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Qantas Twin Dangers~Ben Sandilands

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Qantas Twin Dangers~Ben Sandilands

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Old 22nd May 2011, 11:54
  #41 (permalink)  
 
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interesting comments by MIC

"Mr Sandilands has no right to question management decisions in relation to outsourcing, offshoring, or questioning ‘safety standards’. Management are incredibly astute, have a finger on the pulse and are always ensuring the upper echelon and the shareholder is appropriately remunerated. Happy shareholders equals a happy management team which in turn ensures that money flows freely, and free flowing profits enables the airline to spend more on safety, worlds best practises and latest technologies, an absolute win win."
1) has no right?? the problem here lies in that he knows the inner working of qf too well
2)questioning safety standards? well lets count the last 12 month tally of "incidents"?
3)upper echolon is appropriatly remunerated- restructure and get a pay rise and bonuses all around
4)shareholder appropriately remunerated- dreaming
5) free flowing profits-pls. deliver
6)worlds best practise and latest technology- pls. travel SQ/ME Carriers/CP/ec.
7)absolute win-win pls. explain
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Old 22nd May 2011, 12:07
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QAN_Shareholder:

Going Boeing has answered your question regarding the outsourced RB211 reliability... specifically:

The failure rate of the QF B747 RB211-524G-T engines is currently over 3 times the failure rate when the engines were overhauled "in-house".
Now I'd be interested to hear your response to this. As a shareholder (presumption on my part), how do you feel knowing that Qantas management have made strategic planning errors by sending RB211 work offshore simply to cut costs? How many millions more have the NUMEROUS engine failures cost the company, not to mention the poor PR, when compared to the additional cost of maintaining them onshore?

In all honesty, are you, as a shareholder happy to accept an unlimted number of (unfatal) engine failures due to cheaper offshore maintanence? Will you admit that this has been a management blunder?

Your answers to these questions will speak volumes for the future of our company.

PS. Did anybody else read Management In Charge's response?!?!? I take it we're just looking the other way on that one??? Fair enough.
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Old 22nd May 2011, 12:13
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Ignore M.I.C, that's one troll gone bad...
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Old 22nd May 2011, 19:37
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Hey b/burrito, try reading m.i.c. with a bit of levity.Sounds more like satire to me.
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Old 22nd May 2011, 20:45
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M.I.C. is satire. Unionist is a troll and the verdict is open on QAN Shareholder.

I once did safety reporting and statistical analysis of aircraft failures for a living.

I ran the RB211 engine failure numbers by year supplied by ALEA Fed Sec some months ago using exactly the same procedure as when I reported this sort of stuff to CASA's ancestor.

My conclusion was that we were only one more failure away from proving the hypothesis at the 95% confidence level that there was something wrong with QF's RB211's - to put it another way, being 95% sure that something had changed about the way the engine was either being maintained or operated.

Since then we have had Two more - and unless I am very wrong, something has changed and the change is in the wrong direction.

Since the ATSB are not fools, I would therefore expect that they have reached the same conclusion and will be having a private chat with QF, if they haven't already.


P.S. Statistically a four engined aircraft will have twice the probability of engine failure as a Twin, and Four times the probability of a single, all other things being equal.

I think I also understand that QF's route to Europe avoids the Tibetan plateau and similar high terrain just in case of a double failure.
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Old 22nd May 2011, 22:26
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Can we please put the old engine/new engine argument to bed.
Engines are stripped and rebuilt on an hour or cycle schedule.
An "old" engine rebuilt properly is a sweet thing to watch as it sits on the wing next to it's "more tired" counterparts, burn,egt,N1 all comfortably below the others. In the end it is down to where you get your rebuilds done. I have had rebuilds done at Haeco / Taeco, RR and Luftansa Technic (sp?) and can can attest that LT were by far the tightest rebuilds by a long shot.
MIC, great satire.
As to the twin/quad debate, I'll take 4 over the pole anyday.
Ben, keep it factual.
AJ, bye.
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Old 22nd May 2011, 22:36
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Ohforsure,

