The end for Australian?
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Cabin crew EBA should be signed sealed and delivered by early July. August/September should see some announcements made.
I also think 743s' would be to costly to run. GD would have give AO some help with maintenance costs.
Arsey Eight had a good point about the A330-200s' doing a swap with the AO 767-300. That would be someday down the track though.
I also think 743s' would be to costly to run. GD would have give AO some help with maintenance costs.
Arsey Eight had a good point about the A330-200s' doing a swap with the AO 767-300. That would be someday down the track though.
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Game's up?
Tucked away in the annual results of Qantas were some remarks on the pathetic performance of Australian Airlines: they recorded an EBIT loss of $11.6 million - almost a $13 million "turnaround" on last year's efforts when they produced a $1.1 million profit.
The usual excuses wre proffered but are they valid? Adverse Travel warnings on Indonesia (these have been around for years), the Tsunami (what destination was affected by it?), rising fuel costs (aren't they hedged as Qantas purchasing power/policy etc is utilised), and finally, weak Japanese markets (and yet they are adding two more Nagoya flights a week!) have all been blamed.
Interestingly, there is no forward outlook or indication of what is being done to correct the unprofitability. One has to ask when Jetstar will take over? They are about to start to fly to New Zilland so it may be only a matter of time before the shade of orange changes in FNQ. By JetStar Asia standards the numbers look pretty good as Qantas hasn't dropped nearly the shipload of dollars on Australian as it has in Singapore but can Qantas shareholders afford the management to allow the losses to continue and mount?
I don't think so.
The usual excuses wre proffered but are they valid? Adverse Travel warnings on Indonesia (these have been around for years), the Tsunami (what destination was affected by it?), rising fuel costs (aren't they hedged as Qantas purchasing power/policy etc is utilised), and finally, weak Japanese markets (and yet they are adding two more Nagoya flights a week!) have all been blamed.
Interestingly, there is no forward outlook or indication of what is being done to correct the unprofitability. One has to ask when Jetstar will take over? They are about to start to fly to New Zilland so it may be only a matter of time before the shade of orange changes in FNQ. By JetStar Asia standards the numbers look pretty good as Qantas hasn't dropped nearly the shipload of dollars on Australian as it has in Singapore but can Qantas shareholders afford the management to allow the losses to continue and mount?
I don't think so.
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18 August 2005
Dear AO Team
At 10 a.m. today, the financial results of the Qantas Group for the Financial Year 04/05 were publicly released, accompanied by a Press Conference given by Geoff Dixon and Peter Gregg in Sydney. After tax, the Group earned a record profit of $764 million, up almost 18% on the previous year.
Along with the other managers of the various business units within the Qantas Group, I attended the press conference. In my eyes, Geoff’s main messages were that:
- fuel remains at record highs so the fuel surcharges to date would remain for the foreseeable future and that another fuel surcharge is under consideration, subject to assessment of the dampening of consumer demand. Fuel will cost the Qantas Group an extra $650 million in 05/06, after taking into account hedging and fuel surcharges.
- despite the fuel surcharges, domestic and international airfares remain at record lows.
- internationally, all major competitor airlines flying in and out of Australia are directly or indirectly government supported. This needs to be taken into account by the Federal Government in its review of Aviation Policy being conducted between now and year-end.
- despite being a record profit, and one of the best performances of an airline worldwide, the Group is still not providing sufficient returns to shareholders, compared to other public companies listed on the Australian Stock Exchange. However, we are getting close, especially with a new Dividend Policy for 04/05 that pays higher dividends to shareholders.
- The Sustainable Futures program of transformation needs to continue to offset the increase in fuel costs and the lower fare levels. The focus of the transformation program is the major business units. (Because Australian Airlines buys services from these business units, we anticipate lower costs in the future, though mostly beyond 05/06.)
- The Qantas Group is unlikely to achieve the same profit level in 05/06 due to the extremely high fuel prices.
Australian Airlines reported a loss before tax of $11.6 million. This result reflected the difficulties of the second half of the financial year including weaker demand of Japanese tourists for Australia, the impact of the Asian tsunami and travel warnings to Indonesia, and higher fuel costs. In answer to a question about Australian Airlines, Geoff confirmed that we are fulfilling our mandate of allowing the Qantas Group to maintain a presence in various leisure markets, which would not be possible to maintain with Qantas because of its higher costs. Geoff said that ‘certainly it (Australian Airlines) is viable for the future’.
Dear AO Team
At 10 a.m. today, the financial results of the Qantas Group for the Financial Year 04/05 were publicly released, accompanied by a Press Conference given by Geoff Dixon and Peter Gregg in Sydney. After tax, the Group earned a record profit of $764 million, up almost 18% on the previous year.
