The Demise of Virgin Australia

[sys 4]

With the government guarantee coming Qantas's way.Will this spell the end of Virgin by the means of Qantas now dumping unlimited seats onto the Australian market knowing the Australian government has financially backed QF.Or is Hockey now going to regulate the market place by partially Nationalizing the airline industry.The liberals are playing a very dangerous game here,and it fly's in the face of what the liberal party is all about.They are standing on a very slippery slope.

[spocky]

I would rather have the domestic scene regulated, where everybody has a job and the airlines make a profit rather than a fare war where no one wins:roll eyes::rolleyes: !!

[japandwell]

I though there were really only 2 major competing airlines in domestic Australian markets. I mean- the others are mainly connected to the 2 large carriers via codeshare, or express networks.

Nothing like domestic US anyway.

[thorn bird]

"only 2 major competing airlines in domestic Australian markets"

True, the main difference is one has a CEO the other has a
Leprechaun!!

[Black_Knight]

^To be sure to be sure.

Virgin still carrier the advantage of being able to attract foreign investors something Qantas still cannot do.

Isnt throwing debt gaurentees at qantas a little like given a bad poker player a little extra cash. sure he can play a little longer, but his still bleeding chips.

[Chocks Away]

Spot-on Black Knight :ok:
Virgin aint going anywhere, especially when EY are sneaking their %share up another 3 notches!

[Potsie Weber]

I think the quid pro quo on a debt guarantee will be smashing the unions. The current government makes no secret that this is where it is looking for productivity gains in the economy. Work Choices type legislation would never get through the senate so they are going after unions/conditions any other way they can (aka construction industry royal commission).

Would not surprise me to see something similar to the 1998 Waterfront Dispute develop at QF. Everything possible will be outsourced to non-union contract labour. Does this sound familiar to what QF is currently doing with its structure:

In September 1997, Patrick implemented a restructure whereby the functions of employing its unionised workforce and owning its stevedoring business were divided into different companies. The stevedoring businesses and assets previously held by the employer entities were transferred to other companies within the Patricks Group. In addition, the employer entities entered into various labour supply agreements with the owner entities to supply Patricks with labour. As a consequence, the labour supply agreements became the major asset of the employer entities.
Significantly, the labour supply agreements were terminable by the owner entities without notice in circumstances of industrial action. The details of the corporate restructure were not made known to Patrick's employees or the Maritime Union of Australia (MUA).
In late 1997 and early 1998, Patrick's employees engaged in industrial action, most notably at Melbourne's No 5 Webb Dock.
On 8 April 1998, Patrick's management dismissed all of its employees; liquidated its assets, becoming technically insolvent; and imposed a lockout at most ports in which it operated.
Minister for Workplace Relations, Peter Reith read from a prepared brief, stating that the government fully supported Patrick in their action.[6]
By the following morning the docks were fully operational with new non-union staff in place.

The MUA and Patrick negotiated a new work agreement, which was adopted by the company and workers in June 1998. The agreement specified a near-halving of the permanent workforce through voluntary redundancies, the casualisation and contracting out of some jobs, smaller work crews, longer regular hours, company control over rostering, and productivity bonuses for faster loading. While the union retained the ability to represent maritime workers, the company achieved significant changes to work practices as it desired. Workplace Relations Minister Peter Reith stated at the time "There appears to be a number of reforms which will satisfy the seven benchmark objectives which is very important."[9]
The non-union workers who had been employed to break the union were dumped by their employer at the conclusion of the dispute. Many workers from the non-union group claimed they were still owed thousands of dollars in unpaid wages, and successfully sought payment of the unpaid wages through the courts. In contrast, the Fynwest employees, who were on an annual salary of around A$120,000, were awarded bonuses and commissions worth around $50,000 each on cancellation of their contracts.

So I don't think Virgin need to worry too much for a while, QF is gearing up for an almighty battle with its' own staff first, and with the full support of the government.

[Gate_15L]

Will this spell the end of Virgin by the means of Qantas now dumping unlimited seats onto the Australian market knowing the Australian government has financially backed QF
Don't forget, this all depends on you, QANTAS staff, Willing to do this at 1/3 the salary!

So basically all the QANTAS board have done is achieved a government backed guarantee for their bonus, nice....

If you fail, harp on about it until the government bails you out.

