Future of Qantas in jeopardy: Joyce (Merged)

['holic]

The staff component wasn't broken down any further but I would conservatively estimate the pilot salaries to be 25% of the total salaries cost. This would make the pilot salaries 33% of the aircraft's operating costs - way more than the 4% figure bandied about in these forums!

Lol, you are a dead set genius. Did you borrow Alan's calculator to figure all that out?

Let's look at one small part of the operating cost - fuel. The 767 burns about 5000 kg per hour. Assume QF pay 70c/litre, so that's about $4500 per hour in fuel. So assuming the FO earns 60% of a Captains wage, and our wages combined are 33% of operating costs, a QF Captain must earn at least $1406 an hour. Of course, we haven't included all the other costs such as maintenance, catering, cabin crew etc etc - so a Capt must actually be on even more than this.

Hey, I've got an idea to reduce staff costs. Why don't you go and find another job that's more suited to your capabilities, because I don't think Qantas is really getting value for money from you. And give yourself an uppercut on the way out.

"Qantas' staff costs in the 2002-2003 year were 28% of its total expenses - the highest in the South-East Asian region.

By contrast, airlines such as Singapore Airlines and Hong Kong-based Cathay Pacific are purely international, although they do have some short-haul international routes. In both cases, their labor costs are approx 21% of total costs - much lower than that for Qantas.

So how much of that 7% gap is the result of having duplicate sets of infrastructure for different parts of the group? 2 Flight Ops, 2 Safety departments, 2 training departments etc etc. And the additional layers of management to oversee both sets of infrastructure. Why don't you start looking there before demanding staff take a paycut?

[Worrals in the wilds]

For the sake of discussion, let's assume for a moment that FGD135's assertion is correct, i.e. the only way Qantas can remain viable is to reduce wages. There are still two stumbling blocks.

Firstly, the executives are not offering to take a pay cut. They have never offered to take a pay cut and they are not even hinting at it now, despite being well rewarded by both Aussie and aviation standards. This just makes everyone smell a very large rat whenever they start up with the 'we can't afford to pay' rhetoric, particularly when the share price has gone bungee jumping. If the company's in such a terrible state that they have to cut wages, wtf are the exec getting paid so well?

Secondly, there have been numerous posts on here and stories in real life about how Qantas management has repeatedly reneged on handshake deals. This has resulted in Qantas staff (not just pilots, either) automatically disbelieving everything management says. If management were untrustworthy then, why would they be any different now? They have demonstrated a complete lack of integrity in the past, which fuels further suspicion that the whole thing is crap. I get the feeling that AJ could make a media announcement that the sky is blue and the majority of Qantas frontline workers would all chorus 'bull****e'. This is not normal for a company. People who've been with Qantas a long time may feel it's normal, but it isn't. Most people have at least a grudging respect for their employer and vice versa.

In this way, even if the argument were correct and management were actually being honest and up front for a change, there is no way the average Qantas employee or interested bystander is going to believe them. Once bitten and all that, which is why smart companies aim to retain at least a degree of integrity with their staff. Come belt tightening time, it's a lot easier to sell the 'lean times' argument to the serfs if they don't automatically assume you and your team are incapable of telling the truth based on previous behaviour, and they aren't looking askance at your own massive salaries.

[airbus_galley_girl]

Nothing but trouble checking in - Alan Joyce

Nothing but trouble checking in

Matt O'Sullivan
June 11, 2011 .

Alan Joyce

The next few months will be vital in shaping the legacy of beleaguered Qantas boss Alan Joyce.

ALAN Joyce was his jocular self but in no mood to talk about the deal. Flanked by two of his senior executives, Qantas's boss quipped that he would limit his views on the strategic alliance Virgin Australia had sewn up with Singapore Airlines hours earlier to a ''full stop''.

The Dubliner might have laughed it off in the foyer of the Marina Bay Sands, Singapore's answer to Dubai's luxurious Burj Al Arab, but it was obviously a big blow - and he was in full view of airline executives from around the world who had flown in for the annual gathering of the International Air Transport Association.

