Qantas' - senior executives face scrutiny

[TIMA9X]

Unusual but interesting story finds (leaked?) its way into the business press today, which I find worth posting considering August is fast approaching us, reporting season.

Qantas has hired high-level consultants to run the ruler over its senior executive team, including assessing the performance since the split of the airline's domestic and international flying operations.
BusinessDay has learnt that the consultants have been meeting the airline's senior executives for several weeks as part of an overview of the company.

Read more: Qantas' senior executives face scrutiny (http://www.theage.com.au/business/qantas-senior-executives-face-scrutiny-20130708-2pmat.html#ixzz2YT9xUDg4)

Sources said the latest hiring of consultants was not about succession planning, despite Qantas chief executive Alan Joyce being set to notch up five years in the top job in November. '' everybody in the organisation is wondering what this consultancy group is going to come up with,'' one said.
The airline has hired consultants regularly in the past - most notably Bain & Company - [B]but this time it is believed to have brought in consultants from another firm to look at the airline's structure. Qantas has had a long association with Bain. Jetstar chief executive Jayne Hrdlicka was a former senior partner at Bain and advised Qantas before she joined the airline in 2010.

Read more: Qantas' senior executives face scrutiny (http://www.theage.com.au/business/qantas-senior-executives-face-scrutiny-20130708-2pmat.html#ixzz2YTAW1LoB)

my bold

[Sunfish]

Phase II of the Emirates takeover: lobotomy.

[Feather #3]

Usually, they get consultants in at vast expense to do the job which the various levels of management have been paid to do!:rolleyes:

It's the ultimate management cop-out!!

G'day ;)

[VH-Cheer Up]

Lobotomy?

When they get to Joyce, they'll find they've been beaten to it!

[Jack Ranga]

The consultants will find exactly what they are paid to find. They won't get the next gig if they 'find' anything that reflects badly on whomever brought them in.

[ohallen]

OH dear....... here come the next round of salary increases and bloated Executive bonus schemes and all based on "independent" advice.

No doubt based on industry trends of top performers who QF once emulated but which are now long gone.

History makes us well justified in being cynical with this lot.

[Wally Mk2]

Shirley (surely) we are not surprised about this, this sort of thing goes on in the big business world all the time. They bring in consultants, find some changes that would make the management look good, (usually a good sacking policy) then all pat themselves on the back & live happily ever after, usually at the expense of the employes!!!
These people live in a different world, much like lawyers etc of that ilk.

Am surprised this thread is still running, the Mods must be again asleep at the wheel:)


Wmk2

[TIMA9X]

Am surprised this thread is still running, the Mods must be again asleep at the wheelhttp://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/smile.gif

I think they do a good job, I posted this because normally stories like this don't get into the mainstream press unless there is more to it, something is up, that's for sure.

[tail wheel]

"Am surprised this thread is still running, the Mods must be again asleep at the wheel"

Why???? :confused: :confused: :confused:

[hotnhigh]

Anyone heard if there is a push for an early agm?
Perhaps the numbers aren't adding up?
Maybe Alan's calculator is still dodgy?

So many questions.....

[AEROMEDIC]

Qantas senior executives under scrutiny?

I think not !!

How can Joyce scrutinize anyone when HE and his mates on the board are the problem?

The matter is absurd to say the least and a COMPLETE waste of the shareholders money.

Is it too much for the board to accept the blame for the lack of return to shareholders? Not if they can get away with it, and you can be sure that the bar will be set very low for these tossers, if at all.

:*:ugh:

[TIMA9X]

Interesting take on the matter from Ben Sandilands, Qantas calls in more consultants, but to what end? | Plane Talking (http://blogs.crikey.com.au/planetalking/2013/07/09/qantas-calls-in-more-consultants-but-to-what-end/)
There are some burning questions leaping off the page on today’s very interesting Fairfax story on Qantas calling in consultants (http://www.smh.com.au/business/qantas-senior-executives-face-scrutiny-20130708-2pmat.html), again.

One is why would any senior executive at Qantas take two month’s leave, as is reported to be the case with Simon Hickey, the first CEO of the newly formed independently managed Qantas international division.
Yes, there can be really serious issues in private lives. But when or if they arise they usually require a resignation, not prolonged leave.

This is because of the nature of the position, the need for continuity of leadership, and this very crucial stage on the Qantas story post the Emirates partnership starting, which is a wide ranging restructuring of Qantas international and all of the on going decisions that will be needed to get the best synergies from the new arrangement.

