Merged: QF/JQ reduce capacity
I smell a RAT!!!
Fuel goes up, fares goes up. Everyone's doing it, so why cancel services?
Maybe they have realised the pool of suitably qualified pilots is in fact finite. Maybe in their projections, there won't be enough drivers to crew all of their services.
If you follow the logic (see bullsh!t), then why not ground all your aircraft. fuel then won't cost you a cent!
Fuel goes up, fares goes up. Everyone's doing it, so why cancel services?
Maybe they have realised the pool of suitably qualified pilots is in fact finite. Maybe in their projections, there won't be enough drivers to crew all of their services.
If you follow the logic (see bullsh!t), then why not ground all your aircraft. fuel then won't cost you a cent!
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Tankengine, its like a poorly acted school play.
Ohhh pilot shortage....now we have to cut routes (rex qlink) because of those pesky pilots (its their fault - some of them call sick).
Eeeww high fuel....
mrunionwecan'taffordthatwe'llgivey ou2%
The same old overpaid novices.
Ohhh pilot shortage....now we have to cut routes (rex qlink) because of those pesky pilots (its their fault - some of them call sick).
Eeeww high fuel....
mrunionwecan'taffordthatwe'llgivey ou2%The same old overpaid novices.
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Well I would have thought that with higher fuel prices there is automatically higher airfares. Unfortunately the public doesn't want to pay more money (airfares being price elastic) so discretionary travel declines hence less planes required and so on down the economic tree. In the end pilots jobs reflect the desire of the public to fly. If it is too expensive they don't fly and that is that..
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Lazysundays,
Well yes, but as Coaldemon points out, if the price of your biggest input goes up, but your revenue stays the same, you get thinner margins; to keep your margin, you have to raise your prices. But that means less people buying - so less supply (ie. seats) required.
Best to take your most expensive-to-run bits of kit (ie. Classics of all sorts & other oldies) out and leave it to the newer, more efficient ones to take up the slack - or just cut the marginal routes.
Might all mean a bit of harder arguing with Boeing to get compensation for the787 delays though, as QF will be wanting to get the latest, most efficient kit they can up the line. So maybe some more 76s or 330s (with the latest donks) or even a few 777s for a while!!
Well yes, but as Coaldemon points out, if the price of your biggest input goes up, but your revenue stays the same, you get thinner margins; to keep your margin, you have to raise your prices. But that means less people buying - so less supply (ie. seats) required.
Best to take your most expensive-to-run bits of kit (ie. Classics of all sorts & other oldies) out and leave it to the newer, more efficient ones to take up the slack - or just cut the marginal routes.
Might all mean a bit of harder arguing with Boeing to get compensation for the787 delays though, as QF will be wanting to get the latest, most efficient kit they can up the line. So maybe some more 76s or 330s (with the latest donks) or even a few 777s for a while!!
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Dixon is just manufacturing a gloom and doom story to smash the LAMES.
If there was such gloom and doom, why didn't yesterdays announcement coincide with a profit downgrade. Under the ASX continuous disclosure rules they must keep the market informed of any profit downgrades.
Put simply, there is no forecast hit to profits.
They're not actually sitting planes on the ground. They are just keeping a few spares in the system to minimise delays due to the LAMES action. It will cut their fuel cost by a couple of %, better enable them to manage the disruptions due to the LAMES and create a gloom and doom story to scare everyone. PERFECT!!!!!!!!!!
When has GD deferred executive pay reviews to? From July till August?? My bet is that if they are sucessful in keeping the LAMES and other unions to 3% then they will instantly restore those services and gives themselves a huge pay rise for a job well done.(paradoxically, its probably justified if the unions whimp out of this fight!!)
Its a great tactic that 95% of the public and some QF staff will swallow. I guess it all hinges on whether 50% of LAMES swallow it. I hope not!!
If there was such gloom and doom, why didn't yesterdays announcement coincide with a profit downgrade. Under the ASX continuous disclosure rules they must keep the market informed of any profit downgrades.
Put simply, there is no forecast hit to profits.
They're not actually sitting planes on the ground. They are just keeping a few spares in the system to minimise delays due to the LAMES action. It will cut their fuel cost by a couple of %, better enable them to manage the disruptions due to the LAMES and create a gloom and doom story to scare everyone. PERFECT!!!!!!!!!!
