GD..Under performance, greed & incompetence?
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The six Jetstar A330-200s will be returned in domestic config as will be two of the new ones on order. There will be 4 -200s in International config delivered straight to mainline from the factory.
The planned 22 aircraft fleet will be,
International-10 X A330-300s, 4 X A330-200's
Domestic - 8 X A330-200's. I guess that will mean that more A list guys will get slots on them.
The domestic A330's-200's won't have a crew rest. Once again, the floor strength on the -200's is a furphy. The main stumbling block to making them international is the that they would need a complete strip down to reconfigure them.
The planned 22 aircraft fleet will be,
International-10 X A330-300s, 4 X A330-200's
Domestic - 8 X A330-200's. I guess that will mean that more A list guys will get slots on them.
The domestic A330's-200's won't have a crew rest. Once again, the floor strength on the -200's is a furphy. The main stumbling block to making them international is the that they would need a complete strip down to reconfigure them.
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Yes the 200 series [longrange] A330s were configured with only enough galley space for 1 meal service. Galley bulkheads are not modular as in the boeing product and are integral to the airframe.
Geniuses those QF executives...........
Geniuses those QF executives...........
Nunc est bibendum
I guess that will mean that more A list guys will get slots on them.
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I don't want to upset QF guys here but I heard the other day that the JQ drivers that are currently flying the 330 will be wetleased back to mainline like aus airlines when it's time to go back...
anyone heard of something similar??
anyone heard of something similar??
Nunc est bibendum
That rumour gets trotted out from time to time. I'm not sure how JQ can do that an still manage to crew the 787 operation....unless they're prepared to pay QF rates of pay in which case you may as well give the aeroplanes to QF.
Keep in mind too that QF is currently wearing significant costs of crew sitting around doing nothing due to having lost the aircraft to J* to start off with. It'd be nuts to keep them doing nothing (but still paying them full QF rates) whilst also paying the J* pilots to flog the aircraft around domestically.
Keep in mind too that QF is currently wearing significant costs of crew sitting around doing nothing due to having lost the aircraft to J* to start off with. It'd be nuts to keep them doing nothing (but still paying them full QF rates) whilst also paying the J* pilots to flog the aircraft around domestically.
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Originally Posted by Owen Stanley
Just out of interest, what would the Profit from Revenue figure be if GD cut QF Pilot's wages to those of VB pilots?
If contribution margin is basically the difference between sales revenue and variable costs - what do you think the problem is with QANTAS? Are the costs too high or is the price too low?
Do you think GD should be trying to cut costs or sales revenue?
Here is what Professor John Shank said about it:
In 1989, John Shank (now Professor Emeritus at Dartmouth University) participated in the same panel discussion as Bob Kaplan. Professor Shank’s comments included the following:
I now believe at the broadest possible level that my [former] support for the contribution margin concept was misplaced and short-sighted. … I have been looking for some big successes from contribution margin analysis for 25 years, and I have come up empty. … In fact, it almost seems to be axiomatic, and let me call it Shank’s Axiom.
• If the problem is small enough so that contribution margin analysis is relevant then it can’t have a very big impact on a company.
• And if the possible impact in a decision setting is major, if it can really affect a company in a major way, then it’s silly to consider most of the factors to be fixed.
… Not only can I find no notable big successes from contribution margin concepts in the real world, I can point to many examples of what I consider to be notable failures from the application of the contribution margin mind-set. … I believe that more than one entire industry has competed itself to the brink of insolvency using contribution-based pricing.
- Journal of Management Accounting Research, 1990 (Fall), p. 17
Professor Shank refers to the trucking and airline industries in the years following their deregulation as two examples to illustrate his point. If an airplane is about to leave the gate with empty seats, the marginal cost of adding additional passengers to fill those seats is almost zero (a small increase in fuel consumption, and a few bags of pretzels, perhaps). Hence, an airline applying contribution margin analysis will make every effort to try to fill the plane to capacity, including offering deeply-discounted, last-minute fares. However, it is an open question as to whether the numerous bankruptcies and near-bankruptcies that have occurred in the airline industry in the years following deregulation resulted from a “contribution margin mind-set,” as Professor Shank suggests, or rather from the underlying economic characteristics of the industry. Given overcapacity in the industry, the fact that airlines have high fixed costs and low variable costs, and the fact that airlines have difficulty differentiating the services that they offer from their competitors, it is not clear that any one airline would have improved its situation using a full costing approach to pricing.