In all honesty, are you, as a shareholder happy to accept an unlimted number of (unfatal) engine failures due to cheaper offshore maintanence? Will you admit that this has been a management blunder?
I'm very interested in evidence of management blunders however, I'm not convinced this is a valid example. Let's assume that the increased failure rate is due to change in maintenance rather than a statistical blip (a 95% confidence level, assuming the data is all valid, is quite compelling, but there is still a risk of a data mining bias). Now you can only judge whether the decision was reasonable based on what was known at the time. If figures were available at the time showing that Qantas historically had failure rates 1/3rd of their peers, and that the cost of the increased failures would outweigh the savings, then yes I would admit it looks like a management blunder.
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Old 22nd May 2011, 22:57
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QAN, the problem for you as a shareholder is getting the data. Failure rates broken down by operator are not public information to my knowledge, so comparing the rates between operators & overhaul facilities is almost impossible. The engine manufacturers know exactly what the rates are as they get constant real-time telemetry from almost every operating engine.

As a shareholder you are asking management about failure rates, and comparisons with other operators (of which they are well aware), but will they tell you the truth when you can't verify that information independently (and they know it)? Will they hand you all the data and admit a blunder? This is a highly specialised area, you need to ask exactly the right questions, someone like Sunfish could help.
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Old 22nd May 2011, 23:24
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that the cost of the increased failures would outweigh the savings, then yes I would admit it looks like a management blunder.
So you really do believe that as long as you are saving money, then it is entirely acceptable to have failure after failure.

Are you a consultant to Qantas management by any chance?
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Old 22nd May 2011, 23:45
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QAN - At a simple level, your proposition regarding 4 vs. 2 engines being safer makes sense. However, the failure scenarios need to be examined beyond a simple engine roll-back or flame out during cruise.

One of the issues that needs to be considered is the secondary effects of the failure. This includes possible damage to other systems as well as the role the engine failure may play in being the link in an 'error chain' that leads to a further misshap down the line. 3 engine flight in a 4 engine aeroplane should be no big deal but still cannot be taken lightly. Weather or other issues may add additional complications which have the effect of forcing further errors which degrade safety. Consider the (in)famous Ansett B747 accident at Sydney in 1994: an engine shutdown was a link in the error chain which resulted in a gear up landing.

Secondary damage often results from an uncontained engine failure. QF 32 is a classic example with damage to 2 other engines, structural, fuel leak, flight control, electrical, hydrualic, brake systems.. Although a 4 engine aircraft is quite easily flyable on 3 engines, things get a bit more tricky on 2 engines and are absolutely at crisis level on 1 engine. Now, add in issues resulting from a multiple systems failure and you have further demands on a crew that could force an accident (El-Al in Amsterdam: loss of 2 engines and 2 hydraulic systems + asymetric LE flaps - the crew here had hardly a chance. United 816: Loss of cargo door, flight on 2 engines, depressurised, crew unable to communicate- brilliant airmanship saved the day, but they were very, very lucky to get away with this). 4 engines mean that there is more than twice the chance that something will go wrong than for a twin, with all of these possible consequences.

When ICAO developed the ground rules for the use of 2 engined aircraft consideration was made of failure scenarios beyond a simple engine failure due to flame out. A proper safety analysis must include all possible outcomes of failure and the associated risk. The objective was to have equivalence of safety.Twins are now built with systems that makes them at least equal to 3 and 4 engined aircraft in redundancy. A twin losing both engines will certainly have a forced landing and probably not on an aerodrome. However, such a failure case is improbable and examines the safety case from a single failure type perspective. To state that 4 is better than 2 on this basis is irrational. A 4 engine aeroplane losing 2 engines may come down just as fast as if it were a twin losing 2 engines.

My opinon is that QF management (and their contempories in other airlines) has ceased to heed that a single simple failure can generate an error chain which leads to a far more serious mishap. Aircraft components, systems and engines should be maintained to the highest possible standard so as to avoid creating the error chain's first link. The discussion has raised the issue of outsourcing maintenance, in particular engine maintenance and the evidence is that there has been a loss of quality as a result. Outsourcing has been touted as a great cost-saving idea by KPI obsessed managment, but the result is a loss of control of the various functions critical to the safe and efficient operation of an airline business. Toll, Hallmark, JHES, HAECO etc are businesses in their own right. They operate to their own corporate agendas, which is not neccessarily that of their cleints. In-house fucntions may lack some economies of scale (in QFs case, I can't see how), but it sure does enable a higher amount of quality control.

