug 2012, 08:33

The head start that Qantas had as Australia's own airline was invaluable, yet that advantage has been squandered and the reputation of the brand trashed by incompetence.

Absolutely. The spirit of Australia, and "I still call Australia Home" seems to be replaced with you're the reason we fly.......

I think the former held greater sentiment with most Aussies, however that was allowed to wither and die a little while ago.:ugh:

We need a patriotic airline back if we wish to grab the Aussie market.

mikk_13

23rd Aug 2012, 09:20

Well the 787s that they dumped would be better loved at VA anyway. Maybe John will pick them up and they'll be flying Australians anyway.

ohallen

23rd Aug 2012, 09:23

Nothing will change until the Chairman and CEO go, because whilst they are still there the status quo or cost cutting are the only options they will see or consider. There is not ONE example of expansion beyond Jetstar and they refuse to recognise that cancer is cancer.

What is needed is vision and discipline, and nothing I have heard or seen in the last 2 CEO's shows anything that comes even close to resembling that.

nitpicker330

23rd Aug 2012, 09:47

God I think I'm gunna puke.. :{

Joyce please explain how the strong AUD is a bad thing for QF?????????

What a load of bollocks that the media never call him on...:=

Cargo744

23rd Aug 2012, 09:58

where did i keep my alfoil hemet? maybe fedsec can help me

Qantas 787

23rd Aug 2012, 10:00

What is that old saying........'you have to spend money to make money'. Spending endless amounts of money on marketing and the lounges.......the onboard product is what matters.

I too am puzzled about the 787 decision. Yes it is a bit number on a balance sheet in the coming years, but it will save so much of that fuel bill over its lifetime........so what do they do, keep the older aircraft which will continue to be burning that expensive fuel.

Anyone commented on the '2 $100 staff travel vouchers'........does that make it sound more impressive?

The roadshows are next week - ask the hard questions during those and report back for those who can't attend.

captainrats

23rd Aug 2012, 10:02

The smugness has gone but the bulldust persists.This is a man out of options.
He and those masquerading as management are finally being exposed in the mainstream media for what they are :incompetent.
They need to be held accountable for these continued stuff ups

Worrals in the wilds

23rd Aug 2012, 10:03

the onboard product is what matters.
True.
Qantas management: You're the reason I fly...with another carrier.
I tried, I really did. :sad:

Tableview

23rd Aug 2012, 10:06

Joyce please explain how the strong AUD is a bad thing for QF?????????

A totally one-sided argument. The strong AUD is a bad thing for QF because it makes visiting Australia more expensive for inbound passengers.

The statement ignores the many benefits which outweigh the disadvantage. A real moron's argument, but having seen some of AJ's outpourings, I fear he is a moron.

genxfrog

23rd Aug 2012, 10:12

This moron AJ must be taking advice from Gary Toomey. Remember him?

73to91

23rd Aug 2012, 10:22

Qantas management: You're the reason I fly...with another carrier.
yep, we are regulars to HNL if we can't fly QF we go Hawaiian. QF because well, sometimes I'm not sure.

Hawaiian, because they are cheaper than JQ for 2A2C.

Neighbours are regulars to DPS, they are able to fly J class and refuse to fly JQ now, they have tried their 'business class' but would prefer to fly Garuda.

Management listen to customers and return to OOL but I'd like to know what customers have they asked? I have never been asked as a FF.

Mstr Caution

23rd Aug 2012, 10:54

Nothing will change until the Chairman and CEO go, because whilst they are still there the status quo or cost cutting are the only options they will see or consider.

One must wonder if the Chairman has received a "roasting" from institutional investors yet.

96% support from investors at the Shareholder meeting last October.

Toto, I don't think we're in Kansas anymore.

Must be getting close :E

stubby jumbo

23rd Aug 2012, 11:22

What a performance !

This clown just gets worse with time. I thought it wasn't possible -but the display tonight was downright APPALLING.

The strong $A ..........what tha??????? I thought buying new kit in $USD and paying for fuel in $USD is a non-issue.

But no -lets use Darth's- Chicken Little strategy and deny, lie, spin and moan about stuff that doesn't exist.

Hats Off to you Leigh Sales........2 nights in a row. Last night you hit the Opposition Leader for a six and tonight AJ looked liked some 12 year old private school boy trying to explain the theory of relativity.

"I TINK ITS A TUFF MARKET" :mad::mad::mad::mad: off!

The game is up you chump.

Its time to leave the house.

YOU'RE FIRED !

TIMA9X

23rd Aug 2012, 11:34

Alan Joyce, welcome again to the program.

ALAN JOYCE, CEO, QANTAS: Thanks Leigh. It's good to be here with you.

LEIGH SALES: The question I'm sure passengers would like me to ask you is what does a substantial loss like this mean for them? Will it make any difference to people who fly Qantas?

ALAN JOYCE: No, it won't. I mean, we're still investing very much for the future in Qantas. We're spending $1.9 billion for new aircraft this year and next year. We've gotten the fleet down to the lowest age it's been in some time, 8.3 years of age. We're investing in new lounges, new entertainment system. So that investment is a very important part of the turnaround that we're planning for the international and the domestic business.

LEIGH SALES: A lot of people will remember the industrial action last year and the decision to shut down flights briefly. What's your internal research telling you about the impact that that's had on customer attitudes and loyalty?

ALAN JOYCE: Yeah, customer loyalty for the premium Qantas brand is as strong as it's ever been. We're seeing that our customer advocacy, which is people's impressions of Qantas when they fly, people's impressions of our product and our service, is at the highest levels it's ever been. So we're very confident that we're in a very good position in terms of customer loyalty, in terms of customer focus and in terms of where the brand is positioned.

when you read this bit back again, how do ya feel......:mad: and he gets away with it. double :mad::mad:

video up soon.... for those who missed it...

stubby jumbo

23rd Aug 2012, 11:43

Qantas when they fly, people's impressions of our product and our service, is at the highest levels it's ever been. So we're very confident that we're in a very good position in terms of customer loyalty, in terms of customer focus and in terms of where the brand is positioned.

The ARROGANCE of this bloke is breathtaking.

Rather than trying to use lies and spin.......why not use a strategy that customers want:

HONESTY AND TRUTH.
the highest levels it's ever been.

.......yeah right :rolleyes::rolleyes:

regitaekilthgiwt

23rd Aug 2012, 11:44

We're spending $1.9 billion for new aircraft this year and next year. We've gotten the fleet down to the lowest age it's been in some time, 8.3 years of age.

Could someone please explain to me what aircraft he is in fact talking about?

And

Which fleet is 8.3 years old

Thanks

Iver

23rd Aug 2012, 11:47

Can/will EK invest more money in Qantas? How will operating older generation fleet like the 400s and 767s help Qantas weather the rising cost of fuel? Even struggling Air India recognizes the fleet needs to be fuel efficient. What a complete idiot! :ugh::mad::eek:

Dark days I am afraid. I imagine applications to EK, QR and that other large UAE carrier will be on the rise...

Jabawocky

23rd Aug 2012, 11:51

And

Which fleet is 8.3 years old

The A320's..... :E

The interior fitout of the B744's, does that lower the average age? The paint on the old 767's?

Geeeze Joyce, you could not run a chook raffle.

Like most Australians Qantas is the Aussie Brand. Germany has Mercedes Benz, The USA GM or Ford, Microsoft or Apple. Ask a foreigner about what iconic Aussie brands there are, and it was Qantas. Soon it will be Fosters :yuk:

ALAEA Fed Sec

23rd Aug 2012, 11:54

At least they didn't cancel the Red Q 320 Neos.

TIMA9X

23rd Aug 2012, 12:05

hnGHxDdLYSU

Part 1 hits it on the head

2mpbG6HZy9A

Part 2 as if they were talking about last year.... the mind boggles what this fella says, and gets away with..... doesn't say much for the financial gurus in the media..... just amazing....

gordonfvckingramsay

23rd Aug 2012, 12:11

So many people interviewed in this article suggested that he is in some way being evasive or "economical with the truth" when it comes to the financial state. And not just the evil unions either. APRA should be having field day with him, I wonder why they aren't.

reacher

23rd Aug 2012, 12:19

She set him up perfectly when he was going on about high fuel prices and AUD. All she had to ask was why Q wasn't/hadn't invested in the the 777 or, even better, why he had they cancelled the latest order or 787.

It was sitting there ready to belt him over the head with it!

TIMA9X

23rd Aug 2012, 12:25

YZ6IJKmkFxg

GREG HOY: He blamed the large losses on the soaring dollar, fuel prices and the drag on profits of Qantas International. But Alan Joyce claims the airline is slowly turning the corner.

ALAN JOYCE: The benefits of our transformation program have started to come through.

GREG HOY: So is the Qantas chief's air defence a fair defence?

TONY SHELDON, NATIONAL SECRETARY, TWU: We've got the first loss in 17 years from a management who’s completely lost their way.

VAS KOLESNIKOFF, CEO, AUST. SHAREHOLDERS ASSN: The reality is it is a statutory loss. That is the true result of the company and we believe the management and board should be clearly accountable for the company's performance and its result.

GREG HOY: But it’s not just shareholders it seems concerned how Qantas portrays its profit and loss. Former senior Qantas executives have also voiced their concern to 7.30 about the credibility and transparency of Qantas accounts endorsing the protests of others.

gobbledock

23rd Aug 2012, 12:28

Tim, I believe you forgot to upload Part 3 of the interview...Here it is:
http://www.ichabodsquad.net/images/turd.png

gobbledock

23rd Aug 2012, 12:44

Ladies and gentlemen it's time to play:

http://members.multimania.co.uk/hkwl/uslogo.jpg

Is it contestant number 1?

http://t0.gstatic.com/images?q=tbn:ANd9GcSPJKfbgi3ZA_WtNtA-D9TCtmOk1r0qnbrvqfnQWUBVQ7sisP_Y

Is it contestant number 2?

http://t1.gstatic.com/images?q=tbn:ANd9GcRB1NvQVXKIAPmsf1pDZ89L-6ZQPnUUb257c0S_szUy7LtJwrK0

Or is it contestant number 3 ?

http://resources3.news.com.au/images/2007/02/14/va1237225816767/Qantas-chief-Geoff-Dixon-5332707.jpg

Qanchor

23rd Aug 2012, 12:48

After the APA fiasco John Borghetti stated that the executives were so consumed with the private equity bid that no one was managing the business.

