Qantas to Decline as Jetstar Soars
Interest rates are coming down because the world is about to go into recession!
I'd be more worried about keeping my job in the next 18 months and saving some cash than planning that trip to Phuket!
I'd be more worried about keeping my job in the next 18 months and saving some cash than planning that trip to Phuket!
Dreamliners
Looks like Qantas/Jetstar may have to wait a little longer for their new jets...
From today's Age newspaper:
Boeing delays first 787 Dreamliner flight - News - Travel - theage.com.au
And crikey.com.au:
From today's Age newspaper:
Boeing delays first 787 Dreamliner flight - News - Travel - theage.com.au
And crikey.com.au:
Dreamliner screws Qantas
Ben Sandilands writes:
Some very bad news about the Boeing 787 Dreamliner project has been let slip under the radar of the US election day.
It has been improperly riveted or "screwed" in about 3% of the metal fasteners used to link some sections of the four incomplete test flight jets and two static test units at Everett near Seattle.
And they will have to be "unscrewed", which is not something easily done to a composite jet comprising many criscrossing layers of glued and oven baked reinforced carbon fibre.
Removing the "fasteners" as Boeing calls them involves drilling them out of the structure. They are supposed to stay in place forever. The process can damage and weaken the panels involved.
This means the original Dreamliner 1, that Boeing falsely claimed could fly as early at late September 2007, will now be unscrewed and rescrewed at least twice, the first time being after the sham rollout on 8 July 2007, where it had been deliberately cobbled together with the wrong screws to meet a public relations deadline.
Boeing now has no first flight date, nor first customer delivery date, for the 787, pending what is described as a full assessment of the program.
Qantas was supposed to have received its first 787s, for Jetstar, by the end of this year. In the original hype, they were going to be capable of non-stop services to America.
Then it was promised 15 would be delivered by the end of 2009, and now it is pretty clear Qantas, with 65 on firm order and options or purchase rights for a further 50, mightn’t get any until 2011.
And there are no performance figures for the jet anymore, other than the guarded concession that it won’t fly non-stop to the US. The jet is heavy, late, and looks uncompetitive beside its nearest Airbus equivalent currently in service, the A330-200. Jetstar was supposed to have been able to use its 787s to develop much needed Qantas coverage to
European cities, such as Rome, Athens and Amsterdam, that are no longer viable for the full service multi class Qantas product.
But not if the Dreamliner has to stop twice instead of once to carry its intended payload of 330 passengers all the way.
Qantas trusted Boeing and has been left in the lurch, although compensated so far by $291 million in liquidated damages which assisted its record profitability in the year to 30 June.
There are some really serious issues here that Boeing keeps ducking. Why was all the hype about the Dreamliner so far removed from the actual realities of the design? Where did the performance figures come from? Will it have to scrap the prototypes and start again with jets that have been correctly manufactured and assembled? Is it a victim of the same culture of lying that pervades the behaviour of other and failed major American corporations like Enron or in the finance sector?
Is there a parallel in the so far disastrously late and costly Wedgetail project which is supposed to deliver a sci-fi like radar and surveillance capability to the ADF?
As has become its habit, Boeing has chosen to publicly reveal the latest bad news about the biggest selling airliner in history firstly to a plane spotting blogger, John Ostrower, rather than face up to its responsibility to make detailed and timely disclosure all to its shareholders and customers.
Doing so on election day is especially insulting.
Oh and there is a problem with some 737s too...
Ben Sandilands writes:
Some very bad news about the Boeing 787 Dreamliner project has been let slip under the radar of the US election day.
It has been improperly riveted or "screwed" in about 3% of the metal fasteners used to link some sections of the four incomplete test flight jets and two static test units at Everett near Seattle.
And they will have to be "unscrewed", which is not something easily done to a composite jet comprising many criscrossing layers of glued and oven baked reinforced carbon fibre.
Removing the "fasteners" as Boeing calls them involves drilling them out of the structure. They are supposed to stay in place forever. The process can damage and weaken the panels involved.
