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Squawk7700
30th May 2018, 12:01
Any truth to the talk of a split between these two?

Do you think JQ will start flying to LAX and take routes from QF?

TULSAMI
30th May 2018, 12:18
Iíd say Qantas Group would be looking at what success Scoot has offering east coast to Europe for $678 return (SYD/MEL to Berlin) if itís successful, they might have no choice but to respond and compete or surrender Europe bound market share. The idea isnít foreign to the JQ 787 pilots Iíve spoken with. Not sure about LAX, if thereís no other LCCís on the route I donít see why there would be the need for JQ to be involved.

dr dre
30th May 2018, 12:40
Any truth to the talk of a split between these two?

Do you think JQ will start flying to LAX and take routes from QF?


As a total split between the two and them starting to compete with each other? Not a chance. JQ would be toast within weeks without big brother's support.

wheels_down
30th May 2018, 13:05
Probably more like what Wesfarmers is doing with Coles, spin it off. Jetstar is really now at the scale and level of profitability where it should be demerged and managed as itís own.

The only thing stopping that is Qantas is not and has never been in what should be the best interests of shareholders. Especially under the current regime, could not give two hoots about its shareholders. They seem to be more interested in incentivizing each other on how well the pissing contest with Virgin goes.

SHVC
30th May 2018, 21:22
dr dre- I hope they go it alone there is no reason JQ couldn't survive without "big brother", they would most likely be better off and so would the crew..

Rated De
30th May 2018, 22:11
I hope they go it alone there is no reason JQ couldn't survive without "big brother", they would most likely be better off and so would the crew..

As a total split between the two and them starting to compete with each other? Not a chance. JQ would be toast within weeks without big brother's support.

There are a number of reasons why JQ will not go it alone.

There has never been a tangible reported profit from any (offshore) associate AASB128 entity. All of these entities require substantial capital. 'Big brother' provide that. JQ Asia is consolidated under AASB127 into the JQ segment as Qantas claim control. What is very interesting is the structure of their lease obligations. Funding to cover the operating shortfall comes from Qantas NOT Mr Choo (The alleged majority owner) Without capital would these businesses actually survive is a good question.
JQ is not broken into two operating segments under AASB 8. Management choose to report Qantas this way and despite JQ operating as many aircraft as big brother they refuse the same transparency. Wonder why?
Any organisation undertaking due diligence on a 'purchase' would be extremely interested in 'materiality thresholds'. These thresholds are internally set by executive management. Such detail is not required to be presented in Consolidated Accounts under AASB 10. Any purchaser would investigate this relationship fully to see who pays for what.

JQ was of course being positioned to take over from 'big brother' in fact it is well known that management sought changes to bilateral access in 2011. No doubt conceived by the hardy souls of Consulting groups and IR, the theory of LH Low Cost is a very difficult proposition on longer sector lengths, something Mr Buchanan tried to tell them before being sent packing.

Probably more like what Wesfarmers is doing with Coles, spin it off. Jetstar is really now at the scale and level of profitability where it should be demerged and managed as it’s own.

Nonetheless JQ had and continues to have a role: it ought provide demand stimulus to elastic travelers. Flying some 48% of the ASK of 'big brother' yet only generating 22% of the revenue, we would politely point out is indicative of being over-scale which adversely affects profitability. Reducing its scale is a difficult proposition with the incumbent CEO welded to the 'creation myth' he clings to about JQ.

Squawk7700
30th May 2018, 23:10
I'm guessing it's going to happen as I heard some very large figures being thrown about for the work required to split it. Who knows what will be happen.... it will be interesting to see the outcome.

Popgun
30th May 2018, 23:45
There is NO chance this will happen.

The 2 brands will continue to act in concert as sword and shield. It makes it VERY difficult (especially domestically) for challengers in both the premium and low-cost market segments.

PG

Squawk7700
31st May 2018, 00:15
There is NO chance this will happen.
PG

Never is a very long time.