Along with the other managers of the various business units within the Qantas Group, I attended the press conference. In my eyes, Geoff’s main messages were that:
- fuel remains at record highs so the fuel surcharges to date would remain for the foreseeable future and that another fuel surcharge is under consideration, subject to assessment of the dampening of consumer demand. Fuel will cost the Qantas Group an extra $650 million in 05/06, after taking into account hedging and fuel surcharges.
- despite the fuel surcharges, domestic and international airfares remain at record lows.
- internationally, all major competitor airlines flying in and out of Australia are directly or indirectly government supported. This needs to be taken into account by the Federal Government in its review of Aviation Policy being conducted between now and year-end.
- despite being a record profit, and one of the best performances of an airline worldwide, the Group is still not providing sufficient returns to shareholders, compared to other public companies listed on the Australian Stock Exchange. However, we are getting close, especially with a new Dividend Policy for 04/05 that pays higher dividends to shareholders.
- The Sustainable Futures program of transformation needs to continue to offset the increase in fuel costs and the lower fare levels. The focus of the transformation program is the major business units. (Because Australian Airlines buys services from these business units, we anticipate lower costs in the future, though mostly beyond 05/06.)
- The Qantas Group is unlikely to achieve the same profit level in 05/06 due to the extremely high fuel prices.
Australian Airlines reported a loss before tax of $11.6 million. This result reflected the difficulties of the second half of the financial year including weaker demand of Japanese tourists for Australia, the impact of the Asian tsunami and travel warnings to Indonesia, and higher fuel costs. In answer to a question about Australian Airlines, Geoff confirmed that we are fulfilling our mandate of allowing the Qantas Group to maintain a presence in various leisure markets, which would not be possible to maintain with Qantas because of its higher costs. Geoff said that ‘certainly it (Australian Airlines) is viable for the future’.
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I've said this before... but long term I see JQ running the AO ops with QF 330s. It seems most likely that QF will order 777/787 and the 330s will either be traded in on these new Boeings, or handed off to JQ. Makes perfect sense to me, so maybe it makes some sense to Dickie.
Regardless, QF are going to want to have a lower cost international carrier... and AO's costs are too high.
Regardless, QF are going to want to have a lower cost international carrier... and AO's costs are too high.
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There is some second guessing going on here, but even tho the results are not flash the potential for AO is significant when their operating costs are some 30% less that QF. Why would QF maintain a presence on a marginal route when AO can do it cheaper...? I suspect there is more to AO's existence than meets the eye and in the big scheme of things this loss may not mean very much when other issues are considered. AO is very different to J* and targets a very different market. Although J* have potential over time, me thinks they will be up to their ears coping with domestic routes and NZ for a few years yet. As for types, I think you will find that AO will be 763's for some time and most likely will be the last to operate the type within the QF group.
The "Qantas Group" is an expensive fiction that simply increases the number of management chairs to be filled and provides major opportunities for creative accounting.
Of course the one thing in its favour is the multitude of EBA's allows for some gradual cheese paring of QF conditions.
Of course the one thing in its favour is the multitude of EBA's allows for some gradual cheese paring of QF conditions.
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Bonus time?
Having presided over quite a 2004/05 loss with liitle sign of change, will bonus time come for in the next couple of months for Ms Staines and her acolytes on mahogany row at Mascot and Cairns?
Any bets?
Any bets?
The Reverend
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internationally, all major competitor airlines flying in and out of Australia are directly or indirectly government supported. This needs to be taken into account by the Federal Government in its review of Aviation
Moderate, Modest & Mild.
The "Qantas Group" is an expensive fiction that simply increases the number of management chairs to be filled and provides major opportunities for creative accounting.
It's pretty obvious the way they're being milked, that the old story of there not being any money in airlines, was a fabrication - as suspected all along.
Case in point, we had a stretcher case loaded today, and there were no less than 12 "managers" overseeing the operation.
God knows what they do when there are no stretcher patients around!!
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AO is more expensive than Jet* ..... but I cant see Jet* taking over the whole operation... the base pay of F/a's is much the same (AO crew do recieve allowances)... Jet* will not be able to run a 763 any cheaper than AO does.... so where can AO save money ??? The area I can see JQ getting involved in is ground handling, currently it is done by QF and is quite expensive... now that JQ is established in CNS... my bet is when the ground handling contract comes up for renewal you will see some significantly cheaper tenders than the current one... also if AO were to employ its own tech crew a saving could be made there... I hear JQ pilots are not paid that well
Last edited by Trollywally; 20th Aug 2005 at 12:03.
Grandpa Aerotart
- despite being a record profit, and one of the best performances of an airline worldwide, the Group is still not providing sufficient returns to shareholders, compared to other public companies listed on the Australian Stock Exchange. However, we are getting close, especially with a new Dividend Policy for 04/05 that pays higher dividends to shareholders.
Nunc est bibendum
... if AO were to employ its own tech crew a saving could be made there...