No doubt adding to the pain was the fact that the Singapore Airlines alliance was secured in super-fast time by Virgin's chief executive, John Borghetti.

Advertisement: Story continues below

A 36-year veteran of Qantas, Borghetti lost out on the top job at the national flag carrier three years ago to Joyce. His coup this week overshadowed talk from Joyce about the possibility of Qantas forming closer ties with Malaysia Airlines.

Borghetti, the former third-in-charge at Qantas who spent years grooming its premium product, had already won approval for strategic tie-ups with Air New Zealand, US carrier Delta Air Lines and Middle Eastern airline Etihad. The deals are central to the motor racing fan's plan to take Virgin upmarket and challenge Qantas's stranglehold on the lucrative corporate travel market.

For Joyce, who served his apprenticeship at Ireland's national airline, Aer Lingus, Ansett and Jetstar, it signals the beginning of a critical period for his leadership at the national carrier. The next few months will shape the Irishman's legacy at an airline that has long formed part of the national identity.

Described as Qantas's worst nightmare, Singapore Airline's dalliance with Virgin piles even more pressure on the 44-year-old as he grapples with a damaging stalemate with key unions representing long-haul pilots and licensed aircraft engineers. Then there are the high jet fuel prices, Qantas's loss-making premium international operations, the effect of natural disasters and consumers embracing frugality.

Their mark is plain to see. Qantas's share price slumped to fresh two-year lows this week. Qantas has lost more than a third of its market value - or $2.26 billion - since early November, when it was forced to temporarily ground its A380 fleet after one of the planes narrowly avoided disaster soon after takeoff from Singapore. The Nancy Bird-Walton remains locked in a hangar at Changi Airport, about 20 minutes' drive from the Marina Bay Sands, awaiting repairs expected to cost well in excess of $100 million.

The confluence of events has led to Qantas's no-nonsense chairman, Leigh Clifford, publicly denying suggestions of a rift with the man he hired in favour of Borghetti and Qantas's former finance boss, Peter Gregg. But often when a chairman comes out to defend his chief executive, it raises the very questions such statements attempt to quash.

Resolving the dispute with the 1700 long-haul pilots and 1600 engineers will be crucial to restoring the faith. Yet both sides are no closer to sorting out their differences.

Then there is the Transport Workers Union, which represents baggage and ramp handlers, and catering staff. The union, which has frequently been at loggerheads with Qantas, has already threatened industrial action even before its collective employment contract expires at the end of this month.

Joyce intensified his attack on the "rogue unions" on the sidelines of the IATA gathering in Singapore this week, laying most of the blame for the fall in Qantas's share price on them.

Qantas's 35,000-strong workforce is one of the country's major bastions of trade unionism. The unions representing the pilots and engineers retain a big influence over the airline relative to their size.

''This is really heading to '89 territory here,'' says an airline executive, referring to the pilots' strike in 1989.

''[Qantas management] will struggle to go forward unless they can find a way to convince everyone that they are not crying wolf. Doing nothing is not an option because they are getting outdone internationally.''

Few doubt Qantas's premium operations are at a disadvantage to foreign airlines, which operate on lower-cost bases. Analysts at Royal Bank of Scotland estimate the cost base of Qantas mainline - the planes with the Flying Kangaroo on their tails - is about 50 per cent higher than Virgin's. But the challenge has always been: how do you lower costs without adversely affecting the product? That is made harder with a showdown just around the corner.

Ballots of the long-haul pilots and engineers over taking protected strike action will be completed early next month. They are expected to give their support, which will be the Qantas pilots' first industrial action in 45 years.

The pilots are unlikely to walk off the job, instead resorting to a work-to-rule campaign that includes stop-work meetings and refusing to do overtime. What appears relatively minor - such as not allowing as much time as usual to travel to airports in preparation for flights, or demanding a plane be checked for minor technical issues - can throw the airline's network into chaos.