I now believe at the broadest possible level that my [former] support for the contribution margin concept was misplaced and short-sighted. … I have been looking for some big successes from contribution margin analysis for 25 years, and I have come up empty. … In fact, it almost seems to be axiomatic, and let me call it Shank’s Axiom.
• If the problem is small enough so that contribution margin analysis is relevant then it can’t have a very big impact on a company.
• And if the possible impact in a decision setting is major, if it can really affect a company in a major way, then it’s silly to consider most of the factors to be fixed.
… Not only can I find no notable big successes from contribution margin concepts in the real world, I can point to many examples of what I consider to be notable failures from the application of the contribution margin mind-set. … I believe that more than one entire industry has competed itself to the brink of insolvency using contribution-based pricing.
- Journal of Management Accounting Research, 1990 (Fall), p. 17
Professor Shank refers to the trucking and airline industries in the years following their deregulation as two examples to illustrate his point. If an airplane is about to leave the gate with empty seats, the marginal cost of adding additional passengers to fill those seats is almost zero (a small increase in fuel consumption, and a few bags of pretzels, perhaps). Hence, an airline applying contribution margin analysis will make every effort to try to fill the plane to capacity, including offering deeply-discounted, last-minute fares. However, it is an open question as to whether the numerous bankruptcies and near-bankruptcies that have occurred in the airline industry in the years following deregulation resulted from a “contribution margin mind-set,” as Professor Shank suggests, or rather from the underlying economic characteristics of the industry. Given overcapacity in the industry, the fact that airlines have high fixed costs and low variable costs, and the fact that airlines have difficulty differentiating the services that they offer from their competitors, it is not clear that any one airline would have improved its situation using a full costing approach to pricing.
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The Vacuum of Academia
Very few economic rationalists or theorists ever get to manage their own businesses.
Many are employed as consultants who are scape goated when things go awry.
In this thread we have gone from the sublime piece of quantative comparison(posted by Black Panther) to the plagiarized piece of economic fadism posted by PAF.
Run such a dissertation by GD and you would be met with a blank look and a request for another glass of red.
Businesses as large as Qantas are enormously complex.
The rise or fall of these corporations does not hinge on one factor alone.
The comparisons made between QF and VB and hence BG and GD make fascinating reading.
It would appear that BG would do a much better job of running QF than GD and as an employee would be far more cost effective.
GD is very astute at marketing GD
PAF is very astute at Googling
"What would the Profit from revenue figure be if GD cut management incentive bonuses at QF to the same level of those at VB?"
Many are employed as consultants who are scape goated when things go awry.
In this thread we have gone from the sublime piece of quantative comparison(posted by Black Panther) to the plagiarized piece of economic fadism posted by PAF.
Run such a dissertation by GD and you would be met with a blank look and a request for another glass of red.
Businesses as large as Qantas are enormously complex.
The rise or fall of these corporations does not hinge on one factor alone.
The comparisons made between QF and VB and hence BG and GD make fascinating reading.
It would appear that BG would do a much better job of running QF than GD and as an employee would be far more cost effective.
GD is very astute at marketing GD
PAF is very astute at Googling
"What would the Profit from revenue figure be if GD cut management incentive bonuses at QF to the same level of those at VB?"
Last edited by prunezeuss; 9th Oct 2007 at 12:14.
I see you've discovered contribution margins PAF, good on you!
I have some sympathy with the good professors argument as well, marginal cost pricing will drive people out of business simply because at marginal price levels, no one can cover their fixed costs and the result is predictable and disastrous.
However, the true purpose of contribution margin analysis is to compare operating units of a company on a cash basis without the inherent distortions thrown in by cost allocation.
Thats why I wonder about Jetstar. What is its contribution margin compared to mainline? Probably almost zero. What is its cost allocation? Probably almost zero, hence it shows a profit.
