Clifford gone/ Goyder Next Chairman

[Street garbage]

From the SMH:
https://www.smh.com.au/business/companies/ex-wesfarmers-boss-richard-goyder-to-take-over-as-qantas-chairman-20180628-p4zoaj.html

[neville_nobody]

Hopefully QF isn't planning an entry into UK market

[Kranz]

^^ sausage before each flight - cant go wrong.

[Vertisol]

^^ sausage before each flight - cant go wrong.

So the local scout group will get to become cabin crew for the day

[Servo]

Oh god, I hope Clifford doesnt want or become the CEO of VA................

[busdriver007]

Another Aviation Novice...Means Alan can continue to lie. Bunnings entrance into the UK was a bloody disaster! Well done Richard. Good time for Leigh to leave with 75% Debt to Debt plus Equity(the worst in Qantas' history) and an old fleet plus all the aircraft coming onto the Balance Sheet. I would be leaving too!

[dragon man]

May be this bloke will talk to the staff at the coal face and find out what they firstly think of management and secondly what a sh#t fight it is out there with inadequate staff, aircraft, spares, etc etc.

[WingNut60]

Title below photo of AJ ...." Mr Goyder will choose Alan Joyce's replacement "

[dragon man]

Today they will announce 737 off east coast Perth to be replaced by 330 and 330 on Honolulu to 747 start September. Why? No 737 crews. First 747 to go in October. Oh yea.

[dragon man]

Whoops, lucky it’s a rumour site, 747 to Perth.

[ruprecht]

747 to Perth.


It’s the new classic...

[Transition Layer]

Why? No 737 crews

With negotiations underway it’s a perfect chance for the company to improve the Short Haul Award and stem the mass exodus off the 737. But will they do it...of course not!

[PPRuNeUser0198]

75% Debt to Debt plus Equity(the worst in Qantas' history)

Qantas debt relative to capital is ~45%, which is fine (under 50), and the debt-to-equity ratio is 1.3, which is also fine (under 2). Optimised capital structure in my view...

[bddbism]

With negotiations underway it’s a perfect chance for the company to improve the Short Haul Award and stem the mass exodus off the 737.

Why the mass exodus? Overworked?

[busdriver007]

Qantas debt relative to capital is ~45%, which is fine (under 50), and the debt-to-equity ratio is 1.3, which is also fine (under 2). Optimised capital structure in my view...

You might look again and include the outstanding Leases and Part Leases that are not included. A different picture emerges. Makes me remember a great quote of an Irishman who runs a big Airline in the Asia Pacific region. "Accounting is a black art!"

[Street garbage]

Why the mass exodus? Overworked?
No, just a crap awards to work under, if the Company "seriously" (LOL) wanted to reduce training costs they would fix the award, items like MDC, sick leave provisions, superannuation etc etc. Superannuation is the reason why a lot have left to go to Long Haul.
They won't fix anything though....

[dragon man]

No, just a crap awards to work under, if the Company "seriously" (LOL) wanted to reduce training costs they would fix the award, items like MDC, sick leave provisions, superannuation etc etc. Superannuation is the reason why a lot have left to go to Long Haul.
They won't fix anything though....

Agreed, and they will continue to blame the evil pilots for their problems.

[Rated De]

Qantas debt relative to capital is ~45%, which is fine (under 50), and the debt-to-equity ratio is 1.3, which is also fine (under 2). Optimised capital structure in my view...

Bring the off balance sheet on balance sheet and the DE ratio is a lot less healthy.
Exactly why the genius in fort Fumble spent AUD $1.75 billion on share buy backs when a new fleet was desperately needed.

For what it is worth, DE ratios in the aviation industry are on average a lot higher than 50%...

Good riddance. For the long suffering staff left at Qantas the forlorn hope is that the next on the conga line in Corporate Australia has a little less ideological drive and a little more humanity. Given the recent disaster in the UK, one may hope he pays a little closer attention to the wanderings of little Napoleon than he did with hardware.

[Transition Layer]

Why the mass exodus? Overworked?

As others have said above it’s mainly the award. Otherwise it’s a great gig with good people. My big ticket item is Min guarantee, followed by sick leave and paid reserve. Super not a big deal for those of us in Div 6 (accumulation) but obviously affects all the defined benefit guys.

A slightly more reasonable award and things might change and you’d get more F/Os waiting it out for a command, but instead they’ll sit it out in long haul while their number comes up. This then places a huge strain on training with a lot of seat swapping going on between 737 and 330 at present.

[Dee Vee]

Exactly why the genius in fort Fumble spent AUD $1.75 billion on share buy backs when a new fleet was desperately needed.

AJ's share options vest soon, he can push out the fleet upgrade, before departing with a golden handshake, and more millions from selling off his inflated price shares, as a departing gesture.

Short term goals to worry about, the airline doesn't matter.

[dragon man]

The scuttlebutt around Fort Fumble is the 787 is giving them 8% better economics than budgeted for, just imagine if these idiots had 50 of them now and had started deliveries 10 years ago.

[Rated De]

AJ's share options vest soon, he can push out the fleet upgrade, before departing with a golden handshake, and more millions from selling off his inflated price shares, as a departing gesture.

Short term goals to worry about, the airline doesn't matter.

Should have added the Sarc tag...

The timing of the option vesting date(all granted when Qantas was 'terminal') is a key insight: The 'transformation' date was easy enough to work out, just look at the vesting dates. FY15!
When one deconstructs the 'turnaround' profit it breaks down to $326 million of depreciation (from the biggest loss year FY14- write down of International fleet) and $597 million in fuel savings courtesy of Saudi Arabia. The rest was chump change. The transformation was as manufactured as the terminal..

Lacking any Corporate Regulatory oversight saw these robber barons pull off a heist and the authorities looked the other way; Sadly just like the Banks have proven, Australia's regulators are pathetic.
A Regulator with any insight into nefarious activity would be asking lots of questions..