Not only that, it seems they were so enamoured by their potential windfall that no one bothered to ask if there was a "Plan B", (much less actually have one), in case it didn't come off.

Nothing has changed since.

bubble.head

23rd Aug 2012, 13:21

What's the penalty for cancelling the 35 orders?

theheadmaster

23rd Aug 2012, 13:38

What's the penalty for cancelling the 35 orders?

Part of the $376M 'transformation costs' I'd wager. ;)

SOPS

23rd Aug 2012, 14:00

Why doesn't anyone ask Joyce just where is the investment in Qantas. Not the "group", the investment in QANTAS!!!!!!!!!!!!!!!! Please someone, ask the bloody question, because the answer is nothing, nil, nix.:ugh::ugh::ugh:

600ft-lb

23rd Aug 2012, 14:05

Qantas has invested $20 million in a B767 refurbishment.

That's not a bad start.

SOPS

23rd Aug 2012, 14:11

Permission to disagree...refurbish the 767s, that are 20 years old?? How about some new 787s or 777s...that would be an investment. Or here is another idea, refurbish the 767s and give them to Jetstar and let QF have some 787s, but I think that go against the plan of the destruction of mainline...

Collando

23rd Aug 2012, 14:15

4 years ago or so when AJ took over, qantas didn't need turning around, Now it does. Says alot about his leadership, but now the managers all deny it's not their fault for the loss? Deny all you like, but people aren't that stupid. The buck stop where?

VH-Cheer Up

23rd Aug 2012, 14:17

...flying Jetstar doesn't give you that.

Look at Melbourne. You walk past all the nice Qantas gates down to the dungeon to the dirty lounge where the floor looks like it's never cleaned and the seats are covered in stains.

And the air is humid, sweaty and rank, as if the air conditioning isn't working, and the legionnaire's haven't been around to clean up for a while. It's like walking into a giant teenager's sneaker.

AEROMEDIC

23rd Aug 2012, 14:27

HF3000

23rd Aug 2012, 14:27

ferris

23rd Aug 2012, 14:31

I think the current management's days are numbered. Even the mainstream press are starting to catch on.....Slow learners at Qantas (http://www.theage.com.au/business/earnings-season/slow-learners-at-the-flying-roo-20120823-24npr.html)

ferris

23rd Aug 2012, 14:39

Even the mainstream press are waking up Slow learners at Qantas (http://www.theage.com.au/business/earnings-season/slow-learners-at-the-flying-roo-20120823-24npr.html)

Stalins ugly Brother

23rd Aug 2012, 15:05

Go to BBC - Homepage (http://www.bbc.co.uk/) business, search Qantas.

The thing I found interesting about this blog was not what was said but the fact that in one of the shots of the room during the press conference there was basically no one there!

Hopefully a clear sign the journalist have lost interest in what Alan has to say? Maybe they know this is a dead man walking so what's the point of waisting a day going along to listen to his drivvle.

Some friends in the know reinforce that view, and I am led to believe sooner than later he is gone. Let's all hope. :ok:

qf 1

23rd Aug 2012, 20:24

high Australian dollar is hurting the business.WTF.

denabol

23rd Aug 2012, 20:41

He keeps being allowed to get away with saying the high dollar hurts when it should have ameliorated the price of fuel.

Reading everything I can, and watching everything I could I didn't believe a word of it. This misleading drivel stands in sharp contrast to the actual detail in the ASX announcements.

Qantas has been stripped of new long haul international jets. No-one is paying attention, and that includes a large number of people on this forum who while they dislike Joyce very strongly, didn't seem to realise how despicable the fleet changes are. This was the killer hit when it comes to the future of Qantas long haul.

It's finished. Pick up your stuff and leave the hangar.

Sunfish

23rd Aug 2012, 21:07

I don't bother commenting much on QF these days, there doesn't seem any point.

The mugs that are running the place are infantile in their behaviour and outlook.

To put that another way, If I, when I was a CEO of a tiny company, told my Board that my grand strategy was to go into China, then turn tail and run like hell from that idea six months later, the Board would have rightly sacked me on the spot for incompetence.

To put that another way, my chairman (who was used to doing due diligence on multi billion dollar mining projects) would have had me explaining in detail why my China project was such a good idea and the thinking behind it, before I embarked on it.

The second external director on that Board - who was used to handling billion dollar corporate turnarounds and sat on a number of corporate boards and Government Authorities would have followed up on the Chairman with a graphic description of exactly what was going to happen to me if I stuffed up the execution of the strategy - and meant it.

To put that another way, if there is no way that the CEO of even a tiny company could get away with such incompetence, why the fcuk is Alan Joyce and the Qantas Board?

To put that yet another way, why aren't there penalties for the Board and Alan Joyce for their belated decision to cancel a stack of B787???????

Why aren't people questioning their judgement? The decision to wait for the B787 consumed that one irreplaceable resource - TIME!!!!!!!!!!!

Sunfish

23rd Aug 2012, 21:14

Incompetent!!!!!!!!!

ALAEA Fed Sec

23rd Aug 2012, 21:18

Most of the press are incompetent allowing him to roll out the "high Aussie $" rubbish without further questions.

wrongwayaround

23rd Aug 2012, 21:36

"i tink customer satisfaction levels are back to their usual, 'helty' levels"????

Mate, you left thousands of poor passengers stranded all over the world.

Wow, 90 years of aviation greatness to be left in the hands of this guy. Make no mistake, I'm never the most popular bloke at a party, but when i See AJ on TV - I feel pretty good.

Does the board have the power to sack him?

Romulus

23rd Aug 2012, 21:51

Rather than trying to use lies and spin.......why not use a strategy that customers want:

HONESTY AND TRUTH.

Nope, that's now what customers want, that's what YOU want provided it fits your definition of truth and honesty.

What customers want is a decent level of service at a price they're willing to pay. Other factors will affect that price, the brand perception of Qantas, the feelgood factor, how it's marketed to them etc but the bottom line is that we buy plenty of stuff without considering the honesty of the seller.

Used cars, property, even jobs when it boils down to it, and all cost far more than an airline ticket.

Romulus

23rd Aug 2012, 22:00

How will operating older generation fleet like the 400s and 767s help Qantas weather the rising cost of fuel?

Those old aircraft are paid off one presumes.

So let's say you spend $100M (to make the maths easy) on a new aircraft.

The interest component alone on that purchase will be about $10M p.a.

Depreciation over a 15 year period will be another $6M p.a. if we allow for a $10M salvage value.

So that new aircraft costs you $16M p.a. over the old paid off fully depreciated aircraft.

That buys a lot of fuel and maintenance before you break even.

think of the cars you see on the road. If the true cost of car ownership was fuel and maintenance then everyone would be driving pretty much brand new cars. Instead we get a mix, some people who can afford it buy new toys because they get a real buzz out of it, others like me usually buy cars that are 3 years old as they come off someone else's lease because that way you get pretty much everything a new car had but someone else has worn the first 50% of depreciation, others buy cars in the 4-8 year range because they have depreciated by 50% of the remaining value (i.e. now at about 25% of original cost), all the way down to people who buy clapped out old bangers that just scrape through registration checks because they're dirt cheap. Sure they use a bit more fuel, they break down a bit more, but you get a car that goes from A to B (usually) and it just costs you a few bucks extra a week instead of a whole lot of cash up front (and whilst it's important the net present value of cash is another reason to use older equipment) or committing to a loan that has a weekly payment exceeding the cost of that extra fuel and maintenance.

Romulus

23rd Aug 2012, 22:41

Like most Australians Qantas is the Aussie Brand. Germany has Mercedes Benz, The USA GM or Ford, Microsoft or Apple. Ask a foreigner about what iconic Aussie brands there are, and it was Qantas. Soon it will be Fosters

Interesting.

You do realise Mercedes make more cars outside of Germany than within? BMWs are generally made in either China or South Africa?

GM and Ford are struggling and have struggled for a long time - GM went through Chapter 11 in 2009 to replace employee agreements with significantly less beneficial ones as well as a whole raft of debt.

Microsoft and Apple have both been to the brink and have radically restructured themselves in order to stop going broke.

Your list ultimately argues for Joyce and Co to go much much HARDER attacking working conditions than they currently are.

Romulus

23rd Aug 2012, 22:47

They just HAVE TO rein the costs of fuel. Their hedging strategy has failed dismally during a period of falling oil prices and high AUS$.
If this board get an alliance with Emirates that DOES NOT include access to cheaper fuel, then the losses will continue.

Is there no end to the mistakes and ill-conceived plans of this board?

Hedging does not rein in the cost of fuel, it just makes it more constant. In general you agree to buy X units for $Y. So if the price of fuel drops it costs you more than the spot price. And if the price rises you get it for less.

BUT

The person selling you the fuel knows this game as well. So they add a premium to cover their risk. Nobody wants to sell you fuel at less than market rate so hedging effectively is you finding the person who will take the greatest amount of uncharged for risk on fuel prices.

The key advantage of hedging is NOT reduced cost but cost certainty allowing more effective budgeting (ticket prices, yield calcs etc that you base decisions on) and management decision making.