The drivers up there may be ex mainline but they are actually employed by AO. They're on leave without pay from QF.
What you really mean is that AO should approach a group of pilots who MAY consider under cutting the incumbents because it'd be a pay rise for them and they'd get to fly o/s on bigger machines than what they're on at the moment. Dangle the carrot and see what happens.
Hmmm. I wonder if you'd be happy if I dangled that carrot in front of people who may take YOUR job TW!!!
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Just a quick question re AO taking over QF's A330s and tech crew costs...
My recollection is that Airbus won't let anyone without previous Airbus wide-body (ie. A330/340) experience near the business end of an A380.
That means that any QF pilot wanting to go to A380s will need to spend time in the A330 fleet (whoever operates it).
So, if the A330s go to AO, wouldn't some sort of arrangement therefore be needed, to allow mainline pilots to get A330 hours (flying for AO) before transferring back to mainline?
This, to me, brings up two possibilities:
1. all the AO A330 crew will be QF mainline - so tech crew costs will not be able to be cut; or
2. there would be mixed on-loan-QF/AO-direct-hire tech crew (if the gist of Keg's post is true) - would that be allowed in practice?
Or, once an airline is operating A380s, does Airbus relax the Airbus experience requirement?
I'm not suggesting it (AO operating A330s) can't happen, but this just seemed like a small logistical impediment to me.
My recollection is that Airbus won't let anyone without previous Airbus wide-body (ie. A330/340) experience near the business end of an A380.
That means that any QF pilot wanting to go to A380s will need to spend time in the A330 fleet (whoever operates it).
So, if the A330s go to AO, wouldn't some sort of arrangement therefore be needed, to allow mainline pilots to get A330 hours (flying for AO) before transferring back to mainline?
This, to me, brings up two possibilities:
1. all the AO A330 crew will be QF mainline - so tech crew costs will not be able to be cut; or
2. there would be mixed on-loan-QF/AO-direct-hire tech crew (if the gist of Keg's post is true) - would that be allowed in practice?
Or, once an airline is operating A380s, does Airbus relax the Airbus experience requirement?
I'm not suggesting it (AO operating A330s) can't happen, but this just seemed like a small logistical impediment to me.
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Keg....
stop wondering... no I wouldnt be happy.... personally I think the tech crew at AO are worth every cent.... have recently had some incidents with extremely bad weather in Japan and you realise why they are paid the big bucks..
have many friends who are pilots in oz and os ... they have had to put in a lot of time, money and effort not to mention endure hardships over many years to get to where they are today .....
But as you stated.. there are many people that MAY do the job for less... just as there are thousands that WOULD step into my shoes for less money if given the chance
TW
stop wondering... no I wouldnt be happy.... personally I think the tech crew at AO are worth every cent.... have recently had some incidents with extremely bad weather in Japan and you realise why they are paid the big bucks..
have many friends who are pilots in oz and os ... they have had to put in a lot of time, money and effort not to mention endure hardships over many years to get to where they are today .....
But as you stated.. there are many people that MAY do the job for less... just as there are thousands that WOULD step into my shoes for less money if given the chance
TW
(Sigh) "Jetstar made a profit", "qantas made a profit", "Australian made a loss".
I respectfully suggest that anyone who takes these statements seriously needs to think again.
To use an aircraft analogy, I can fill the left main tank, transfer it to the centre tank or the right tank and make statements such as "The left/right tank is full/empty" and such like, but the total fuel quantity has not changed at all.
So it is with "the Qantas group". One can make profits appear and disappear at a moments notice anywhere in the group by a little bit of cost allocation - the metaphysics of accounting.
The benefit of slicing and dicing your airline this way is multiply the number of EBA's and use these to put pressure on the workforce in your mainline operation. You can also hide illegal predatory pricing activities by inventing a sham "low cost" airline to compete with your real "low cost" competitors.
The downside of having a group is:
1: Requiring more than one paint scheme, marketing plan, uniform design.
2. Proliferation of managers - you not only need managers for everything, you create a special class of "Group General Managers". Furthermore, if the entities are companies, and not just business names, you require the entire panoply of Subsidiary Boards, complete with supporting corporate infrastructure.
3. Wasting the Board's time, dealing with multiple reports and deconflicting the groups company's business strategies all the time.
4. You run the risk of diluting the value of the brand name. For example, if Jetstar or Australian were to have an accident (perish the thought) does Qantas still get to claim an unblemished safety record?
At one stage a few years ago I had eight subsidiary companies foisted on me and I can assure you that it was a royal pain.
And even earlier I was the meat in the sandwich during extremely heated arguments between the "Main" Ansett airline on one of its subsidiary airlines on the subject of cost allocation. I still have the scars
I respectfully suggest that anyone who takes these statements seriously needs to think again.