This means the original Dreamliner 1, that Boeing falsely claimed could fly as early at late September 2007, will now be unscrewed and rescrewed at least twice, the first time being after the sham rollout on 8 July 2007, where it had been deliberately cobbled together with the wrong screws to meet a public relations deadline.
Boeing now has no first flight date, nor first customer delivery date, for the 787, pending what is described as a full assessment of the program.
Qantas was supposed to have received its first 787s, for Jetstar, by the end of this year. In the original hype, they were going to be capable of non-stop services to America.
Then it was promised 15 would be delivered by the end of 2009, and now it is pretty clear Qantas, with 65 on firm order and options or purchase rights for a further 50, mightn’t get any until 2011.
And there are no performance figures for the jet anymore, other than the guarded concession that it won’t fly non-stop to the US. The jet is heavy, late, and looks uncompetitive beside its nearest Airbus equivalent currently in service, the A330-200. Jetstar was supposed to have been able to use its 787s to develop much needed Qantas coverage to
European cities, such as Rome, Athens and Amsterdam, that are no longer viable for the full service multi class Qantas product.
But not if the Dreamliner has to stop twice instead of once to carry its intended payload of 330 passengers all the way.
Qantas trusted Boeing and has been left in the lurch, although compensated so far by $291 million in liquidated damages which assisted its record profitability in the year to 30 June.
There are some really serious issues here that Boeing keeps ducking. Why was all the hype about the Dreamliner so far removed from the actual realities of the design? Where did the performance figures come from? Will it have to scrap the prototypes and start again with jets that have been correctly manufactured and assembled? Is it a victim of the same culture of lying that pervades the behaviour of other and failed major American corporations like Enron or in the finance sector?
Is there a parallel in the so far disastrously late and costly Wedgetail project which is supposed to deliver a sci-fi like radar and surveillance capability to the ADF?
As has become its habit, Boeing has chosen to publicly reveal the latest bad news about the biggest selling airliner in history firstly to a plane spotting blogger, John Ostrower, rather than face up to its responsibility to make detailed and timely disclosure all to its shareholders and customers.
Doing so on election day is especially insulting.
Oh and there is a problem with some 737s too...
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I believe Qantas will indeed decline as jetStar soars.
Why?
Well I believe senior Management will gain more from the way JetStar has been set up than they can out of Qantas particularly after the APA fiasco.
Plus the termination clauses on many of the JetStar aircraft leases would more than likely be quite onerous. It will be cheaper for the group to get rid of the fully amortized (read ,clapped out) airframes in Mainline to reduce capacity in Qantas and push passengers JetStar's way to prop up the fantastic business model there.
Why?
Well I believe senior Management will gain more from the way JetStar has been set up than they can out of Qantas particularly after the APA fiasco.
Plus the termination clauses on many of the JetStar aircraft leases would more than likely be quite onerous. It will be cheaper for the group to get rid of the fully amortized (read ,clapped out) airframes in Mainline to reduce capacity in Qantas and push passengers JetStar's way to prop up the fantastic business model there.
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Load Factors
Have to agree with you.
LCC'S are reliant on a higher load factor.
Full service airlines on premier routes are a higher yielding operation due to J and P class.Look at Syd-Cbr with 24 full fare J class seats.
Easier to write off the old QF aircraft that help make the paper every few weeks and supply Jetstar with artificially higher load factors where QF no longer fly or have the capacity.
Jetstar have the newest and most fuel efficient aircraft to boot. Isolate the costs as well and Jetstar looks great on the books.The institutional imperative at its finest.
Perhaps Alan Joyce should have a chat with Eddy Groves.Sure we could make the figures look even better.
LCC'S are reliant on a higher load factor.
Full service airlines on premier routes are a higher yielding operation due to J and P class.Look at Syd-Cbr with 24 full fare J class seats.
Easier to write off the old QF aircraft that help make the paper every few weeks and supply Jetstar with artificially higher load factors where QF no longer fly or have the capacity.
Jetstar have the newest and most fuel efficient aircraft to boot. Isolate the costs as well and Jetstar looks great on the books.The institutional imperative at its finest.