Romulus

23rd Aug 2012, 22:49

He keeps being allowed to get away with saying the high dollar hurts when it should have ameliorated the price of fuel.

Unless you've hedged the price of fuel in Aus $ perhaps?

Romulus

23rd Aug 2012, 22:54

To put that yet another way, why aren't there penalties for the Board and Alan Joyce for their belated decision to cancel a stack of B787???????

Somewhat bizarrely the 787 situation is one of Joyce's big wins.

The aircraft is late.

He's getting about $100M in compensation from Boeing next year regardless.

He can cancel 787 options but still keep that compensation.

Not too shabby an outcome. Of course, had the 787s turned up on time and the fuel savings etc flowed to the bottom line then the whole fleet strategy would have been vindicated.

Whoever set that 787 contract up was one smart cookie and pulled one over Boeing IMHO.

Doesn't mean the rest of the airline is being run well but somebody played an absolute blinder in procurement.

gobbledock

23rd Aug 2012, 23:07

Does the board have the power to sack him?
Indeed they do, but they won't. Today's Boards are hand picked, usually mates or linked to the CEO in some favorable manner. So it is unlikely the Board will sack this bloke as it is he who has enabled them to be highly remunerated feeders of the trough, even if it appears that they are at arm's length from him. The only way he would be sacked is if the Boards gravy train and longevity was endangered by his incompetence. The whole lot of them will, and are, spinning there way out of the mess to sensure the trough stays full for a bit longer yet.

Unless all of mainstream media, as well as the public demand, in fact force an end to this saga the point of absolute no return will be reached, and even if QF survives it 's soul will be part of history like Ansett.

I wish the Government could just tear up his passport and send him back to potato land. He has already fouled part of Australia's history and this wrecking ball is on a mission.

Don't be fooled, they may be preaching doom and gloom and posting losses but one area of the Rat is highly lucrative - Management.

1A_Please

23rd Aug 2012, 23:22

Can/will EK invest more money in Qantas?
I don't think EK are interested in investng money in QF. They have stated that all they are after is a codeshare arrangement and even then it will probably be on their terms.

Why would they want to invest in a business they cannot control and see it pi$$ed up against a wall on LCCs that are no relevance to their business model whatsoever.

Bigboeingboy

23rd Aug 2012, 23:26

Its also highly lucrative to be on the AIPA Exec and do nothing. Except for all expenses paid junkets.

TIMA9X

23rd Aug 2012, 23:28

The aircraft is late.

He's getting about $100M in compensation from Boeing next year regardless.

He can cancel 787 options but still keep that compensation.

Not too shabby an outcome. Of course, had the 787s turned up on time and the fuel savings etc flowed to the bottom line then the whole fleet strategy would have been vindicated.

Whoever set that 787 contract up was one smart cookie and pulled one over Boeing IMHO.

Doesn't mean the rest of the airline is being run well but somebody played an absolute blinder in procurement. Yep, a pretty fair summation Romulus, credit to where credit is due...
AJ is very good at playing the compensation game, nothing he set up himself... taking advantage of the good work done in the past by people who now are working with JB over at Virgin...:D..(RR A380 engine saga) pretty much a feature of his management style. The result, Q mainline is left with relics from the past when it comes to the "stock metal" soldering on in competition with more nimble, fuel efficient airframes in most of its competition fleets.

http://upload.wikimedia.org/wikipedia/commons/thumb/8/8f/Desoldering.jpg/330px-Desoldering.jpg

Certainly shines a light on the bad decisions made by the board in choosing the right people to run the overall Qantas package... but yesterday they got away with it for another year..... Even GT made a guest appearance on Lateline last night to rub salt into some old wounds...

ndW7a8Z-Efw

August 23 2012 was the longest day of my life.... unbelievably depressing to watch what LC, AJ and the board got away with under the watchful eyes of our financial gurus in the media... brain dead....

Bagus

23rd Aug 2012, 23:36

How did QF made a billion dollar few years ago when fuel was at record high at around $140 a barrel ,dollar below .80c and jetstar was only flying a few aircraft,how,how,how

gobbledock

23rd Aug 2012, 23:53

How did QF made a billion dollar few years ago when fuel was at record high at around $140 a barrel ,dollar below .80c and jetstar was only flying a few aircraft,how,how,how

Magic (sometimes referred to as stage magic to distinguish it from paranormal or ritual magic) is a performing art (http://en.wikipedia.org/wiki/Performing_art) that entertains audiences by staging tricks or creating illusions (http://en.wikipedia.org/wiki/Illusion) of seemingly impossible[1] (http://en.wikipedia.org/wiki/Magic_(illusion)#cite_note-0) or supernatural (http://en.wikipedia.org/wiki/Supernatural)[2] (http://en.wikipedia.org/wiki/Magic_(illusion)#cite_note-1) feats using natural means. These feats are called magic tricks, effects, or illusions.
One who performs such illusions is called a magician or an illusionist. Some performers may also be referred to by names reflecting the type of magical effects they present, such as prestidigitators (http://en.wikipedia.org/wiki/Sleight_of_hand), conjurors (http://en.wikipedia.org/wiki/Conjuration#Contemporary_references), mentalists (http://en.wikipedia.org/wiki/Mentalism), or escape artists (http://en.wikipedia.org/wiki/Escapology).

Foie gras

24th Aug 2012, 00:43

EK's Tim Clark said this earlier in the year “When we enter into derivatives, betting whatever it may be with counterparties who actually control the price of fuel in the first place, you have to ask yourself, ‘Is that smart?’”

CFM56-7

24th Aug 2012, 00:56

By delaying 787 deliveries qf will boost bottom line for next 6 months by $140mil, what a joke more "profits" from aircraft manufacture's handouts again just like from Airbus a few years ago. Somethings never change with this mob.

600ft-lb

24th Aug 2012, 01:22

Few things that need to be put in perspective.

Self inflicted airline shutdown $200million
Qantas International transformation costs $376million

An approx $570million self inflicted financial wound. Qantas international did not lose $400million, the management forced it to lose $400million. Operationally per the results its pretty close to breaking even.

Imagine the praised heaped on them when they turn this $400million loss around in only a year!

Bagus

24th Aug 2012, 03:01

Industrial action,shutting down airline ,higher fuel bills, redundancy payment are all put into the international division to make it look bad so they can piss it off,not to worry more redundancy to come.

midas

24th Aug 2012, 03:15

Was QANTAS actually making a profit in recent years?

When Dixon was in charge we had the sustainability cost cutting program where at least $500 million dollars in costs were cut each year and then QANTAS would post a profit.

Now that there is not much left to cut the true position of the company is now being shown.

Too bad there couldn't be a sustainable cost cutting program with management, that would be a huge saving.

gordonfvckingramsay

24th Aug 2012, 03:21

Making bad decisions is not a crime, making bad decisions after receiving good advice is not even a crime. Making bad decisions, destroying a national carrier, thousands of livelihoods, lying about it, blaming those you have hurt the most, deceiving the public and the shareholders, despite receiving good advice most certainly is! :ugh: You must have a fabulous legal team mate!

nomorecatering

24th Aug 2012, 03:55

Maybe someone could coax John Menadue out of retirement.

Mstr Caution

24th Aug 2012, 05:49

One must wonder how long the cancelation of the 35 Boeing 787's has been on the cards.

Makes sense to delay the announcement of the cancelation

Especially if your perpetrating the line we must reduce engineering coverage cause these new generation aircraft like the 787 aircraft require less Maintanence less often.

MC

QF94

24th Aug 2012, 05:50

This is as taken from the inside cover of the 2001 Annual Report. How times have changed.

QANTAS, THE OLDEST AIRLINE IN THE ENGLISH-SPEAKING WORLD, WAS FOUNDED IN THE QUEENSLAND OUTBACK IN 1920.

REGISTERED ORIGINALLY AS THE QUEENSLAND AND
NORTHERN TERRITORY AERIAL SERVICES LIMITED,
THE AIRLINE HAS BUILT A REPUTATION FOR EXCELLENCE IN:

• SAFETY

• OPERATIONAL RELIABILITY

• ENGINEERING AND MAINTENANCE

• CUSTOMER SERVICE
QANTAS CARRIED MORE THAN 22 MILLION PASSENGERS IN 2000/2001, OPERATING A FLEET OF 178 AIRCRAFT ACROSS A NETWORK SPANNING 129 DESTINATIONS IN 34 COUNTRIES.

QANTAS EMPLOYS AROUND 31,000 STAFF OF MORE THAN 100 NATIONALITIES, IN MORE THAN 30 COUNTRIES AND SPEAKING MORE THAN 50 DIFFERENT LANGUAGES.

ejectx3

24th Aug 2012, 06:06

Qantas carried more than 22 passengers in 2012/2013 operating a fleet of 8 aircraft across a network spanning 9 destinations in 3 countries.

Qantas employs around 31000 staff of more than 100 foreign nationalities, in more than 30 countries and speaking more than 50 different languages.

QF94

24th Aug 2012, 06:11

Qantas employs around 31000 staff of more than 100 foreign nationalities, in more than 30 countries and speaking more than 50 different languages.

30,000 of those staff are employed in more than the other 29 countries. ;)

packrat

24th Aug 2012, 07:23

.....that my friend is gold.
BTW the Gimp is Ian Oldmeadow

TIMA9X

24th Aug 2012, 08:35

Must have been tough working in the PR department this week at Q after all that yesterday....;)

xIvT_sGhyYE

Have a good weekend everybody...

Jethro Gibbs

24th Aug 2012, 09:05

No new Aircraft does that mean the old ones that don't repair themselves need maintenance :eek: We just sacked 600 plus maintenance staff. :ok:

noclue

24th Aug 2012, 09:09

From a "market watch" write up:

"Because Qantas is based in faraway Australia, though, and because it recently has added so many long-haul routes around the world, it is feeling the pinch of rising fuel costs more than most airlines. In some ways, that makes it the canary in the air shaft."