When has GD deferred executive pay reviews to? From July till August?? My bet is that if they are sucessful in keeping the LAMES and other unions to 3% then they will instantly restore those services and gives themselves a huge pay rise for a job well done.(paradoxically, its probably justified if the unions whimp out of this fight!!)
Its a great tactic that 95% of the public and some QF staff will swallow. I guess it all hinges on whether 50% of LAMES swallow it. I hope not!!
Guys I'm sorry to say but its looks like QF are starting to reduce their leisure routes, so there is every possibility that they are looking to continue with the "downsize". Its just an excuse, but a plausible one at that.
The fact that the A321 for JQ was scrapped was because of the poor condition of the airframe and the paper trail which seemed never ending. The A320, I'm pretty sure, was the A320 that is going back to Jetstar Asia or to Jetstar Pacific a little earlier then planned.
Its funny how no-one has mentioned the capacity increase in JQ of 30% over the coming months. I sense some Melbourne Ayres Rock and Sydney Ayres Rock sectors going JQ's way. Though people would not like to admit it, JQ will be the driving force behind cost reductions and the ever increasing price of fuel. The low cost base has been established, which is specifically what QF is looking to do to mainline, reduce non-fuel related costs. Maybe the day will come where JQ provides all ground services. Who knows.....
Interesting times ahead......... I hope EVERYONE comes out through the other side. Fingers Crossed. Bring on Brazils and China's entry and re-entry into the international oil market. Though at current prices, if that were to happen it wouldn't surprise me if they reduced production worldwide to keep the price as high as it is. Keep on hedging.
The fact that the A321 for JQ was scrapped was because of the poor condition of the airframe and the paper trail which seemed never ending. The A320, I'm pretty sure, was the A320 that is going back to Jetstar Asia or to Jetstar Pacific a little earlier then planned.
Its funny how no-one has mentioned the capacity increase in JQ of 30% over the coming months. I sense some Melbourne Ayres Rock and Sydney Ayres Rock sectors going JQ's way. Though people would not like to admit it, JQ will be the driving force behind cost reductions and the ever increasing price of fuel. The low cost base has been established, which is specifically what QF is looking to do to mainline, reduce non-fuel related costs. Maybe the day will come where JQ provides all ground services. Who knows.....
Interesting times ahead......... I hope EVERYONE comes out through the other side. Fingers Crossed. Bring on Brazils and China's entry and re-entry into the international oil market. Though at current prices, if that were to happen it wouldn't surprise me if they reduced production worldwide to keep the price as high as it is. Keep on hedging.
Why let JQ run to AYE when QF has a monopoly on the route and can pretty much charge as they please? Makes no sense when you slug them for premium prices.
As for the parking of jets, classic retirements are nothing new, parking a 737, probably a Jet Connect 300, they didn't spec mainline, probably replace it with a 400 from the mainline. Another 800 is just about to turn up along with a few to follow. A321 is surpirsing but if the airframe is rubbish then that is probably a good thing.
Having a look at the routes and especially the turn around times is a good thing. Nothing spells delay and therefore more fuel burn than 35 minute turnarounds with aircraft changes.
As for the parking of jets, classic retirements are nothing new, parking a 737, probably a Jet Connect 300, they didn't spec mainline, probably replace it with a 400 from the mainline. Another 800 is just about to turn up along with a few to follow. A321 is surpirsing but if the airframe is rubbish then that is probably a good thing.
Having a look at the routes and especially the turn around times is a good thing. Nothing spells delay and therefore more fuel burn than 35 minute turnarounds with aircraft changes.
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Dixon is just manufacturing a gloom and doom story to smash the LAMES.
Couldn't say it better my self..... Funny they announce this just before the industrial action.
Smell a rat
Couldn't say it better my self..... Funny they announce this just before the industrial action.
Smell a rat
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get real..........?
Does that wrinkled ol fool at the helm of QF honestly think that all of us are so stupid to fall for this......... obviously the public will be.
The JQ A321 was cancelled because it was in such apaulling condition and all of us that have anything to do with JQ know it.
The B737-400 are on the hit list to go as the new 800's arrive and there is one of these turning up in June.....Der
The B747-300 were going at the end of the year anyway as the A380's arrive
The ZX series 767's are pretty close to stuffed, I am not sure on their leases but were to start to disappear from this year onwards as well.
