Future of Qantas in jeopardy: Joyce (Merged)

[noip]

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.

FGD

That figure sounds that they have an easy life, but translates to what would be the legal maximum block hours a year. You imply they are underworked whereas that is not the case - I look at the figure and see that they are being worked pretty hard.

True working week would be about double the figure quoted, perhaps more for a shorthaul operation, as your source only states the block hours rather than working hours (Pilots are generally only paid from pushback to on the gate, unlike almost every other part of society).

There are lies, damn lies, and spreadsheets.

N

[Xcel]

Who is the author? Where are the research notes and notations that derive your figures...

I could write the same drivel and pass it off as gospel too.

I would have thought there was a more interesting statement in there, how abot this one:

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.

So The hact is the aircraft NEEDS pilots and cabin crew and engineers and ground crew. It doesn't need the 300% higher staff numbers that Ansett and now Qantas employ. Hmmmm I wonder where these additional jobs can be cut? We need pilots etc or the plane can't fly... Oh I know it's the leeches of management, consulting and any other fictispus job to get me mate working next to me. How about Qantas increase productivity and effeciencies by making VR for management - oh that's right their severances and golden handshakes would sink the company alone.

Cut the bull****e this is not a problem caused by crew!!

[QFinsider]

You just don't get it.

Short haul flying is actually more costly than long haul...H. Kelleher South west airlines.

Crew costs per hour are less than 4% of operating cost of a shiny jet.

Defined costs including, enroute costs, landing charges and even handling charges are determined vary little from airline to airline. Maintenance is a given. Fuel accounts for 40% of the cost. Hedging reduces the variation.

You can then as Qantas do, tell pilots they can't compete and that Jetstar are 30% cheaper..blah blah. So they save maybe 1%..

To further cloud the gullible, add back costs for engineering (so engineering is a profit centre) Add back the "sale" from FF of a seat. Stack on an accounting charge, for services rendered (Hey presto, accounting is a profit centre). Commercial charge a premium price (to maximise their revenue and "profit") when needing seat to position pilots to operate, qantas commercial slug flight operations (profit again) Of course without pilots to operate the service, ALL revenue would be severely curtailed.

The summary is really simple, every cost gets duck shoved. The responsible "manager" will protect budget and hit those KPI. As the genius Dixon said all segments have to compete for capital..The problem is that some centres are cost centres, some profit. In the end the business bears the cost, irrespective of where the accountants put it.

So as it relates to Qantas flight operations we get loaded all sorts of ancillary costs, probably ranging from uniform to duty travel...Of course the flying operation can be made to struggle. Selective definition of "cost" by management clouds it further for the gullible.

The camel is carrying too much straw with all these ancillary charges, but it isn't related to the damn salary a pilot earns..

Go read up on the damage business segmentation causes the firm engaged in it..Geez

Further have a look at the ratio of operationally related staff to administrative staff. Any public holiday sees many thousands of staff enjoying a long weekend, whilst the operational people keep doing what airlines do. That is put people on planes, with a meal, a cabin and flight crew, engineers fuel and a flight plan,their bags...

[ejectx3]

Re hours worked per week ....
My credit hours, ie the hours I am paid for are usually about half my "duty" hours ....ie the hours from sign on to sign off...

So every time one of our esteemed bosses bleats on about how little we
work for our pay they are distorting the truth by half.

Fact

[stubby jumbo]

......with thanks to Tail Wheels investigation

Here you go Alan........a piece of work for you that matches your Skills and Capabilities.

Irish, Leprechaun and St. Patty Coloring Pages - Free Color Pages - Printable Pages - Holiday Printables - ColoringBookFun.com

[teresa green]

I tried that Stubby but it was too hard, perhaps something a little simpler?

[Worrals in the wilds]

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

So why not cite the author? Not doing so is plagiarism, or at least very bad manners (given this is an internet forum rather than an academic paper).

Could you confirm that the passage is from 'Flightpaths', a book by Geoffrey Thomas and Christine Forbes Smith? It appears to be.