SOPS

24th Aug 2012, 09:09

And nobody picks him up on this. All Joyce and Wirthless (and for that matter on in house "expert:yuk:GT) have been sprouting on about is how new aircraft "dont need to be fixed like old aircraft", the only thing is QANTAS DONT HAVE ANY NEW AIRCRAFT!!!!:mad::mad::mad::mad:

When will some one in the media work this out!!!!!

Worrals in the wilds

24th Aug 2012, 09:18

When they can figure out the difference between an A330 and an A380. In other words; don't hold your breath. :hmm:

blow.n.gasket

24th Aug 2012, 09:33

Where can I join a Class Action against these so called "Managers":eek:

Ichiban

24th Aug 2012, 09:42

Australian Financial Review, Page: 22
By Andrew Cleary
Friday, 24 August 2012

Alan Joyce had a line yesterday and he was sticking to it: no matter the record loss, most airlines around the world would love to be in Qantas’ position.

The upbeat Qantas chief was referring to the company’s dual-brand strategy that has fostered a profitable low-cost carrier in Jetstar and helped reinforce the premium airline’s dominant position in the domestic market. But the position Qantas International is in buffeted by high fuel prices, suffering an uncompetitive cost base, and at war with its own employees is one shared by a host of legacy carriers around the world.

Regional rivals including Cathay Pacific and Singapore have taken a very different course of action.

The response of both has been to accelerate the retirement of older, fuel guzzling aircraft and usher in next generation models as fast as possible.

However, Qantas is extending the lifespan of its 747 jumbos and 767s with cosmetic makeovers that do nothing to change inferior operating economics. And now it has cancelled the delivery of $US8.5 billion worth of Dreamliners, the aircraft Joyce as recently as June argued was partly to blame for Qantas International’s dire state due to their delayed arrival.

What Qantas has gained is a shortterm reprieve from ratings agencies and investors worried about the prospect of a capital raising.

What it has lost is the chance to recapture momentum among Australian outbound flyers as a product and brand leader. Qantas is betting that its international arm can survive four more years as a capital light business even as its rivals throw more capacity and the latest aircraft types on the same routes out of Australia.

It is a dangerous assumption that when Qantas International has met its financial milestones, having ceded market share and customer loyalty along the way, it will suddenly be able to win back customers who have switched allegiance in the medium term.

Management is, in effect, asking investors to believe that while the longterm success of the domestic outfit depends on a rigid adherence to a 65 per cent market share, the international business will be able to shrink its way to profitability and then re-emerge as a growth engine. It’s a tough line to swallow.

FlareArmed

24th Aug 2012, 09:44

I just watched the ABC interview and paid particular attention to the part about the strong AUD being a problem for Qantas. There were only a few words said in a blink, but I got the gist of what he was on about in relation to Qantas International.

His beef – Qantas home-base costs, expressed in US dollars, have increased a lot over the last few years. This puts Qantas International in a weak position against the Americans, and any other airlines that have home currencies pegged to the USA dollar...Emirates.

Using salaries as an example, as the AUD strengthened, the cost of the Australian based employees rose in terms of USD. Someone employed in early 2010 (when the AUD was weak) for AUD100,000 cost about USD60,000 – now they cost USD105,000 (a 75% increase in USD terms). For the USA dollar based carrier, that employee is still USD60,000.

Fuel is contracted in USD, so fuel paid for with revenue collected in Australia is a positive (they collect revenue in several currencies, but I imagine most of it is AUD). Of course, this didn't support the 'poor me' argument, so it wasn't mentioned.

SeeBee

24th Aug 2012, 10:30

So, again, it is all about cost - no talk of other methods of increasing profit. This is all that has been produced for the last nearly 20 years - cost reduction. The airline needs managers who will attempt to grow a business not concentrate on cost as the only method to profit.

If you keep on doing the same thing, then expect the same result.:*

ampclamp

24th Aug 2012, 10:46

flarearmed,
The low dollar was a problem years ago (ref Margaret J) , now its the high dollar (:eek:) even though the majority of earnings are AUD denominated and biggest cost , fuel, is paid for in weak USD.

International has shrunk as the dollar has increased so its relative cost should be ameliorated. but no its costs have grown hugely despite having given away the loss making routes.Something is going wrong with that strategy!

Goodness knows what he'll say when fuel is 200 bucks and the dollar reverts to the mean of about 70 to 80 c per USD.

Then it will be the weak dollar killing Q, nobody in Aus can afford to fly overseas, cant afford expensive USD aircraft , fuel etc.:rolleyes:

The high AUD surely does inflict pain on inbound tourism but methinks he complainith too much.

booglaboy

24th Aug 2012, 11:00

Would appear there is
Something terribly wrong with the fuel
Policy. Airline shrinks, retires older inefficient aircraft, withdraws from loss making routes(Qf words) and with a strong dollar still Can't maintain costs? There is not a word of truth in the reporting. ASIC should be charging all the board n senior management

Dale Hardale

24th Aug 2012, 22:15

This moron AJ must be taking advice from Gary Toomey. Remember him?

Absolutely.

KrispyKreme

25th Aug 2012, 00:47

AEROMEDIC

25th Aug 2012, 01:44

The biggest ‘real’ cost that Qantas has is ‘Alan Joyce’. As long as he keeps delaying the aircraft upgrades the further Qantas will fall behind and will just disappear like many of the other iconic brands. How he manages to convince the Qantas board that he is worth his package defies logic, but maybe the whole board needs a refresh. Just goes to prove how well privatisation of government assets works for the citizens.

What he is really saying is that finance for new and fuel efficient aircraft is not available due to the higher risk lenders face, and the cash reserves will be used to prolong the inevitable demise of the company if no solution to their woes is found. An agreement with Emirates including access to cheaper fuel may be the answer.

Martin VanNostrum

25th Aug 2012, 03:07

Here’s the Qantas Catch 22: it can’t afford to spend $8 billion upgrading with 35 Boeing 787s, but how will it be able to compete in a few years’ time without them?

The reason given for cancelling the much-delayed 787s was ‘‘lower growth requirements in this uncertain global context’’. Yet total Australian and regional aviation is growing very nicely – it’s just that Qantas apparently has given up expectations of getting much of it.

And here’s another mystery: chief executive Alan Joyce has been telling everyone that key ingredients in his bottom line loss were high jet fuel prices and the high Australian dollar – but the stronger Australian dollar is something of a natural hedge for high jet fuel prices.

If the Aussie had been weak, then Qantas really would have had a problem paying the fuel bill, as Tony Webber explains (Webber is being modest by not including himself as part of the risk management team that is no longer with the Flying Roo.)

Advertisement
Something isn’t quite adding up in the Qantas story as it’s being officially told – unless the CEO and board are quietly pursuing a strategy of cleaning the business for potential sale with dismemberment either before or after the event.

Yes, there are major obstacles in the form of legislated ownership restrictions, but they can be circumvented, as demonstrated by the Allco/TPG/Macquarie bid in 2006. (Remember that that would-have-been disaster was only stopped by one hedge fund manager’s greedy miscalculation.)

There is no doubting the difficult position Qantas has found itself in - a position the board and CEOs past and present must take responsibility for, for their actions or lack of actions, over the past decade.

Having survived the rise of its old Asian rivals, Singapore and Cathay, by lifting its own game to meet the competition, Qantas now looks set to surrender all but a token presence in Europe in the face of attacking Middle Eastern carriers.

Meanwhile the promise of an explosion in Chinese travel is being met with the launch of another Jetstar brand, this time out of Hong Kong in partnership with one of China’s major airlines. A story about a gingerbread man comes to mind.

One thing’s for sure – Qantas’s institutional shareholders wouldn’t think twice about accepting an offer, any offer.

Michael Pascoe is a BusinessDay contributing editor.

Read more: Qantas 787 Catch 22 (http://www.smh.com.au/business/the-qantas-conundrum-20120824-24pvw.html#ixzz24WWBvPdw)

Lodown

25th Aug 2012, 04:22

I suspect Joyce and the board already have something in mind. Deride and degrade international to such a seemingly low point and then lead in a knight in shining armour and say "Look what I found!" Everyone thinks they are saved and rejoices.

Fly_by_wire

25th Aug 2012, 07:02

If it manages to survive they will still get 787-9's from the 50 options but effectively just delayed 2 years - the options still have guaranteed build/delivery dates. They just got PAID 400M I think it was for this cancellation, ~100 of which they took to profit this FY(clever accounting).

virginexcess

25th Aug 2012, 07:37

Qantas long haul is never going to see a 787.

By the time they arrive at Q, Long haul will look just like Virgin International. Flying to America and the middle east, using the 380, as long as Alan can afford the fuel bill.

catch18

25th Aug 2012, 11:31

Why don't they sell all their planes and lease them back to improve the bottom line.

Infact they could sell the offices and hangers too and lease them also.

This would be the sort of genius that gets MGMT back their bonuses:ugh:

stubby jumbo

25th Aug 2012, 12:08

Why don't they sell all their planes and lease them back to improve the bottom line.

Infact they could sell the offices and hangers too and lease them also.

WHY NOT SELL THE WHOLE DAMN LOT .....and start all over again !

At least it will rid us of the tumour that has infected the whole F:mad::mad::mad:'IN business

(Apologies to Hudson-Fysh, Baird, and McGuiness)

QF94

25th Aug 2012, 12:13

Quote:
Why don't they sell all their planes and lease them back to improve the bottom line.

Infact they could sell the offices and hangers too and lease them also. WHY NOT SELL THE WHOLE DAMN LOT .....and start all over again !