Strange as it may seem, work-to-rule can be more costly than if the pilots did walk out because Qantas still has to pay their wages. And there's the flow-on effect: grumpy employees making clear to passengers their dissatisfaction, or travellers considering other airlines because of looming industrial action.

With both sides playing hardball, Qantas desperately needs what Joyce's predecessor, Geoff Dixon, often referred to as a ''circuit-breaker''. But it was not evident this week in Singapore, where Joyce said he would not pump any more funds into the international operations - the division dominated by the long-haul pilots - until they returned their cost of capital. Aiming directly at the pilots and engineers, he said Jetstar and the Frequent Flyer division "could just not continue to subsidise" the international operations.

Qantas has had a taskforce led by a senior executive, Lesley Grant, reviewing the options for the international business since January. It could include setting up a full-service subsidiary in Asia or adjusting aircraft orders (though it will not apply to the A380s or Boeing's long-delayed 787 Dreamliner).

Meanwhile, Borghetti has been quietly reinvigorating Virgin. He has won over Singapore Airlines under the nose of Qantas and has some time to prove to investors that his strategy is right. It is obvious why he wants more of Qantas's prized customers: business-class flyers make up less than 10 per cent of a plane's total passengers but can contribute about 40 per cent of the revenue.

Borghetti even claimed that Virgin's product was now ''better than our competitor's''. And not content with snaring more passengers in the domestic market, he wants to boost Virgin's international market share.

Qantas's share of international traffic to and from Australia has fallen from about 42 per cent when it was floated in 1993 to 27 per cent (about 8 per cent of which is Jetstar) today. But it would be unwise to underestimate the dominance of Qantas.

It is still one of the most profitable airlines and boasts an investment-grade credit rating that allows it to borrow more cheaply than its competitors.

Paul Fiani, managing director of Integrity Investment Management, says while Qantas needs to stay on the ball, he believes the threat from Virgin is overstated. ''Their ability to attract the business market is going to take a long, long, time. Virgin needs to spend a fortune to replicate what Qantas has in the business market and they don't have the money to do it,'' he says.

Despite Borghetti's new friend in Singapore Airlines, Virgin is still flying towards a second-half loss of up to $150 million because of fuel prices and a decline in yields from leisure travellers on domestic flights.

Some short-term relief for Australia's dominant airlines has come from Tiger, the Singapore ultra-budget carrier that last month shelved its ambitious growth plans in Australia because of mounting losses. Tiger has been a big irritant to Qantas offshoot Jetstar and Virgin since entering the market three years ago.

Its decision to drop some domestic routes raises speculation about whether it will eventually pull out of Australia. This would help ease the pain for Joyce and Borghetti.

The demands of Joyce's high-profile job are unrelenting. His time steering Qantas has been tough from the outset: he took over from Dixon in the aftermath of the global financial crisis.

And the short-term outlook is not rosy. Investment bank Goldman Sachs this week increased its forecasts for jet fuel - an airline's single-biggest bill - to $US136 a barrel this year, from $US117. And next year is worse - $US139.

''There are many things that impact on the airline business that are beyond the control of management - fuel prices, currency, the global economy. You just have to continue to manage the things you can manage,'' says Sir Rod Eddington, a former boss of British Airways and former chairman of Ansett.

Joyce, the maths whiz from the outer-Dublin suburb of Tallaght, now faces his biggest test managing the industrial relations headwinds buffeting the Flying Kangaroo.

The reporter travelled to Singapore courtesy of IATA.


Nothing but trouble checking in

[airbus_galley_girl]

APPROVED: Virgin Australia and Delta alliance to challenge Qantas

APPROVED: Virgin Australia and Delta's Pacific joint venture challenging Qantas' US-Australia dominance - Flights | hotels | frequent flyer | business class - Australian Business Traveller

Virgin Australia is gearing up to challenge Qantas for a larger slice of the
lucrative US travel market, following final US government approval overnight for its alliance with US carrier Delta Airlines.

