Qantas Truths according to CAPA

[CamelSquadron]

Report from CAPA:

"Qantas faces two main challenges to its future: (1) its classic legacy model is extinct, notably internationally; and (2) domestically it is overweight and ill-equipped to deal with the competition that Virgin Australia has generated since its metamorphosis from LCC to full service airline.”

“There is literally no place in the international aviation future for an end of the line legacy carrier like Qantas – in its current form.”


“But here is where the silly stuff begins. Qantas is at the centre of a bizarre debate over preserving anachronistic ownership provisions in the 22 year-old legislation that provided for the airline’s privatisation.”


“It is genuinely difficult to discern the logic in arguments supporting the status quo concerning the Act. Although inertia is a most powerful force, denial of world aviation changes – well beyond the power of the Australian government or Qantas to influence – can only lead to very uncomfortable collisions with reality.”


“If truth is the first casualty in war, there is certainly no shortage of misrepresentation from those who want to cling on to the archaic 70-year old “ownership and control” rules of the airline industry. And, in this case to the fast-ageing Qantas Sale Act legislation.”


“In short, as protectionist barriers are removed around the world, there is no place for rear-view mirror strategies. Adaptation is possible still in 2014, but soon the limited range of options will disappear entirely.
Amending the Qantas Sale Act will alone by no means save Qantas. There is much more to be done. But not amending it will do a lot to ensure its demise”


“In a labour intensive industry with substantial input costs outside management control (fuel alone accounts for over a third of costs), there are few levers for management to pull when looking to slim down. The obvious one is labour costs – and improved productivity. Hence Qantas will be making even deeper staff cuts than its long running cost reduction programme has required.”


“Cutting routes is another, and there will be some announcements surely on 27-Feb-2014 – but there is always the danger in this case of reducing costs while undermining revenues. Looking further, if the short term fix is to be anything more than that, some form of restructuring is going to be necessary too.”

“Qantas does have advantages: In operating terms, it has made a big step to being able to access new international markets “virtually” over Dubai with its major partner, Emirates. Its low-cost subsidiary Jetstar has been a saving grace, protecting it from a ravaging Virgin Blue in the domestic market in the early part of the last decade and then later in the international forum, as Qantas’ high cost base ruled it out of most Asian long-haul routes. It also has one of the best and most profitable Frequent Flyer Programmes in the world. The domestic regional operations too are still profitable, despite Virgin’s inroads"

Full Report is here:

Is loving Qantas to death in Australia?s national interest? Airline ownership dogma defeats logic | CAPA - Centre for Aviation (http://centreforaviation.com/analysis/is-loving-qantas-to-death-in-australias-national-interest-airline-ownership-dogma-defeats-logic-154426)

[Wizofoz]

Am I wrong in thinking the bi-lateral agreements that allows QF to operate Internationally are dependent on it being majority Australian owned?

Ansett International had to be a separate corporate entity and with a majority Australian hare holding to operate.

Do those rule no longer apply?

[piston broke again]

Had a couple of laughs there...

Emirates being the saving grace internationally? Umm no - they are in it for themselves and nothing Qantas has done will change that.

JQ being the saving grace domestically? - well yes they stemmed the flow of VA initially but now with tiger owned by VA, it appears JQ are the 'new world carrier' stuck in the middle.

Agree about the FF program though but then how long until they sell that off though in part or it's entirety?

PS - good luck to mates at QF - stick it up the wee leprechaun.... :ooh:

[BNEA320]

there was once a programme called Global Rewards.

Think you can now buy it for $1 or less even.

[maggot]

Am I wrong in thinking the bi-lateral agreements that allows QF to operate Internationally are dependent on it being majority Australian owned?

AFAIK yes, the bi-laterals still apply so yeah, there's that. :hmm: I guess a foreign investor could buy up a larger amount than under the QSA, if they wished to keep the rights of an 'australian airline'. I'm guessing it's more about outsourcing and selling the family jewels to mates than anything else :zzz:

[Airbets2040]

Camel,

Are you Jetstar or a management troll? Really, its bleeding obvious that Joyce et al (nicely set up by Dixon et al) have messed it up. Dixon had an end game plan which was foiled and Joyce is just incapable.

Its about aviation. A simple management hierarchy with the right planes, right destinations and a reliable and desired product to get passengers from A to B. But big egos, greed and ill thought out plans (and political agendas) by a small few are now ruining the future for many.