Last edited by Anthill; 22nd May 2011 at 23:58.
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Old 22nd May 2011, 23:46
  #51 (permalink)  
 
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First year MANAGEMENT 101...

Save money wherever you can, at whatever cost!

You will be finacially rewarded for all your hard work, at the end of the financial year, with a generous bonus!

Meanwhile in the real world, Passengers are inconvenienced and continue to go off to the opposition in droves! Emirates, Singair and Cathay are making record profits at the moment.

Five to ten years down the track, you wonder why the airline is not performing where it should be? Gee, it must be the "excessive" salaries paid to our hard working pilots and engineers!!!

SERENITY NOW!!!
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Old 23rd May 2011, 00:24
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QAN Shareholder, when considering business decisions these days at senior level, the issue is what is called risk management which is part of the corporate governance mission of the Board of Directors.

I was taught this as a new CEO myself by a Chairman who shall be nameless, but I know that The Chairman of QF will know exactly what I'm talking about because I know that Rio Tinto goes through this same exercise every time it makes a major decision.

Where Qantas management failed, and it is a huge failure, is not that they decided to close the engine shop, which is a legitimate business decision for them to take, but that they failed to either understand and/or manage the risks associated with that outsourcing decision. The outcome of that, again as far as I can tell, is that the costs of damage to the brand have totally outweighed the costs saving (if any) that the outsourcing was supposed to generate.

That is what the entire debate about Qantas is about - failure to manage the business risks associated with a long string of management decisions over the years. What is telling is that most of them, as far as I know, appear to be related to an inadequate understanding of the technical intricacies of the business. There are plenty of posters here who can give you a litany of stupidities that have cost the company huge amounts of money.

So let us go back to the engine shop closure. Posters here have stated that the QF engine shop overhauled RB211 engines to much tighter tolerances than those specified by Rolls Royce, and that was allegedly the source of their reliability. The prudent way of managing the risks associated with quality and reliability would have been to outsource a proportion of the engine shop work and then compare performance with the in-house overhauled product over say Three to Five years - it takes that long to spot trends. It also allows time to develop a working commercial relationship with your supplier - or not. As we have seen, the relationship between QF and RR at the moment could probably be defined as "rocky".

Again with the B787 purchase; where was the risk management plan to deal with late delivery? I don't mean financial compensation, I mean what prudent steps were taken to manage the risk of damage to the brand associated with late delivery? For example, why was there not a wet lease facility established that would have seen B777 or even LR B767 leased to QF until the 787 deliveries were made? Boeing do this type of deal all the time, its a common industry practice.

Then of course there is Jetstars' sudden backdown today regarding employment of pilots on a toxic contract. Who in the Qantas group was managing the risks associated with that little exercise? Then there is the alleged "offshore" pilot cadet problem. Does anyone in the Qantas group even understand what the associated risks actually are?

What about the commercial risks associated with Jetstar potentially cannibalizing QF's mainlines market share? What about the well known commercial risks associated with Western businesses attempting to break into Asian markets? Surely even you must know about those.

This is what everyone here is jawing about - obviously stupid decisions taken with no risk management activity at all.

Of course none of this makes it into the annual report, except for the financial risk management activities prescribed for inclusion by law. Everything else is glossed over and invisible unless you have inside knowledge, technical and accounting skills.

P.S. What is doubly distressing for the staff, I suggest, is that the whole business of flying and maintaining an aircraft revolves around risk management. Pilots, Engineers and Air traffic controllers are constantly doing this both consciously and unconsciously. It is even prescribed in regulations and in most cases it is a criminal offense not to manage risks as prescribed - for example failing to obtain a current weather forecast.

....And then they get to watch senior management shooting from the hip with no understanding of risk whatsoever! .... And no sanctions, let alone the criminal sanctions that hang over every Pilot and Engineer every working day.

Last edited by Sunfish; 23rd May 2011 at 00:46.
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Old 23rd May 2011, 00:33
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QAN Shareholder said:

and that the cost of the increased failures would outweigh the savings, then yes I would admit it looks like a management blunder.
Now, that's a biggie !