Qantas is an enterprise that has ceased to pay dividends and has an utterly trashed share price. It has been filing some very sobering traffic reports with the ASX in recent months suggesting that it has been wounded by engaging in a capacity war, as well as the acknowledged pressure that competition has placed on yields, and it has even extended that observation to its Jetstar operations.

Management is responsible for what happens to this company, and it is a moot point that calling in consultants would be of value if all that they do is point to management failings, which are self evident from the share price and the traffic reports .

For those impatient for Qantas to exercise its options on Boeing 787-9s, which can be delivered from 2016 on should they be exercised in a timely manner, these are worrying signs

Possibly the ambulance has arrived now seeking the chaser... :ouch:

[Wally Mk2]

The thread has the "Q" word in it (that's why I am surprised) & we can't have that now can we:-) ?


Wmk2

[mrs nomer]

Qantas execs being lined up yet again in the Far Queue again :E

[Buttscratcher]

Jayne Hrdlika. ?!?



Seriously ?

I bet she's fantastic !! I'll pay more attention in future

I learn new things here every day, thanks!

[Jack Ranga]

So Wally is not whinging after all?

[Sunfish]

Jack Ranga:

The consultants will find exactly what they are paid to find. They won't get the next gig if they 'find' anything that reflects badly on whomever brought them in.

Quite often consultants are brought in to provide the reasons to fire people that senior management have already targetted. That way the boss doesn't get blood on his hands.

Having been on both sides of this game - as a Consultant and later as part of a management group being scrutinised by consultants, I can make one observation with 100% accuracy:

No useful work will be done by Qantas managers from now, until the last consultant leaves the building and the axe has dropped.

[C441]

Interestingly, in an internal memo, Alan is denying any consultants have been called in.
Someone's going to get shafted/boned!! :rolleyes:

[Jack Ranga]

Sunny-fair enough :ok:

[Animalclub]

I'm still a believer of Sunfish's theory of a (now not so stealthy) QF takeover by Emirates... so is this the way that someone high up in QF gets the boot and an (ex)Emirates' employee will be installed?

[Mstr Caution]

If anyone spots a consultant.

Could you steer them away from the admin buildings & point them in the direction of an airport or aircraft.

Get them to talk to some engineers, pilots, cabin crew and ramp staff.

How could you possibly make an accurate assessment of how management strategy works without experiencing the full effect of their decisions.

MC

[Wally Mk2]

Geee 'JR' yr not becoming my best friend are ya?.......I/we never whinge, we are too old for that we are just bitter & twisted old codgers:E

Tnxs 'rmc' I wasn't going to elaborate 'cause I'll get sin binned for telling it how you say:-):ok:

Wmk2

[Managers Perspective]

If anyone spots a consultant.

Could you steer them away from the admin buildings & point them in the direction of an airport or aircraft.

Get them to talk to some engineers, pilots, cabin crew and ramp staff.

How could you possibly make an accurate assessment of how management strategy works without experiencing the full effect of their decisions.

MC


Why on earth would you consider they are interested in you?

The consultants will review and make recommendations in the best interest of the owners of the company, not a disgruntled employee group.

Engaged employees are without doubt they key asset of any company, but they are not the reason for the existence of the company.

MP

[JPJP]

Managers Perspective - The consultants will review and make recommendations in the best interest of the owners of the company



In that case, the replacement of the board and the majority of senior management would be the only logical recommendation. Since they have been unable to maintain what you've so rightly defined as a key asset.

[Sunfish]

MP, the consultants do the bidding of whoever is paying them. They are not necessarily there for the shareholders benefit. This is fact.

[Omnipresent]

MP, the consultants do the bidding of whoever is paying them.

Absolutely. Consultancy is all about understanding the agenda of individuals, not the organisation.

One ranks relationships between its staff and client individuals on its CRM system using a scoring system. No 2 is "Understands business agenda". No 1 is "Understands personal agenda". Go figure!

[T28D]

Managers Perspective - The consultants will review and make recommendations in the best interest of the owners of the company Directors must operate in the best interests of the Company ( Corps Law ) Consultants act for the provider of the investigative brief ( not bound by specific law )

[V-Jet]

MP, the consultants do the bidding of whoever is paying them. They are not necessarily there for the shareholders benefit. This is fact.

Some years ago I had the great fortune to have a discussion with a consultant at Qantas. In confidence of course!

I have been through a few stages in my understanding of Qantas management. Uncaring - they knew what they were doing. Interested - I might learn something from these guys, using unusual solutions to simple problems. Questioning - Are they really that smart? Incredulous - These guys are as thick as bricks and no-one else seems to understand! And finally, festering hatred at the incompetence, fraud and theft.