A reduction in holiday destinantions....... Well?..... let me see, isnt most of the country currently experiencing winter of some sort ...... isnt this the time we all travel least....... Der
I smell a wave of EBA's coming up, so we can all be told how bad off its going to be for us all. As for the exec salaries, 1000 of, btw thats 1 exec to every 36 employees (a little top heavy), thats to make us feel good about not getting paid.
Well mr di*k son (Dixson) , a lot of LAME's took a 6% pay reduction over the last 18months because this company begged us to re-roster to save a amount of money for rough times ahead, then only to turn around after it was all over announce another record profit. cmon give us a break if you mr GD cant say something positive then dont say it....... no wonder the QF moral is shot to pieces
The JQ A321 was cancelled because it was in such apaulling condition and all of us that have anything to do with JQ know it.
The B737-400 are on the hit list to go as the new 800's arrive and there is one of these turning up in June.....Der
The B747-300 were going at the end of the year anyway as the A380's arrive
The ZX series 767's are pretty close to stuffed, I am not sure on their leases but were to start to disappear from this year onwards as well.
A reduction in holiday destinantions....... Well?..... let me see, isnt most of the country currently experiencing winter of some sort ...... isnt this the time we all travel least....... Der
I smell a wave of EBA's coming up, so we can all be told how bad off its going to be for us all. As for the exec salaries, 1000 of, btw thats 1 exec to every 36 employees (a little top heavy), thats to make us feel good about not getting paid.
Well mr di*k son (Dixson) , a lot of LAME's took a 6% pay reduction over the last 18months because this company begged us to re-roster to save a amount of money for rough times ahead, then only to turn around after it was all over announce another record profit. cmon give us a break if you mr GD cant say something positive then dont say it....... no wonder the QF moral is shot to pieces
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It's interesting that some of the reporting is also stating that there will be a recruitment freeze - heard this on the ABC last night and was puzzled when it failed to materialize in the Media Release etc.
It's also reported on ABC Online and News.
So...is that a recruitment freeze only for non-457 applicants?
Interesting, though, that if this is supposedly aimed at the LAMEs & Joe Public that S&P have also fallen for the spin and cut QF's credit rating - now that will hit the bottom line.
BD
It's also reported on ABC Online and News.
So...is that a recruitment freeze only for non-457 applicants?
Interesting, though, that if this is supposedly aimed at the LAMEs & Joe Public that S&P have also fallen for the spin and cut QF's credit rating - now that will hit the bottom line.
BD
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I hope the lames union among others, get their PR people on message with this ASAP.
This is just another cynical ploy by Dixon in his obsession to destroy collective bargaining in Qantas. As others have already mentioned there is nothing new in these aircraft 'retirements'. The timing is of course perfect..eh Mr Oldmeadow.
Qantas executive management, if you are serious about saving money, give back some of the millions of dollars in bonus's you've raked out of the company in recent years.
What is that I hear? 'No' you say...of course I expected nothing less.
You greedy B
d's!
This is just another cynical ploy by Dixon in his obsession to destroy collective bargaining in Qantas. As others have already mentioned there is nothing new in these aircraft 'retirements'. The timing is of course perfect..eh Mr Oldmeadow.
Qantas executive management, if you are serious about saving money, give back some of the millions of dollars in bonus's you've raked out of the company in recent years.
What is that I hear? 'No' you say...of course I expected nothing less.
You greedy B
d's!
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My first thought when hearing of this 'news' yesterday was 'what's the real story?' contacting mates working at the Rat i found out there was no story, just the same old spin and BS from past masters of it.
Is any one still surprised at this mob and their tactics? most on this forum aren't of course, but the great unwashed are.
Will be interesting to see the accompanying Spin & BS when the currant round of EBA's etc are out.
Now that the public have been primed for poor old Qantas doing it hard they may have the publics sympathy on clamping down on 'excessive' employee wage/condition requests.
Screw the workers a bit more GD, mission accomplished.
GD & Co continue to set new corporate lows.
Is any one still surprised at this mob and their tactics? most on this forum aren't of course, but the great unwashed are.
Will be interesting to see the accompanying Spin & BS when the currant round of EBA's etc are out.