At least it will rid us of the tumour that has infected the whole Fhttp://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/censored.gifhttp://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/censored.gifhttp://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/censored.gif'IN business

(Apologies to Hudson-Fysh, Baird, and McGuiness)

Let's just sell the QCA building complete with the management team, and return back to Admin 1 and have QANTAS run by QANTAS people that can actually run a business for the benefit of the company as a whole. We may have to just go back 20 or 30 years in order to advance and be a real competition to the other airlines again.

Cactusjack

25th Aug 2012, 12:37

Let's just sell the QCA building complete with the management team

No no no. Can't sell management, they have brought the stock down in value and left a brown smear all over the airline. The building is worth a couple of cents, but management simply can't be sold in the same package as they cause too much devaluing of the commodity. Perhaps management could be auctioned off seperately, or used as fishing bait, turned into part of the filtering system at Luggage Point in Brisbane, frozen and fired into some engines at Pratt and Whitney's test center, melted down and mixed with cooking oil and be used on a special eco friendly farcicle test flight on some environmental media grabbing spin exercise???

QF94

25th Aug 2012, 13:14

No no no. Can't sell management, they have brought the stock down in value and left a brown smear all over the airline. The building is worth a couple of cents, but management simply can't be sold in the same package as they cause too much devaluing of the commodity. Perhaps management could be auctioned off seperately, or used as fishing bait, turned into part of the filtering system at Luggage Point in Brisbane, frozen and fired into some engines at Pratt and Whitney's test center, melted down and mixed with cooking oil and be used on a special eco friendly farcicle test flight on some environmental media grabbing spin exercise???

Too much effort. Couldn't be bothered. Just sell QCA with them in it and get what we can. The "loss" of them will bring great rewards and profits back into the company.

dragon man

25th Aug 2012, 21:05

The building was sold in the early ninties on a 15 year lease with 5% per annum rent rise if my memory serves me correctly and then re sold last year. So that piece of furniture has long been burnt to keep the house warm.

What The

25th Aug 2012, 23:47

Remember Strong and Toomey made profits by selling everything that wasn't bolted down.

They then failed to reinvest in a fleet renewal program, starting the rot that eats away at Qantas today.

QF94

26th Aug 2012, 06:17

Remember Strong and Toomey made profits by selling everything that wasn't bolted down.

They then failed to reinvest in a fleet renewal program, starting the rot that eats away at Qantas today.

Good to see old habits die hard. At least they're consistent. Stupid but consistent.

Fruet Mich

26th Aug 2012, 07:02

Virgin and JBs number one marketing manager is Alan Joyce.

Unfortunately, You cant keep your good airline credit rating buying 787s for Qantas when you have 135 A320s on order.

Arnold E

26th Aug 2012, 09:36

Unfortunately, You cant keep your good airline credit rating buying 787s for Qantas when you have 135 A320s on order.

What exactly do you mean by that??:confused:

mikk_13

26th Aug 2012, 10:11

So where do the 135 A320s go. Is that part of the capacity war against virgin?

DeafStar

26th Aug 2012, 10:19

Qantaslink.

ampclamp

26th Aug 2012, 10:52

Arnold, I think he means qantas' capital expenditure is already stretched with all those 320s on order without coughing up more for 787s.

SOPS

26th Aug 2012, 12:01

You wait, they will cancel the A320s next.

QF94

26th Aug 2012, 12:54

So where do the 135 A320s go. Is that part of the capacity war against virgin?

Jetstar Asia, Japan, Hong Kong. That's where the 320's are going

teggun

26th Aug 2012, 22:38

Qantaslink

1A_Please

26th Aug 2012, 23:38

So where do the 135 A320s go

As well as Asian expansion, some of these new A320s will replace the older A320s currently flying with JQ. LCCs tend to hold their fleets for around 10 years and the original JQ A320s will be 10 years old in 2014.

vigi-one

27th Aug 2012, 00:37

definately NOT QANTASlink, ask your two new bosses. QLink status quo (crewing and aircraft) to remain for at least next two years. Direct from the new guru's mouth.

1A_Please

27th Aug 2012, 01:15

One thing that the press never picks up AJ on is his constant reference to fleet age being very low. When he quotes this, he is always talking about the total Group fleet including JQ. When you do QF alone, the average fleet age is 11 years, which is average by world standards not the 8.3 years quoted in the investor presentation. JQ's average fleet age is 5 years.

Hopefully the QF average will decline as the final 734s leave the fleet but it will be much higher than the group average for the forseeable future.

Condition 1

27th Aug 2012, 01:48

Not to mention, joyce says we're closing maintenance facilities as new aircraft don't need as much work, like a new car. Now that he's cancelled the 787s, what new aircraft is he talking about?

TIMA9X

27th Aug 2012, 02:16

Now that he's cancelled the 787s, what new aircraft is he talking about? Classic, how true, but too technical for the institutional investors to comprehend or they still just don't get it..:hmm: So many holes in what AJ says going unchallenged by people who should know.... gives us little hope for the future direction of Qantas, it's all about J*

HF3000

27th Aug 2012, 02:34

Can anyone explain why it is financially beneficial for a LCC to turn over an aircraft every 10 years but not financially beneficial for a Full Service airline to do the same?

Romulus

27th Aug 2012, 02:49

Can anyone explain why it is financially beneficial for a LCC to turn over an aircraft every 10 years but not financially beneficial for a Full Service airline to do the same?

Careful what you wish for.

It IS beneficial for a Full Service airline to do the same.

Provided they get rid of all the service elements that support the older aircraft - smaller maintenance team, smaller tech team, smaller everything i.e they need to "get rid" of vast numbers of people working in the "old way".

That costs them redundancy money so I guess it's not absolutely as beneficial but in the long run that's where they will head. Numbers will be wound down and many positions will go the way of manual telephone exchange operators - tens of people replaced with just one and an automated system.

QF94

27th Aug 2012, 03:36

Quote:
Originally Posted by HF3000
Can anyone explain why it is financially beneficial for a LCC to turn over an aircraft every 10 years but not financially beneficial for a Full Service airline to do the same?
Careful what you wish for.

It IS beneficial for a Full Service airline to do the same.

Provided they get rid of all the service elements that support the older aircraft - smaller maintenance team, smaller tech team, smaller everything i.e they need to "get rid" of vast numbers of people working in the "old way".

When things go wrong, it's amazing how often the "old way" of doing things gets them out of the deep hole they continually dig themselves trying to eradicate any form of legacy practices. Even new cars have to have old maintenance practices done on them at times.

Yes. Just ask Team A380 how little maintenance they do on their aircraft. They require more people on a transit than a 747. More things go wrong with the highly "advanced" systems and continual failures of the electronic seats and gizmos at the front of the aeroplane.

That costs them redundancy money so I guess it's not absolutely as beneficial but in the long run that's where they will head. Numbers will be wound down and many positions will go the way of manual telephone exchange operators - tens of people replaced with just one and an automated system.

Yes, the level of service will decline even further than it is already. Management, short-term financial gain. Company, long-term pain.

600ft-lb

27th Aug 2012, 03:45

Provided they get rid of all the service elements that support the older aircraft - smaller maintenance team, smaller tech team, smaller everything i.e they need to "get rid" of vast numbers of people working in the "old way".

That costs them redundancy money so I guess it's not absolutely as beneficial but in the long run that's where they will head. Numbers will be wound down and many positions will go the way of manual telephone exchange operators - tens of people replaced with just one and an automated system.

Or so the spin goes. I wonder why these new advanced aircraft such as the A380, so advanced it almost fixes itself, for some reason has quite a few more engineers attending this aircraft when it rolls into the gate? whereas the old, maintenance intensive 767s and 747s don't ?

The redundancies we have seen in the engineering side of things is more to do with removing the legacy of the TN era, MOC/Heavy Maintenance and consolidating it in one place, Sydney.

The only advancement is the shared liability of the newly built airliners being outsourced to many different manufactures, having the balls to delay the periodic inspections, A checks, C checks etc, to levels which make the current era of jets seem maintenance intensive. How successful that will be remains to be seen - and I think most will believe it when they see it.

At least the A380 has provided plenty of jobs for the guys who would've been made redundant in Sydney when they closed down that engine shop a few years ago. You gotta thank airbus for that at least.

1A_Please

27th Aug 2012, 03:47

Can anyone explain why it is financially beneficial for a LCC to turn over an aircraft every 10 years but not financially beneficial for a Full Service airline to do the same?

I would think it is a combination of factors:

LCC aircraft tend to accumulate cycles very quickly.
LCCs tend to want to avoid heavy maintenance "D" checks

Some of the other posters are probably correct that legacy airlines would love to turn over their aircraft quicker and some of the wealther ones (SQ/EK for example) do.

I'm not technical so can't contribute as to whether modern aircraft need less maintenance. My hunch is that they need different maintenance and that tends to be more of the pull out, throw away then replace rather than the older style reconditioning. I assume aircraft are part of the throw away age, just like everything else.

MELKBQF

27th Aug 2012, 04:11

The JQ A330 fleet will be due for D checks from 2014 onwards, I bet any money these aircraft will be transferred back to mainline just before they are due and mainline (most likely the international division) will foot the bill.

Ultergra

27th Aug 2012, 04:57

MELKBQF

You'll notice the JQ 330's are on lease from QF, as such, QF are responsible for maintenance on these aircraft anyway. The bill has already been looked after!

Romulus

27th Aug 2012, 06:48

Or so the spin goes. I wonder why these new advanced aircraft such as the A380, so advanced it almost fixes itself, for some reason has quite a few more engineers attending this aircraft when it rolls into the gate? whereas the old, maintenance intensive 767s and 747s don't ?

There needs to be a base level of qualified personnel to work on the aircraft. As the numbers of aircraft increase the number of attending engineers in the 380 team will probably not change at all. Currently they have the numbers to build enough experience to suit the Qantas fleet, too many less than current and you can't ramp up aircraft numbers. Once they're trained they need keeping current so until more aircraft arrive over which the 380 team must be spread it gets a larger number of attendants.

