Qantas will be dead in 6 months

[puff]

Sorry - altered

[Wiley]

Firstly, let me say that I too don't believe the 'Q' brand name will go the way of Ansett.

However, after reading the second paragraph of puff's post #39, (before he altered it), I think we could safely end the debate and take what he's said as the way it's going to be. Maybe not necessarily in six months, but sometime, probably sooner rather than later.

If there's someone out there who doesn't think this is Mr Joyce's "option of first preference", (as it was Mr Dixon's), I've got this bridge you might like to buy...

[Gingerbread]

The difficulty with your view Puffy is that it doesn't take into account that:

Jetstar's success contributed but 10 per cent to Qantas Group earnings before interest and tax last year."

Murdering the Roo to save a potentially rising star is just too risky.

Much safer to push 'Joey' out of the pouch when it can fend for itself and set up a 'new world airline' that is much more capital efficient than both Qantas & Jetstar can ever hope to be.

In the big scheme of things, all this nasty industrial argy bargy, really is just small change.

No need to worry though - if AJ doesn't get it, ultimately the Government and the Shareholders will do it for him; unless of cource the global economy and the airline industry suddenly unexpectidly recover and things spring back to what they were.

[WhoFlungDung]

It is great to see so many JQ optimists out there. Keep it up, it is good for morale which has taken such beating in recent months.

That said, JQ will always be the black and decker version. Nothing has changed and nothing will. The model is low service low cost. Changing the model to full service is tantamount to changing QF to low cost. It simply won't happen. Why? Because QF is where the money is. Without QF, JQ won't survive.

[Capt Kremin]

Qantas announces a 5% reduction in flying and Harbison pronounces it on life support and that Jetstar must save the day!

Give me a break.

Lets have a look at the headlines from the last couple of days shall we?

Singapore Airlines announced a 17% reduction in its fleet.
Cathay Pacific announced an 8% reduction in flying.
DragonAir announced a 13% reduction in flying.
Southwest Airlines announces its third consecutive quarterly loss.

Anyone notice a pattern here? Well run profitable airlines all suffering the same malaise it seems.

If I can offer a personal opinion on this thread. There are many contributors to Dunnunda who have sufferred from various ructions to their working life that were out of their control. A lot of them have done it hard. Thats life in this game unfortunately.
Human nature being what it is though, a lot of these pilots have seen their QF brethren seemingly sail through on good T&C's, good equipment and little to worry them while they have been doing it tough... There seems to be an overwhelming urge from some of them to see QF pilots finally get theirs...
Hence some of the posts on this board.
You may get your wish, I don't know. I can guarantee you however that any fleeting pleasure you will get out of QF's potential demise will be short-lived, and you won't be any better off after it... quite the contrary.
(dismounts the pulpit)

[Mstr Caution]

AJ was quoted as saying as recently as a few weeks ago (words to the effect) J* will never exceed the size of Qantas mainline during his tenure as CEO.

In the paper today he's also quoted as saying - on given international routes J* is not the way to go.

I really wouldn't expect much else from the QF management camp other than the line, J* continues to exceed expectations. Since these are the same individuals responsible for the entity. Admitting other than success for the J* operation would be an acknowledgement of their own failure.

[QFinsider]

Sort of like the floors of accountants deciding to axe themselves...
Not likely to happen...

Easier to reduce operational staff

[blow.n.gasket]

Qantas will be dead in 6 months

Come on guys, this was obviously a finger error, what Harbison meant to write was:

Centre for Asia Pacific Aviation will be dead in 6 months.

How many times can this guy get it so wrong yet still survive?

[QF Observer]

Goose

Once again I find myself wondering how some of you people think. Lets get some 'facts' out there.

Sept 2001 - The International Air Transport Association had announced its member losses will amount to US$30 billion between September 2001 and the end of the 2003 calendar year.

2001/ 2002 - Qantas announced profits of $631m despite the aviation industry being turned upside down due to Sept 11. Results some what propped by demise of Ansett on Sept 14 2001.

Nov 2002 - Outset of SARS and turmoil in aviation industry

2002/ 2003 - Qantas announced profits of $502.3m once again despite aviation industry copping it across the board.

2003/ 2004 - Profit $964.6m
2004/ 2005 - Profit $1,027.2m
2005/ 2006 - Profit $479.5m
2006/ 2007 - Profit $1032.1m
2007/ 2008 - Profit $1,408m
2008/ 2009 - Profit Forecast $100 - $200m

Despite everything that has being going in respect to the extremely volatile airline industry, fuel prices, current economic climate, SARS, War on Terror, War in Iraq, Sept 11, Qantas has responded extremely well, much more than can be said to Qantas competitors.