This consultant coincided with my 'Interested' period, so I was genuinely discussing and not 'dissing'. Nowadays I think my reaction would be along the lines of a Charles Saatchi/Nigella Lawson approach, but I digress:)

I outlined a few points and why I felt they were valid and thought nothing more about it.

Until I got a call to attend an involuntary 'Tea and Bickies' with the Fleet Manager about unspecified transgressions. Go through log book, call crew, try to remember if I had forgotten hat/jacket recently, usual stuff - all turned up nothing.

As it turned out it was my aggressive and hostile attitude to an external consultant on Company Business that was the cause of the problem. FWIW I was neither aggressive nor did I have a hostile attitude. What I did not do was tell the guy what he wanted to hear, and he made it very plain what he DID want to hear, and it was exactly what he would have been paid to report. Even more interesting was discussing with others who had spoken to him it was clear I had merely said exactly what everyone else had said. Despite his denials that nothing but 100% support for Qf's brilliant management existed in the workforce, he obviously got very frustrated hearing things he couldn't put in his report.

In my career I have had two 'Tea and Bickies' meetings (WK1 patterns). This one merely reinforced that the company in its current form (back then) was doomed. I said as much, laughed and simply walked out saying I just had the proof I needed an exit strategy, urgently! Now it is actually way worse than I thought it could ever get!

[Kharon]

No doubt many know the more popular, ribald rugby and navy versions of this song; and will, no doubt robustly sing along using their own words. Somehow, this version caught my imagination. Just seemed an appropriate way to spend my two bob...http://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/smile.gif

On the bridge at midnight.

[ampclamp]

No useful work will be done by Qantas managers from now, until the last consultant leaves the building and the axe has dropped

I must have missed when it started.:E

[Sunfish]

V jet understands. Never offer "new information" to a consultant because you never know where that information will end up.

In my case I once tried to be helpful to someone and ended up being the punching bag in a stoush between Gray and McMahon for my trouble.

[TIMA9X]

appears to be a few pigeons flying around the big end of town delivering messages.. I note a slightly different take in this link below compared to the last 3 years..

I find this bit interesting and not a usual line.

Which airline stock should you own? (http://finance.ninemsn.com.au/newsbusiness/motley/8688084/which-airline-stock-should-you-own)

"Australia’s biggest airline by market capitalisation is Qantas (ASX: QAN). It also holds the title of most expensive airline in terms of earnings. However, Morningstar predicts solid earnings increases in coming years, which will see that figure decline significantly. The The company’s continued focus is on debt reduction and providing free cash flow."

I am also surprised this squabble is still continuing, Qantas Deal with Qld Tourism (http://www.smh.com.au/business/qantas-sticks-to-tourism-australia-freeze-out-20130711-2pskq.html) doesn't help anybody. I note they still work together at the annual "G'day LA" event, but still not anything else.

Since they have been unable to maintain what you've so rightly defined as a key assetI also remember the "key assets" being urged "to move on" by management and have done so well since the grounding kefuffle etc., etc. Probably time for the guys at the top to do the same, doesn't leave a positive message for the said pigeons to carry.



World's Best Dummy Spit - YouTube (http://youtu.be/UrOnGzmB7Bs)

[Sunfish]

The stock tip comes from Channel 9 which is bought and paid for by Qantas. Ignore it. The most logical explanation is that someone wants to ramp the stock to get rid of their holding.

To put that another way, by the time the general public is told something about the sharemarket, everybody else is set.

By the way, we are about due for one of those "The falling Australian dollar has increased our fuel costs and blah, blah" spruiks.

[V-Jet]

A friend of a friend (in money market) made a comment to me at a BBQ a few days ago that suggested QF were using their cash to bolster their own share price ahead of reporting season. Not that this guy liked airlines, but he clearly liked Borghetti over Joyce!

Agree with Sunfish, I have total disregard for anything Ch 9 says about Qf. You get the same insightful analysis from Pravda/Qantas news.

[AEROMEDIC]

Right on the money Sunfish.


A contact I have in the company has advised that worries are emerging about the falling dollar. Fuel hedging has not been what it should have been and costs for spares are rising (being in USD).
This is not good in such a competitive market place.

Stand by for the announcement.

As for MS, this is a company that does not engage it's employees. Most haven't even heard of the Employee Relations manager, let alone believe that their input counts for anything.
The so-called "consultants" will provide the company what it wants to hear, rather than what it SHOULD hear, so the exercise is pointless AND are waste of money.
They're probably getting paid in USD.

[Keg]

They may make the comment re fuel prices and the USD but AJ and co have long been on the record that an AUD between 70 and 80 cents to the USD is ideal for QF.