Perhaps Alan Joyce should have a chat with Eddy Groves.Sure we could make the figures look even better.
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Qantas AGM
Profit before tax
Qantas in excess of 900 million
Jetstar 116 million
and this from Dixon
Profit before tax
Qantas in excess of 900 million
Jetstar 116 million
and this from Dixon
this large and complex Qantas group enterprise is surprisingly nimble and agile. If something is working it can be expanded very rapidly, or if it's not then the group can also do something else very quickly.
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You are all partially right and partially wrong
I've only just taken an interest in this thread and am not surprised at the depth of feeling and passion in the arguments put through by both sides in this debate. To address some of the main issues raised in this thread:
(1) QF had to start Jetstar to exploit a new market which was prepared to sacrifice comfort and service for low fares.
This might have some merit but it was never necessary for this reason alone as it could have been done within QF mainline by establishing another brand which could have been "Jetstar" using existing employees and resources. All you do is rebrand some of the aircraft and change the internal configuration.
"Ah ha" you say but the existing staff and resources cost more than setting up with a greenfields approach. Maybe so but if you look at other LCC that only applies for the first few years of a new LCC because it doesn't take long for new employees in the LCC to demand industry standard wages and conditions. Just look at Virgin salaries now compared to when they started. Guess where Jetstar salaries will go.
"Ah ha" again you say...."What about staff flexibility?" Yep you might have me there but then again, if you asked QF staff now whether they would rather give more flexibility and have the job opportunities that Jetstar has provided in QF rather than a separate company what would the answer be? It just takes a bit more convincing (blackmail) prior to rebranding.
(2) Qantas will decine as Jetstar expands
Possibly but possibly not. What both factions have to understand is that unless the management teams wish to venture into one anothers market (which probably require board approval) then the relative size of the two airlines will reflect the size of their natural market. The employees of both outfits ought to watch out for such moves. There is a lot of potential for the Board to use one outfit to whip the other with if either steps out of line. This is probably the main reason Jetstar was set up rather that a new brand created.
(3) Jetstar is lower cost than QF
This is "BULL****" or QF managemnt is failing. It is the sort of crap that management and the clueless put out to camouflage what is really going on. The first thing you have to do making these comparisons when serving two or more different markets is factor out costs that exist because you are serving a different market. After having done this any board worth its salt demands that costs in any business are kept as low as is possible and unnecessary costs are removed.
For a QF manager to say that costs in Jetstar are lower is a QF Manager who is saying "I have failed in my job of keeping costs low or eliminating unnecessary costs because some guy in Jetstar can do it better"
Finally there are better alternatives for a legacy carrier than setting up a subsidiary LCC. They generally require a much better relationship between staff and management than you lot in QF appear to have but I guess that will lead to a chicken and egg discussion
(1) QF had to start Jetstar to exploit a new market which was prepared to sacrifice comfort and service for low fares.
This might have some merit but it was never necessary for this reason alone as it could have been done within QF mainline by establishing another brand which could have been "Jetstar" using existing employees and resources. All you do is rebrand some of the aircraft and change the internal configuration.
"Ah ha" you say but the existing staff and resources cost more than setting up with a greenfields approach. Maybe so but if you look at other LCC that only applies for the first few years of a new LCC because it doesn't take long for new employees in the LCC to demand industry standard wages and conditions. Just look at Virgin salaries now compared to when they started. Guess where Jetstar salaries will go.
"Ah ha" again you say...."What about staff flexibility?" Yep you might have me there but then again, if you asked QF staff now whether they would rather give more flexibility and have the job opportunities that Jetstar has provided in QF rather than a separate company what would the answer be? It just takes a bit more convincing (blackmail) prior to rebranding.
(2) Qantas will decine as Jetstar expands
Possibly but possibly not. What both factions have to understand is that unless the management teams wish to venture into one anothers market (which probably require board approval) then the relative size of the two airlines will reflect the size of their natural market. The employees of both outfits ought to watch out for such moves. There is a lot of potential for the Board to use one outfit to whip the other with if either steps out of line. This is probably the main reason Jetstar was set up rather that a new brand created.