Qantas need a new fleet

[PPRuNeUser0198]

AUD $1.75 billion on share buy backs when a new fleet was desperately needed

Qantas probably took this path to bump up EPS (which benefits investors and themselves), as well as drive an increase in the share price (less shares in the market + it sends a signal that the stock is undervalued, and / or management have confidence in the company). It's also a preferred method over dividends for various reasons.

Shareholders are only accepting to a lack of returns i.e. dividends or share repurchases if they earn capital growth, which, is determined by the share price, and that has been a fluctuating journey.

It then depends on what Qantas does with those shares once they have repurchased them i.e. retire them, or use them for internal bonuses (as non-award staff are on share / cash incentive plans).

[Rated De]

Qantas probably took this path to bump up EPS (which benefits investors and themselves), as well as drive an increase in the share price (less shares in the market + it sends a signal that the stock is undervalued, and / or management have confidence in the company). It's also a preferred method over dividends for various reasons.

Shareholders are only accepting to a lack of returns i.e. dividends or share repurchases if they earn capital growth, which, is determined by the share price, and that has been a fluctuating journey.

It then depends on what Qantas does with those shares once they have repurchased them i.e. retire them, or use them for internal bonuses (as non-award staff are on share / cash incentive plans).

Yes of course Leigh and Napoleon act in the company interest...As stalwarts they protect and enhance the long term viability of the company/ sarc
However Forbes magazine suggests a different motivation.

https://www.forbes.com/sites/stevedenning/2018/03/25/why-its-raining-share-buybacks-on-wall-street/#5e5573e13346

They hit upon a magic shortcut: why bother to create new value for shareholders? Why not simply extract value that the organization had already accumulated and transfer it directly to shareholders (including themselves) by way of buying back their own shares? By reducing the number of shares, firms could, as a result of simple mathematics, boost their earnings per share. The result was usually a bump in the stock price—and short-term shareholder value.Of course, by diverting important resources to boost the stock price, the tactic ran the risk of further hindering the firm’s capacity to innovate and generate fresh value for customers in future. But why worry about that? With luck, by the time it became apparent that the firm had undermined its long-term capacity to add real value to customers, the executives responsible for the decisions would be safely retired, with bonuses already paid. The loss of capacity to create value would be someone else’s problem.

Good riddance Leigh and Qantas still need a new fleet.

[Dee Vee]

Maybe some of Qantas's creative accounting is about to be undone.

Accounting changes for leases (https://www.afr.com/markets/australian-accounting-standards-in-biggest-shakeup-since-2005-20180627-h11wur)


Then from July 1, 2019, Australia will join an international movement captured by AASB 16 that requires lease exposures to be recognised for the first time, eliminating a quirk of accounting that famously caused Sir David Tweedie, former chairman of the body governing international standards, to remark that his lifelong ambition was to fly in a plane that existed on an airline's balance sheet.

[RealityCzech]

QAN already discloses its net debt figure that is inclusive of off balance sheet operating leases of about $2.1b. They're reflected on the P&L on a straight line basis. If you think the market or analysts are going to suddenly get excited by AASB 16, I think you're going to be disappointed.

[blow.n.gasket]

And Jetstar’s leasing arrangements?
Care to comment on what’s presently going on there Reality ?

[dragon man]

https://www.smh.com.au/business/companies/pilot-shortage-forces-qantas-to-put-jumbo-jets-on-domestic-services-20180703-p4zp63.html

Rats leaving the ship?

[dragon man]

Today’s AFR, Clifford pissing in his own pocket.

Leigh Clifford: "I'll be judged by how the community and the market views the capability and success of the CEO that I appointed - and I reckon I get a tick on that regard." Louie Douvis

He might think so as do the people in the circles that he mix’s in, however from where I sit at the pointy end and the people I see in Qantas at the coal face we all think you and CEO were and are a disaster. POQ please.

[Rated De]

Today’s AFR, Clifford pissing in his own pocket.

Leigh Clifford: "I'll be judged by how the community and the market views the capability and success of the CEO that I appointed - and I reckon I get a tick on that regard." Louie Douvis

He might think so as do the people in the circles that he mix’s in, however from where I sit at the pointy end and the people I see in Qantas at the coal face we all think you and CEO were and are a disaster. POQ please.

A fluffy piece in a dying rag.

[Street garbage]

Trust? From the coalface workers ? What little was left after the lockout evaporated with the Bonus that wasn't.
You only have to read the results from the recently released (dis)engagement survey to confirm that.

[wheels_down]

Goyder won’t do much. Responsible for the Bunnings UK disaster, and the fact he had zero idea that the Target Accounting scandal was playing out under his watch shows how little control he had over at WES.

[wombat watcher]

Goyder won’t do much. Responsible for the Bunnings UK disaster, and the fact he had zero idea that the Target Accounting scandal was playing out under his watch shows how little control he had over at WES.


He might just do enough to keep you bunch of disrespectful clowns in a job.
It never ceases to amaze me why, if you hate the organisation so much, you don’t resign and go and work for an organisation where your obviously hidden talents would be appreciated. Maybe Cathay and Emirates would be a good start.

[Blitzkrieger]

Wombat...I think you’ll find no one hates Qantas at all. Most people I know have had to endure a decade or more of pointless corporate rape of what used to be one for worlds great airlines. Absolutely none of what has been done at QF was necessary to keep the company doors open, it was all done to line the pockets of an elite few.

if you’re happy to stand by while the company is allowed to decay, perhaps it is you who should head overseas.

[dragon man]

Wombat...I think you’ll find no one hates Qantas at all. Most people I know have had to endure a decade or more of pointless corporate rape of what used to be one for worlds great airlines. Absolutely none of what has been done at QF was necessary to keep the company doors open, it was all done to line the pockets of an elite few.

if you’re happy to stand by while the company is allowed to decay, perhaps it is you who should head overseas.

Well said. We actually have long term skin in the game and want it to succeed not just long enough to collect the short term bonus’s like some.

[LeadSled]

Folks,
I am surprised, in all this, that there has been no talk/discussion of the 747 that have been parked in the desert for a while being brought back into service, and its significance, if any, for the figure for the fleet fuel efficiency ---- with fuel prices on the way up, again.
As I hear it, a team has work well under way, presumably at Victorville.
Is this another triumph for QF fleet/crew planning??
Tootle pip!!