[004wercras]

AEROMEDICAL, can you elaborate a little more on the fuel hedging, you've got my attention?
As much as I dislike old scrotum face, when it came to hedging he along with Colin Storey and Borghetti collaboratively nailed it pretty much every time. So team Joyce, if they are as good as they say they are, shouldn't get belted with unexpected huge losses on fuel (unless he has the kiddies from Vietnam doing the hedging :E). Also the group should be picking up additional revenue from freight exports as volumes increase with a lower dollar, so don't believe any doom and gloom spin that he throws your way to justify cuts.

After 5 years this bloke has truly transformed QF into something totally lame. As for the 'consultants', well there has already been a bit of debate as to why these people are sniffing about, but I think you will shortly see more cuts and restructure but at the senior level. Why? Well for one his splitting of the executive structure and associated portfolios isn't working. And secondly the current structure at the top does not align with EK. There is a doubling and tripling of high level trough dwellers in several areas, so expect some boning to commence. Ol Tim won't take to kindly to propping up QF's top tier of piggy wiggy's. And also, unfortunately, my source tells me that there will be more re-alignments at the coal face, so brace yourself folks, the buggerisation (thanks Sunfish) will continue.

Oops, I forgot, what about the shareholders? Who???

[lamem]

One of engineerings old Black Belt Lean Sigma managers has just returned from the railways to carry out a secret project for nappystain as well. Probably trying to decide how far to cut engineering back to earn their kpi's.

[V-Jet]

Curious 004, any hint as to which workforces?

Purely for interest sake, no axe to grind as I see Qf as near terminal-pardon the pun:)

[AEROMEDIC]

004wercras,

Not in a position to offer specifics, but take on board this.

Qantas hedged a good part of their fuel requirements for 2011-12 at worst case scenario of US$ 123.59 after increasing the fuel surcharge. The exchange rate then was $1.02 and the Jet fuel price was over USD$120.
I don't know what hedging has been done for 2012-13 but since then, the AUD has dropped to say, 0.92 to the USD representing about a 10% increase in the cost of fuel.
Jet fuel is over USD$120 again and if hedging (currency included) hasn't been done right, Qantas will have to again increase the fuel surcharge or the bottom line will take another hit. Doing that will be hitting the very people that provide the revenue.

Stand by for THAT announcement and then you'll know.

[004wercras]

V-Jet, my source tells me there are some potential changes within ground handling in various locations.

AERODMEDIC, indeed, the world waits with baited breath for the 'we are going broke due to fuel costs we cannot control' folly, or something of that nature. One way they could save fuel is by not uplifting Cosgrove or the other Board minions who are about as useful as herpes.

[V-Jet]

Thks 004. Despite saying I had no axe to grind, I may have misled you. I appreciate knowing that at least management has decided to remove people who actually do the work from the workforce. Thank god they have seen the light and are not thinking about removing a single manager, or god forbid, a CEO, board member etc etc...

[Going Nowhere]

QLink ground handling in BNE has just been changed over to a mix of Carbridge for ground transport and Aerocare for baggage, cleaning and turn arounds.

Possible sign of thingsmto come?

[TIMA9X]

I guess it's like one big happy family after reading this, it seems everyone knows each other or has met along the way.

Hrdlicka's first client at Bain in Australia in the late '90s was a thirty-something Alan Joyce, then in charge of Ansett's route network.
After the consultancy gig for Ansett ended, the pair stayed in touch and, more than a decade later, Joyce, who by this time was Qantas chief executive, offered her a job in 2010 as head of strategy and information technology.
Hrdlicka's predecessor at Jetstar, Bruce Buchanan, had a five-year stint at BCG, during which he led the team that prepared the business case for Jetstar. Joyce and former chief executive Geoff Dixon asked him to stay on at Jetstar for six months, and it turned into an eight-year stint at the budget airline.

Read more: Are consultants worth the money? (http://www.smh.com.au/business/are-consultants-worth-the-money-20130712-2pvok.html#ixzz2Z6HOWy3U)

[AEROMEDIC]

Ah.......an exclusive little club

For management selection,they'll always use someone with whom they feel comfortable and a "blast from the past" because the interview has already been done. The friendships made, the right things said, the right attitude formed, the nod, the wink and held the right positions with friendly companies.

All very nice, except for one thing....competency.

[Animalclub]

You've all heard of the Peter principle........

[maggot]

I guess it's like one big happy family after reading this, it seems everyone knows each other or has met along the way.

As they say, its not what you know....