Did you ever think that Virgin would buy Tiger?
What about Alaska buying Virgin America?

crosscutter
31st May 2018, 02:29
I suspect what this thread is discussing and what has actually been discussed are two very different things. What Rated De has mentioned in conjunction with an incoming fleet replacement might lead to more accurate conclusions....and the costs involved....you donít split a golden nugget unless youíre forced to.

Lookleft
31st May 2018, 03:14
Only when Jetstar executives are paid by Jetstar will I give this rumour any credence.

airtags
31st May 2018, 03:51
I suspect what this thread is discussing and what has actually been discussed are two very different things. What Rated De has mentioned in conjunction with an incoming fleet replacement might lead to more accurate conclusions....and the costs involved....you donít split a golden nugget unless youíre forced to.
....especially when your international route approvals are all legacy of QF and the real motive for splitting would be to raise capital which would immediately void the route approvals which state .."QF or another wholly owned subsidiary" - until the cascade of variation letters to govt start (as they did with JQ's spreading its wings previously) the current balance sheet arrangements will remain

AT

Rabbitwear
31st May 2018, 04:04
How about it QF START a new subsidiary called Qantas Domestic(TAA) , a brand new Airline with new staff at different pay rates , direct entry crews , would they need to sell JQ to do this , maybe !
would sure ease the training costs in Qantas as they gradually wind down the 737 ops !

Street garbage
31st May 2018, 05:16
How about it QF START a new subsidiary called Qantas Domestic(TAA) , a brand new Airline with new staff at different pay rates , direct entry crews , would they need to sell JQ to do this , maybe !
would sure ease the training costs in Qantas as they gradually wind down the 737 ops !

Another crap post from a management troll.
Let me see..."different pay rates"..like, pay engineers and pilots less pay in a market where supply is rapidly dwindling?
Winding down 737 ops..oh, that's right, we just got 6 more to fly.
Since when did "creating" a new airline reduce training costs?
Direct entry..from where?? 457 Visas? Of course!!
This isn't Lucerne, the only thing you didn't say was non-unionised labour.
Pfffffttttt.

Rated De
31st May 2018, 05:18
Could just as readily been planted from Coward street.

With superlatives exhausted, an engineered fight with Canberra airport and a month to run on the FY, a bit of 'froth' for the ASX might help!

How about it QF START a new subsidiary called Qantas Domestic(TAA) , a brand new Airline with new staff at different pay rates , direct entry crews , would they need to sell JQ to do this , maybe !
would sure ease the training costs in Qantas as they gradually wind down the 737 ops !

Qantas had the opportunity to do just that with an embedded 734 operation, a gift from the Australian taxpayer. 734, crewed by the same already costed pilots, a fresh coat of paint and high density interiors, they had the Low Fare Airline almost ready to fly.
Instead what they preferred was an entire greenfield operation, all designed to lever downwards terms and conditions.

Street garbage
31st May 2018, 05:23
Could just as readily been planted from Coward street.

With superlatives exhausted, an engineered fight with Canberra airport and a month to run on the FY, a bit of 'froth' for the ASX might help!



Qantas had the opportunity to do just that with an embedded 734 operation, a gift from the Australian taxpayer. 734, crewed by the same already costed pilots, a fresh coat of paint and high density interiors, they had the Low Fare Airline almost ready to fly.
Instead what they preferred was an entire greenfield operation, all designed to lever downwards terms and conditions.

They are looking for another "sky is falling" moment for leverage in EBA negotiations..
Yawn.

Rated De
31st May 2018, 06:41
They are looking for another "sky is falling" moment for leverage in EBA negotiations..
Yawn.

Think 457 Visa
Jetconnect in VH registered aircraft
Network to operate A320
Comfort letters from Unions (sarc is off)

Rather ironic that even with a global pilot shortage and these things happening, most are so myopic they can't see it hidden in plain sight!