Plus they get to work on sorting out those initial glitches so extra manpower as a risk mitigator is easily justified.

booglaboy

27th Aug 2012, 07:54

The a380 is a manpower pig no matter how you spin it. It will always require extra engineers in comparison to a 747. It's over-complicated, over-sized, fragile and unreliable. It's been in-service 4 years and has barely improved in all regards. The Aj statement re the a380 requiring less maintenance is completely false. Feel free to argue but I work it daily and know the facts

Romulus

27th Aug 2012, 08:57

QF94

27th Aug 2012, 09:01

There needs to be a base level of qualified personnel to work on the aircraft. As the numbers of aircraft increase the number of attending engineers in the 380 team will probably not change at all.

There will be no increase in the number of A380's for a number of years, if at all, due to AJ deferring/cancelling the remaining order of 8. As the number of international sectors decrease, so does the requirement for extra aircraft.

Currently they have the numbers to build enough experience to suit the Qantas fleet, too many less than current and you can't ramp up aircraft numbers. Once they're trained they need keeping current so until more aircraft arrive over which the 380 team must be spread it gets a larger number of attendants.

Plus they get to work on sorting out those initial glitches so extra manpower as a risk mitigator is easily justified.

Redundant statement. No ramping up of aircraft numbers, therefore too many "attendants".

Also, the A380 can't be used on the DFW sector, but the outdated 747 can, albeit the return sector is via BNE. What happens when the 747's are finally retired? No 787 to replace them, and the A380 is useless, unless it carries a greatly reduced number of passengers.

booglaboy

27th Aug 2012, 09:12

The 380 airframe life is 20 years. Can't imagine the manpower requirements trending downwards based on the 4 years of service it's seen thus far. It takes 2 engineers to transit a 747 in 90mins in my port. The equivalent 380 will use 6 engineers and the turn-around time will be 180 mins minimum. Someone smarter than me will have to do the maths

ampclamp

27th Aug 2012, 09:43

One of the former smartest guys in the room said you'd need 24 LAMEs to do the whole fleet of 20! He has of course since left the room.

AEROMEDIC

27th Aug 2012, 11:44

Frightening to think about A380 D checks when due............

QF94

27th Aug 2012, 12:27

Frightening to think about A380 D checks when due............

Nah!! We won't be around to worry about it. Someone elses problem by then.

Guglielmo

27th Aug 2012, 12:48

Re D checks.
That's the whole point of AJ's statement about needing less manpower in OZ. The A380, and the B787 when it arrives, will never see a C or D check carried out in OZ as QF are doing what many other operators are doing and that's paying the manufacturers to arrange and take care of those checks wherever they have certified organisations. Half the QF A380 fleet have already been away to Germany for C checks.
As a side note, the B787 is anticipated to have D checks done about every 12 years so there's a long wait for those.

Romulus

27th Aug 2012, 12:59

There will be no increase in the number of A380's for a number of years, if at all, due to AJ deferring/cancelling the remaining order of 8. As the number of international sectors decrease, so does the requirement for extra aircraft.

The important part being "AJ deferring/cancelling".

Unless you expect that when the 380 team was set up they should have acted with the knowledge that would occur then you are utilising the power of hindsight and claiming it as some kind of flaw in AJ that he didn't. Current 380 numbers were based on projections as per fleet strategy at the time and allowed for increased aircraft numbers, natural attrition and even accelerated attrition based on people like Emirates and SIA poaching a number of people with 380 licences and experience.

The 380 team looks big for what it does I agree, but not for the future that was predicted for it. That was the key point.

Redundant statement. No ramping up of aircraft numbers, therefore too many "attendants".

No, that's a flawed analysis. The ramping up of aircraft numbers or lack thereof could not possibly have been acted upon at the time the 380 team was set up. For you to go back and claim that somehow the number of people working the 380 should be spot optimised for the current situation is an example of the worst type of management thinking that AJ and Co are regularly accused of around here.

Also, the A380 can't be used on the DFW sector, but the outdated 747 can, albeit the return sector is via BNE. What happens when the 747's are finally retired? No 787 to replace them, and the A380 is useless, unless it carries a greatly reduced number of passengers.

When did DFW start? Do you think it was included as part of 380 strategy planning? Methinks not.

Again, you need to stop using hindsight to criticise decisions taken based on a very different set of beliefs.

Arnold E

27th Aug 2012, 13:03

Half the QF A380 fleet have already been away to Germany for C checks.

Germany???? I would not have thought that labour was cheaper in Germany than Australia? So tell me again why QANTAS is getting rid of Ozzy LAME's?:confused:

QF94

27th Aug 2012, 13:29

When did DFW start? Do you think it was included as part of 380 strategy planning? Methinks not.

Again, you need to stop using hindsight to criticise decisions taken based on a very different set of beliefs.

DFW started this year, but was being looked at about six or seven years ago when QANTAS was looking at the possibility of the proposed A350 long range twin aircraft to do the 15 hour sector. The 777 didn't even get a look-in at the time (not starting a should have gotten the 777 debate).

The important part being "AJ deferring/cancelling".

Unless you expect that when the 380 team was set up they should have acted with the knowledge that would occur then you are utilising the power of hindsight and claiming it as some kind of flaw in AJ that he didn't. Current 380 numbers were based on projections as per fleet strategy at the time and allowed for increased aircraft numbers, natural attrition and even accelerated attrition based on people like Emirates and SIA poaching a number of people with 380 licences and experience.

Prior to AJ, GD was cutting back on QF sectors and ramping up Jetstar, yet placing orders of A380's. I'm unaware of people from QF being poached by EK or SQ, but there could be some.

Even by AJ's own words last year regarding QF International that it had been losing money for a number of years, and the "Group" was absorbing its losses, and they would be pulling out of loss-making sectors, yet they proceeded with proposed fleet expansion/replacement of aircraft that aren't really compatable with thier needs. Very easy to throw the money. Not so easy to make it back.

No, that's a flawed analysis. The ramping up of aircraft numbers or lack thereof could not possibly have been acted upon at the time the 380 team was set up. For you to go back and claim that somehow the number of people working the 380 should be spot optimised for the current situation is an example of the worst type of management thinking that AJ and Co are regularly accused of around here.

From the start, the A380 was always man power heavy, even during the purchase negotiations, due to its size, complexity, etc. It couldn't go into all the ports it needed, and certainly couldn't be flown at the speeds as required by the QF timetable. That's why the LAX run is an hour longer than the 747, as they were burning the fuel at a rapid rate to fly the 14 hour sector as per the timetable.

No one has a crytsal ball, but due diligence when making a very expensive purchase, and maybe listen to those that have knowledge of aircraft and being able to go through the figures and see what is the best aircraft for your needs, and not the back room accountants.

QF94

27th Aug 2012, 13:31

Germany???? I would not have thought that labour was cheaper in Germany than Australia? So tell me again why QANTAS is getting rid of Ozzy LAME's?http://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/confused.gif

They don't want "liabilities".

noip

27th Aug 2012, 19:32

couldn't be flown at the speeds as required by the QF timetable. That's why the LAX run is an hour longer than the 747, as they were burning the fuel at a rapid rate to fly the 14 hour sector as per the timetable.

Not true.

I'm not entirely sure as to why the planned sector times were increased but I suspect it was more to do with improving on-time performance. And yes, the times were increased about the same time the A380 came on the scene.

Standard cruise speeds for the 747 and A380 are pretty much the same. There might be .005 mach in it but that is about all. Added to that is the reduced TAS because the A380 cruises at a higher level. The 380 cruises pretty nicely at 0.86 if you want to. (so there MIGHT be 5kt - 10kt TAS or so in it?)

The fuel burn differential between a 0.86 and 0.84 cruise is not all that much.

N

Romulus

27th Aug 2012, 20:17

Germany???? I would not have thought that labour was cheaper in Germany than Australia? So tell me again why QANTAS is getting rid of Ozzy LAME's?

Scalability.

Somebody had to put together the capability to do larger checks on the 380 and aggregate the market in order to obtain enough work to keep a crew fully occupied. Qantas had the option to do it but didn't, Singapore have it. Emirates probably have big enough fleet projections to go it alone.

Romulus

27th Aug 2012, 20:29

I'm unaware of people from QF being poached by EK or SQ, but there could be some.

Point being that it had to be ALLOWED for in projected staff losses so if it happened Qantas were covered.

As for the rest, it's hard to blame AJ and Co for choosing the 380 based on decisions made later. At some point a decision had to be made and the 380 was it. One can always call for more time or analysis but that is a recipe for getting nothing done at all, the ultimate disaster.

With regard to flight times I can only say that as a customer who (or more accurately whose employer) generally pays a premium rate to fly Business I organise my timetable around the 380 flights. Quieter, far more comfortable, and if that means an hour extra so be it, well worth it.

When the 787 gets here I reckon that will have a similar effect on my timetable choices so this isn't a A v B thing, it's simply choosing to fly in the next generation of aircraft that provide more to the customer. Not saying the 777 isn't a good aircraft, it's just not AS good as the new ones.

Again, with hindsight and the delays in the 787 program and all the rest Qantas should probably have bought the 777 but they didn't. Decision based on information available at the time and if the 787 had been on time and on spec then QF would have stolen a march over the competition who bought the older technology.

QF94

28th Aug 2012, 00:58

I'm not entirely sure as to why the planned sector times were increased but I suspect it was more to do with improving on-time performance. And yes, the times were increased about the same time the A380 came on the scene.

Not to improve the OTP of the 747's, but for the A380.

noip

28th Aug 2012, 01:09

Not to improve the OTP of the 747's, but for the A380.