The partnership will see the Virgin Australia and Delta share bookings, routes, lounges and frequent flyer programs, similar to Virgin Australia's current arrangements with Etihad and Air New Zealand and the recently-inked agreement with Singapore Airlines.

Virgin Australia CEO John Borghetti has already spoken of his desire to see Los Angeles become the airline's "second international hub" (alongside Etihad's Abu Dhabi base) and says he plans to have the Virgin Australia-Delta alliance "up and running by the end of the year."

The scheme not only taps Delta’s reach into the North American market but also paves the way for Virgin Australia to open new routes into the US, with a direct service to San Francisco - abandoned earlier this year by Qantas – said to be on the shortlist.

Travellers will also have access to connections through to Canada, Mexico and New Zealand, beyond the primary Australia-USA trunk route.

Both Virgin Australia and Delta have pledged not to reduce flights below their current levels of a joint 22 weekly flights for six months of the year during the high season and 17 flights during the off-peak seasons.

The combined market share of Virgin Australia and Delta of the ANZ-US market is estimated at 21%, well behind both Qantas (at 40%) and the Star Alliance carriers United and Air NZ share (39%).

Impact analysis

The Virgin Australia-Delta alliance will likely mean changes to both flight times and destinations, with the airlines flagging their intent "to fully cooperate on network planning and distribution to deliver a more attractive and competitive service for customers".

In other words: look for the removal of duplicated routes and timetables. It's the clearest sign yet that a Virgin Australia route to San Francisco and other destinations outside Los Angeles is on the cards.

Expect also to see further codeshared flights -- Virgin Australia flights with Delta's DL code, and vice versa. The next slate of codeshares starts on May 21.

Virgin Australia's flight codes -- either the old Virgin Blue DJ code or the old V Australia VA code -- will be added to Delta's flights from LAX to San Francisco, Las Vegas, Detroit, New York JFK and Orlando.

Delta's DL flight codes will appear on Virgin Australia flights from Sydney to Brisbane, Melbourne, Perth, Adelaide, Canberra, Auckland and Christchurch.

A notable omission from the codeshares on this side of the Pacific is flights to New Zealand's capital, Wellington. Virgin Australia and its trans-Tasman partner Air New Zealand promised the Australian and New Zealand governments they would increase flights to Wellington as part of their trans-Tasman joint venture agreement.

For a clue to other possible Virgin Australia codeshares, take a look at Delta's route map from Los Angeles:



Also hidden in the ruling is a clue to the joint Virgin Australia and Delta strategy: flights across the Pacific on large Boeing 777 aircraft, rather than following Strategic Airlines' plans to fly smaller Airbus A330s across the Pacific (the same type that Virgin is using on its Sydney to Perth Coast-to-Coast service).

It would also appear to nix the likelihood of moving one of Delta's larger ex-Northwest Boeing 747-400 planes to the Australian routes.

[FGD135]

Let's look at one small part of the operating cost - fuel.

'holic, the "aircraft operating" figures I was quoting did not include fuel and oil so your assertion is invalid. The "fuel and oil" component of the total costs for Qantas in 2002/03, if you are interested, was 14%.

So how much of that 7% gap is the result of having duplicate sets of infrastructure for different parts of the group?

These figures were from 2002/2003 - Jetstar did not exist then.

Wow, did you pull that one from your...

Yes, that is a figure I came up with myself, but I did state that in the post. What percentage do you reckon the pilot salaries would be of the total staff costs? It would not be less than 20%.

I have found some more research related to airline economics - and the ludicrous claim that "Pilot salaries cost the airline something like a dollar per ticket".

This research again draws on the Qantas annual report from 2002/03 but also something titled "Airline fare October 2003" and details the components of the typical Syd/Mel return airfare (then costing $221).

Of this $221 fare, $4.43 goes to "profit", $17.71 goes to "fuel and oil" and $35.42 goes to "staff".

This indicates that the true figure for pilot salary per ticket is closer to $10. Note again that I am assuming that pilot's salaries are 25% of the total staff costs (my estimate).