[DirectAnywhere]

One of the rumours doing the rounds is that the consultants were brought in to investigate the costs of shutting down QF International entirely. 500 million was the rumoured figure. If it happens, that is highly unlikely to be announced until after the federal election as it would be politically explosive.

[Lookleft]

Interesting that Hrdlicka kept her Ansett association very quiet when she started with Jetstar and started to introduce herself! Her main claim to fame as she put it was she was brought to Oz to run a trading card business! It was suggested that her association with QF came through James Strong as she was consulting for Woolworths. Why the secrecy?

[OneDotLow]

But our dear leaders are all doing such a wonderful job and constantly patting themselves on the back for it.... That just wouldn't add up at all.

:hmm:

[Tuner 2]

Rumour around Mascot is that one of the many CEOs at Qf went to the board to allegedly express his unhappiness with the AOC splitting process and as a result the consultants were called in. Splitting the AOCs probably removes a big red-tape regulatory barrier to shutting down or selling-off in whole or part one of the divisions - or alternatively using it to force the govt's hand and amend the Sale Act.

[pull-up-terrain]

One of the rumours doing the rounds is that the consultants were brought in to investigate the costs of shutting down QF International entirely. 500 million was the rumoured figure. If it happens, that is highly unlikely to be announced until after the federal election as it would be politically explosive.
.

I hope that rumour isn't true but what are qantas management thinking they are going to achieve by doing that? Are they intending on starting a new international airline from scratch by re-employing all the current qf staff, but on lower contracts or lower paid eba's?

[DirectAnywhere]

Tuner 2's post would help explain why Simon Hickey has been on gardening leave for a couple of months. Pull-up, it doesn't really matter what they plan to do. If QF international is losing as much dough as management suggests, they just want to be rid of the albatross around their neck.

International is basically an irrelevancy anyway. Any lift that domestic gets from passengers feeding into it can probably be achieved from EK and other code shares. QF international has been heading down the path of being a virtual airline for years.

[Ngineer]

Who knows, you may be working for your old CEO again.

[FYSTI]

One of the rumours doing the rounds is that the consultants were brought in to investigate the costs of shutting down QF International entirely. 500 million was the rumoured figure.

If, and I stress if this rumour is correct, then it is just the official acknowledgment of a strategy that has been in train for at least a decade. The EK deal was the biggest hurdle - the ACCC blessing was the key pivotal decision. Domestic is now hooked up to a true international partner. The current management never had any intention of attempting to compete beyond domestic and near regional.

[Jackneville]

Swiss Air ?

[BuzzBox]

If it happens, that is highly unlikely to be announced until after the federal election as it would be politically explosive.

Since when does Alan Joyce give a toss about causing political ructions? An announcement like that with a pending election would surely compel the politicians of both sides to act to 'save' Qantas.

[DirectAnywhere]

Which is precisely why nothing would be announced until after an election. Management doesn't want it saved...they want it gone. That gives the pollies and the electorate three years to forget about the whole thing.

It's kinda like Team America - destroy Paris to save it. I really hope I'm wrong on this one and you can all come back in 12 months and tell me so. My gut tells me something different though.

[busdriver007]

Bill Meaney(formerly of Swiss) now non-executive director on the Qantas board. Closely associated with Bonderman(TPG), Clearly there is no intent of growing Qantas International and when the axe falls it will be an embarrassment for Australia. The irony of this is that the money used for this internal destruction is the worker's money of Australia. How dumb are we? American consultants have a great track record, Global Financial Crisis, my case in point...:ugh:

[astroboy55]

Hope its not true:{

If people get a whiff of this, watch the rush to the 737!!

Personally, I don't see the 330/380 operation disappearing anytime soon.

[ferris]

Qantas has recently become consistently cheapest (and by cheaper, I'm talking cheaper than Qatar et al) for my regular trips home. Not only that, the flights are nowhere near full (last flight was about 40% on an A380). Not many up front, either.
You don't have to be blind freddy to realise they can't continue like that. I'm becoming nervous about forward booking- I can't believe I'm saying that about QF int.

[Toruk Macto]

International to go ? Domestic to be tied up with Emirates . Qantaslink to expand ? Jetstar ? Interesting times !

[Mstr Caution]

I heard Hickey had the ****s with the potential reversal of the decision to transfer the 767 to the Domestic business unit.

One AOC with the 767 under Strambie and reporting to the Domestic Chief Pilot.

Load his International business up with the surplus crew as the 767 retires, whilst it contributes to the Domestic profit centre.

It's quite amazing with the stroke of a pen you can decide where costs are allocated and profit is generated. Oh.......that's right. It's been happening for close to 10 years.