I have absolute faith in the ability of the board and senior management to see Qantas out of this trough and to bigger and better things.

Do I think the airline industry will be the same: NO. There will be more merged entities/ partnerships. I will bet my house on the fact that Qantas will be in the mix and leading the charge in the brave new world of the airline industry.

You cant help wonder how Qantas employees who actively post in this forum continue to beat their own company down, I think this is UN-Australian. As I have previously mentioned, this is the time where staff/ management/ and shareholders alike need to band together and do what it takes to continue to offer the services that Qantas offers to the 35 million passengers it carries every year, not to mention the employment of 34,000 staff, most of which are Australian.

Let the records speak for themselves, Qantas will come out of this a better organisation.



Optimistic Shareholder

[whatever6719]

Totally agree with that!
Numbers speak for themselves.

[BrissySparkyCoit]

Optomistic Shareholder. The problem, as Qantas staff see it, is that in these tough times under Dixon, we were told we needed to tighten our belts, take wage freezes and then, wage increases that fell well behind CPI.

Meanwhile, in these tough times, Dixon and other senior managers had their noses firmly in the trough. Remuneration packages became obscene. Managerial and other superficial positions grew and grew whilst frontline staff remained same and in some case, were reduced.

Qantas survived and suceeded under Dixon and became top heavy. But there is a whole lot of potential to be a whole lot better.

I am optomistic about Alan Joyce. I honestly hope he can turn around the damage done by Dixon. De-segmentation in certain areas is a welcome step. Likewise, the removal of 590 managers. Read that again. 590 managers. WHY does a business of around 36,000 employees need so many managers? (after the departure of 590, how many will remain)? That is one manager gone for every 60 emloyees. Or, aproximately 4 managers for each aircraft in the fleet!

There is a lot of bitter sentiment amongsed staff, left by Dixon. If Alan Joyce can re-engage staff, Qantas will emerge from this crisis stronger than ever.

[blade.runner]

In The Blood

Qantas was once run by individuals who had aviation in their blood.It was what they loved.
Many of us still have that love of Aviation and Qantas.
Ward,Borghetti,Lindeman all had great affection for the company and aviation.They had been involved since theri youth
Dixon didnt give a toss.For him it was all about the creation of wealth ...his own.
I doubt that Qantas will ever be run with the same passion that it once was.
Today we have the "visitors".Come in make a few changes.Put their stamp on the business.Earn a few million and then leave.
Then the cycle begins again.
Unfortunately Qantas employees will wait in vain for the second coming.
There will never be another Keith Hamilton.John Ward or John Menadue.
We are stuck with the blow ins.
The sooner we all move on the better.
We have seen the good days at Qantas...they are now behind us

[iriver88]

QF Observer Post 49

There were many factors why QF did well during those years of SARS, Sep 11 etc.

some of the factors that makes this downturn so much more severe and could not be compared to previous disasters are:
Lehman Brothers Bankrupt
AIG nationalised
Citibank/ Bank of America almost nationalised
when the banking system collapse as in the situation we find we are in now, banks are not willing to lend money unless you have excellent credit rating QF credit status is just 2 notches above Junk status, BA is Junk status and that why they are losing millions of sterling each month.
With such bad credit rating, and recently only managed to raise around 500 plus million in cash by selling shares super cheap, QF needs to borrow money. QF keeps saying their cash reserves is over this and that billions but so far the facts have not shown that to be even true. Share prices are dismal, they need to even top up their own super plan with over a period of 3 years liability added to their balance sheets
On top of that we now have Delta and V Aus competing on pacific not just from sydney but also brissy and Melbourne.
We then have MH continuously and relentlessly discounting fares like there's no tomorrow. AJ himself said the prices have gone down to 50% and is eating into margin, this is not sustainable.
Add to that QF has also got such a high labor cost base, compared to other airlines.
Not to mention Japan, germany, UK, US, Singapore, HK all very important markets all in deep deep mud of recession. No economic experts have been able to even guess when all these countries will come out of it.
I forgot too the brand is damaged by regular consistent safety problems. Some of which was so serious people were injured. None of the above factors happened in sept 11, in SARS etc.

If those above factors continue to prolong over 6 months, it will be the end of Q.

according to sydney morning herald article on april 19 CX slashes Flights,

"This slow-down will be deeper and longer" than previous recessions, said Winson Fong, of SG Asset Management in Hong Kong. "The bad news will continue to come."