[Rated De]

Folks,
I am surprised, in all this, that there has been no talk/discussion of the 747 that have been parked in the desert for a while being brought back into service, and its significance, if any, for the figure for the fleet fuel efficiency ---- with fuel prices on the way up, again.
As I hear it, a team has work well under way, presumably at Victorville.
Is this another triumph for QF fleet/crew planning??
Tootle pip!!

As has been repeated in the thread, Qantas need a new fleet..

With this dynamic duo (Messrs Clifford and Joyce ) at the wheel, Qantas has sped headlong into peak hour traffic with their steely gaze fixed firmly in the rear view mirror (Apologies to the Hon PJ Keating)

Qantas need a new fleet.
Off to the Wood shed Leigh.

[dragon man]

A decision will be made at a board meeting next Friday if it would be a good idea to keep an extra 747 than planned as a spare so to speak.

[LeadSled]

A decision will be made at a board meeting next Friday if it would be a good idea to keep an extra 747 than planned as a spare so to speak.

dragon man,
Do you mean an existing aircraft "planned for disposal" will remain longer, or all the money and effort that has been spent on returning one or more "parked" aircraft to service might be wasted??
I am assuming, of course, that the board knows what is/has been going on. Is that an unwarranted assumption??
Tootle pip!!

[esa-aardvark]

Goyder won’t do much. Responsible for the Bunnings UK disaster, and the fact he had zero idea that the Target Accounting scandal was playing out under his watch shows how little control he had over at WES.
Arrived back in the UK from a long time away. Heating system had broken. Very cold weather. Went to the local Bunnings
for some electric heaters. "sorry we have none, technically it's Spring so we don't sell them". I told the guy "you must have some clever managers".
Other places were sold out. Have to say Bunnings in New Zealand was excellent.

[dragon man]

Yes, an existing aircraft will stay longer. They should never have let OJT go.

[dragon man]

I think they are under the pump. The network guru Myers has gone, the training section is on an austerity drive, me thinks things aren’t travelling as well as they would like everyone to think.

[blow.n.gasket]

Marcus Aurelius (Roman Emperor and stoic philosopher) said:

‘If anyone can show me, and prove to me, that I am wrong in thought or deed, I will gladly change. I seek truth, which never yet hurt anybody.
It is only persistance in self delusion and ignorance that does harm.’

[Rated De]

Marcus Aurelius (Roman Emperor and stoic philosopher) said:

‘If anyone can show me, and prove to me, that I am wrong in thought or deed, I will gladly change. I seek truth, which never yet hurt anybody.
It is only persistance in self delusion and ignorance that does harm.’


If it is true that Mr Meyer has exited the business, this is potentially another dissenting view that has been dismissed.
Mr Buchanan after securing the 788 from QF mainline passionately explained that the Long Haul Low Fare model was unsustainable.
He was sent on gardening leave shortly thereafter.

Fort Fumble is devoid of any differing opinion.
Despite Tino's best efforts, the ever increasing fuel price exposes them for what they are; One Trick ponies.

[LeadSled]

Yes, an existing aircraft will stay longer. They should never have let OJT go.

Dragon man,
So, what about all the work going on in the desert?? No comment??
Maybe OJT is one of them??
I don't know if it is, or exactly how many are on the way back, it is more than one.
Tootle pip!!

[Chris2303]

As has been repeated in the thread, Qantas need a new fleet..

With this dynamic duo (Messrs Clifford and Joyce ) at the wheel, Qantas has sped headlong into peak hour traffic with their steely gaze fixed firmly in the rear view mirror (Apologies to the Hon PJ Keating)

Qantas need a new fleet.
Off to the Wood shed Leigh.

I've already asked you this but you didn't reply.
Please define new fleet and the routes they will work.

[dragon man]

I know nothing about the 747s in the desert, OJT has gone, sold I believe. I believe Myers told them spending $600 million on the 380 refurbishment with fuel at the current price was a waste of money and would be better spent on more 787s.

[Keg]

I think they are under the pump. The network guru Myers has gone, the training section is on an austerity drive, me thinks things aren’t travelling as well as they would like everyone to think.

Not just Training section. Apparently everyone is on an austerity drive. “Another transformation type purge” were the exact words I heard used.

There are no doubt some areas that could do with some trimming. I’d start with the list of names that attended basket weaving in the street a few weeks back ( that’s not a euphemism folks, that actually happened as part of NAIDOC week) or those that took time out to do yoga during ‘safety and welbeing week’ (funnily enough I didn’t see that offered to front line staff between aircraft transits or dealing with our customers). Where they can cut in flight training or Flight Ops though has got me stuffed. Already people in those departments are under significant work stress and doing big hours to get the job done.

[Chris2303]

Wombat...I think you’ll find no one hates Qantas at all. Most people I know have had to endure a decade or more of pointless corporate rape of what used to be one for worlds great airlines. Absolutely none of what has been done at QF was necessary to keep the company doors open, it was all done to line the pockets of an elite few.

if you’re happy to stand by while the company is allowed to decay, perhaps it is you who should head overseas.

But there is little difference between the rape of Qantas and the rape of other Australian greats (and New Zealand greats for that matter)

[Rated De]

The tide is going out, fuel price is rising. Oil traders have positioned accordingly. 4 November may see the term structure indicate more contango; QF fuel expense rises.

With Mr Clifford off to fairy land, just in the nick of time, rather like Rio Tinto. Tom wasn't so lucky.

A fuel inefficient fleet and petrol prices at the pump down edging towards $2.00 a litre, Little Napoleon needs another distraction.
It might be 'transformation purge' it, it may even be industrial, but the simply fact is Qantas needed a new fleet a decade ago.

Mr Joyce can spend his remaining time virtue signalling the entire dying print media, but the facts speak for themselves..