You are happy for me, and hundreds of other fare-paying passengers, to be put through the stress of an un-contained engine failure ... as long as you get a dividend.

I don't think you have any place on this forum discussing safety related issues
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Old 23rd May 2011, 01:17
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From the Chief Risk Officer:

"What keeps me awake at night - my 3 main challenges are: Fuel, Government Policy & Management"

Perhaps SAFETY might one day become this guys' priority!


Chief Risk Officer
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Old 23rd May 2011, 01:21
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Sunfish,

I always thought you were a bit of a tosser.

TO PUT IT ANOTHER WAY, I think I'm starting to warm to you
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Old 23rd May 2011, 01:30
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Yeah and if Management was high on the risk radar he got that right too didnt he?

I watched the Board of a now failed company get told that one of the highest risk was management fraud and didnt that cause a furor. The report was soon enhanced with further and better particulars.

Is this the same Risk officer who I recall was paid about $1.2m a year and left? If so, where is the accountability.
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Old 23rd May 2011, 01:47
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Peuce,

I think you have, I hope inadvertently, left off the first half of my sentence in your quote.

If figures were available at the time showing that Qantas historically had failure rates 1/3rd of their peers, and that the cost of the increased failures would outweigh the savings, then yes I would admit it looks like a management blunder.
My point is that in the circumstances I mention you could fairly unequivocally say it was a bad decision. If there was a tradeoff between cost savings and moving failure rates to a level in line with peers then it is a more nuanced argument. I didn't suggest that it was acceptable to tolerate failure rates above peers.
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Old 23rd May 2011, 02:00
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Ref QAN post #47 above:

Let's assume that the increased failure rate is due to change in maintenance rather than a statistical blip (a 95% confidence level, assuming the data is all valid, is quite compelling, but there is still a risk of a data mining bias). Now you can only judge whether the decision was reasonable based on what was known at the time. If figures were available at the time showing that Qantas historically had failure rates 1/3rd of their peers, and that the cost of the increased failures would outweigh the savings, then yes I would admit it looks like a management blunder.
It is essential that people read and understand what is being said between the lines here. It gives a very telling look into the thought processes of those who are entrusted with the Airline, and their inability to see beyond the spreadsheet in an industry that NEEDS care and "that bit extra".

From that statement, I can deduce that Safety is NOT the number one priority.

Swiss Cheese.


N
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Old 23rd May 2011, 02:02
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Rising to Their Own Level of Incompetence

When Qantas was taken over by Strong and his management team the corporate memory and soul of Qantas was essentially lost.Strong was a self promoting show pony who didnt have a clue how to run an international airline.He left and was replaced by Dixon.Here was an individual who was a middle aged ex journo with even less credentials than Strong.He quickly realized he wasnt up to the task and surrounded himself with people who were even less competent than himself.They all found themselves on the ultimate gravy train.Oldmeadow and BCG were running the show.Dixon and his cronies had their noses in the trough.
Then someone came up with idea of flogging Qantas off and then siphoning off large fees for doing so.This was more than likely Oldmeadow' ideas.It was also about this time that Strong joined the board for no other reason than to partake in the carve up of fees that were to be generated
No one was at the helm.Decisions were being made by incompetents and no one was overseeing these decisions.The business was going to be flogged off anyway.Problems that would emerge would be dealt with someone else.
The deal fell over and now we have the mess that Dixon created not being cleaned up.It can't be cleaned up by this lot because they dont know how.The company needs a new board and a new management team.
What will be the catalyst for that?
Thats the scary question
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Old 23rd May 2011, 02:07
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QAN Shareholder, with respect, You don't quite get it. Closing the engine shop may or may not have been a bad decision. A Fifty percent average is pretty good for corporate decision making.

The bad decision was not to have a "plan B" or make the outsourcing reversible if technical, political or commercial issues surfaced.

QF appears to continue to fail in this manner from what I can see.

Even today, they failed to manage the risk that their pilot groups at QF and Jetstar would not take the new Jetstar contract and cadet program lying down.

So today we have Two thoroughly incensed pilot groups, further decreases in levels of trust between management and employees, which is always toxic, and a thoroughly aroused Senate, Aviation and industry Ministers, who may yet legislate to close loopholes Qantas has attempted to use, and of course one Court case, which may not go away any time soon.
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