Let me give you a fictitious example of an aircraft manufacturing company to ponder.
Total revenues 20,000, 000 variable costs 10,000,000 fixed costs 8,000,000. profit 2,000,000.
Allocated as:
Division Sales Variable cost Contribution Allocated Costs Profit
Structures 10,000,000 5,000,000 5,000,000 2,000,000 3 mill
Engines 5,000,000 3,000,000 2,000,000 1,000,000 1 mill
Foundry 5,000,000 1,000,000 4,000,000 5,000,000 1 mill loss
You then, as a bright little manager, without looking at the contribution margin, decide that your foundry is a loss making proposition and close it.
Think I'm joking? I've seen at least three companies (One public, two private) make exactly that mistake, and in fact CAC used exactly this logic to close its aerospace foundry at Fishermans Bend, and then wondered why it hadn't saved any money, which of course is obvious - you don't get rid of fixed costs that easily.
However cost allocation is the accounting equivalent of metaphysics, and if you haven't seen this example yet, your not getting a good education...
It also illustrates exactly why Qantas will never get prosecuted (or even charged) with predatory pricing over Jetstsar.
I have some sympathy with the good professors argument as well, marginal cost pricing will drive people out of business simply because at marginal price levels, no one can cover their fixed costs and the result is predictable and disastrous.
However, the true purpose of contribution margin analysis is to compare operating units of a company on a cash basis without the inherent distortions thrown in by cost allocation.
Thats why I wonder about Jetstar. What is its contribution margin compared to mainline? Probably almost zero. What is its cost allocation? Probably almost zero, hence it shows a profit.
Let me give you a fictitious example of an aircraft manufacturing company to ponder.
Total revenues 20,000, 000 variable costs 10,000,000 fixed costs 8,000,000. profit 2,000,000.
Allocated as:
Division Sales Variable cost Contribution Allocated Costs Profit
Structures 10,000,000 5,000,000 5,000,000 2,000,000 3 mill
Engines 5,000,000 3,000,000 2,000,000 1,000,000 1 mill
Foundry 5,000,000 1,000,000 4,000,000 5,000,000 1 mill loss
You then, as a bright little manager, without looking at the contribution margin, decide that your foundry is a loss making proposition and close it.
Think I'm joking? I've seen at least three companies (One public, two private) make exactly that mistake, and in fact CAC used exactly this logic to close its aerospace foundry at Fishermans Bend, and then wondered why it hadn't saved any money, which of course is obvious - you don't get rid of fixed costs that easily.
However cost allocation is the accounting equivalent of metaphysics, and if you haven't seen this example yet, your not getting a good education...
It also illustrates exactly why Qantas will never get prosecuted (or even charged) with predatory pricing over Jetstsar.
In discussing the costs incident to various types of operations, the analogy was drawn of the restaurant, which adds a rack of peanuts to the counter, intending to pick up a little additional profit in the usual course of business. However, the accuracy of the analogy is evident when one considers the actual problem faced by the Restaurateur (Joe) as revealed by his Accountant-Efficiency Expert (Eff. Ex.)
EFF. EX. Joe, you said you put in these peanuts because some people ask for them, but do you realize what this rack of peanuts is costing you?
JOE It ain't gonna cost. 'Sgonna be a profit. Sure, I hadda pay $25 for a fancy rack to holda bags, but the peanuts cost 6 cents and I sell 'em for 10 cents. Figger I sell 50 bags a week to start. It'll take 12 ½ weeks to cover the cost of the rack. After that, I gotta clear profit of 4 cents a bag. The more I sell, the more I make.
EFF. EX. That is an antiquated and completely unrealistic approach, Joe. Fortunately, modern accounting procedures permit a more accurate picture which reveals the complexities involved.
JOE Huh?
EFF. EX. To be precise, those peanuts must be integrated into your entire operation and be allocated their appropriate share of business overhead. They must share a proportionate part of your expenditures for rent, heat, light, equipment depreciation, decorating, salaries for your waitresses, cook,...
JOE The cook? What'sa he gotta do wit'a peanuts? He don' even know I got'em!