[hotnhigh]

Everyone can voice their concerns but the reality is, the new chairman, the board, the media.......don't give a s%$T.
No one appears capable to take a clinical look at the numbers nor see the trainwreck approaching, that whoever the next CEO is, will inherit.
Bring on the next happy clappers meeting in the street!
Did someone mention engagement? What a fine set of numbers for a case study.
The future will get very ugly and people will lose their livelihoods.
That's the legacy.

[Rated De]

I've already asked you this but you didn't reply.
Please define new fleet and the routes they will work.

With the exception of possibly a South American route (although LAN are doing it in a 789) and perhaps to South Africa, all the other routes currently flown, can NOW be flown by the big twins.
Pick one? All the airlines flying the Pacific did, whether it be a B777 or a B789, "the World's most enlightened airline management' chose to ignore this, instead getting lucky with a low fuel price. The fuel included CASK on any route is lower with a big twin. Lower fuel expense would cushion earnings volatility.
As was evident in FY15, $597 million of the 'turn around profit' was reduced fuel expense as fuel prices fell.
Axiomatically, the reverse is true: the impact is much more a problem for QF with their fleet metrics than the competitors as Operating expense rise disproportionately on a rising fuel price.


This is the genesis of the ICCT article in January 2018.

https://www.abc.net.au/news/2018-01-17/qantas-fuel-efficiency-worst-for-trans-pacific-flights-study/9333616

If it is true as Keg alluded to that the there is yet another 'efficiency drive' then again Fort Fumble is a dollar short and a day late.

[dragon man]

Add on the massive savings coming to them when all the longhaul legacy aircraft have gone to be replaced by pilots on the B scale 787 rates. Within ten years I would suggest it will be in the hundreds of millions of dollars.

[Chad Gates]

Rumour doing the rounds that QF will be all twin in the next 5 years. I don’t understand how that’s possible with the capital expenditure limits, but that’s the latest rumour. I guess somewhere between 5 and 10 would be accurate.

[V-Jet]

Rumour doing the rounds that QF will be all twin in the next 5 years. I don’t understand how that’s possible

I do. How about one massive fleet (Australia's largest?) of 14 Dreamchangers and code share the rest. I wouldn't put anything past them. They've taught me _anything_ is possible, even if it is totally self destructive and makes no sense to anyone not personally benefiting from the idea.

[Transition Layer]

:uhoh:
If Evert Meyer goes, then it’s not a good sign at all.

He is the only person in the whole show who has any original ideas on routes/aircraft and the know-how to make it happen.

[crosscutter]

Evert Meyer has definitely left or was thrown off the ivory tower. Another opposing voice to the yammerganda gone.

[dragon man]

Evert Meyer has definitely left or was thrown off the ivory tower. Another opposing voice to the yammerganda gone.

Had his ID taken from him and shown the door.

[ExtraShot]

Evert Meyer has definitely left or was thrown off the ivory tower. Another opposing voice to the yammerganda gone.

Unbelievable! Any ideas where to? If a competitor wanted to cut Qf’s lunch...

[dragon man]

I believe planning for the replacement of the 737s and A330 were also not well received.

[Rated De]

A good old purge with the 'aviation lightweight' still there.

A worrying development is that rising fuel prices with Qantas show no real sign of waning, as the geo-politics imply more risk premium. The term structure for oil is not good for an airline with fleet metrics like Qantas.


In a Bloomberg TV interview, Chief Executive Officer Alan Joyce said there’s “plenty of operating cashflows” to fund both shareholder returns and fleet investments. He was responding to a report by S&P Global Ratings last week that said Qantas needs to divert money away from investors to pay for fleet upgrades. Joyce said the ratings company should have waited to see the airline’s first-half results .

They have seen the results and whilst the free cash flow was ok in June, it gets chewed up with fuel. There fleet metrics are still horrible.
Those airlines with an efficient fleet are better placed to absorb volatility. There is no one else to blame.

I do. How about one massive fleet (Australia's largest?) of 14 Dreamchangers and code share the rest. I wouldn't put anything past them. They've taught me _anything_ is possible, even if it is totally self destructive and makes no sense to anyone not personally benefiting from the idea.

Perhaps worrisome for the Australian government is that Qantas has already established a narrative suggestive the QSA 1992 that is the problem.
It isn't. However a government may be pressured into concessions. It is no secret Qantas want to merge.

The fact remains that they are neglectful, wasteful and a long way behind the curve.
Mr Goyder ought have a close look at the inter-segment management accounts. The ones that rarely leave the special hiding place on QCA9

[ebt]

The sky is not falling in at QCA/B/C - and by the sounds of it if it were, there would be some baskets to gather it up in.

Yes, fuel is rising, but QF have done well with hedging such that it's not (yet) going to have a major impact. Arguably, they are getting a huge operational hedge by replacing the 747s with 787s, even if in their config the benefit is only a few %.

Hedging will help to lower the impact on cash flow, as will suspending dividends, which I expect will happen soon given the tax losses from previous years have been reversed and so they will not have any more franking credits. As it is, they have managed to use cash to buy their last few 787-9s, and they are buying a stack of 737s, A320s and A330s as they come off-lease, which the credit ratings agencies like. The debt has been but, is now at a lower rate, and a longer maturity, and the rating is at investment-grade. So even assuming that they have to quickly renew everything, they would have lessors and banks falling over themselves to give Qantas attractive rates.

Best of all, the biggest irritant for them - Virgin - are just getting their heads above water financially and gave away their cost advantage as the Borg took them upmarket. Both carriers took hits in the capacity war, but Virgin came off second-best and had to have its balance sheet revamped a couple of times. And if the rumours of HNA seeking an out are true, while Etihad would probably exit at the right price, things aren't going to get easier on the other side of the fence any time soon.

So, in summary...chill, Winston.

[Pinky the pilot]

Qantas needs to divert money away from investors to pay for fleet upgrades

I'd like to see some money diverted away from AJ and various others for precisely the same reason.:=

But WTF would I know?:confused: I'm only someone whom, once a year, fills a seat in Row 44 or thereabouts on a 744 long haul flight out of YSSY and returns a few months later. And have done each year, at approximately the same time of year for the last six years.