That is not my experience, and given that A380s do not fly SYD-MEL commercial sectors, I doubt the increased sector times were introduced for the A380.

Last LAX-MEL, we had to fly at CI 0 to come close to arriving on schedule.

What I'm trying to say, is that whilst I at first thought as you do, the evidence does not support the assertion you make.

:)

N

ruprecht

28th Aug 2012, 01:36

Last LAX-MEL, we had to fly at CI 0 to come close to arriving on schedule.

Of course, schedule integrity was the primary reason.;)

noip

28th Aug 2012, 01:53

r,

Of course - are there any other considerations? ..

:)

N

hotnhigh

28th Aug 2012, 02:35

Spot the difference.
Virgin veers into a Qantas dogfight | Stephen Bartholomeusz | Commentary | Business Spectator (http://www.businessspectator.com.au/bs.nsf/Article/virgin-australia-qantas-john-borghetti-airfares-co-pd20120828-XL3SC?OpenDocument&src=sph)

Not only is it now profitable, with an underlying pre-tax profit of $82.5 million for the year to June, but revenue grew 19.8 per cent, yields were 12.2 per cent higher

Didn't Gareth and Alan bang on the other day that it was about market share not yield?
No wonder they are the smartest guys in the room.
Delivering nothing for everybody!

The Bungeyed Bandit

28th Aug 2012, 02:40

Before the 380 arrived Airbus said an "A" chk would take 56 man hours.

They're a hell of a lot more manpower hungry than that.

I'd hate to think how things would have panned out if John Holland had of got the gig to maintain it hey Romulus.

Romulus

28th Aug 2012, 05:10

I'd hate to think how things would have panned out if John Holland had of got the gig to maintain it hey Romulus.

Perhaps BEB, perhaps. Imagine if JHAS did it on less than current QF requirements. Might have put you out of a job.

That's one of the benefits of outsourcing, you get a price and you get reduced cost risk, the contractor wears most of the risk.

Or do you mean to say you think JHAS would have taken even more staff and thus cost Qantas more? Do you have any ability to back that up with supporting evidence?

Didn't think so. But we'll never know.

QF94

28th Aug 2012, 07:06

Rumour has it that JHAS is in financial trouble and about to go under. It can't be substantiated, but when there is an exodus from JHAS to AMSA, there must be an element of truth in it. I'm not a fan of either organisation, but I would have though JHAS would have been the least bad to work for.

Romuous,

That's one of the benefits of outsourcing, you get a price and you get reduced cost risk, the contractor wears most of the risk.

The contractor wears the cost risk, and the airline/company outsourcing wears the "brand" damage risk should something go wrong. If an item purchased fails quickly, or an aircraft has a major accident, it is the reputation of the company/airline that is first damaged. The public won't care at first who did the shoddy maintenance. That will come after it is found that the work wasn't done locally.

Remember QF32 A380 (OQA) that blew No.2 engine over Singapore. That sent the share price into a nose dive, and the airwaves ablaze that a QANTAS aircraft had crashed, especially when you had photos of local Indonesians holding a piece of engine cowling with an intact roo logo. Not QANTAS's fault, but they got hammered for a little while. RR had their reputation damaged and cost them a cool $95million for a faulty oil line. Granted, this was a warranty issue, but when something goes bang inflight, people go running and fingers start pointing.

If risk is to be managed, it is best eliminated or reduced to virtually zero. In house work is not 100% guaranteed, but is much closer to 100% as the people employed to do the job have "ownership" of the job.

There's more to a company than glossy financial statements and blurbs from HQ.

Romulus

28th Aug 2012, 13:36

BP2197

28th Aug 2012, 21:39

Love how Virgin is rubbing QF's nose in it. On a number of occasions lately, I have heard them state that they have a 15-20% cost advantage over the incumbent - Gold! The moaning on this issue used to come from the other side but I guess when you have an advantage you might as well exploit it; particularly when the opposition seems limited in their response.

Ushuaia

28th Aug 2012, 21:49

qf94 said The public won't care at first who did the shoddy maintenance. That will come after it is found that the work wasn't done locally.

and

Not QANTAS's fault, but they got hammered for a little while.

Mate, you are absolutely right in what you say but also slightly incorrect. The public did, and still does, see the A380 engine explosion as a "Qantas maintenance failure". What you say about first impressions is absolutely spot on and what is at risk when you outsource the very essence of what you have a reputation for. In QF's case: maintenance excellence.

The general public still hasn't shifted its thinking on who is to blame for QF32. They don't generally name RR as the sole culprit. In fact, most of the general public would be hard pressed to even NAME Rolls Royce as the manufacturer. In their mind still: it was a Qantas failing. That is a failing of QF Public Relations and it was not even a maintenance issue, outsourced or otherwise! It was a manufacturing issue, under warranty.

I continue to hear people say they "will not fly with Qantas because their maintenance standards have slipped" or "because of all the maintenance problems". A number of them, when pressed, will cite QF32 as an example of what they mean. Major PR failure. But then again, OW and her team have been distracted beating up on those nasty employees, I suppose.

maggot

28th Aug 2012, 22:34

Mate, you are absolutely right in what you say but also slightly incorrect. The public did, and still does, see the A380 engine explosion as a "Qantas maintenance failure". What you say about first impressions is absolutely spot on and what is at risk when you outsource the very essence of what you have a reputation for. In QF's case: maintenance excellence.

The general public still hasn't shifted its thinking on who is to blame for QF32. They don't generally name RR as the sole culprit. In fact, most of the general public would be hard pressed to even NAME Rolls Royce as the manufacturer. In their mind still: it was a Qantas failing. That is a failing of QF Public Relations and it was not even a maintenance issue, outsourced or otherwise! It was a manufacturing issue, under warranty.

I continue to hear people say they "will not fly with Qantas because their maintenance standards have slipped" or "because of all the maintenance problems". A number of them, when pressed, will cite QF32 as an example of what they mean. Major PR failure. But then again, OW and her team have been distracted beating up on those nasty employees, I suppose.

it doesn't matter, if QANTAS has em on the wing, they are responsible for ensuring they are well maintained, end of story. Just 'cause some middle manager thinks he's outsourced all the risk it doesn't change that reality.

Sunfish

28th Aug 2012, 22:41

The problems for Qantas will only get worse because the people who got you into this situation cannot, by definition, get you out of it.

They are focussed on cost instead of the value proposition for the customer.

They have the strategic focus of a gnat - witness how China was supposed to save the company and the time and effort spent on that hall of mirrors.

They have no understanding of outsourcing - in particular that the charge rate and total cost of outsourcing will only increase, it looks cheap at the outset, but once you are committed and have abandoned the idea of doing work yourself (by destroying your in house engineering capability) you will be royally screwed.

To put that another way, all the cost benefits of getting down the learning curve on a new aircraft type will go to the contractor, not Qantas.

They have the HR resource capability of Attila the Hun. Airlines are very popular places for would be managers because of the international travel perks. Qantas has failed to guard against the hiring of narcissists in management and the result is always the same: Too many levels of management and a poisonous set of relationships between employees and management.

As Gough Whitlam allegedly said: "Being made a Director of Qantas is the Australian equivalent of becoming a member of the House of Lords". The strategic capability of the Board - picking the A380, not picking the B777 and of course the APA bid demonstrate a less than stellar understanding of the role their lordships were required to fill.

All problems stem from these simple issues.

gobbledock

28th Aug 2012, 23:03

The last few posts in this thread really hits the nail on the head in regard to many of the QF issues, excellent work gents.

QF94
The contractor wears the cost risk, and the airline/company outsourcing wears the "brand" damage risk should something go wrong. If an item purchased fails quickly, or an aircraft has a major accident, it is the reputation of the company/airline that is first damaged. The public won't care at first who did the shoddy maintenance. That will come after it is found that the work wasn't done locally.
And Ushuaia;
Mate, you are absolutely right in what you say but also slightly incorrect. The public did, and still does, see the A380 engine explosion as a "Qantas maintenance failure". What you say about first impressions is absolutely spot on and what is at risk when you outsource the very essence of what you have a reputation for. In QF's case: maintenance excellence.
The general public still hasn't shifted its thinking on who is to blame for QF32. They don't generally name RR as the sole culprit. In fact, most of the general public would be hard pressed to even NAME Rolls Royce as the manufacturer. In their mind still: it was a Qantas failing. That is a failing of QF Public Relations and it was not even a maintenance issue, outsourced or otherwise! It was a manufacturing issue, under warrantyAnd
I continue to hear people say they "will not fly with Qantas because their maintenance standards have slipped" or "because of all the maintenance problems". A number of them, when pressed, will cite QF32 as an example of what they mean. Major PR failure. But then again, OW and her team have been distracted beating up on those nasty employees, I suppose.
And this is the major problem.Stone faced incompetent bulls#itartist PR chumps who do not know or understand how to salvage a product during a time of crisis, with the Dugon incident being a perfect example. PR can or will break an airline, and the QF spin machine are doing just that - contributing to the trashing. The public want to know that planes are safe, and they want that assurance at all costs. But QF prefer to trash Engineers reputations, paint a picture of them being an 'unnecessary evil' to be disposed of, culled and outsourced at all costs. Not a smart way to do business.
Team Joyce need to pull their heads out of the spreadsheets and start smelling the Avgas.

And this comment from Sunfish sums up the situation succinctly. Alan, print this off and place it above your fu#king desk;

As Gough Whitlam allegedly said: "Being made a Director of Qantas is the Australian equivalent of becoming a member of the House of Lords". The strategic capability of the Board - picking the A380, not picking the B777 and of course the APA bid demonstrate a less than stellar understanding of the role their lordships were required to fill.

evertonliverpool

28th Aug 2012, 23:17

They have the HR resource capability of Attila the Hun how very true, They are now trying to rip off the last 10 engineers from the redundancy by refusing to pay out the 12 weeks in lue of notice, they never lean,

Fris B. Fairing

29th Aug 2012, 03:52

Quote:
As Gough Whitlam allegedly said: "Being made a Director of Qantas is the Australian equivalent of becoming a member of the House of Lords". The strategic capability of the Board - picking the A380, not picking the B777 and of course the APA bid demonstrate a less than stellar understanding of the role their lordships were required to fill.

and let's not forget shutting the airline down when not even the Japs could achieve that during WWII.