[gordonfvckingramsay]

Nothing but trouble checking in

Read it weep AJ

[Capt Kremin]

FGD, you are proposing that QF pilots take a PAY cut in order to save Qantas.

You have quoted figures there about COSTS; most of which are fixed and have nothing to do with what a pilot gets PAID.

Disregarding pay for a second, most COSTS would be the same no matter what the pilots were being PAID. Simulators, Hotels, crewing departments, allowances etc are costs to the Company, a cost of doing business and have no bearing on what a pilot gets in their pocket no matter what airline they fly for.

Now I know what a 4 man A380 crew gets paid to do a London return. So it is very easy to work out what the cost per passenger is on a London return ticket for the entire crew. Guess what Qantas could offer as a reduced fare to the punters per ticket if pilots did it for free?

$40.

[The Green Goblin]

Notice the green poison surrounding AJ?

Coincidence?

Any one still have the 747 tail with Dixon giving the bird? It might be time to roll out mark 2

[SkyScanner]

It is obvious FGD is not a QF pilot otherwise they would have known there was a forum on Qrewroom dedicated to how much pilots cost the company per hour. Capt Kremin is correct in that if the pilots worked for free the customer would save around $40.

[FGD135]

So why not cite the author?

I have no idea which book that stuff came from. What I have is photocopies of several of the chapters from that book. None of the pages shows the name of the book.

The section I was quoting from has a title page which says "Chapter 14 - Dollars and Sense of Airlines".

Could you confirm that the passage is from 'Flightpaths', a book by Geoffrey Thomas and Christine Forbes Smith? It appears to be.

You say "appears to be". Can you please be definite about this as I have found this material to be extremely interesting and informative and would like to purchase a copy of this book. Hopefully there is a more recent edition!

You have quoted figures there about COSTS; most of which are fixed and have nothing to do with what a pilot gets PAID.

Capt Kremin,
I am puzzled at why you say "have nothing to do with what a pilot gets paid". The principal figure I was working from was the "staff" component of the total costs for the 2002/03. That figure was 3 billion AUD and represented 28% of all costs to Qantas for that year.

That figure is, in effect, the sum total of all money (including super) paid to all employees for that year so I would have thought that that figure had EVERYTHING to do with what the staff got paid.

I bring this up as an admission that when I'm puzzled, it usually means that I've misunderstood something.

So it is very easy to work out what the cost per passenger is on a London return ticket for the entire crew.

Yes, and that is true for the crew that share the aeroplane with those passengers. But, the passengers, through their tickets, are paying the salaries for ALL Qantas pilots - not just the crew flying them at the time.

As a long time PPRUNE reader I have learned to be wary of these "calculations" that pilots do between themselves whilst sitting in the cruise whiling the hours away. Apart from assuming 100% load factors, these calculations never seem to look at the full picture.

For the philosophical "proof" of my assertion above - that passenger tickets pay for ALL pilots, not just those on the same plane - consider this:

If Qantas were to plan to do only ONE flight for the 2011/12 year, they would need to build into the ticket price enough dollars to cover the salaries for all the pilots for the whole year.

If the A380 return trip to London was that only flight then the tickets would cost almost one million dollars each (based on the 02/03 figures).

So, what I am saying is that this "$40 saving" is misleading in the extreme. It does not indicate what you think it does.

To make that calculation much more meaningful, however, please do it again, but this time with ALL the Qantas pilots working for FREE for the WHOLE YEAR. That result will be far more enlightening.

Which brings me to my next point:

there was a forum on Qrewroom dedicated to how much pilots cost the company per hour

Why do these pilots insist on working things out on a "per hour" basis? The pilots are not paid on a per hour basis. Please work everything out on an annual basis. Only then would it be possible to do meaningful calculations and comparisons.

[Xcel]

I would actually love a system in which we are paid zero.

However everytime we save fuel, costs, or actually work to increase the efficiencies and productivity of the staff around us we get a bonus paid automatically.

Then everytime management cost the company in fines, fear campaigns, damage to brand etc they would have to pay back to the company.

KPI's for pilots and penalties and punishment for management for wrong/poor/conflicting decisions.

I would be a squillionaire and poor old AJ would be on the dole.