The A/C are showing their age!!:hmm:

[Rated De]

The sky is not falling in at QCA/B/C - and by the sounds of it if it were, there would be some baskets to gather it up in.

Yes, fuel is rising, but QF have done well with hedging such that it's not (yet) going to have a major impact. Arguably, they are getting a huge operational hedge by replacing the 747s with 787s, even if in their config the benefit is only a few %.

Hedging will help to lower the impact on cash flow, as will suspending dividends, which I expect will happen soon given the tax losses from previous years have been reversed and so they will not have any more franking credits. As it is, they have managed to use cash to buy their last few 787-9s, and they are buying a stack of 737s, A320s and A330s as they come off-lease, which the credit ratings agencies like. The debt has been but, is now at a lower rate, and a longer maturity, and the rating is at investment-grade. So even assuming that they have to quickly renew everything, they would have lessors and banks falling over themselves to give Qantas attractive rates.

Best of all, the biggest irritant for them - Virgin - are just getting their heads above water financially and gave away their cost advantage as the Borg took them upmarket. Both carriers took hits in the capacity war, but Virgin came off second-best and had to have its balance sheet revamped a couple of times. And if the rumours of HNA seeking an out are true, while Etihad would probably exit at the right price, things aren't going to get easier on the other side of the fence any time soon.

So, in summary...chill, Winston.

Clearly,
UBS,
S&P,
The ICCT ,
and Roger Montgomery need to settle.

Despite every other airline having re-equipped almost without exception a decade ago, QF know something everybody else doesn't!

As Mr Montgomery mused;

In addition to benefiting from cheaper fuel, cash flows have also been boosted by a strategy that has allowed the fleet to age. As I said earlier, the most expensive part of running an airline is replacing old, cheap planes with newer and more expensive models.
Airlines cannot escape this capital expenditure lest passengers jump to competing airlines with fancier entertainment offerings and more comfortable seats, bars and beds. You can call it a disciplined approach to capital spending or you could say the board might prefer to
see the share price go up now, maximise share price-related incentives for current management and leave the reality of replacing planes to the next CEO.

Mr Montgomery is already half right, it is a new Chairman's problem.

[PoppaJo]

Best of all, the biggest irritant for them - Virgin - are just getting their heads above water financially and gave away their cost advantage as the Borg took them upmarket. Both carriers took hits in the capacity war, but Virgin came off second-best and had to have its balance sheet revamped a couple of times. And if the rumours of HNA seeking an out are true, while Etihad would probably exit at the right price, things aren't going to get easier on the other side of the fence any time soon.
I think the worst is gone.
https://www.news.com.au/finance/business/breaking-news/virgin-australia-flags-h1-profit-rise/news-story/1d0f72073aa10c005a78d8c4fd561092

[Keg]

Dragon man,
So, what about all the work going on in the desert?? No comment??
Maybe OJT is one of them??
I don't know if it is, or exactly how many are on the way back, it is more than one.
Tootle pip!!

There will be no jets brought back from the desert.

Some crystal ball gazing. Whilst the dead stop date for the 744 is somewhat fixed (end of 2020 and wouldn't surprise me if it coincides with the 100th anniversary on 16 November) the reality is that this date could be moved either way quite quickly. Note that as at the Nov 2020 date the Qantas fleet has all fourteen 787s in it. So either there is a reduction of four airframes to do the flights the last retiring 744s were doing or there are likely to be more 787s due to arrive from early 2021. I don't discount the possibility of the 787s actually 'slow flying' in the lead up to the last of the 744 replacements also and being able to ramp up their hours to cover the loss. My gut says more 787s in 2021 with Sunrise jets due to come on line 12-18 months later in 2022.

At the moment it's likely the 744 fleet could survive with all the Captains and F/Os currently on it staying until the last flight if they choose to do so. The last four jets (needed to fly a HND- SYD- JNB- SYD service) can be heavy crewed with Captains and F/Os. Wouldn't surprise me though if they RIN S/Os before that or at least hope they take promotion to F/O on the 737 for the newbies, or the A330 or 787* for those who've been around a while. As at November 2020 we start the RIN process for Captains and F/Os and we'll know a bit more about aeroplane orders beyond that time from mid to late next year.

I do strongly suspect that any decision to retire the 744s earlier than November 2020 will come with a commensurate acceleration of 787 arrivals and potentially additional airframe orders due by the end of 2020 also. If this occurs the RIN process simply starts earlier than November 2020.

When the RIN occurs the top 35ish 744 Captains not retiring can displace to the A380 if they so choose. The remaining 30-35ish won't have the seniority to displace to the A380 and either retire or go to the redeployment positions available on the 787 (or heck, even displace to the A330! :eek: ). Logistically, if Qantas wanted to shrink capacity in the short term this RIN is possible anytime from January next year given the numbers of 787s due to arrive over the subsequent 12 months. I don't reckon this is capacity reduction is likely... yet.

Anyway, lots of water to go under the bridge on this one. We'll see how it plays out.

(*Rumours of vertical promotion coming back for 787. Very second to third hand info though).

[ebt]

Franking credits are used when a company has paid tax, it’s a credit for tax that the company has paid, so what you write is incorrect. Management were only paying token dividends because there were no franking credits and shareholders had been whining about no dividends for a long time.


My apologies, I used the wrong term, but the strategy has been the same - pay dividends when the accumulated losses are providing a tax shield, which runs out this fiscal year. They've also done a heap of share buybacks to keep the investors happy, but both of those are can be put on ice if needed to invest in fleet. If they had to do it today, they would probably rely on the debt market to finance new jets as rates are still at historic lows, but they are a few years off from making a major decision on that.

Also, for the record, the S&P report was not as alarmist as some reckon it was. Have a read, they say that the fleet is fit for purpose now, but will require replacement later on, as all ageing aircraft do. They see some risk in that, but it's nothing that a competent management team cannot handle. Of course, the definition of competent varies from person to person.

[dragon man]

Interesting rumour I’m hearing today is that Fridays meeting is actually to discuss keeping the 747s longer now because the loads are so high that the 787 can’t replace them.