[Mstr Caution]

Ferris

International.. LAX must be doing ok. Ever tried staff travel out of the joint.

[maggot]

Dunno when youve been travelling ferris but aside from a few skinny flights after the change to dxb its been ~500 pob to lhr and back from my obs

[ferris]

I can only go by my experience (the DXB- oz legs).

Look up expedia etc. and search DXB to say, MEL on any particular date over the next few months. QF comes up cheapest- by a long way. That, combined with economy pax stretching out over 4 seats, can't be good. I follow Peter Lynch in that regard..."invest in what you know".

[Mud Skipper]

Ferris, you are dreaming. From the flights I have done, loads are good via DXB. Like wise we left 40 Staff behind in LAX the other day.
Still think Dubai is not a good stop over, Singapore was much better from a final leg flight time & body clock adjusting in Singas slip. Passengers have also remarked likewise.
Qantas service, though much maligned is also far far better than EK from my personal experience.
In fact I felt much more secure about my QF job when I last flew EK.:bored:

[maggot]

Not disputing you ferris, just curious. My flights have been chockas but it has been the june/july period when we need to be full. Ive been at work too much so ive noticed :hmm:

[virgindriver]

I wouldn't be surprised if Mr Joyce decided to shut down QF International now that it's separate from Domestic. He has done it before.

Shut it down then just use Jetstar as the international and domestic carrier for the leisure market, Emirates the premium one and QF domestic for the domestic premium.

Keep what assets he wants then cut the rest loose, just like ANZ.

If QF drivers want a job they can fly their old A330s on the new Jetstar contract.

Goodbye to all the 767 and 744 drivers who he doesn't need as well as all the surplus international flight attendants.

That sounds like a plan he would use and I am sure he has learnt a bit from his Ansett days.

[OneDotLow]

Yep, easy as that, Virgindriver. :rolleyes:

[Buttscratcher]

If he does, he'll need a team of bodyguards!

[FYSTI]

If he does, he'll need a team of bodyguards! Think Patrick's and the dock disputes (it even has the Dubai connection in common, what a coincidence), they won't just have bodyguards, but dogs, helicopter, buses with blacked out windows & private security backed up by the police, and army if necessary, for the security of Airports and Federal property, of course.

Chris Corrigan is still alive & well today, free to dine Caviar, rock oysters and the finest Champagne, if he so desires, because he can certainly afford it, so it will be for Alan.

[virgindriver]

If he does, he'll need a team of bodyguards!

Not really- he would get a huge bonus for doing this then retire back to Ireland or NZ.

I thought Olivia was already waiting to take over his job once he takes the golden handshake anyway?

[ferris]

Angry The QANTAS group is more than financial So, which is it? Is QF Int actually profitable, and they are 'magicing' the money away, or is International really the millstone the "Group" says it is? If it's the latter, then what do you think Joyce should do, for the good of the "Group"?
if god forbid, QF Int. was to be shut down then your ticket would be rolled onto an Emirates flight. I'm looking at the fine print, and I can't see that anywhere. If Int. is split off as a separate entity, what liability does the "Group" hold? What makes you think EK has the capacity to do that anyway? A FAR more likely scenario, in my view, is that all QF tickets would be converted into EK ones, and QF leases the fleet to EK until EK fills the (small) void. (Helloooooo contracts).
Look, I certainly don't wish any ill will, but I think some here need to pick up a copy of "Who moved my cheese?".
I was only yesterday reading an article about the how high AUD has caused a record amount of overseas travel, and that that is over. How much did QF grow their international business during that boom, and how does it look going forward into a decline? Disgusting mismanagement, really.

[hotnhigh]

I think some here need to pick up a copy of "Who moved my cheese?"

Agreed Ferris, unfortunately though, I think the majority would be keen to do whatever it takes but it requires leadership you can trust in.
The likes of the board and its management group move the cheese, they eat the lot along the way, and only leave ratsack behind.

[Keg]

I wouldn't be surprised if Mr Joyce decided to shut down QF International now that it's separate from Domestic. He has done it before.


Not possible. Heard of the Qantas Sale Act? It specifically prohibits him from doing something like that.

What he can do is sell of domestic but if I'm a Qantas shareholder would I want an under performing international airline and no domestic traffic to feed it? He can sell of Jetstar if he wants but can't see him doing that.

After the talk of earlier this year of things 'turning around', I can't see him walking away from international and handing it all to EK. No, I suspect that it will be something about replacing Simon Hickey or new aeroplanes, or new routes, or something else to do with the AMAAAAZINNNG turnaround that he and his exec are responsible for.