EFF. EX. Look, Joe, the cook is in the kitchen, the kitchen prepares the food, the food is what brings people in here, and the people ask to buy peanuts. That's why you must charge a portion of the cook's wages, as well as a part of your own salary to peanut sales. This sheet contains a carefully calculated cost analysis which indicates the peanut operation should pay exactly $1,278 per year toward these general overhead costs.
JOE The peanuts? $1,278 a year for overhead? The nuts?
EFF. EX. It's really a little more than that. You also spend money each week to have the windows washed, to have the place swept out in the mornings, and to keep soap in the washroom. That raises the total to $1,313 per year.
JOE (Thoughtfully) But the peanut salesman said I'd make money -- put'em on the end of the counter, he said -- and get 4 cents a bag profit.
EFF. EX. (With a sniff) He's not an accountant. Do you actually know what the portion of the counter occupied by the peanut rack is worth to you?
JOE Ain't worth nothing - no stool there - just a dead spot at the end.
EFF. EX. The modern cost picture permits no dead spots. Your counter contains 60 square feet and your counter business grosses $15,000 a year. Consequently, the square foot of space occupied by the present rack is worth $250 a year. Since you have taken that area away from general counter use, you must charge the value of the space to the occupant.
JOE You mean I gotta add $250 a year more to the peanuts?
EFF. EX. Right. That raises their share of the general operating costs to a grand total of $1,563 per year. Now then, if you sell 50 bags of peanuts per week, these allocated costs will amount to 60 cents per bag.
JOE What?
EFF. EX. Obviously, to that must be added your purchase price of 6 cents per bag, which brings the total to 66 cents. So you see, by selling peanuts at 10 cents per bag, you are losing 56 cents on every sale.
JOE Something's crazy.
EFF. EX. Not at all. Here are the figures. They prove your peanut operation cannot stand on its own feet.
JOE (Brightening) Suppose I sell lotsa peanuts - thousand bags a week 'stead a fifty?
EFF. EX. (Tolerantly) Joe, you don't understand the problem. If the volume of peanut sales increases, your operating costs will go up. You'll have to handle more bags, with more time, more depreciation, more everything. The basic principle of accounting is firm on that subject: "The Bigger the Operation, the More General Overhead Costs that Must be Allocated." No, increasing the volume of sales won't help.
JOE Okay, you're so smart, you tell me what I gotta do.
EFF. EX. (Condescendingly) Well -- you could first reduce the operating expenses.
JOE How?
EFF. EX. Move to a building with cheaper rent. Cut salaries. Wash the windows bi-weekly. Have the floor swept only on Thursday. Remove the soap from the washrooms. Decrease the square foot value of your counter. For example, if you can cut your expenses 50%, that will reduce the amount allocated to peanuts from $1,563 down to $781.50 per year, reducing the cost to 35 cents per bag.
JOE (Slowly) That's better.
EFF. EX. Much, much better. However, even then you would lose 26 cents per bag if you charge only 10 cents. Therefore, you must also raise your selling price. If you want a net profit of 4 cents per bag, you would have to charge 40 cents.
JOE (Flabbergasted) You mean after I cut operating costs 50%, I still gotta charge 40 cents for a 10 cent bag of peanuts? Nobody's that nuts about nuts. Who'd buy 'em?
EFF. EX. That's a secondary consideration. The point is at 40 cents, you'd be selling at a price based upon a true and proper evaluation of your then reduced costs.
JOE (Eagerly) Look! I got a better idea. Why don't I just throw the nuts out -- put 'em in a trash can?
EFF. EX. Can you afford it?
JOE Sure. All I got is about 50 bags of peanuts -- cost about three bucks -- so I lose $25 on the rack, but I'm outa this nutsy business and no more grief.
EFF. EX. (Shaking head) Joe, it isn't quite that simple. You are in the peanut business! The minute you throw those peanuts out, you are adding $1,563 of annual overhead to the rest of your operation. Joe, be realistic -- can you afford to do that?
JOE (Completely crushed) It'sa unbelievable! Last week, I was gonna make money. Now, I'm in a trouble -- justa because I think peanuts on a counter is a gonna bring me some extra profit -- justa because I believe 50 bags of peanuts a week is a easy.