[crosscutter]

Can’t see any 747s being kept. Alan has had no problem reducing capacity in the past. Getting rid of 747s equals less fuel, less engineers, less crewing costs and less maintenance. Alan has never expanded LH. I would suggest Friday’s meeting is about managing capacity to fit with the 747 unchanged retirement schedule. I’d love to be wrong.

[ruprecht]

(*Rumours of vertical promotion coming back for 787. Very second to third hand info though).

Second time in 5 days I’ve heard that rumour.

[dragon man]

I think you will find it’s correct Mrs Doubtfire said for all types.

[blow.n.gasket]

So passé Dragon.
Get with the hipsters .
Been told by a management S/O that “Aunty Jack “ is the preferred moniker.

[Transition Layer]

Second time in 5 days I’ve heard that rumour.


You gotta be sh1tting me! Let’s see how the 15 year + S/Os go with one sector a fortnight on the 787 :eek:

[ruprecht]

You gotta be sh1tting me! Let’s see how the 15 year + S/Os go with one sector a fortnight on the 787 :eek:


Qantas doesn't care about that.

Qantas cares about money and training costs. :hmm:

...and I should add: its only a rumour.

[73qanda]

What does vertical promotion mean? I’ve taken a few sideways steps in my time but thought that vertical was normally the goal?

[V-Jet]

Promotion on type. Sky gods past decreed only they were talented enough to manage to go from seat to seat on the same type. The idea was to force more handling experience than typical long haul ops provided. Among many bizarre consequences it would also have increased training costs massively.

[ruprecht]

What does vertical promotion mean? I’ve taken a few sideways steps in my time but thought that vertical was normally the goal?

Initially it meant promotion from SO to FO, or FO to captain on the same aircraft type.

It was fine on all fleets until the powers that be put a stop to it on the 747-400, ie as an SO you could promote to FO on the 747-300, A330, 737 or 767 but not the 747-400. Similar story for FO to captain.

Now it also applies to the A380 and 787, which means SO's have to promote to the 737 or A330 before they can be an FO on the 744, A380 or 787.

[dragon man]

Initially it meant promotion from SO to FO, or FO to captain on the same aircraft type.

It was fine on all fleets until the powers that be put a stop to it on the 747-400, ie as an SO you could promote to FO on the 747-300, A330, 737 or 767 but not the 747-400. Similar story for FO to captain.

Now it also applies to the A380 and 787, which means SO's have to promote to the 737 or A330 before they can be an FO on the 744, A380 or 787.

And now because training costs have gone thru the roof plus they don’t have enough pilots in the correct category on the correct aircraft they are looking for a quick fix.

[73qanda]

Thanks for the replies.
I don’t understand who would have thought it a good idea to prevent vertical promotion, pilots or management?
It seems illogical to me.

[Rated De]

Thanks for the replies.
I don’t understand who would have thought it a good idea to prevent vertical promotion, pilots or management?
It seems illogical to me.


It would seem to the outsider that the things that airline ought have corporate knowledge of, the corporation has forgotten. For a long established airline in the modern age to make 'rookie errors' with flight crew numbers, fleet metrics and the 'bread and butter' operational decisions it a reflection of senior management, no matter what token department head carries the can: Fish rot from the head.

Its business seemingly doubling up on presence 'with dual brand strategy' eating its yield pouring resources into a segment that is heavily dependent on mother Qantas, yet is incredibly demand elastic.
A strategy, optimising fleet and network appears the purview of Mr Meyer. Whilst once must give kudos to Qantas for creatively spinning every possible thing into some sort of 'info-mercial' running an airline isn't list on the list of priority.
It could be Mr Meyer decided a safe exit is preferable.

Perhaps Mr Clifford is smelling the breeze.

[fearcampaign]

Was it not the case that vertical promotion was only restricted for the initial 8 787s?
Vertical promotion remains restricted on A380/747 SO to FO.
SO pay is so low on the 787 that it makes it well worth a move to 737 so can’t see anyone hanging around on the 787 as an SO.
Heard from a manager that Qantas 787 tech crew costs are less than half that of a US airline crew given they have
2 CPTs and 2 FOs on long haul routes and are paid more in rank also.

[Beer Baron]

Was it not the case that vertical promotion was only restricted for the initial 8 787s?
No, albeit that was a common misconception. There was a blanket restriction on all promotion (SO -> FO and FO -> Capt) for the first 4 787’s however the vertical promotion restriction for SO’s is in the TACM and applies to all the 787’s (until they scrap the rule).

Whatever your feelings on the rule, I can’t think of a worse possible time to remove it than now. There are guys who will have been in the back seat and not landed a plane in 16 years (due in large part to the massive erosion in career opportunities caused by Qantas strategy) and may now move onto a type as FO where they might only do 1-2 landing a month! How do you consolidate your training and get comfortable flying again under those circumstances?

This push to scrap the rule is cynical penny pinching.

[ruprecht]

When the ban on vertical promotion came in, you couldn’t promote to FO 744 because of the sector lengths and low landings per month. You could, however, promote to the classic 743 and do endless blank/reserve. After your training freeze period you could then go to the 744. :hmm:

[donpizmeov]

Thought you would be running the place by now Rup old boy . Hope to see you at the event beginning of Dec and we can talk take over strategy then :}

[goose1]

No, albeit that was a common misconception. There was a blanket restriction on all promotion (SO -> FO and FO -> Capt) for the first 4 787’s however the vertical promotion restriction for SO’s is in the TACM and applies to all the 787’s (until they scrap the rule).

Whatever your feelings on the rule, I can’t think of a worse possible time to remove it than now. There are guys who will have been in the back seat and not landed a plane in 16 years (due in large part to the massive erosion in career opportunities caused by Qantas strategy) and may now move onto a type as FO where they might only do 1-2 landing a month! How do you consolidate your training and get comfortable flying again under those circumstances?

This push to scrap the rule is cynical penny pinching.

bullcrap! Most of the long time s/o’s Are highly experienced and would be offended by your concerns! I am. Pull your head in.

