Qantas hit hard by July slump
Join Date: Jun 2003
Location: Australia
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Absolutely, Wirraway. The deployment of Skimpy is an important part of the long-term security of their domestic business.
As for the shareprice, Qantas stock is hugely underpriced at the moment, and it's probably a very good time to buy. A quick look at the current major analyst recommendations on QAN shares has 4 of 13 analysts saying HOLD, 7 with MODERATE BUY and 2 with STRONG BUY - I can't find any other largecap stock with these sorts of recommendations at the moment. That basically confirms the general feeling that once the dust settles over the ACCC etc (a few months away, given the appeal will take some time) the price will normalise somewhere between $3.50 and $4 in the near term, and then mid $4 thereafter. Obviously a hard one to call, but everyone agrees that the stock is well down on what it should be.
Interesting, Waste Gate - the formula's a pretty good one in that case, as management seems to be very happy with AO's model. I'd imagine Skimpy would continue to build on the AO savings by making increased use of third party/contract services in engineering, sales, catering etc, rather than 'slashing and burning' their staff remuneration further.
ED
As for the shareprice, Qantas stock is hugely underpriced at the moment, and it's probably a very good time to buy. A quick look at the current major analyst recommendations on QAN shares has 4 of 13 analysts saying HOLD, 7 with MODERATE BUY and 2 with STRONG BUY - I can't find any other largecap stock with these sorts of recommendations at the moment. That basically confirms the general feeling that once the dust settles over the ACCC etc (a few months away, given the appeal will take some time) the price will normalise somewhere between $3.50 and $4 in the near term, and then mid $4 thereafter. Obviously a hard one to call, but everyone agrees that the stock is well down on what it should be.
Interesting, Waste Gate - the formula's a pretty good one in that case, as management seems to be very happy with AO's model. I'd imagine Skimpy would continue to build on the AO savings by making increased use of third party/contract services in engineering, sales, catering etc, rather than 'slashing and burning' their staff remuneration further.
ED
Moderate, Modest & Mild.
It's "bights" (and bites) such as your's that are a breath of fresh air, ED.
Thank you for your well considered, intelligent reply.
With respect, there is a point or two with which I'd like to take issue - solely in the interests of hopefully intelligent debate. I'm open to any criticism, and welcome rebuttal based on substance.........so without too much more ado, here we go.
Did Virgin Blue slash their conditions? Virgin Atlantic have been a long established operator, famous for paying less than their competitors, but also "famous" for the extra "frilly bits" - the staff travel, the advancement opportunities (for the relatively in/non experienceds), the "fun" working conditions.
In the case of VB, the idea to formulate, and materialise the airline, in fact happened well prior to the collapse of Ansett - so there were not that many pilots at the "point of desperation" ("desperation of thousands of unemployed pilots"), that would have made starting an airline a viable proposition at that time, based on that description.
However, as I pointed out earlier, Virgin offers non/lesser experienced staff a "go". And so there were - in Oz - enough "frustrated" wannabes...be they pilots or cabin crew, check-in staff, or other groundies......who thought that they would NEVER see an airline job, willing to grasp THEIR chance.
The concept of a third domestic airline, at the time that VB entered the market, was – as a matter of fact – floated to Mr Godfrey by a couple of 1989 Oz Dispute pilots who were employed o/s the time, but who nonetheless apparently conveyed the idea that there was a ready market, both in terms of willing employees, and wanting consumers, to justify another operator.
But this has ALWAYS been the case, ED – the Asian carriers, Singapore, Malaysian, Garuda, China – have been operating competitively with QANTAS for the past 30 years. And QANTAS has successfully weathered the storm.
It is only since MANAGEMENT BONUSES became an issue, that “suddenly” QANTAS looks as though it was on the verge of becoming extinct!!
If anything, salaries, conditions, and currencies, for Asian staff have RISEN remarkably, whilst the converse has been applied to QF staff – thereby narrowing the difference in operating costs, ie. an increase for Asian airlines, but pretty much status quo for QF, if not a DECREASE in overall costings.