EFF. EX. (With raised eyebrow) That is the object of modern cost studies, Joe, to dispel false illusions.
EFF. EX. Joe, you said you put in these peanuts because some people ask for them, but do you realize what this rack of peanuts is costing you?
JOE It ain't gonna cost. 'Sgonna be a profit. Sure, I hadda pay $25 for a fancy rack to holda bags, but the peanuts cost 6 cents and I sell 'em for 10 cents. Figger I sell 50 bags a week to start. It'll take 12 ½ weeks to cover the cost of the rack. After that, I gotta clear profit of 4 cents a bag. The more I sell, the more I make.
EFF. EX. That is an antiquated and completely unrealistic approach, Joe. Fortunately, modern accounting procedures permit a more accurate picture which reveals the complexities involved.
JOE Huh?
EFF. EX. To be precise, those peanuts must be integrated into your entire operation and be allocated their appropriate share of business overhead. They must share a proportionate part of your expenditures for rent, heat, light, equipment depreciation, decorating, salaries for your waitresses, cook,...
JOE The cook? What'sa he gotta do wit'a peanuts? He don' even know I got'em!
EFF. EX. Look, Joe, the cook is in the kitchen, the kitchen prepares the food, the food is what brings people in here, and the people ask to buy peanuts. That's why you must charge a portion of the cook's wages, as well as a part of your own salary to peanut sales. This sheet contains a carefully calculated cost analysis which indicates the peanut operation should pay exactly $1,278 per year toward these general overhead costs.
JOE The peanuts? $1,278 a year for overhead? The nuts?
EFF. EX. It's really a little more than that. You also spend money each week to have the windows washed, to have the place swept out in the mornings, and to keep soap in the washroom. That raises the total to $1,313 per year.
JOE (Thoughtfully) But the peanut salesman said I'd make money -- put'em on the end of the counter, he said -- and get 4 cents a bag profit.
EFF. EX. (With a sniff) He's not an accountant. Do you actually know what the portion of the counter occupied by the peanut rack is worth to you?
JOE Ain't worth nothing - no stool there - just a dead spot at the end.
EFF. EX. The modern cost picture permits no dead spots. Your counter contains 60 square feet and your counter business grosses $15,000 a year. Consequently, the square foot of space occupied by the present rack is worth $250 a year. Since you have taken that area away from general counter use, you must charge the value of the space to the occupant.
JOE You mean I gotta add $250 a year more to the peanuts?
EFF. EX. Right. That raises their share of the general operating costs to a grand total of $1,563 per year. Now then, if you sell 50 bags of peanuts per week, these allocated costs will amount to 60 cents per bag.
JOE What?
EFF. EX. Obviously, to that must be added your purchase price of 6 cents per bag, which brings the total to 66 cents. So you see, by selling peanuts at 10 cents per bag, you are losing 56 cents on every sale.
JOE Something's crazy.
EFF. EX. Not at all. Here are the figures. They prove your peanut operation cannot stand on its own feet.
JOE (Brightening) Suppose I sell lotsa peanuts - thousand bags a week 'stead a fifty?
EFF. EX. (Tolerantly) Joe, you don't understand the problem. If the volume of peanut sales increases, your operating costs will go up. You'll have to handle more bags, with more time, more depreciation, more everything. The basic principle of accounting is firm on that subject: "The Bigger the Operation, the More General Overhead Costs that Must be Allocated." No, increasing the volume of sales won't help.
JOE Okay, you're so smart, you tell me what I gotta do.
EFF. EX. (Condescendingly) Well -- you could first reduce the operating expenses.
JOE How?
EFF. EX. Move to a building with cheaper rent. Cut salaries. Wash the windows bi-weekly. Have the floor swept only on Thursday. Remove the soap from the washrooms. Decrease the square foot value of your counter. For example, if you can cut your expenses 50%, that will reduce the amount allocated to peanuts from $1,563 down to $781.50 per year, reducing the cost to 35 cents per bag.
JOE (Slowly) That's better.