To use an aircraft analogy, I can fill the left main tank, transfer it to the centre tank or the right tank and make statements such as "The left/right tank is full/empty" and such like, but the total fuel quantity has not changed at all.
So it is with "the Qantas group". One can make profits appear and disappear at a moments notice anywhere in the group by a little bit of cost allocation - the metaphysics of accounting.
The benefit of slicing and dicing your airline this way is multiply the number of EBA's and use these to put pressure on the workforce in your mainline operation. You can also hide illegal predatory pricing activities by inventing a sham "low cost" airline to compete with your real "low cost" competitors.
The downside of having a group is:
1: Requiring more than one paint scheme, marketing plan, uniform design.
2. Proliferation of managers - you not only need managers for everything, you create a special class of "Group General Managers". Furthermore, if the entities are companies, and not just business names, you require the entire panoply of Subsidiary Boards, complete with supporting corporate infrastructure.
3. Wasting the Board's time, dealing with multiple reports and deconflicting the groups company's business strategies all the time.
4. You run the risk of diluting the value of the brand name. For example, if Jetstar or Australian were to have an accident (perish the thought) does Qantas still get to claim an unblemished safety record?
At one stage a few years ago I had eight subsidiary companies foisted on me and I can assure you that it was a royal pain.
And even earlier I was the meat in the sandwich during extremely heated arguments between the "Main" Ansett airline on one of its subsidiary airlines on the subject of cost allocation. I still have the scars
Taildragger 67, I think your "recollection" might be a crock.........
Airbus are surely not going to turn around and tell Fedex and British Airways that, as a pre-requisite to taking delivery of their A380's, they must first operate some A330's or 340's.
Airbus have stated that the A380 will not be covered by the CCQ that exists for A318 to 340. I have little doubt that the A380 course will be comprehensive and cater for customers from a wide variety of backgrounds.
Sounds like an Aero Club myth to me.
Airbus are surely not going to turn around and tell Fedex and British Airways that, as a pre-requisite to taking delivery of their A380's, they must first operate some A330's or 340's.
Airbus have stated that the A380 will not be covered by the CCQ that exists for A318 to 340. I have little doubt that the A380 course will be comprehensive and cater for customers from a wide variety of backgrounds.
Sounds like an Aero Club myth to me.
taildragger
As Chimbu stated, there is no Airbus requirement for pilots intending to fly the A380 to have previous experience on other Airbus widebodys. It is up to each airline to determine what experience level is required. Qantas' current policy is for the initial batch of training staff and the line pilots for the first two A380's to have time on the A330 prior to their A380 conversion. Line pilots for subsequent aircraft will be able to transfer directly from their current aircraft type.
Back to the original thread. It is quite possible that AO may get to operate the A330-200's in an all economy layout on international routes as this would not require the floors to be strengthened. To operate international services in QF mainline they would have undergo expensive floor mods prior to fitment of the "sleeper" business class seats. I'm not sure if this will happen as I understand that it is still planned to transfer the B747-300's to AO (Sydney base) to fly low yield routes. The transfer of these aircraft has been delayed at least six months because of the late arrival of the A380's.
As Chimbu stated, there is no Airbus requirement for pilots intending to fly the A380 to have previous experience on other Airbus widebodys. It is up to each airline to determine what experience level is required. Qantas' current policy is for the initial batch of training staff and the line pilots for the first two A380's to have time on the A330 prior to their A380 conversion. Line pilots for subsequent aircraft will be able to transfer directly from their current aircraft type.
Back to the original thread. It is quite possible that AO may get to operate the A330-200's in an all economy layout on international routes as this would not require the floors to be strengthened. To operate international services in QF mainline they would have undergo expensive floor mods prior to fitment of the "sleeper" business class seats. I'm not sure if this will happen as I understand that it is still planned to transfer the B747-300's to AO (Sydney base) to fly low yield routes. The transfer of these aircraft has been delayed at least six months because of the late arrival of the A380's.
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GB:
What of the possibility to use the 332's on trans-tasman routes? Surely there is no need for sleeper's on those services. Mind you, I spose you'd need more than 4 332's to operate those legs. Perhaps just services from SYD?
Point being - QF have complained about how poorly the 330s have been on CityFlyer services (IE. poor turn times etc...). Is there ANY chance QF will push the 332's into international flying? Surely using such long range a/c for SYD-MEL flights is a piss poor operation?
What of the possibility to use the 332's on trans-tasman routes? Surely there is no need for sleeper's on those services. Mind you, I spose you'd need more than 4 332's to operate those legs. Perhaps just services from SYD?
Point being - QF have complained about how poorly the 330s have been on CityFlyer services (IE. poor turn times etc...). Is there ANY chance QF will push the 332's into international flying? Surely using such long range a/c for SYD-MEL flights is a piss poor operation?