Contract season anyone?

crosscutter
31st May 2018, 07:20
Even if the company was trying to manufacture some leverage I'm not sure pilots in general would place any weight on it...in any company. Its simple, people will move to the position that gives that individual the best lifestyle proposition and in times of a pilot shortage, in Qantas at least, that means pilots will spend minimal time on a type they consider inferior. So manufactured crisis or not, it's going to take a genuine downturn for this structural predicament to return to equilibrium. Perhaps, there is a better way? At the moment I'm not sure many people care if the can is kicked down the road. More pay and/or more promotion. It's really simple and the industrial relation teams have their work cut out for themselves.

theozguru
3rd Jun 2018, 05:48
QF Group have a lot of B787 options. They are replacing the remaining 747's with 787's frame for frame and then the rest go to JQ for international expansion.

What The
3rd Jun 2018, 06:10
QF Group have a lot of B787 options. They are replacing the remaining 747's with 787's frame for frame and then the rest go to JQ for international expansion.

That would make sense to the arseclowns running this outfit. Expand something that has never made a dollar of profit. Bravo.

Rated De
3rd Jun 2018, 06:50
QF Group have a lot of B787 options. They are replacing the remaining 747's with 787's frame for frame and then the rest go to JQ for international expansion.


JQ isn't reported as two Operating Segments for a reason. Any guess why?
Qantas management chose to report QF Domestic and QF International as two operating segments as permitted in AASB 8. At the time the narrative of 'terminal decline' was their industrial play. Showing just how 'bad' Qantas International was suited their purpose. JQ International does not make any money and likely is nowhere close to the Quantitative threshold to ever be exposed. It was after all JQ CEO Mr Buchanan who tried to tell the board JQ International was a wreck. He was promptly shown the door.

Mr Joyce has a carefully constructed hero myth, with JQ the centre piece. His ego needs it. To actually expose JQ to further scrutiny adding aircraft is not something they will allow. For an airline flying 48% of the ASK of Qantas, yet only capable of delivering 22% of the revenue, more air frames makes complete sense from an industrial perspective, but is nuts from an economic perspective.

JQ International is luckily hidden in the JQ 'group' segment, quietly being supported from Coward Street. Of course not illegal, but the less scrutiny the better

GA Driver
3rd Jun 2018, 06:53
then the rest go to JQ for international expansion.
.......
Since when??
I recall Georgina spruiking something like this. 2 years ago! She got the chop so Iíll beleive the 787 bullish!t when theyíre out front of the terminal.


I guess it is a rumour network.....

ScepticalOptomist
3rd Jun 2018, 08:28
QF Group have a lot of B787 options. They are replacing the remaining 747's with 787's frame for frame and then the rest go to JQ for international expansion.

Actually, what Iíve heard is that the 787-8s from JQ will join the QF fleet to replace the A330s on some routes to allow more flexibility in the flying program.

From what Iíve heard this would coincide with the Neos arriving at JQ.

That would bring the 787 fleet to 25 for QF.

GA Driver
3rd Jun 2018, 21:24
That sounds a lot more plausible and also somewhat resembles the rumours thatís floated around JQ.

The 321neo wonít do a number of the longer legs JQ do with them ie. HNL, so they will still need something else. Anything widebody airbus (even re-stealing the stolen generation) would just be common sense so thatís not going to happen.

angryrat
3rd Jun 2018, 21:54
That sounds a lot more plausible and also somewhat resembles the rumours thatís floated around JQ.

The 321neo wonít do a number of the longer legs JQ do with them ie. HNL, so they will still need something else. Anything widebody airbus (even re-stealing the stolen generation) would just be common sense so thatís not going to happen.
Rumour in Jetstar that 787ís going to Qantas while rumours in Qantas that 787ís going to Jetstar. An obvious trend going on here, YAWN! Itís contract season alright.