EFF. EX. Much, much better. However, even then you would lose 26 cents per bag if you charge only 10 cents. Therefore, you must also raise your selling price. If you want a net profit of 4 cents per bag, you would have to charge 40 cents.
JOE (Flabbergasted) You mean after I cut operating costs 50%, I still gotta charge 40 cents for a 10 cent bag of peanuts? Nobody's that nuts about nuts. Who'd buy 'em?
EFF. EX. That's a secondary consideration. The point is at 40 cents, you'd be selling at a price based upon a true and proper evaluation of your then reduced costs.
JOE (Eagerly) Look! I got a better idea. Why don't I just throw the nuts out -- put 'em in a trash can?
EFF. EX. Can you afford it?
JOE Sure. All I got is about 50 bags of peanuts -- cost about three bucks -- so I lose $25 on the rack, but I'm outa this nutsy business and no more grief.
EFF. EX. (Shaking head) Joe, it isn't quite that simple. You are in the peanut business! The minute you throw those peanuts out, you are adding $1,563 of annual overhead to the rest of your operation. Joe, be realistic -- can you afford to do that?
JOE (Completely crushed) It'sa unbelievable! Last week, I was gonna make money. Now, I'm in a trouble -- justa because I think peanuts on a counter is a gonna bring me some extra profit -- justa because I believe 50 bags of peanuts a week is a easy.
EFF. EX. (With raised eyebrow) That is the object of modern cost studies, Joe, to dispel false illusions.
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We can hope...
Here s a little gem lifted from Wikipedia...
After the failed Qantas takeover bid in December 2006, and on the back of growing concern of Qantas' future due to the A380 debacle, an independent review of the board of directors by the shareholder's representative group found irregularities and serious shortcomings in the current leadership. The outcome was a vote of no confidence in Mr. Dixon's continuing leadership; as well as that of Peter Gregg (CFO) and John Borghetti (GM) and a recommendation to call a new board election. This is expected to occur towards the end of the year.
Here s a little gem lifted from Wikipedia...
After the failed Qantas takeover bid in December 2006, and on the back of growing concern of Qantas' future due to the A380 debacle, an independent review of the board of directors by the shareholder's representative group found irregularities and serious shortcomings in the current leadership. The outcome was a vote of no confidence in Mr. Dixon's continuing leadership; as well as that of Peter Gregg (CFO) and John Borghetti (GM) and a recommendation to call a new board election. This is expected to occur towards the end of the year.
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Originally Posted by PpruneZeuss
the plagiarized piece of economic fadism posted by PAF.
Sunfish:
Your example is fine as such but consider Relevant Cost if you are comparing operating a Jetstar Aircraft vs. a QANTAS aircraft. I don't think your example really considers mutually exclusive projects. Not to mention the fact that proper analysis of Fixed Costs would not result in the decision you highlight in your example. You're right though that the allocation of fixed costs to specific projects can be a pitfall - however I'm not sure how this applies to the Jetstar / QANTAS example (aka GD performance)
NPV (Net Present Value) is the key. Especially if you consider the Jetstar creation / expansion as a mutually exclusive project to expanding mainline. The highest NPV wins.
Comparing various projects across an enterprise purely on the basis of return is a bad way to do things. It implies that the cost of capital for a particular project (i.e. the risk) is the same as the average for the enterprise. The market demands that the return on equity is based on the risk to that equity. Naturally if QANTAS changes its risk appetite then things change.
What you should be asking is does Jetstar add to the shareholder value of the Qantas group? If it does the next question is which adds more to shareholder value - ploughing resources into Jetstar as opposed to mainline.
All other things being equal - the market opinion of QANTAS (Geoff Dixon, the board et al) is factored into the share price. If that has been rising it either implies that the market is expecting or witnessing increased returns or the risk level of QANTAS as a business has fallen.
Contribution Margins can help when allocating a scarce resource so yes if pilots / aircraft etc can be transferred between the group, Contribution margins (especially during a pilot shortage) may be relevant. However I'd assert that's a short term decision.
For example which route to allocate airframes and crew to in the next few months. The introduction of something like Jetstar is a long-term decision (i.e. Capital budgeting decision). As such NPV is the order of the day.
