ANCDU

As much as everyone would like it, Joyce won't be gone anytime soon. We all know exactly what will happen. In a few months time they will announce a $600 mill or whatever profit. Clifford will praise Joyce and his "team" Joyce will praise his two airline strategy and say how J* is the only thing keeping the company afloat and how terrible the international part of qantas is performing, blame the unions for its performance and walk off with his bonus and hopefully go to the dentist!

What these people don't realise is that without the international arm of Qantas there would be no profitable FF scheme, no huge business network for domestic to on-load to, and nowhere to hide the cost of J*. Go on Allan, get rid of the international arm of Qantas, watch how quickly everything falls in a heap.

the_company_spy

ANCDU you have hit the nail on the head. Joyce will harp on about %return on capital and yes as a % mainline is low, but capex is massive. The more profitable parts of the group however rely on mainline for their very existence. Cut the apron strings and the rest becomes irrelevant.

Capt Kremin

Good points there ANCDU.

Joyce is quick to sprout that QF international is struggling but he doesn't say why. Those of us who have been around for a while would remember the early 90's where QF international was struggling, and the reasons are exactly the same and entirely unrelated to what the staff are paid.

Back then the world was emerging from the downturn caused by the first Gulf War and Qantas was re-equipping with many new 744's and 767's. The strain on the balance sheet was huge.

It is the same today. The world is still recovering from the GFC and QF has 20 A380's on order at total cost of $7 Billion which are being funded mainly out of cash flow.

Now the cost of re-equipment should all should be part of running an airline. Instead we see it used as a cyclical EBA related threat.

QF regards an 8% return as making back the cost of capital. That is not going to happen until the 7 billion dollar re-equipment phase is over. The institutions know this and this is why they are hanging on to a stock which at the moment is not a growth stock or making a decent dividend.

But in the mean time it is useful to blame the performance on the unions.

There are rumours going around however that things may change. The biggest one happening is that the A380 fleet order will be halved and the 744's will soldier on for the forseeable future. Whether this means that aircraft such as the 777 or the A350 are on the cards can only be speculated.

KABOY

There will always be an international arm of QF, probably a couple of 380's.

The rest of it will be lean and based somewhere else with Australian pilots flying it!

Might even be some ex QF pilots who are faced with redundancy or an opportunity to transfer within the group. Happened before and will happen again.

Clipped

A decade of management incompetence and inability to provide a strategic framework to counter the international assault has led to the demise of the company's market share.

A decade of Jetstar, Jetstar Asia have not succeeded.

An inept management and Board have been quick to blame the Sales Act, unions, foreign govts, unions, natural disasters, unions, 9/11, unions etc etc for their failings.

Can someone out there please help our airline and save us from these nitwits?

Redstone

Capt. Kremin, at the risk of seeming pedantic, Qantas is already operating "half of its A380 order" with two more to arrive late 2011 early 2012 (they are already well down the line) with another two in service 2013, so a rumour that the 380 fleet order will be halved I would suspect is just that, a rumour.

I think the 380 is here to stay.

The rest I agree with, spot on.

Capt Kremin

Thanks Redstone. You are correct about the current deliveries. My information comes from people involved in cabin crew recruitment who, according to the rumour, have been told that CC recruitment on the A380 will shortly stop and they should look at the 20 or so 744's being crewed for at least the next five years.

Rumour-in-confidence

slim

Ben Sandilands, aviation reporter and Plane Talking blogger, writes:
ALAN JOYCE, CATHAY PACIFIC, JETSTAR, LEIGH CLIFFORD, QANTAS

The pressure for change at the top of the Qantas group is building to levels where the chairman Leigh Clifford and the CEO Alan Joyce will be either be quickly removed or embroiled in a bitter struggle to retain control.

The pressure has little to do with union strike action, there hasn’t been any, nor the constant Qantas whingeing about competitors. These are just diversionary sideshows.

It is about two years without shareholder dividends, the bad mouthing of Qantas full-service, long-haul flights by the management team responsible for them, doubts about the real viability of Jetstar, and amateur hour stunts such as supposedly convenient flights to Dallas-Fort Worth that stuff business travellers into a second-rate cabin, leave them without luggage and clean clothes because of payload restrictions, and add hours to flights that could have been done via Los Angeles.

Qantas oneworld partner Cathay Pacific had a very quietly spoken message for Clifford and Joyce yesterday when its new CEO John Slosar was in town.

And that was, work in your space, not ours. Asked about Qantas’s get-out-of-jail plans to miraculously solve its inadequacies and the burden of being an Australian icon by setting up off-shore entities in Asia, Slosar referred to the issues with government and authority relationships and the need, in the obvious context of its own success in China, to nurture generations of relationship building to get where it wanted to be.

The Dallas debacle has made Qantas an object of mirth among other long-haul carriers because it involved using a jet that is patently incapable of flying the distance reliably non-stop in both directions from Australia with everyone’s luggage on board.

It is this contempt in Qantas for technical advice and customer expectations that has led it into errors in fleet and route planning from which there is no quick escape, as well as more fundamental safety-related errors. This was apparent in Alan Joyce’s time as the founding CEO of Jetstar when he was responsible for a decision to change the A320 approved flight manual procedure for a go-around, a mistake that saw one of its jets carrying about 140 people come close to crashing in fog at Melbourne airport in 2007, after which the carrier was found by the ATSB to have failed to keep traceable records or to have conducted a mandatory safety management system analysis before making changes it has not to this day explained to anyone.