But the savings have been gobbled up by MASSIVE MANAGEMENT BONUS PAYOUTS!
“Formed” – at what (unnecessary) cost?
The “formative” costs of setting up an entirely new company far outweigh any sensibilities needed in NEGOTIATING the same outcome from an existing company.
The formation of Australian Airlines, imo, only further proves that QANTAS has a non-accountable, cash-rich, expenditure-irresponsible management, at its helm! AO could just as easily – and more economically – have been established as part of the EXISTING QANTAS, rather than as a stand-alone company.
The EXTRA management at AO – paid as such – is UN-NECESSAY!!
The FACT is the extra AO management could more cost efficiently have been retained as existing QF staff, on LOWER salaries, than to have been deployed as separate AO staff!!
…at a cost of TENS of MILLIONS of DOLLARS!
Thank you for your well considered, intelligent reply.
With respect, there is a point or two with which I'd like to take issue - solely in the interests of hopefully intelligent debate. I'm open to any criticism, and welcome rebuttal based on substance.........so without too much more ado, here we go.
DJ/PB went where no other Australian 737 (or equivalent) operating carrier has gone before, and slashed its conditions (relative the industry benchmark prior to it coming on the scene), knowing that it could do so to capitalise on the desperation of thousands of unemployed pilots in this part of the world.
In the case of VB, the idea to formulate, and materialise the airline, in fact happened well prior to the collapse of Ansett - so there were not that many pilots at the "point of desperation" ("desperation of thousands of unemployed pilots"), that would have made starting an airline a viable proposition at that time, based on that description.
However, as I pointed out earlier, Virgin offers non/lesser experienced staff a "go". And so there were - in Oz - enough "frustrated" wannabes...be they pilots or cabin crew, check-in staff, or other groundies......who thought that they would NEVER see an airline job, willing to grasp THEIR chance.
The concept of a third domestic airline, at the time that VB entered the market, was – as a matter of fact – floated to Mr Godfrey by a couple of 1989 Oz Dispute pilots who were employed o/s the time, but who nonetheless apparently conveyed the idea that there was a ready market, both in terms of willing employees, and wanting consumers, to justify another operator.
Now - AO. On routes where QF is going head to head (directly or indirectly) with government-owned or subsidised Asian carriers, the same applies. These carriers, with a lower cost-per-pax-per-km, will out-discount mainline QF almost every time. Couple that with the number of leisure destinations in Asia, where a vast number of pax will be on discount economy packages (read 'break even' for the airline), it's clear that the airline will either be making a loss or a bare-bones break-even on routes.
It is only since MANAGEMENT BONUSES became an issue, that “suddenly” QANTAS looks as though it was on the verge of becoming extinct!!
If anything, salaries, conditions, and currencies, for Asian staff have RISEN remarkably, whilst the converse has been applied to QF staff – thereby narrowing the difference in operating costs, ie. an increase for Asian airlines, but pretty much status quo for QF, if not a DECREASE in overall costings.
But the savings have been gobbled up by MASSIVE MANAGEMENT BONUS PAYOUTS!
And so AO was formed, with a view to reducing unit costs..
The “formative” costs of setting up an entirely new company far outweigh any sensibilities needed in NEGOTIATING the same outcome from an existing company.
The formation of Australian Airlines, imo, only further proves that QANTAS has a non-accountable, cash-rich, expenditure-irresponsible management, at its helm! AO could just as easily – and more economically – have been established as part of the EXISTING QANTAS, rather than as a stand-alone company.
Management at AO is barebones, contrary to popular belief,
The FACT is the extra AO management could more cost efficiently have been retained as existing QF staff, on LOWER salaries, than to have been deployed as separate AO staff!!
(QF) was forced into reducing costs ('Sustainable Futures') by a) the unprecedented move of DJ/PB slashing labour costs as a means of reducing its unit costs….AO was launched to counter this..