I think your fascination with Contribution margins is based on some experience you've had with short term resource allocation. Add into the NPV mix sensitivity analysis and Jetstar may look even better.
So in short - no I haven't just discovered "contribution margin" I just don't think it's applicable to capital budgeting decisions. There is a reason why the majority of CFO's use NPV.
It's not a one sided "I love management" perspective. My opinion works both ways. For example I think that any pilot signing onto a 5 year (or even 3 year contract - AWA or EBA) at the moment for a pay rise you would like this year is crazy. Again it comes to risk - the airline can see a near full employment economy (possible inflation) and looming pilot shortage. They are just transferring the risk of these increases to pilots.
Last edited by Pass-A-Frozo; 10th Oct 2007 at 08:39.
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PAFs Corporate Empire
PAF
How many people do you employ.?
What is the nature of your corporate empire.?
Like most pseudo academics you hide behind poly syllabic profundities.
When it comes to the courage and vision required to initiate a business you are found sadly lacking.
An armchair CEO sans credibility
You are flying in circles of ever decreasing radius and will eventually disappear.
For you a quote and plagiarism are one in the same ie. they belong to someone else and are not your own original thought.
How many people do you employ.?
What is the nature of your corporate empire.?
Like most pseudo academics you hide behind poly syllabic profundities.
When it comes to the courage and vision required to initiate a business you are found sadly lacking.
An armchair CEO sans credibility
You are flying in circles of ever decreasing radius and will eventually disappear.
For you a quote and plagiarism are one in the same ie. they belong to someone else and are not your own original thought.
Last edited by DEFCON4; 10th Oct 2007 at 12:42.
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DEFCON4,
I apply my knowledge in a private sense and that's all you need to know about that. Not everyone in society earns their money and spends it all on repaying debt or consumer goods and you're off the mark to suggest I do (although not so long ago that's what I did do!).
The thread is about the financial analysis of QF's performance of late. What would you like that assessment based on? I understand from all your posts on the Cabin Crew threads you dislike management but how about offering a financial solution if you think the company is being financially mismanaged at the strategic level. I'm not sure what you would base that on if you don't believe in any kind of financial theory or the application of that theory. It's not some kind of 1st year Uni English theory - it's knowledge applied by those in corporate finance. Am I one of the top 10 CFO's in Australia - no . Does that infer that what I'm talking about is fatally floored - I'd say no. If you say yes then you should justify why using statements not just based on "I'm Cabin Crew and I don't think it works that way"
What's you basis for believing that financial tertiary education in this country is off the mark?
Come on mate. You have internet access - you can find out the difference.
I apply my knowledge in a private sense and that's all you need to know about that. Not everyone in society earns their money and spends it all on repaying debt or consumer goods and you're off the mark to suggest I do (although not so long ago that's what I did do!).
The thread is about the financial analysis of QF's performance of late. What would you like that assessment based on? I understand from all your posts on the Cabin Crew threads you dislike management but how about offering a financial solution if you think the company is being financially mismanaged at the strategic level. I'm not sure what you would base that on if you don't believe in any kind of financial theory or the application of that theory. It's not some kind of 1st year Uni English theory - it's knowledge applied by those in corporate finance. Am I one of the top 10 CFO's in Australia - no . Does that infer that what I'm talking about is fatally floored - I'd say no. If you say yes then you should justify why using statements not just based on "I'm Cabin Crew and I don't think it works that way"
What's you basis for believing that financial tertiary education in this country is off the mark?
For you a quote and plagiarism are one in the same
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Off The Mark... Why?
I have a B.Comm.LLB From UNSW and it counts for nothing other than to understand the pseudo intellectual tripe that you and your ilk carry on with.
BTW...I am not your mate.
BTW...I am not your mate.
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Good University! It's a shame you didn't carry on to study some Masters level Finance.
UNSW B.Comm course - 2 units of Economics and maybe one of Finance if you wanted it as an elective?
UNSW B.Comm course - 2 units of Economics and maybe one of Finance if you wanted it as an elective?
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The Black Panther,
Excellent and thought provoking post, I can only hope other QF shareholders and decision makers read it.