[dragon man]

Il add my two bobs worth. The 737 contract is at the moment so bad compared to long haul that the company struggles to get SOs to bid over there hence by banning vertical promotion they are forced there , the draw back from this is the current scenario where they stay for as short a time as possible and hence the training system can’t cope. I have flown with a number of x Virgin 737 FOs and there is no way they were going back to domestic flying.

[ruprecht]

Il add my two bobs worth. The 737 contract is at the moment so bad compared to long haul that the company struggles to get SOs to bid over there hence by banning vertical promotion they are forced there , the draw back from this is the current scenario where they stay for as short a time as possible and hence the training system can’t cope. I have flown with a number of x Virgin 737 FOs and there is no way they were going back to domestic flying.

FO 380, 744 and 330 is so senior that the 737 is the only short term option, regardless of the vertical promotion ban.

[ruprecht]

Thought you would be running the place by now Rup old boy . Hope to see you at the event beginning of Dec and we can talk take over strategy then :}

Unsure if I'll be there, I may have upset the roster gods. :(

[Keg]

FO 380, 744 and 330 is so senior that the 737 is the only short term option, regardless of the vertical promotion ban.

With a 744 S/O RIN likely in the medium term perhaps lifting the vertical promotion prohibitin is about enticing some of the long term S/Os into the front of a 787 instead of displacing to S/O A380? I haven’t looked at the 744 S/O list to see how many that could apply to.

[dragon man]

With a 744 S/O RIN likely in the medium term perhaps lifting the vertical promotion prohibitin is about enticing some of the long term S/Os into the front of a 787 instead of displacing to S/O A380? I haven’t looked at the 744 S/O list to see how many that could apply to.

To many for the companies liking I would suggest.

[ruprecht]

With a 744 S/O RIN likely in the medium term perhaps lifting the vertical promotion prohibitin is about enticing some of the long term S/Os into the front of a 787 instead of displacing to S/O A380? I haven’t looked at the 744 S/O list to see how many that could apply to.



That's exactly what this is about. Realistically, only about 15 744 SO's would be senior enough for a 787 slot. On the 744 SO list the bottom 22 are junior to the most junior 380 SO, leaving the other 86 able to displace. A bloodbath it will be, say Yoda.

Of course, this only applies if there is a RIN... :rolleyes:

[dragon man]

That's exactly what this is about. Realistically, only about 15 744 SO's would be senior enough for a 787 slot. On the 744 SO list the bottom 22 are junior to the most junior 380 SO, leaving the other 86 able to displace. A bloodbath it will be, say Yoda.

Of course, this only applies if there is a RIN... :rolleyes:


Add in the FOs and Capts who can also RIN to the 380 and Houston we have a problem.

[Keg]

Not as many as you’d think. Only 30-35 Captains. I haven’t looked at F/O numbers though I’d suspect they’d be similar.

Of those 86 others ruprecht, have you looked at where the crossover is? IE most senior displaces most junior, next most senior displaces second most junior, etc. At some stage there is a crossover and the 744 S/O can’t displace anyone.

[ruprecht]

Of those 86 others ruprecht, have you looked at where the crossover is? IE most senior displaces most junior, next most senior displaces second most junior, etc. At some stage there is a crossover and the 744 S/O can’t displace anyone.


No, I just gave it a quick glance. But if they RIN in stages remember that only those named in a RIN can displace. Is it possible that someone named in a RIN displaces another SO, only to be displaced themselves when someone more senior than them gets named?

The 380 SO list is down from 125 this roster to 115 next roster so I wouldn’t be surprised if some more A380 SO positions are advertised/awarded.

[Keg]

Yes. That’s possible. It’s also why I’d be stunned if they did multiple RINs for exactly that reason.

Actually, a RIN of those they know don’t have seniority to displace could be on the cards. After that though multiple RINs cause significant additional pain. That’s why I reckon only one big RIN for Captains and F/Os and multiple RINs for S/Os only if they will avoid the scenario you’ve high lighted.

[Tankengine]

Yes. That’s possible. It’s also why I’d be stunned if they did multiple RINs for exactly that reason.

Actually, a RIN of those they know don’t have seniority to displace could be on the cards. After that though multiple RINs cause significant additional pain. That’s why I reckon only one big RIN for Captains and F/Os and multiple RINs for S/Os only if they will avoid the scenario you’ve high lighted.
For Captains even the most junior can displace off the 380.
I agree there wil be only one RIN.

[Rated De]

Whilst Mr Goyder may be new to the post and although 'pilot stuff' not necessarily the purview of the Chair, what ought concern all with a direct or ancillary interest in QF: Is what else is being hidden?
A festering mess with respect to pilot recruitment, training and promotion( when sitting in plain view for decades) does not bode well.

Little Napoleon is known to have a filthy temper.
Unlike a master of any subject, where questions, challenges to method and approach are welcomed and debated, Little Napoleon has form as a dictator.

If Qantas cannot, despite self proclaimed 'transformation' get the basics right, what other stuff is hidden in the closet?

[dragon man]

Many 747 Captains will go with the aircraft, some will go on year 4 money to the 787 in both Sydney and Brisbane. IMO probably about 20 might go to the 380.

[yy16]

With all the talk of RIN, what if Qantas puts all the new 787s in Sydney, turn around and say no reduction in numbers, here are the redeployment vacancies you can bid for, what happens then? Cause that seems a lot cheaper than doing all these extra training courses.

[Tankengine]

Not correct. Having quickly done the RIN in my head, the most senior 747 Capt. displacing the most junior 380 Capt. with a couple of assumptions(I know... but what else can you do, every Capt. wants to go to the 380 in SYD then the next lot want to go to 380 in MEL and nobody retires), the top 35 747 Capt. get a slot in SYD and the next 11 get a slot in MEL. 30 miss out and need to find another home.
I was responding to Keg’s earlier post, in the context of only RINing those too junior to displace. - there are no 747 Captains that junior. If there is only one RIN (as we suspect) then it is just as you say.

[ruprecht]

I think Keg was referring to the junior 744 SOs.

Anyway, it’s going to be an interesting process.

[almostthere!]