[noip]

FGD

Yes, and that is true for the crew that share the aeroplane with those passengers. But, the passengers, through their tickets, are paying the salaries for ALL Qantas pilots - not just the crew flying them at the time.

Wrong. Your logic is faulty. You are correct in so far as there are pilot costs from those on Blank lines and reserve and training courses who do not do full line flying, however that would result in, at most an additional 50% cost (snap estimate - and I'm being REALLY generous to you here). The other Pilots earn their money on the trips THEY fly passengers on.

So, I'll concede you $60 instead of the $40.

Your problem is that you do not understand the way Pilots get paid.

The pilots are not paid on a per hour basis

... er news to me! What did I just say above?


N

Just to be really pessimistic, I did my own calculation on a London trip, being as generous as I could, using maximum pilots, 80% load factor 50% allowance for non-line pilots etc etc and could still only get just over $100 per passenger for the return trip for Pilot costs.

[FGD135]

The other Pilots earn their money on the trips THEY fly passengers on.

But they are still "earning" money when not flying are they not?

What if a pilot only does one flight for the year? According to you, he wouldn't make too much money that year.

As I understand it, there is a base salary, then various allowances and additions on top of that - and some of those allowances and additions may be on a "per hour" basis.

I will try saying it a different way:

The total money a pilot makes for the year has come from every ticket sold by the airline. It is only a small percentage from each ticket (about 0.001% - see below) but it all adds up to make the total annual income for the individual.

Using figures I have quoted in previous posts we can arrive at the following. Note that these figures are not necessarily applicable to Qantas:

$35 of the $221 ticket revenue for the Melb/Syd flight of 2002/03 goes to paying staff. Assuming the pilots are on the receiving end of 25% of the staff pay, then the pilots get 9$ of the $221.

For this particular trip and fee structure, this equates to 4%. But this 4% must then be divided up amongst ALL pilots. If there are 4,000 pilots, for example, then each individual pilot gets 0.001% of the ticket revenue.

Please could a Qantas pilot do a rough calculation to see if this figure is in the ballpark.

Assume an average ticket price, multiply it by your best guess for the total number of tickets sold for a year. Then take 0.001% of that figure. Is the result somewhere near your annual income?

[Tankengine]

I am a Qantas pilot, I get paid by the hour, to fly aeroplanes.
If you want me to do maths for you, will you pay me my hourly rate?

[noip]

FGD,

I understand you are genuinely trying to get your head around this, however it is obvious that you simply don't understand how our system works. I covered your question in my post above (re pilots who are training, running the simulator etc) but perhaps in a way that you missed, when I added a premium to the base flying cost of a ticket.

Yes, in most operations, the Pilots are guaranteed a minimum number of flying hours pay whether they fly them or not, but I covered that above. Most people fly the minimum or above in a normal operation and so the safety net is not needed. You only get paid for the trips you do.

If there are a significant number of Pilots sitting round not flying then there is something wrong with the management of the company. (Google Qantas).

Oh and with the exception of the safety net, no, you are not earning money when you are not flying.

N

[Capt Kremin]

FGD, this is the problem... you have no idea about how pilots are paid.

The only time QF pilots are paid for doing nothing is if they are not utilised on a reserve line.

We are paid the greater of 5.5 hours credited hours a day or flight hours flown. In the A380 example I quoted you the crew was on a 9 day trip. They were paid 50.3 hours credit, were on duty for 49 hours and logged 42.6 hours flying, about 2/3 of it at night. They got 6.4 hours overtime. Add to that ODTA and super.

A roster for an A380 pilot is currently 160 Credited hours but they can be rostered to 175 credited hours. You only get paid for the credited hours you do.

Therefore the PAY that each pilot receives for each flight is very easily calculated and accounted for. Therefore the cost to a passenger is also very easily calculated.

Now if you wish to talk about COSTS, that is another matter. As I said before, pilot COSTS are a COST of doing business and would not vary substantially from airline to airline. A J* pilot has to be checked and trained, accommodated and fed whilst on duty, flights have to be crewed etc etc same as a VOZ, Cathay QF etc etc.