"A toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact is making it more important than ever to preserve cash," said the airline's chief executive officer, Tony Tyler.

Now if you add a dose of chicken flu outbreak and u will have a recipe guarantee Q's demise.

Has anyone thought about how long will oil prices stay low? Will it suddenly go up again? Who knows?

remember chicken flu has not been completely eradicted with occasional eruptions in pockets of Asian and Europen region.

*I cannot get over the fact that 590 managers including senior managers are shown the door, this means these 590 manager's contribution (I'd be polite here) is something the company could have done without all along... This is equivalent to making no contribution whatsoever, that's a lot of money wasted...total waste of money. Once out the door, these managers know they will not get any comparable money that they get at Qantas for basically moving the mouth and fingers and making no contribution. I hope they are prepared for this.

[packrat]

Rubbish

Qantas is one of only three airlines in the world that has an investment grade credit rating.
Its credit rating has nothing to do with its cash burn rate.The CBR is the relationship between its day to day operating costs and its revenue.So far its standing up.
It is obliged by law to be truthful about its cash reserves which currently stand at $A3.5 Billion.
The top up for its defined benefit scheme this current financial year is $A66million unlike BA which is in the hole for !.5 billion pounds.
Qantas share price has been trashed along with rest of the worlds stock prices.Qantas has not been singled out
Airlines are a cyclical business and require large capital investment in the form of aircraft purchases.When stock markets go south so do airline stocks.
Qantas has become overmanaged in the last 8 years and AJ is redressing that imbalance.That is about the only statement that was true in the last post.
Read and remember.....this economic downturn will be over in a year.
Airline revenues will be back to normal within this time frame.
Qantas will be here when others are long gone

[mrpaxing]

and the word

on the street is that QF wants the QF sales act amened so they can more easily go for a merger. my oracle tells me the QF/BA talks will be on by the end of the year agin.

[Pegasus747]

QF will not merge with BA. They are a moribund inwardly looking dinosaur that will be lucky to survive unless they undertake a massive restructure and the unions start to work with the company to ensure the survival of the goose that laid the golden egg for them

Qantas is more likely to look towards a carrier like Etihad who will make QF one stop to anywhere in the world and bypass singapore

Its all part of a broader strategy that the recent Etihad codeshare announcements are a precursor to

[What The]

Add to that QF has also got such a high labor cost base, compared to other airlines.

Do you have some facts to back up that statement?

[Pegasus747]

structurally Qantas' labour costs are not dissimilar to any large Australian Company. These would best be described as legacy conditions.

With Globalisation and liberalisation of trading between countries; overseas airlines that do not have OHS laws, Workers Compensation, Long Service Leave and a standard of living like Australia has have made in increasingly difficult to compete on cost

Qantas is not unlike any Australian company that finds it challenging to compete with lower cost imports. The wages are only high relative to competitors that in many cases do not compete with Qantas on a level playing field

[kotoyebe]

Gee, you can tell it's school holidays.

So,

BA is Junk status and that why they are losing millions of sterling each month.

Right. I get it. If your company gets rated by a (failed) ratings agency as junk status, then you instantly start losing money?

So BA losing money has nothing to do with (from the same post about CX),

A toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact is making it more important than ever to preserve cash

So BA are losing money because of their junk status, but CX are losing money because of the GFC. Where's the logic in that, iriver?

Pegasus, nice summary.

[teresa green]

WRONG, Who Flung Dung without JQ, QF will not survive. The world has to become leaner and meaner, and that includes airlines, the days of top heavy carriers are over and that includes domestic. I have no doubt QF will survive, albeit in a leaner and meaner way, JQ will continue to grow but in a different way to QF, but they will both need each other to survive in the new world order against more cashed up and aggresive eastern and aisian airlines. Where this takes current QF pilots and engineers is anyones guess, but the pressure will be on for more work and less money, no doubt going on previous severe downturns, very senior Capts will be offered early retirement, trouble makers will discreetly be seen no more, professional First Officers will be shown the door, cadets will be sent bush, S/Os this time unlikely to be seconded, could find themselves on extended leave, and the rest will get less flying, some only enough to keep current, having lived and worked thru no less 3 severe downturns this seems to be the pattern, I don't think many of you are going to end up on cropdusters, but there are worrying times ahead, and if I were a young bloke like most of you are, I would have plan B in order like a bit of moonlighting or making money out of a interest you have, until the whole box and dice settles down again as it surely will.