Now that the public have been primed for poor old Qantas doing it hard they may have the publics sympathy on clamping down on 'excessive' employee wage/condition requests.
Screw the workers a bit more GD, mission accomplished.
GD & Co continue to set new corporate lows.
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Having now seen the QF promotions it looks like the recent allocations account for the reduction in flying, 27 Classic Captains awarded slots on other types should just about do it for 4 a/c. Should this be the case then the question is, how long ago were these reductions planned? Allocations are not done overnight.
ALthough I believe it will be the LCC who are most affected by high oil prices, I find it hard to believe that QF would not seek other opportunities for the JQ cost structure.
Nevertheless, whilst some put their heads in the sand and hope this will 'blow over' the harsh reality may be that we are seeing yet another paradigm shift in the airline industry.
ALthough I believe it will be the LCC who are most affected by high oil prices, I find it hard to believe that QF would not seek other opportunities for the JQ cost structure.
Nevertheless, whilst some put their heads in the sand and hope this will 'blow over' the harsh reality may be that we are seeing yet another paradigm shift in the airline industry.
Yeah Rak a San...good points!
QF have been keeping capacity for a long time now and this is no supprise. Dixon's good at the spin associating it with the oil price.
The Cooly flights have been on the nose for a while...QF would have left long ago if it wasn't for the local white shoe brigade that don't want Jetstar!
Great timing too with the EBA's....notice there hasn't been any profit downgrades announced.
Fares have gone up indicating Qantas feel the market can absorb it but then announce capacity cuts...doesn't make sense in the pure business sense.
QF have been keeping capacity for a long time now and this is no supprise. Dixon's good at the spin associating it with the oil price.
The Cooly flights have been on the nose for a while...QF would have left long ago if it wasn't for the local white shoe brigade that don't want Jetstar!
Great timing too with the EBA's....notice there hasn't been any profit downgrades announced.
Fares have gone up indicating Qantas feel the market can absorb it but then announce capacity cuts...doesn't make sense in the pure business sense.
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Yeah Rak a San is right!
The 321 they cancelled is a heap of $hit.
I'd place money on no aircraft being *parked* as they'd have us believe.
The 320 suggested as being parked will pick up the QF OOL flights, plus i wouldn't mind betting additional SYD-AVV flights.
If the 787s were to arrive on time, do you think there would be this "reduction" in capacity?? No, I don't think so. There's only so much sticky tape you can apply to an old aircraft.
Where are the lurking journos now???
Oh crap, what's that? A piece of the sky just fell on their heads.
The 321 they cancelled is a heap of $hit.
I'd place money on no aircraft being *parked* as they'd have us believe.
The 320 suggested as being parked will pick up the QF OOL flights, plus i wouldn't mind betting additional SYD-AVV flights.
If the 787s were to arrive on time, do you think there would be this "reduction" in capacity?? No, I don't think so. There's only so much sticky tape you can apply to an old aircraft.
Where are the lurking journos now???
Oh crap, what's that? A piece of the sky just fell on their heads.
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More than fuel behind the Qantas capacity cuts
Ben Sandilands @ Crikey writes:
The screwing has only just begun for Australian air travellers.
The Qantas decision to cut capacity by around 5% is nothing compared to 10-11% groundings announced by carriers like American and Air France/KLM, and confirmations that major reductions will be made by the three biggest low cost carriers of all, Southwest, Ryanair and easyJet.
But the oil screen that Qantas was surprisingly slow to erect, and Virgin Blue might copy any moment, hides other developments.
Qantas is out to bust the backside off its pilot and maintenance unions much faster and harder than ever before, helped at least so far by the Rudd government’s quick compliance with a demand that it approve 457 visas to import foreign pilots for it’s Jetstar subsidiary rather than transfer pilots from its own operations.
This strategy is stressing the relationship between the Australian Federation of Air Pilots which covers significant numbers of Jetstar and Virgin Blue pilots and the Australian and International Pilots Association, the Qantas union, which is held in condescending contempt by the carrier’s management.
Of course this divide and destroy approach, under the cover of an oil price emergency, might fail. Jetstar isn’t in the game when it comes to competing in the global pilot market against Emirates, Etihad or even Singapore Airlines.