None of those COSTS bear any relation to what the pilots are being paid, nor do pilots have any significant input into them.

If you wish to have your aircraft flown however, a business must pay those costs.

The fact remains however, that of the $2000 most people pay to go to London and back, $40 of that ends up in the pockets of the flight crew. It works out at less than a dollar an hour/per passenger for a 15000 hour Captain, a 10000 hour F/O with an A380 command endorsement and two S/O's who are guaranteed to be experienced.

The figures will vary of course over different fleets and patterns with differing amounts of seats on the aircraft/hours flown/crew compliment etc but if you are telling me that we are expensive and need to take a pay cut to save the airline.... sorry I beg to differ.

The other flaw in your argument of course is that, despite all its troubles, Qantas is still making a profit. A lot of that profit comes from LH pilots flying domestically on the 767, A330 and 747.

[Pukka]

Source: Royal Bank of Scotland

The news broke on Friday, but was quite widely reported over the weekend was the news that EasyJet's pilots have agreed a new pay and scheduling pact following a recommendation from cockpit union British Airline Pilots Association. The deal comprises a 4% salary increase and a 5% rise in sector pay, but the union flags that crucially the agreement also goes some way to resolving some of EasyJet pilots' long-term concerns about rostering and scheduling. The union credits chief executive Carolyn McCall will a "brave" decision to take on the operational difficulties and discuss a "gamechanging" partnership. The two sides will work under an independent chairman to resolve any outstanding problems. The ballot resulted in 85% voting in favour of the deal, on a turnout of 76%.

Obviously the 4-5% pay deal is not cheap but will, we imagine, have been factored into company guidance. The good cop bad cop partnership of CEO McCall and ops Director Warwick Brady looks to have worked well.
Plainly the market will be very focused on revenue development through the summer and on whether bad cop Warwick and CFO Chris Kennedy can manage crew costs going forward after this not inexpensive settlement. But this episode looks to earned the CEO some kudos and should have
bought the company a good dose of goodwill from the cockpit crew that should help secure the operation through whatever ATC strikes, storms, volcanoes, bean sprout pandemics or other challenges the world throws at the business this summer.

[600ft-lb]

The Word - The Business End - The Colbert Report - 6/9/11 - Video Clip | Comedy Central

Even though this isn't Qantas as such, its very relevant, especially the person this is the subject of.

Bain & Company is an entirely separate company from Bain Capital, a private equity firm founded in 1984 by former Bain & Company Partners that included Mitt Romney

Fast forward to about 55 seconds in that video and its about leveraged buyouts, massive profits for the companies (bain and co) and companies going bankrupt as soon as they're sold off..

Essentially what the APA bid was all about.

Some other interesting easily accessible facts;

Clifford, is a senior advisor to Kohlberg Kravis Roberts & Co.

KKR & Co. L.P. (formerly known as Kohlberg Kravis Roberts & Co.) (NYSE: KKR) is a global private equity firm, specializing in leveraged buyouts, based in New York, New York. The firm sponsors and manages private equity investment funds.

Jayne Hrdlicka - Group Executive Strategy and Technology, has just joined from Bain and Co.

1970s Bain & Company was established in 1973 by seven former partners from the Boston Consulting Group headed by Bill Bain.

Where appropriate, we work with clients to make it happen - which may mean fundamentally changing the company.

Barbara Ward - Independent Non Executive Director, member of Allco (APA)... and is on the Advisory Board of LEK Consulting.

L.E.K. Consulting is an international strategy consulting firm, with headquarters in London.
Started in 1983 by three partners from Bain & Company, James Lawrence, Iain Evans and Richard Koch, L.E.K. has since grown to over 850 consultants and 20 offices worldwide.

Gary Hounsell - Independent Non Executive Director... He is Chairman of Investec Global Aircraft Fund, a Director of Ingeus Limited and a Board Member of law firm Freehills

Key private equity transactions announced in 2006 in which Freehills has played a lead advisory role include the Airline Partners of Australia consortium’s bid for Qantas

I'm sure theres many more interesting connections.

I'm actually very interested in what the term 'independent director' means.