Or perhaps after a bunch of years in the job he's ready to give it away and we're going to get a new CEO? :E

[Keg]

PS: Lots of water to still go under the belt before Domestic and International are truly separate.

[the_company_spy]

The rumour is 10 new A330's (as well as the J* returns)
That's either new routes for international or a hell of a lot more capacity domestic.

[pull-up-terrain]

. The rumour is 10 new A330's (as well as the J* returns)
That's either new routes for international or a hell of a lot more capacity domestic.


If that rumour is true, I dare say the additional 10 a330's would be for completely replacing the 767 fleet and maybe a few 744's flying into Asia. I can't really see them expanding or adding new routes.

[Mstr Caution]

I don't believe for a moment the a330 Perth base is to a accommodate domestic flying only.

[pull-up-terrain]

Correct me if I'm wrong, but qantas is receiving 10 a330's from jetstar, and we have a fleet of 21 767's?

So that will leave us will 11 767's. So 10 additional a330's might be possible, but I will only believe it when I see it.

[Stalins ugly Brother]

Keg,

The Qantas sales act would stop any part of the Australian based business being more than 49% foreign owned and 25% owned by one foreign entity. So even with two AOCs and two listed businesses the above would still apply. It also applies to Jetstar Australian ops.
As for shutting down either LH or SH that can happen BUT would have massive ramifications for the group, would destroy the share price, alienate shareholders and also will come under heavy scrutiny from the government of the day and the ACCC.

Surprisingly I'm of the belief this will be about the 787 and growth in the mainline business going forward.
Although he did shut down the airline totally before so nothing would surprise me. :ugh:

[Keg]

Fleet of 767s is currently 18- but doing the flying of just 15. By the end of the year we're at 15 airframes with no reduction to the flying hours on the fleet.

There are 10 A330s to come back from J*. I vaguely recall that there are two additional A330s coming from somewhere apparently to take us to 12 coming back over the same time as the 767 is retired with additional 737 capacity to make up for the extra three 767s. No net loss of airframes supposedly.

That's how I recall it anyway.

Thanks Stalin. I still can't work out why we're going down the road of two AOCs but I don't think shutting down international is featuring in any of the thinking.... at this stage anyway!

[Stalins ugly Brother]

keg, I think the nutshell of it is if you have a business that say is worth $100 but you can only sell 50% then the most you can make is only $50.
But if you can split your business and make them two independent, profitable operating units then technically you have two business now worth more, may not be double but worth more than the one entity. So say each unit is now valued at $75 each, total $150, now sell 50% to investors and your profit is $75. A 50% increase in profit.

I know this is a very simplistic view but still indicates that it is driven so to be able to attract investors to different units (profit making)in the business rather than an investor having a chunk of the overall package where there could be loss making unit.

So, split the business, have investors invest in the money making unit, use the money made from that investment to restructure and turn around the loss making unit, make that profitable to attract more investors and so on.

Selling or closing one of the units would be detrimental to this scenario.

Maybe there is after all method to the madness. Let's hope :ok:

[Jack Ranga]

Years ago a bunch of imbeciles, you might call them the smartest men in the room, split part of the business off. Part of the business was a cash cow, the part they split off and prepared for sale, on it's own, was not profitable but a vital part of the business just the same. Management roles were duplicated (making it even more unprofitable). It was then offered for sale, even the stupidest men in the room figured out it was a dog & laughed at the smartest men in the room.

The separate organisation was disbanded & rolled back into the core business. Yet more millions of their customers money blown. You can do what you like when you're a monopoly ;) the smartest men in the room are still there, wasting millions of their customers money :D

[Keg]

Maybe you're right. Sell off (say) 40% of Jetstar and QF domestic as two distinct entities. Maintain a controlling stake but get a whole bunch of money. Bonuses all round.

[Shark Patrol]

What about the scenario whereby, after completing the separation of LH and SH that they decide to rename SH. Say something like .... AUSTRALIAN AIRLINES. How then does the Qantas Sales Act apply? It is the "Qantas" Sales Act, not the "Qantas Group" Sales Act, because the "Qantas Group" didn't exist when the legislation was drafted.

[OneDotLow]

I think Keg is along the right track. How would a sale of 30-40% of QF Domestic sound, with the proceeds being invested back into some new metal (plastic) for QF Intl which will have recently completed its "amaaaaazing transformation".

[Derfred]

They aren't separating SH and LH.

They are separating domestic and international.

[mrbigbird]

Something big is up. That seems certain. Too much chatter to be anything less.

I keep hearing repeated references to a restructure focused on two distinct fleets. The comments above about a new A330 base in Perth and 10 new birds only serves to confirm this.