Can you displace another from an aircraft already declared to be in surplus?

[Beer Baron]

bullcrap! Most of the long time s/o’s Are highly experienced and would be offended by your concerns! I am. Pull your head in.
goose1, rather than being offended why don’t you articulate what part of my post was “bullcrap”?

Are we to assume that you were such a good pilot when you joined that a 15 year break from takeoffs and landings will not in anyway have dulled your skills? Well good for you. I wish I could say the same but my extended stay in the back seat made my promotional training harder than it otherwise would have been and I have been glad for the many sectors since then to get back up to speed.

[Keg]

Can you displace another from an aircraft already declared to be in surplus?

Yes. RM 18.1.12.e.(iii). The EA makes no distinction as to where you can displace to or whether the category you’re displacing has been declared surplus.

You may be thinking of the return from LWOP provision (Scedule 1,Part C) which talks about not coming back to a category in surplus. So a pilot returning from LWOP is unable to go to (say) F/O 744 even if their seniority would permit it if it creates a surplus.

[goose1]

goose1, rather than being offended why don’t you articulate what part of my post was “bullcrap”?

Are we to assume that you were such a good pilot when you joined that a 15 year break from takeoffs and landings will not in anyway have dulled your skills? Well good for you. I wish I could say the same but my extended stay in the back seat made my promotional training harder than it otherwise would have been and I have been glad for the many sectors since then to get back up to speed.


ok, your reference to take off and landing! And, that vertical promotion is a threat!
the main area that diminishes is in flight management ( if you allow yourself to get a bit lazy)!
a focused mindset and normal training (which has improved immensely in QF) is all you need for a successful transition!

In my opinion it would be a good thing to once again allow vertical promotion as there are a lot of highly experienced people who have been Rinned or held back due to their own circumstances, and would find it a refreshing change to be able to move to their desired position without arbitrary obstacles in the way.

[jetlikespeeds]

goose1, rather than being offended why don’t you articulate what part of my post was “bullcrap”?

Are we to assume that you were such a good pilot when you joined that a 15 year break from takeoffs and landings will not in anyway have dulled your skills? Well good for you. I wish I could say the same but my extended stay in the back seat made my promotional training harder than it otherwise would have been and I have been glad for the many sectors since then to get back up to speed.

How is it possible that the words ‘pilot’ and ‘15 year break from takeoffs and landings’ are even in the same sentence? Rediculous!

[ruprecht]

How is it possible that the words ‘pilot’ and ‘15 year break from takeoffs and landings’ are even in the same sentence? Rediculous!










You managed it. :hmm:

In short, the answer is:

Nil recruiting for a long while.
Seniority, which leads to:
Lifestyle, and
Money

[ramble on]

The mere existence of the position of SO in modern airlines is to me just another mechanism for the airline to not to have to pay one other experienced aviator on the flight deck a decent salary. What a crock.

[Tankengine]

With all the talk of RIN, what if Qantas puts all the new 787s in Sydney, turn around and say no reduction in numbers, here are the redeployment vacancies you can bid for, what happens then? Cause that seems a lot cheaper than doing all these extra training courses.
I hear what you say, and Qantas would love that - but what if nobody bids for that redeployment? 😛

[Keg]

With all the talk of RIN, what if Qantas puts all the new 787s in Sydney, turn around and say no reduction in numbers, here are the redeployment vacancies you can bid for, what happens then? Cause that seems a lot cheaper than doing all these extra training courses.



You can only offer redeployment positions as part of a RIN.

If what youre saying is that Qantas simply advertises the 787 slots and says nothing to the 744 drivers then they’ll still need to eventually do a RIN. The 744 drivers are under no compulsion to bid for those slots- and why would they given they’d go to year 1 pay when they can wait for the RIN and go to year 4 pay.

The real question is how do you keep flying 4-6 744s until the end of 2020 whilst simultaneously taking delivery of the last of the 787s? One way is to run divisors on the 787 and A380 close to maximum in the lead up to the 744 retirement so that RIN’d 744 drivers then retraining to those types don’t create too much of a surplus. I suspect more likely is additional 787 orders for arrival from late 2020 through 2021 on which the now surplus 744 drivers can go to. Some will obviously still exercise their right to displace to the A380.

[Rated De]

Back on topic.

Has the AGM seen off the toxic dinosaur?
Were there marching bands, balloons and white doves?

[C441]

Were there marching bands, balloons and white doves?
There was a protest crowd out the back of the Hilton but that was a group opposed to Qantas carrying passengers to and from detention centres or back from whence they came (I think), not celebrating or lamenting Leigh's departure.
There was a small gathering of shareholders (many in dual roles as interested employees) at the AGM. Alan thanked Leigh for his service to which not all those present responded with a rousing ovation.:)

[Rated De]

There was a small gathering of shareholders (many in dual roles as interested employees) at the AGM. Alan thanked Leigh for his service to which not all those present responded with a rousing ovation.

Good riddance.

For a business that requires a lot of people all working together to deliver customers safely, the choice of Mr Clifford was odd.
Paradoxically, if the intent were to deceive the wider populous with the erroneous narrative of 'terminal decline' whilst simultaneously running a divisive and destructive anti employee model, then he was the perfect relic.

Perhaps, long suffering Qantas staff can dare hope for something better.
What is for certain, is Mr Clifford is just another footnote in the dustbin of history.

[Beer Baron]

a focused mindset and normal training (which has improved immensely in QF) is all you need for a successful transition!

In my opinion it would be a good thing to once again allow vertical promotion as there are a lot of highly experienced people who have been Rinned
Well given the current high rate of SO->A330 FO training failures it would appear that the normal training is not quite cutting it.

On the subject of rinned pilots, they are not effected by vertical promotion restrictions. The TCAM states; To be​ eligible​ for the​ rank​ of​ A380,​ B747​ or B787​ First​ Officer, the​ pilot​ must​ have​ operated as​ a ​First​ Officer on another Company​ aircraft​ e.g. B737​ or​ A330.​ ​
So if they have been demoted from FO previously then they will not be prevented from promoting to the 787,747 or 380.