[QFinsider]

What a load of unadulterated bs.

The heavy case per hour 4% of direct operating COST per hour for flight crew.
The low case between 2.5% to 3%. Qantas is somewhere in between.
(Source QF- until labour costs became the new bonus driven doctrine)

Most aircraft cost is fixed.

Unless of course you back load all sorts of 'operating costs', to the "flight operation", whether it be duty travel, loadings so FF appear profitable for every person "sold" a seat. Engineering costs can be loaded too..How many you want to add on, so everything becomes a "profit centre" competing for Capital?

The definition applied definitely is subjective to suit the agenda of the day..As stated these days staff are the enemies.

[Ngineer]

Joyce said he would not pump any more funds into the international operations - the division dominated by the long-haul pilots - until they returned their cost of capital.

If Qantas goes under, Jetstar will follow suit not long after. One cannot live without the other, make no mistake about it!!!

[Xcel]

What maths school did you go to fgd??

35.42/221

= 16% far from your 30% which changed to 24% which went to 20% and using your figures plucked frm space...

second to that staff would include - cabin crew - tech crew - baggage handlers - check in staff cleaners etc etc - we are talking 2.5%-4% and that IS from qf themselves...

[FGD135]

What maths school did you go to fgd??

I suggest you have another read of my posts. I have been addressing two separate figures.

The first is the percentage that pilot salaries are of aircraft operating costs. I have found that, in the case of Qantas, the figure (from 2002/2003) is about 33% - which is contrary to the 4% figure being bandied about these forums. If "fuel and oil" are included in the operating costs then the figure becomes 20%.

The second is the number of dollars from each ticket sale that goes to pilot salaries. I have found that the figure is almost $10 - again contrary to the $1 figure that is popular on these forums.

35.42/221

= 16% far from ...

If you had read my post properly you would see that the correct math is in fact (25% x $35.42) / $221 = $9. Why 25% of? Because the $35.42 represents all staff but we are only interested in the pilot's component. If you had read my post you would know this.

[Xcel]

Which way do you want me to divide that??

16%/4= 4%

9/221=4%

yeap must be 20% hey aj... These are you figures dude... QF themselves agree 4% is a high average on there costs.

Using your awesome math how about you work out the average for say - management - Hr - accounting - I'm sure I could skew a few of those for you. Your arguement is nonexistant!!

[What The]

The reality is that you have no idea what you are talking about.

Move along people, nothing to see here.

['holic]

For starters, let's use numbers from the right decade.

Quote:

Let's look at one small part of the operating cost - fuel.

'holic, the "aircraft operating" figures I was quoting did not include fuel and oil so your assertion is invalid. The "fuel and oil" component of the total costs for Qantas in 2002/03, if you are interested, was 14%.

Ok, from the 2010 Annual Report, pg 47
Expenditure
Manpower and staff related ... $3405m
Fuel ........................................ $3283m

So now based on my previous calculations, at 33% of operating costs a QF Capt is earning $1458 an hour. Thanks for pointing that out.

Quote:

So how much of that 7% gap is the result of having duplicate sets of infrastructure for different parts of the group?

These figures were from 2002/2003 - Jetstar did not exist then.

(sigh) It's my own stupid fault for attempting to engage in a meaningful discussion with a manager. Firstly, if you look at the page above from the 2010 report, "Manpower and Staff related" account for 25% of expenditure. So I could ask you "So how much of that 4% gap is the result of having duplicate sets of infrastructure for different parts of the group?". But how about you think of a number, any number at all, substitute it in the above question, and then try and answer it.

[jaded boiler]

Your toy abacus will give more accurate results fgd if you try to keep it level.

[FGD135]

'holic,

So now based on my previous calculations, at 33% of operating costs a QF Capt is earning $1458 an hour.

Your calculations are invalid because they take no account of the number of pilots employed by Qantas. Your calculation would yield $1458 per hour irrespective of whether Qantas employed one pilot or one million, for example.