There is no reason for Jetstar and Qantas to not exist side by side. There is a market for low cost travel in Australia and a market for premium travel. It is the cannibalization at the expense of quality, which is the problem.

And Jetstar Asia delusions....... China and India are the fastest growing middle classes. That is where the growth is and they are capable of providing suitable aviation options themselves, they don't need Joyce to tell them what to do. So what is the point of Jetstar HK and what happened to RedQ? Its Napoleonic idiocy.

[airtags]

the bilateral agreements are executed via IASC approvals - over the last five years the approvals have moved from QF to QF or a wholly owned QF subsidiary to more recently QF JQ or a majority owned subsidiary. The qualification of majority owned in not just paid up capital but can means a third party under a franchise

AT

[neville_nobody]

I am starting to think that AJ is yet another airline executive with delusions of grandeur. Rather than sticking to the basics as Airbets2040 has suggested he has gone off on this world domination campaign which is about to blow up.
Unfortunately he could take everybody with him.

[NowThatsFunny]

Report from CAPA:

"Qantas faces two main challenges to its future: (1) its current management; and (2) its current management."

FULL STOP.

[emergency000]

Report from CAPA:

"Qantas faces two main challenges to its future: (1) its current management; and (2) its current management."

FULL STOP.

And that's the kind of attitude that'll lose everyone in Qantas their jobs. Not that AJ will care, he'll move on to the next company. But how will you pay your mortgage off?

Still haven't learnt the lessons from Ansett, eh?

[SOPS]

So what do you suggest 000, continue along the current path?

[Keg]

No one is suggesting there isn't 'other' challenges. The 'main' challenges however...... management and management! :{

[ANCPER]

CAPA, huh!

What the f**** would they know.

[emergency000]

So what do you suggest 000, continue along the current path?

The current path that leads to oblivion? Certainly not.

But the attitude that "it's all management's fault" is what I saw when I was in QF H/M Melbourne before it shut down, where everyone on the floor was only too happy to blame management for the shortcomings of the base and wouldn't admit that there were huge inefficiencies in the way the base was run.

Would cutting these inefficiencies have saved Melbourne? Perhaps not, but it may have made management think twice about which base(s) got the chop.

[Lodown]

Qantas continues to underestimate what is important to the customer. Multiple scheduling options, on-carriage, ease of access, on time service, consistency of product, exceeding expectations. Safety? Couldn't give a rat's unless something happens. The assumption is that the airline is safe and it will be considered so until the airline does something to dispel that assumption.
Dixon, Joyce and the board have been cutting costs for 20 years now. One wonders if they will ever get around to prioritising what is important to the customer and the Qantas employee over what is important to the their egos and the desires of the shareholder. Probably too late now. The company lost my business more than a decade ago. I don't have any need to change back.

[Airbets2040]

I would argue that the inefficiencies of employees are the result of their contracts and the inefficient running of the business. I know pilots would be happy to be more efficient, but its impossible with all the forced leave. Pilots want to fly and work hard for the company. The discrepancies in fleet pay should be changed. A380 second officers make far too much money for what they do (no offence, this is not personal).There are many things that could and should be sorted out, but management have not been interested. And how about the all those inefficiencies of planes sitting on the ground for Jetstar Asia? And the financial waste of freight cartel fines etc. Its inefficiency from the top and trickles down.

But the writing is on the wall now, Qantas employees are just a political football.

[Lodown]

Except the employees are not inefficient. Pilots have a set number of hours available in which to fly. It's not strenuous work most of the time. It can be tiring and it can be stressful at times, but it hasn't been strenuous since the days of the Connies. Pilots used to be the face of the company. They haven't been now for 30 years. The face of the company is the Internet, and the people at the baggage counter, the gate desk and in the cabin. In perception, those people have more direct control over a customer's flight experience than anyone else who works for Qantas. I'm not belittling the role of others, but the personal interactions are the perceptions.

[Trent 972]

Airbets2040 said
A380 second officers make far too much money for what they do (no offence, this is not personal...
Why would anyone say that?
Of course it is personal.
It is your personal opinion, and I for one don't agree with you.
What you are saying is akin to "let's shaft the S/O's so we can keep our pay"
I thought that only happened in Short Haul and J*.
I'd like to think we were better than that. :sad:

[chimbu warrior]

The face of the company is the Internet, and the people at the baggage counter, the gate desk and in the cabin.

Last time I travelled Qantas I checked my own bag in, there did not seem to be anyone at the gate desk until boarding time, and the cabin crew were rather disengaged (can't blame them really).