Based on chatter new fleets likely to be:

Long haul/international A380 - (#747)

Short haul/regional/domestic 737 800 - A330 300/200 - (#767)

# NB As we all know the 747 only has a few years left at best and it appears from all indications that the 767 will be disappearing perhaps as early as next year. Or close to it. Lots of talk too about VR packages being 2-3 times recent payouts to encourage 30/40 year veterans to walk - which is where the main cost of being a legacy carrier resides.

At present the 767 and A330 A/C work across both international and domestic networks and consequently are operated by cabin crew from both divisions.

I'm being told from several sources the new fleets will see cabin crew locked onto the aircraft within one fleet only. Meaning they will fly where ever the aircraft flies. As distinct from now where 'short haul' cabin crew will operate an A330 within Australia, but 'international' crew will operate it to Asia.

Perhaps the old legacy terms we have always used for short/long haul - domestic/international are acting like blinkers preventing us from thinking outside the box about how the fleets might be restructured.

If what I suspect eventuates the new fleets might be better thought of as (or labelled) 'Regional' (domestic and Asia) and 'Long Haul' (being LA,Dallas,LHR and Dubai).

The 787 would then fit very neatly into the new Long Haul fleet and allow for retirement of the 747s and growing new routes from Dubai into Europe.

So instead of actually shutting the current long haul division down they might just be shrinking it be just the A380 and an ever decreasing rump of old 747 gristle - crew on legacy conditions.

Who knows they might go nuclear and bone' the whole 747 problem early and operate a purely A380 fleet until the 787 arrives and they can then crew it as cheaply as the A380.

We'll know soon enough -It will probably all be announced the night of the election.

[Capt Kremin]

Lots of talk too about VR packages being 2-3 times recent payouts to encourage 30/40 year veterans to walk - which is where the main cost of being a legacy carrier resides.

That doesn't make much sense.

[neville_nobody]

That doesn't make much sense.

Depends on what you are trying to achieve.

Would make perfect sense to a actuary who will only be around for a few years and will collect on the way through if he could devise a scheme that would make the books look good.

Long term staff are a liability in a accounting sense, lots of sick leave, lots of holidays, massive super all of which is a liability in an accounting sense. If you can get rid of them it makes the bottom line look awesome.....
Then go about hiring a whole bunch of intakes on lower salaries and hope the wheels don't fall off, or there is a massive demand for your labour. Probably from Qantas's perspective they still believe everybody wants to work for them so they will never have that problem.

Airservices Australia is a classic example of all this. And about 10 years after they had some generous redundancy offers out there to get rid of the 'dead wood' they now have a staffing and experience crisis.

It has all been done before and it is all about financial engineering and creating an illusion that you are doing really well when in fact all you are doing are creating major problems for the next guy, but you are not paid to worry about that.

[Keg]

Nev, at the moment excess crew are burning all their leave so that liability won't exist in a couple of years time. Every mainline Captain is on 12 year pay so getting rid of senior 744 captains by paying excess VR doesn't really achieve anything. The captains that go to the 787 will still be on 12 year pay- which would be identical to what those 744 captains demoting to the 787 will be on. Whether they can afford the pay cut from a smaller aeroplane and less overtime with the 787 likely to do some domestic flying as part of it's makeup is another question entirely.:E

The ONLY reason to offer VR to senior Captains is to avoid multiple training courses that demotion may throw up. Even then, if a 744 Captain displaces someone junior to them on another fleet it's about seven training courses. I'm not sure what the cost of that would be but would find it hard to believe it'd equate to 2-3 times the 'normal' redundancy pay out. Besides, given that redundancy is normally last on, first off and 6 months pay, they're going to need to offer decent packages to get any one else to take it. See my previous point about the 'cost' of retraining courses compared to the VR they're likely to offer as to whether it's worthwhile.

[DirectAnywhere]

Lots of talk too about VR packages being 2-3 times recent payouts to encourage 30/40 year veterans to walk - which is where the main cost of being a legacy carrier resides.

The VR reference could be in relation to Cabin Crew. That would at least make a modicum of sense as there have been no 'recent' payouts to tech crew with which to make this comparison. However, I doubt such a plan would be likely. Chatting with a 30 year veteran CC the other day who is taking redundancy at about 170k, it seems senseless to pay 2-3 times this amount to get rid of a LH F/A.

[Mstr Caution]

I was thinking the "big news" is similar to the tie up with Emirates.

Profit share, or tie up (Emirates style) with LATAM.

LAN.com - Mapa de Rutas LAN (http://www.lan.com/en_us/info_viajes/mapa_de_rutas/index.html)

MC