I would be happy to work out for you (based on those 02/03 figures) what the "average" Qantas captain is making per "average" hour, but first, you would have to tell me:

1. What percentage of the pilot group are captains? And,
2. What was the total hours flown for the year for all captains?

No need for precise figures. Ballpark will do.

[ferris]

Forget all the obfuscation FGD, here are your words....

This indicates that the true figure for pilot salary per ticket is closer to $10

So you are saying if pilots take a pay cut of, say, 10%, this is what the future of the company swings on?

Seriously? Your words..... $1 dollar per fu$king ticket? The pilots could receive a pay increase of 10% and I would wager that QF would save more than the $1 a ticket in goodwill, consultants fees, wasted management time etc. etc. But then what would the dolts do with their time? They would be forced to actually add value. What a concept!

[FGD135]

So you are saying if pilots take a pay cut of, say, 10%, this is what the future of the company swings on?

The future of Qantas absolutely, definitely swings on them being able to reduce their wages bill. Whether 10% is enough of a reduction, I don't know - but would suspect not.

Your words..... $1 dollar per fu$king ticket?

I have spent about 20 minutes looking at this statement and cannot work out what you are saying - or what it is you think I have said.

The pilots could receive a pay increase of 10% and I would wager that QF would save more than the $1 a ticket in goodwill, consultants fees ...

I would take you up on that wager. Sure, there would be great goodwill from the pilots but this would only last for a few weeks. Goodbye Qantas.

[FGD135]

I have spent the afternoon reading and researching airline economics and found some interesting stuff that I would like to share with you.

First, a few quotes to set the tone:

"I'm flying high and couldn't be more confident about the future."
- Freddy Laker, Laker Airways, 3 days before the collapse of Laker Airways, 3 Feb 1982.

"These days no one can make money on the goddam airline business. The economics represent sheer hell."
- C.R. Smith, President of American Airlines.


The following text is not my work, but I have bolded certain bits that are relevant to the current Qantas situation:


It may be hard to believe but the airline industry is actually the world's least profitable industry. In 2000, the airlines had a good year with a turnover of $328 billion but a net profit of just $3.7 billion or just 1.1%. The industry's best year was in 1966, when it made 6.1% net profit, but in the past 30 years, most airline balance sheets have revealed losses of about 1.5% or profits of about the same order.

In fact, from 1947 to 2001 (54 years), the world scheduled airline industry has made a cumulative (and combined) net profit of $27 million. In comparison, Microsoft made a profit of $7.4 billion in 2001 alone.

Being a service industry, airlines are labor intensive. This is true, although to a lesser extent, even for low-cost carriers. Each airline employs armies of pilots, flight attendants, mechanics, baggage handlers, reservation agents, check-in staff, security personnel, catering staff, cleaners, administration staff, accountants, lawyers and the list goes on.

The cost of staffing an airline is related to the region in which it operates and the general level of wages in that region, whether it is a short-haul or long-haul airline operation and whether it is a full-service or a "no frills" operation.

Qantas' staff costs in the 2002-03 year were 28% of its total expenses - the highest in the South-East Asian region.

By contrast, airlines such as Singapore Airlines and Hong Kong-based Cathay Pacific are purely international, although they do have some short-haul international routes. In both cases, their labor costs are approximately 21% of total costs - much lower than that for Qantas.

A factor in the significantly lower staff costs for these airlines is the nature of long-haul operations which tend to be less labor-intensive. In addition, both Asian-based airlines overall enjoy better productivity from their staff and employ leaner work practices.

American Airlines, the world's biggest airline and considered by many as the most successful of the past century, has been tragically affected by the events of September 11 and has also felt the impact of the upsurge in low-cost airlines. Table 14.7 lists its costs for the year 2002.

These figures reflect the generally much higher staff costs for many US full-service airlines which in some cases reach 49% of total costs. High staff costs put such airlines at a serious disadvantage on the international front where they have to compete overseas with operators like Singapore Airlines, and on the domestic front, with Southwest Airlines and JetBlue, all of which operate with a much lower cost base.