So Qantas has essentially become "faceless", and that really strikes a chord with some customers.

[Maxmotor]

AJ has said staff engagement has never been higher.

Not.

[Keg]

Trent


A380 second officers make far too much money for what they do (no offence, this is not personal...


......is a very different statement to.....

what you are saying is akin to "let's shaft the S/Os so we can keep our pay".

In fact, they're so different that I'm surprised that you've gone down that road.

Let me give you an example:

what you are saying is akin to "let's shaft the S/Os so we can keep our pay".

What you are saying is that you're happy to continue screwing over F/Os who have more responsibility, work more duty hours and more flying hours in a bid period for 20% less pay than the A380 S/Os.

What you're saying is that you're happy to see some S/Os out of a job and F/Os demoted so that other S/Os can keep taking home exorbitant amounts.

See how the game is played?

[Trent 972]

Keg, you know damn well there is not on any fleet, any S/O who is paid at a higher hourly rate than the most junior F/O, (ie. the most senior 380 S/O get a lower hourly rate than the most junior 767 F/O), and likewise their is not an F/O who is paid at a higher hourly rate than the most junior Captain.
What you are playing games with is the overtime component that 380/747 S/O's get for operating Long Haul..
Are you saying people shouldn't be paid accordingly for the hours/overtime they work?

[DirectAnywhere]

Remember that the SO rate is a fixed percentage of the Captain rate. If the SOs get paid too much on the 380 then that says a lot for what the Captains and FOs are getting paid on that type.

Fix the amount Captains get paid and the SO pay will fix itself.

Overtime should have disappeared years ago. Senior crew going to Dallas, LAX - insert senior destination here - already get the benefit of higher density to get more days off. There's no reason they should be getting up to an extra 50 hours a BP - close to 30% extra dough on a 160 hr divisor - for sitting in the crew rest for 7 hours DFW-BNE or LAX-MEL. Pay them for the hours they fly, ie. retain the current pattern credits, but ditch the ADP.

And don't give me the "long haul flying's hard so the extra money is for that" line.

[Chocks Away]

I'll just pick up on another point in CAPA's article that REALLY gives me the ****s every time I hear it.

...an end of the line legacy carrier like Qantas.

It's not an "end of the line"...to think so is terribly old thinking and ignores the Sth American growing markets! (World Cup Soccer & Olympics coming too)
Tell me, you have the B747's (coz yuh didn't order B777's), so why not deploy them where others can not go???:ugh: ...over the pole to Chile/Brazil/Argentina and Sth Africa, heck so many markets to tap into from Mexico all the way south! Expand what few are currently done and exploit your 4-engined market advantage!
All goes back to management & fleet decisions again. :rolleyes:

[Keg]

What you are playing games with is the overtime component that 380/747 S/O's get for operating Long Haul..
Are you saying people shouldn't be paid accordingly for the hours/overtime they work?

An A380 s/o on a 175hr divisor will do approx 180 hours tour of duty, 140-150 stick, spend.at least 40 hours in the bunk or on a break and make about 40ish hours of overtime. A 767 F/O on a 175 divisor will do 230-240 hours tour of duty, 145-155 hours stick, spend about 210+ hours on the flight deck with the remaining time lost on long transits between sectors. The A380 S/O will earn approximately 40-50K more per annum. The 767 driver will do more time in a control seat on a BNE- DRW- BNE for nil ADP than a S/O will SYD- DXB. You don't see an issue here? You don't see a problem looking for a solution? You don't think this doesn't adversely affect all of us? You don't think this doesn't contribute to the demise of the long haul pilot group?

Direct anywhere is on the money. Overtime came in when it involved flying arduous multi sector tours of duty and in the classic, little time off. Do you think it's now been distorted just a tad from what was originally intended? Do you reckon that an overtime bill to the tune of approx $70 mill per annum is sustainable let alone justifiable?

This is not an attack on S/Os. It's a cry to stop deluding yourself that there isn't a problem that needs fixing for a multitude of different reasons.

[SOPS]

Keg, for those of us not in Qantas could you explain what is a divisor?

[Tankengine]

A divisor is the number of credited hours per 56 days ( eight weeks)
Credited hours per trip is the greater of stick hours or 5.30 hrs per day.( more or less)

[Trent 972]

Post removed because I take no joy in arguing with Keg. I know him to be a good and decent bloke.
We'll just have to disagree on this subject. :ok:
ps. I'm right though. :E