QF94

29th Aug 2012, 04:13

Mate, you are absolutely right in what you say but also slightly incorrect. The public did, and still does, see the A380 engine explosion as a "Qantas maintenance failure".

Ushuaia, I can't believe I'm even saying this, but it has been reported by AJ on many accounts that RR paid $95million for QF32 and the remainder under insurance, and that it was a design fault in the engine that caused the explosion and is part of their financial reporting and so on. AJ didn't try and blame the engineers this time (he must have slipped up on that one).

People will remember the engine explosion, and then the gallant effort of all the flight crew in landing the aircraft that had more problems that even Airbus couldn't envisage. Maybe there's a message in there that high level of flight crew training saved the aircraft and those on board. Hmmmmm, QF management could be on to something there. But then again, I guess they still believe all the pilots and QANTAS employees in general are "overpaid" as slated by AJ and the investors.

bddbism

29th Aug 2012, 05:03

Wedcue

29th Aug 2012, 05:41

The roadshow was on today in Melb.. Did anyone go and see Joyce and Co?? What was said?

gobbledock

29th Aug 2012, 05:45

Here is the transcript of what was served up!

http://t2.gstatic.com/images?q=tbn:ANd9GcTybePfRO8eH2Hb5rjchgtGJknOcLk3GwWIn0Iywj_ Qxp7JIOX7Ow

Wedcue

29th Aug 2012, 06:27

But can it be polished?

QF94

29th Aug 2012, 06:49

Would it be fair to deduce that with the grounding costs of $95...sorry what day is it, $195 million, plus the $300 million for the restructure that a loss of $244 mil is really a profit of $250 mil without the negative efforts of AJ and co? That's not bad at all. How are we losing money again?

Make no mistake. QANTAS is profitable, including the International operations. As has been pointed out, there is continual waste, back flips, cancellations, embarking on new ventures, which wipe out any profits of the group, and the losses are then allocated against Inernational. I don't know of any company that has 3 CEO's to run it. More waste and more layers of management. The Domestic and International CEO's are obviously the buffer for AJ should one of the "businesses" not perform so well, then it is the "CEO" of that business that gets the bullet, and AJ's position remains intact.

As far as AJ and Co are concerned, everything that is good is bad, and everything that is bad is International.

ohallen

29th Aug 2012, 07:13

Don't forget also that this sort of organisational structure is a way of a CEO attempting to blame others when it turns to dust or the reported message turns out to be something other than what was stated. Even better if the incumbents leave in the meantime.

Whilst it is dressed up as a profit driver, it is usually anything but that and forms a smoke and mirrors charade.

Romulus

29th Aug 2012, 09:49

Needs an Irish accent but still...

I weep for society (http://video.news.com.au/2273928250/Carries-shocking-Qantas-slip-up)

ejectx3

29th Aug 2012, 09:52

Ha ha I saw that live..... apt

AEROMEDIC

29th Aug 2012, 13:11

ozaggie

29th Aug 2012, 13:25

Summed it up nicely, I thought. :}

QF94

29th Aug 2012, 13:33

Many contributors to this thread are right about the many problems that Qantas faces, but the reality is that Alan Joyce and the board don't read these posts and don't care what is said if they did.
They have the high ground on managing the business whether we like it or not and it's only the major shareholders that can change that.
I wonder what THEY would think of think of these posts.
If anyone has something to contribute on that, it might be interesting.

Aeromedic, you're right about this. AJ and Co also don't care what the investors think either. What is needed is a few more interviews with Leigh Sales and maybe another session in front of the Senate Committee. But this will only have any effect if the questions can be asked without being pre-scripted and have the accounts of QANTAS checked to see which part of the company is bleeding the other.

As has been repeated by AJ over the last 12 or so months, International is dragging everyone else down, and when it's said enough times, it becomes believable. Even the management start to believe their own guff.

Ushuaia

29th Aug 2012, 14:32

qf94 said

Ushuaia, I can't believe I'm even saying this, but it has been reported by AJ on many accounts that RR paid $95million for QF32 and the remainder under insurance, and that it was a design fault in the engine that caused the explosion and is part of their financial reporting and so on. AJ didn't try and blame the engineers this time (he must have slipped up on that one).

Yes, you are absolutely right, mate. I know that, you know that, most people in the industry know that. But ask around amongst Joe Public a bit. See what THEIR perceptions and recollections are. You will be dismayed, as I am. They blame Qantas, they see it as a Qantas failing. From the taxi driver, to the hairdresser, to the banker. That is what the average impression is. There are exceptions; I am talking about the average.

QF used to have two big differentiators; two things people were happy to pay extra for. "Australianism" and Safety. We have blown the first one by doing things like cutting QF international routes, replacing them with JQ flights filled with Thai cabin crew, or Jetconnect flights filled with Kiwis, and having an image of offshoring as much of the airline as possible. The latter is not as significant as the public thinks, but it doesn't matter - that is what they think. Ask them. The engineers rhetoric has not helped in that regard. And I heard a terrible "Qantas" experience today from complete strangers who flew NZ-Aus and were well aware it was Jetconnect and that it wasn't "Australian". They have now given up on Qantas - their next international flight is to be with EK. They volunteered the story to me with no prompting at all.

The second differentiator, Safety: we have blown it with how PR has handled many of the incidents that were not QF's fault, and indeed how too many trivial things even make it into the media. The media has a lot to answer for here but QF PR shares blame here also - unable to reign in the media clowns, unable to convince the media to leave things like RTO stories and G/A stories alone. Note how every such story invariably trots out a litany of QF's recent failings in the final paragraphs, thus reinforcing the negative perceptions. Qantas is still definitely safe, no question, indeed safer than most other airlines but the public doesn't think that anymore.

In the end, the differentiators are gone. QF is just another airline in the eyes of the public, and one that has an inferior cabin product and is more expensive. So it is little wonder we are losing market share.

QF94

29th Aug 2012, 14:59

Here's some figures for thought. These are international airline statistics comparing all airlines flying into and out of Australia.

http://www.bitre.gov.au/publications/ongoing/files/International_airline_activity_1205_M.pdf

Just some extracts out of this 28 page monthly document. This is the most recent, May 2012.

51 airlines operated services into and out of Australia.

1,000,238 inbound passengers on 6,214 inbound flights.

1,096,730 outbound passengers on 6209 outbound flights.

QANTAS International makes up just 2% of international airlines flying in and out of Australia and carried 186,325 inbound passengers (18.6%), 200,064 outbound passengers (18.2%) and flew 1,157 flights in and 1,156 flights out, making up 18.6% of flights in and out.

On average, QANTAS has an 18.4% share of the international market, followed by Singapore at 9.4%, Virgin Australia at 8.9%, Emirates at 8.3% and Jetstar at 8.0%.

When AJ uttered those famous words in August 2011 "When 100 people go to an Australian international airport, right now, only 18 of them choose a QANTAS flight" he failed to mention that the other 82 fly on 50 other different airlines that go to places we don't go, and that the average seat utilisation on a QANTAS flight is 72.15%, much like its competitors SQ at 72.6%, VA at 72.9%, Jetstar at 72.25% and much better than Emirates at 60.15%.

If you choose to delve into the other figures going back, there hasn't been much change in the marketshare over time, and QANTAS maintaining an almost double share of the Australian market over its nearest competitor, and doing it with "aging aircraft, crappier service, outdated less comfortable interiors" and a very poor performing management team. People still want to fly the red tail, even though their choice to is being diminished by poor executive decisions and poor fleet choices.

ejectx3

29th Aug 2012, 23:14

Very interesting stats thanks for posting.

goodonyamate

29th Aug 2012, 23:37

or Jetconnect flights filled with Kiwis,

if what is being said is right, not for much longer........

K9P

30th Aug 2012, 00:15

"Lies, damned lies, and statistics"

Ushuaia

30th Aug 2012, 00:46

Yes, lies, damned lies and statistics is right.

You cannot just grab May 2012's figures, make sweeping statements about maintaining a double market share over the next airline and then somehow translate that into things not changing much over time. I don't have the time to drag out all the references, but yes, delving back into time: about 10-15 years ago Qantas International had a bit over 35% of the traffic out of Australia. Now it has 18%, and the Group has 26% of the traffic when you include Jetstar. So overall, over time, yes, market share has been lost.

There are a number of reasons for this: extra capacity is one very big reason but the other reason is we have driven customers to that alternative capacity. You just have to ask Joe Public - they "used to fly Qantas but, sorry, now I am flying XYZ." I have alluded already to the reasons why QF has driven customers away.

Transition Layer

30th Aug 2012, 02:10

I posted this in the Virgin results thread but equally pertinent here. This is QF management spin at its best!

Quote:
Virgin Australia Full Year Results
============================================================ =============
Virgin Australia has reported a statutory Net Profit After Tax of $22.8 million. However, with a $29 million
loss in the second half of the year, Virgin's profit figures have disappointed some shareholders.

It's important to note that Virgin - with a domestic market share of around 30 per cent - made an underlying
EBIT of $115.6m, while Qantas and Jetstar - with a combined domestic market share of 65 per cent - made a
combined underlying EBIT of over $600m.

Virgin is half the size of Qantas yet its profit was just one sixth the size of ours. This shows the Qantas
domestic strategy to achieve a profit maximising 65 per cent market share target is working.