Safety, however, may not be front of mind in investor perceptions. Declining market share, lack of dividends, and an inability to manage labour relations before they result in court approval of protected industrial action at a time chosen by the unions are all hallmarks of management failure.

Telling Australians that Qantas needs to be less Australian to be successful is not a winning message. Every Qantas management since the company was listed on the stock exchange in 1995 has emphasised the value of it brand, which is inextricably bound up with being Australian.

But the only new guidance for a market looking for prompt remedial action at Qantas has been a vague concession that a study into a new Asia-based carrier is under consideration with no further details to be announced before the end of the year.

Joyce and Clifford have weeks if not days to come up with answers, rather than year’s end.

33 Disengage

I don't know how much of it will come to pass, but it "warms the heart" to know that the media are starting to see what we have been seeing for a long time.

TIMA9X

Says it all, this should be easy for the mainstream media to understand. Leigh Clifford and the CEO Alan Joyce, the days are numbered guys.... AIPA need to send a press release and get on air.
Reading between the lines, it is unusual that a partner finally says it, or even implies it.

Mstr Caution

Roll back to the Senate Inquiry on 25th Feb 2011.

Alan Joyce wasn't saying that Qantas International was in need of structural change, nor was he spruiking the need to set up a Qantas Asia.

When the Chair asked "How much do you have to reduce costs?"

Joyce replied, there was "no set target to reduce cost. We leverage as much as we can in efficiencies through new technology, and have always done for our entire history."

So no indication to offshore the workforce there!

Heffernan continued ".........at some point in time it must become a crisis to compete?". Heffernan was pointing out the difference in labour costs to those available in Asia. Again Joyce didn't indicate that Qantas International was in need of major structural change or a potential move offshore.

Quite the opposite, Joyce replied " I don't think so, because I think new technology is changing the industry all the time, and costs and efficiencies can be generated by having new ways of doing things". Joyce continued "It will change further as we introduce new aircraft like the 787 and the A380".

So what's the major crisis since February? Joyce told the Senate Inquiry that savings & efficiencies would come thru fuel efficient aircraft. No mention of the Asian Kangaroo?

So why is Qantas International in need of structural change? Joyce went on to say "It is NOT that we're not efficient or that we are bloated back in 1935"

So what is it Alan? Are we efficient like you told the Senators? Why the need to by-pass all you current, efficient, loyal employees to set up another airline overseas? And why not provide your efficient Australian based employees with some job security for a pay increase less than CPI?

MC

Roller Merlin

When news of a CEO/Board strategy split starts popping up in the media, that means it has been bubbling away for some time and certain decisions will be imminent.

Timing is everything.

We look forward to...
-June 10 - AFAP has Jetstar in Federal Court over dud contracts
-June 15 - Senate Enquiry report tabled
-From June.....Protected industrial actions TBA continuing
-1 Sep BB - the date until BB has frozen recruiting FOs on pilot contracts supposedly in response the email bombardment, but more likely due to the Fed Court action
-Final week of October - QF AGM

If the strategy is to continue wheeling out the spokesbod to deny and counter with spin, that will not cut it any more.

the_company_spy

Performance of the QF spokesmodel has been less than ordinary. That the media was going to wake from their stupor was only a matter of time. Systemic incompetence is entrenched in QF executive manage.

Budfox

When are Jetstar actually going to start paying for their own Aircraft and stop
gouging of the big sister ?
Do they pay their own fuel bills also ?
If they did that then it would put a big dent in the profit they report.
Reminds me of the Enron story about how year on year the company reported profits and never made a loss. Kind of like what AJ's calculator may be like at present
Cooking the books maybe ??
Open up the books for all to see, I smell a rat and its not the painted kind on the Aircrafts Tails.

Qantas 787

So Bruce Buchanan would the one to take over? No thanks, he would be a lot worse that Joyce.

What has Clifford actually done during his tenure? More questions should be asked about the board in general, they are the ones approving the major decisions. The board should go before the CEO does.

ALAEA Fed Sec

Who would we want on a new board though?

the_company_spy

Makes no difference from where I sit FedSec, we can't do any thing aout it, and either way the song remains the same.


Maintain the rage.

ALAEA Fed Sec

About 10 years a bloke called Bill Taylor who I worked with told me that you could never change our union. I didn't believe him.

the_company_spy

I agree on one level Steve, however workers are the union, we are not the board. It is inherently adversarial, labour and capital or sould I say corporations and workers.

Things started to go pearshaped when "things" were allowed to own other "things"

But I digress, back on topic, you are quite correct, who would be best apointed to the board of Qantas if the encumbants are so deficient?

Correct me if I'm wrong but I think in Germany workers have a voice on boards of companies, makes sense, we're all in it together.

Mstr Caution

Joyce should take a leaf out of the Cathay's CEO's "how to" handbook, focussing on the core brand, frequency of services, fuel efficient aircraft & not starting up a low cost carrier.

Cathay Pacific says it won't follow Singapore Airlines into budget operations | The Australian

But Joyce has Orange Fever.