[ohallen]

I also suspect that one day the public are going to get over any attachment to Qantas and see it for what it is despite the efforts of staff to show otherwise. The current and former management have presented themselves and the business in a way that has broken many long standing relationships and we must be getting close to the point that the public has had enough of their whingeing and working the system for the benefit of a few while pretending to actually care.I know the number show otherwise but wait until they start slashing and burning while continuing the Rockpool entertainment fest which will undoubtedly be splashed over every newspaper in town.

Lets also see if any smart journo can find a link between previous staffers and Hockey in these latest events.Term conflict of interest comes to mind.

[moa999]

QFi's problems are high costs relative to pretty much every other airline in the world - this is a geographic problem and very difficult to fix, albeit the position can be improved.

QFd's problems are high costs relative to other companies operating in the same industrial relations environment and in the same geographies - this is what can be fixed, or else they might as well shut down QFd mainline and just have the flights "Operated by Jetstar", much like the QFLink services.

QFd's issues started back with Compass - its just taken a while to work its way through the system

[thorn bird]

"QFi's problems are high costs relative to pretty much every other airline in the world - this is a geographic problem and very difficult to fix, albeit the position can be improved".

True, but Air New Zealand is in an even worse Geographic position, but manages a tidy profit.
Could it be their sensible regulatory system allows them to operate "much as every other airline in the world" thus being able to compete on a more level playing field.
What is the price Australia pays for its unique, prescriptive, costly regulations that do nothing to improve or even promote "Safety"?

[roger_ramjet]

QFi not only has the geographical disadvantage of being an end of the line carrier, it is encumbered by inefficient aircraft operated by costly crew. For example, the 744s should have gone years ago - Emirates openly state their most profitable aircraft is still the original 777 on 7-8 hour sectors.
With a tidy fleet of 772/773s QFi could have positioned themselves as the carrier of choice into and out of Australia to the key hubs of SIN/HK/DXB with multiple frequencies, as SQ do very successfully, and also service thinner routes that the 744/388 cannot.
They have lost international market share over the past few years for many reasons but one of them is that they're not out there doing the flying! SQ can find room to fly SIN-BNE 3 times a day - QF can only do it once.

[S70IP]

Took just 4 posts and it's how to fix Qantas again.
Merge the threads moderators.... FFS

:ugh:

[hoss]

" the demise of virgin australia"!

Really?

[Trevor the lover]

"True, the main difference is one has a CEO the other has a
Leprechaun!!"

This statement, to me, continues the theme of "well I'm on pprune and its the thing to do to say how great JB is." I mean everyone just seems to jump on the bandwagon of gold coating JB as THE MAN.


Well quite frankly, I'm going to hold judgement until JB's grand plans turn a profit. Virgin is bleeding blood colored money as is their new acquisition, Tigerair.


So when it turns into profit I will say job well done. Until then, I'll let the bandwagon rumble on by. And this is in no way an endorsement of the arrogant little garden gnome.


Don't throw things at me - I'm hiding.

[LeadSled]

True, the main difference is one has a CEO the other has a
Leprechaun!!

Thornbird,
M' old mate, don't you think that is a bit defamatory of Leprechauns, who are usually thought to be smart and cunning, and always ahead of the main game.
Tootle pip!!

[34R]

Not sure why it's the demise of VA, if thing go bad just bleat to the government and have them go guarantor on their debt as well...

[neville_nobody]

Not sure why it's the demise of VA, if thing go bad just bleat to the government and have them go guarantor on their debt as well

Yeah just like they did with Ansett.......:rolleyes:

[Square Bear]

I also suspect that one day the public are going to get over any attachment to Qantas and see it for what it is despite the efforts of staff to show otherwise.

R.M. Williams, Arnott's, Ugg, Speedo's, Uncle Toby's, Billabong, Tooheys, Bundaberg Suger, Golden Circle, and Victor are all now foreign owned....please remind me how/why Qantas is different.

(Oh, thats not to mention those that no longer exist....Ansett, GM-Holden (well GM-H very soon) etc etc.

[thorn bird]

yeah leadie your right, to all the leprechauns out there I'm really really sorry, but I sort of thought of common purposes, you know the pot of gold, forgot one wanted to keep it the other wanted to own it.

[oicur12.again]

"I would rather have the domestic scene regulated, where everybody has a job and the airlines make a profit"

A regulated market generally results in fewer jobs than a free market. Especially in the airline game.

[bangbounceboeing]

Does this mean EY,NZ,SQ can funnel yet more money in VA?

[KRUSTY 34]

They'll funnel alright, but it'll come at a cost. That cost will ultimately be the complete sell off of VA. Just who gets the lion's share? Now that will be interesting.

As we all know, three's a crowd!