As as far as a split happening, wonít happen for a number of reasons including selling off a subsidiary that has 1500 pilots(not sure of the correct number in Jetstar). You donít sell your pilots in a shortage when you will finally be able to up ticket prices to cream yield.

Popgun
4th Jun 2018, 02:27
As as far as a split happening, wonít happen for a number of reasons including selling off a subsidiary that has 1500 pilots(not sure of the correct number in Jetstar). You donít sell your pilots in a shortage when you will finally be able to up ticket prices to cream yield.


Jetstar is used as both a shield and a sword by Qantas.

They will hardly be likely to sell a low-cost sword to a competitor that can then be turned against them. Nor are they likely to give up the defensive attributes of this shield which would leave a chink in their low-cost armour to be exploited by other LCCs.

I agree...its contract season. Don't be naive enough to fall for this shite. Yawn.

PG

theozguru
11th Jun 2018, 05:43
I have heard that following the latest batch of B789's going to QF to replace the B744's that another 8 B789's are going to JQ for European options via SIN/BKK/JKT/DPS from the East coast to compete with Scoot.

SixDemonBag
11th Jun 2018, 07:31
I have heard that following the latest batch of B789's going to QF to replace the B744's that another 8 B789's are going to JQ for European options via SIN/BKK/JKT/DPS from the East coast to compete with Scoot.
https://cimg4.ibsrv.net/gimg/www.gmforum.com-vbulletin/250x166/giphy_fbd7a1d37501bdc7d2e19d901bcbf942bd8ba2c7.gif

Street garbage
11th Jun 2018, 11:32
Compare post #19 and post #27
Another management troll- yawn.

wheels_down
11th Jun 2018, 13:54
You wonít be seeing Jetstar competing against Scoot unless it bases its 787s in Singapore. Large cost differences between the two, they could not successfully fight them off by basing its operation here. Bruce tried to bring down costs with the A330s in Singapore which ended in an absolute $hitfight.

On on the other hand Scoot has considerable scale in Singapore (and is doing very well) where as Jetstar Asia has been on life support for the best part of this decade, no executive has the balls to shut it down. By 2022 Scoot will be four times that of Jetstar Asia. Impossible to compete.

Global Aviator
11th Jun 2018, 15:47
As long as QF flies into Singapore I think youíll see Jetstar Asia around. Agree canít see them expanding or even trying to compete with Scoot.

The ole 330 base in Singapore haha yes what a schamozzle that was. Always surprised me they couldnít work it out or expand it, then again Red Q springs to mind. Then again JQ international is pretty much AUS direct to destinations anyway no stop over required.

As for QF and JQ divorcing... As as been said why would QF sell the LCC who would then be a competitor?

fearcampaign
11th Jun 2018, 23:49
Absolute rubbish.
Jetstar rely heavily on Qantas Internationals feed.
Jetstar reports two segments together as splitting them would show how poorly JQ international performs.
JQ Domestic is highly profitable as itís a closed market and the group can make sure itís competition is limited.
LCC economics get worse with both distance and higher fuel prices. If they were going to fly to Europe or USA they would have done it by now. With fuel rising itís the worst time to launch low cost long haul routes.
It is EBA time and pilots are stupid so.............

Global Aviator
12th Jun 2018, 01:03
FC, reread what I said...

As long as QF fly into Singapore Jetstar Asia will be around. Yes indeed Jetstar Asia relies on the feed however QF relies on Jetstar to provide that feed. Without the orange bro who would QF onbook to? Scoot? Singapore Airlines? Tell him he’s dreaming son. Maybe if there was a one world partner short haul. Even EK code share.

Long haul LCC Scoot have the huge advantage of being under that huge SQ umberalla, like Jetstar to QF.

Anyways yes interesting times to fight for what one should be paid. The biggest issue are the people willing to accept well anything.

It shall be interesting to see the turnouts to the China roadshows advertised in the paper.