And the Qantas fleet groundings are not news. They include three aged and chronically unreliable Boeing 747-300s that ground themselves as soon as they are towed toward a passenger gate, and have individually and collectively paralysed the transcontinental schedules to Perth for hours at a time, and even more than a day, throughout this year.
Qantas and Virgin Blue are sitting on a mountain of cash capable of covering their operating costs for months on end if the guidance they gave in their last financial reports is holding true, and killing off older jets, returning expiring leases and forcing passengers into fewer and, if humanly possible, fuller jets at much higher fares all makes perfect sense for shareholders.
The six jets to be deferred or grounded by Qantas represent around 1650 seats in domestic service, or more than twice the 720 seats offered by the token Tiger Airways fleet of four, but going on five, A320s.
Tiger counts for nothing in the current situation. It has no useful frequencies, it doesn’t fly to Sydney at all, and it has the most punitive check-in and baggage rules. It will fly for just as long as its 49% owner Singapore Airlines can stand the pain.
It’s declared target market for ultra-cheapies comprises people who can no longer afford to drive to an airport to use a $29 fare and get shafted for all the "extras".
The fuel shock dynamics for Qantas/Jetstar and Virgin Blue are more uncertain. It could be that Virgin Blue’s being in the middle, between the expensive Qantas product, and the crammed in Jetstar experience, is also where the higher yielding frequent fliers might migrate faced with constantly rising fares and fewer and in some case no Qantas seats.
Then again, Virgin Blue’s trolley snacks from hell and satellite news by Foxtel can make what’s left of the Qantas Cityflyer timetable look really good.
There is going to be a lot more screwing before any winners emerge from behind the oil screens.
The screwing has only just begun for Australian air travellers.
The Qantas decision to cut capacity by around 5% is nothing compared to 10-11% groundings announced by carriers like American and Air France/KLM, and confirmations that major reductions will be made by the three biggest low cost carriers of all, Southwest, Ryanair and easyJet.
But the oil screen that Qantas was surprisingly slow to erect, and Virgin Blue might copy any moment, hides other developments.
Qantas is out to bust the backside off its pilot and maintenance unions much faster and harder than ever before, helped at least so far by the Rudd government’s quick compliance with a demand that it approve 457 visas to import foreign pilots for it’s Jetstar subsidiary rather than transfer pilots from its own operations.
This strategy is stressing the relationship between the Australian Federation of Air Pilots which covers significant numbers of Jetstar and Virgin Blue pilots and the Australian and International Pilots Association, the Qantas union, which is held in condescending contempt by the carrier’s management.
Of course this divide and destroy approach, under the cover of an oil price emergency, might fail. Jetstar isn’t in the game when it comes to competing in the global pilot market against Emirates, Etihad or even Singapore Airlines.
And the Qantas fleet groundings are not news. They include three aged and chronically unreliable Boeing 747-300s that ground themselves as soon as they are towed toward a passenger gate, and have individually and collectively paralysed the transcontinental schedules to Perth for hours at a time, and even more than a day, throughout this year.
Qantas and Virgin Blue are sitting on a mountain of cash capable of covering their operating costs for months on end if the guidance they gave in their last financial reports is holding true, and killing off older jets, returning expiring leases and forcing passengers into fewer and, if humanly possible, fuller jets at much higher fares all makes perfect sense for shareholders.
The six jets to be deferred or grounded by Qantas represent around 1650 seats in domestic service, or more than twice the 720 seats offered by the token Tiger Airways fleet of four, but going on five, A320s.
Tiger counts for nothing in the current situation. It has no useful frequencies, it doesn’t fly to Sydney at all, and it has the most punitive check-in and baggage rules. It will fly for just as long as its 49% owner Singapore Airlines can stand the pain.
It’s declared target market for ultra-cheapies comprises people who can no longer afford to drive to an airport to use a $29 fare and get shafted for all the "extras".
The fuel shock dynamics for Qantas/Jetstar and Virgin Blue are more uncertain. It could be that Virgin Blue’s being in the middle, between the expensive Qantas product, and the crammed in Jetstar experience, is also where the higher yielding frequent fliers might migrate faced with constantly rising fares and fewer and in some case no Qantas seats.
Then again, Virgin Blue’s trolley snacks from hell and satellite news by Foxtel can make what’s left of the Qantas Cityflyer timetable look really good.
There is going to be a lot more screwing before any winners emerge from behind the oil screens.