Not too sure about some of the thread hijackers after you though!?!
Excellent and thought provoking post, I can only hope other QF shareholders and decision makers read it.
Not too sure about some of the thread hijackers after you though!?!
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Quite So....My Apologies
Black Panther..... quite an outstanding piece of analysis
We have a compliant media who have been hoodwinked into believing that QF management are superlative.
Closer scrutiny such as yours indicates that they are not.
Lets hope that this rolling stone obtains a lot more traction.
We have a compliant media who have been hoodwinked into believing that QF management are superlative.
Closer scrutiny such as yours indicates that they are not.
Lets hope that this rolling stone obtains a lot more traction.
NPV's are about projects Frozo, and when you do your NPV you also have to take into account costs.
What has been discussed and suspected about Qantas is that "The Qantas Group" is a fiction, Jetstar is profitable because the accounts are structured to make it appear profitable, and showing Jetstar making money is a convenient way to hide the enormous profits Qantas mainline makes from gouging the flying public.
There is a book you should read (probably long out of print) called "Up the Organisation" about the rescue of Avis many years ago.
One of the things management contemplated at the time was setting up a separate "discounted" car hire operation to compete against the cheaper discount operators without compromising high revenue corporate account sales for the main Avis brand.
The project looked good on paper until the marketing manager said "In Poland, we call that pissing in the soup".
The Jetstar operation is "pissing in the soup" in marketing terms. And if Qantas think that starting Jetstar and outsourcing engineering pass for a good corporate strategy then good luck.
P.S. The more usual name for "pissing in the soup" is cannibalisation.
What has been discussed and suspected about Qantas is that "The Qantas Group" is a fiction, Jetstar is profitable because the accounts are structured to make it appear profitable, and showing Jetstar making money is a convenient way to hide the enormous profits Qantas mainline makes from gouging the flying public.
There is a book you should read (probably long out of print) called "Up the Organisation" about the rescue of Avis many years ago.
One of the things management contemplated at the time was setting up a separate "discounted" car hire operation to compete against the cheaper discount operators without compromising high revenue corporate account sales for the main Avis brand.
The project looked good on paper until the marketing manager said "In Poland, we call that pissing in the soup".
The Jetstar operation is "pissing in the soup" in marketing terms. And if Qantas think that starting Jetstar and outsourcing engineering pass for a good corporate strategy then good luck.
P.S. The more usual name for "pissing in the soup" is cannibalisation.
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I love these threads where us wonderful pilots hurl abuse at each other. Really helps us in the big picture (now which big picture was that?)
Now, where is Darth Bobo ... have we forgotten him?
N
Now, where is Darth Bobo ... have we forgotten him?
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Leaving aside the mind-numbingly boring and largely irrelevant-to-the-argument pages of dry economic theory, I think Sunfish is quite correct. JQ is structured to show a profit regardless. There is no more "raw" example of this than the Honolulu manager who tried to bill a million dollars worth of logistics support (A330 spares, and so on) to Jetstar on commencement of their HNL services, to be told by the accounts people that the bill goes to Qantas. On querying this, it was apparently suggested in no uncertain terms that he wind his neck in, and do as he's told.
Also, if you were a shareholder before the failed APA bid, I can't understand how you wouldn't be absolutely spitting chips if you sold your shares on the Board's (and hence GDs) advice, knowing how the bid ended up and what happened to the share price afterwards.
Under GD, Qantas has turned a good profit, and people may argue that this proves his credentials. However in the current environment, with the levels of protection QF has on the lucrative routes, Daffy Duck could also make QF turn a profit, and GD and his team have made some horrendous screwups along the way.
Also, if you were a shareholder before the failed APA bid, I can't understand how you wouldn't be absolutely spitting chips if you sold your shares on the Board's (and hence GDs) advice, knowing how the bid ended up and what happened to the share price afterwards.
Under GD, Qantas has turned a good profit, and people may argue that this proves his credentials. However in the current environment, with the levels of protection QF has on the lucrative routes, Daffy Duck could also make QF turn a profit, and GD and his team have made some horrendous screwups along the way.