(3) Jetstar is lower cost than QF
This is "BULL****" or QF managemnt is failing. It is the sort of crap that management and the clueless put out to camouflage what is really going on. The first thing you have to do making these comparisons when serving two or more different markets is factor out costs that exist because you are serving a different market. After having done this any board worth its salt demands that costs in any business are kept as low as is possible and unnecessary costs are removed.
For a QF manager to say that costs in Jetstar are lower is a QF Manager who is saying "I have failed in my job of keeping costs low or eliminating unnecessary costs because some guy in Jetstar can do it better"
Finally there are better alternatives for a legacy carrier than setting up a subsidiary LCC. They generally require a much better relationship between staff and management than you lot in QF appear to have but I guess that will lead to a chicken and egg discussion
There is a lot of potential for the Board to use one outfit to whip the other with if either steps out of line
Historically Qantas was seen as a typical large bureaucracy. Inflexible with a large union presence. Some would argue that this is still the case however QF have worked hard to reduce this influence.
Enter Jetstar.
I still believe the issue is primarily one of segmentation but....
There is a lot of potential for the Board to use one outfit to whip the other with if either steps out of line
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Any comments as to the ramifications of Manager Group Flight Training now reporting to the QF Mainline Chief Pilot.
Looks like LS is starting to get issues back on track.
Looks like LS is starting to get issues back on track.
Hallejulah! We don't have to listen to Manning's bullsh1t Cane Toad State of Origin rants each year.
Coates Hire is dead and buried!!!
Coates Hire is dead and buried!!!
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A snip-it from Aviation Week Feb 2009
But later quoted as being a 800 seat config...
So, is that the Qantas never?
As a consequence of a slump in long-haul premium traffic, Qantas is “deliberately growing” its Jetstar low-cost subsidiary which is still profitable. But while the Jetstar fleet is increased, Joyce rules out shifting part of its Airbus A380 order to the affiliate.
But later quoted as being a 800 seat config...
“In Jetstar lay-out, it would have more than 800 seats and that’s too big. That will never happen,” says Joyce, who headed Jetstar until taking over the group CEO position last December.
So, is that the Qantas never?
Last edited by Short_Circuit; 15th Feb 2009 at 04:53.
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I think AJ is a bit out with his 800 on a Jetstar A380.
Two Class QF 747-300 had 450 seats, if you change J to super Economy, maybe 475; if you then add 25% (my working number for A380 v 744) you get about 600 seats in a two-class config. And I'm convinced Jetstar will be two class Internationally.
Certainly Jetstar have to deliver some significant new market growth to places like Southern Europe using the 787, if it ever arrives, before thinking about A380.
But if you contemplate old QF two class 747 markets, like Bali, Fiji, Secondary city Japan, and Southern Europe, then a Jetstar A380 might make sense longterm. Lack of freight might be the killer.
On the rest of it, I haven't changed my mind; the market will decide the relative growth rates of QF and Jetstar; not any management bias for one over the other.
FWIW
Afterthought. If Freight is the killer, can you cheaply put seats in the lowest deck in lieu of freight containers. That might get you to 800.
Two Class QF 747-300 had 450 seats, if you change J to super Economy, maybe 475; if you then add 25% (my working number for A380 v 744) you get about 600 seats in a two-class config. And I'm convinced Jetstar will be two class Internationally.
Certainly Jetstar have to deliver some significant new market growth to places like Southern Europe using the 787, if it ever arrives, before thinking about A380.
But if you contemplate old QF two class 747 markets, like Bali, Fiji, Secondary city Japan, and Southern Europe, then a Jetstar A380 might make sense longterm. Lack of freight might be the killer.
On the rest of it, I haven't changed my mind; the market will decide the relative growth rates of QF and Jetstar; not any management bias for one over the other.
FWIW
Afterthought. If Freight is the killer, can you cheaply put seats in the lowest deck in lieu of freight containers. That might get you to 800.
Last edited by Wod; 15th Feb 2009 at 07:55. Reason: Afterthought