The high labor costs are a legacy of heavily unionized workforces combined with short-haul operations. Airlines such as Eastern and US Air were badly affected by high labor costs which was a significant factor in their eventual demise.

The cost of running American Airlines and its regional subsidiary American Eagle in 2002 was $20.63 billion. Combined, the airlines flew 178.7 billion Available Seat Miles (ASM) for a cost of $0.115/ASM or $0.071/ASK.

Southwest Airlines, however, with its one aircraft type and a more simplified operation, produced impressive figures for 2002 amounting to just $0.074/ASM or $0.043/ASK.

Despite Southwest Airlines being a short-haul airline with an average sector length of just 720 miles (1,199km), its staff costs are only 35% of operating costs - 7% below that of American Airlines. US Airways, prior to entering Chapter 11 (bankruptcy protection) in 2002, was similar to Southwest. It was essentially a short-haul airline with a few longer sectors but had much higher labor costs which was a major factor initiating its filing for bankruptcy protection. US Airways costs were $0.124 cents/ASM - 68% higher than Southwest's.

In taking a closer look at the cost of labor to airlines, the Association of European Airlines provides a pertinent look at the break-down of staffing costs for European airlines in 2000. Graph 14.8 illustrates the split of staff by workgroup as well as the salary percentages for each workgroup.

This provides an interesting perspective into the relationship between the volume of staff within each workgroup and the cost burden associated with the salaries of each workgroup. Note that the pilot workgroup represents 8% of the staff but commands 21% of the staff salary costs.

The fact remains that costs per employee are among the highest of any industry, according to the US Air Transport Association. The ATA provides some intriguing labor cost figures for US airlines at August 2002.

Remembering that US national average earnings are $17.13 an hour for a 39.6 hour week, it is interesting to note that pilots ranked the highest paid workforce in the US with hourly earnings of $107.22 and an average working week of just 21.9 hours. The survey included regional and commuter pilots who are typically paid much lower wages than their mainline colleagues.

Flight attendants who ranked 45th, had hourly earnings of $32.73 but they only worked 20.7 hours a week. As a comparison, waiters and waitresses in the hospitality field earned $3.95 an hour during a 36.7-hour week. However, they receive tips to supplement their wage.

Another of the airline sector employees are airline engine mechanics who earn $22.04 an hour and work 40 hours.

Discontent between the various airline employee groups has evolved due to the starkly different pay increases granted over the five years to the end of 2002. During this time, pilots' wages have soared by 57% while flight attendants' salaries have increased by 44%. Check-in agents' incomes have risen by 17% but engine mechanics' salaries have barely moved.

One of the starkest examples of the efficiencies of low-cost airlines is the comparison between the defunct Ansett Australia and low-cost operator Virgin Blue's passenger uplift/staff ratio. According to Virgin Blue figures the airline will carry more passengers than Ansett on major Australian domestic truck routes for the year ending 31 March 2004, with only a third of the staff. The two airlines' RPM/RPK figures are almost identical, however Virgin Blue only has 3,300 staff compared with the 10,000 staff that Ansett employed for its domestic trunk route division.

[FGD135]

No wonder Ansett went under.

Now, 10 years later, the writing is on the wall for Qantas ...

[skybed]

Interesting stats FDG, but

the true picture of costs amongst various airlines have changed since 2002.
Let's not forget QF now has the most expensive airline management in the world (up around 50% from last year). Add various management consultants and in-house secondments(the costs being attributed to the labour costs) and a truely distorted figure is presented.
modern airline management=

[packrat]

True Labour Costs

Skybed is right on the button.
True labour costs(read non management employees) of Qantas is more like 18%.
The cost of management inflates the wages bill and allows execs to claim that labour is more expensive than competitors.
Nice ploy:increase your own remuneration.Include in it labour/manpower costs and then claim that employees are paid too much...what a bunch?