Qantas : Some astute Commentary

[fishers.ghost]

1. WTF! Game on Alan. Let’s talk about the brand, where it was, is, and just who has damaged it.
2. Of all the elements a board and a CEO must manage and protect, surely building and protecting the brand of a company must be their number one priority.
3. Clifford came out swinging on the weekend saying the focus of the board and CEO must be, and is, on the share price and return of capital. But it is the brand that drives the share price, not the other way around. Everything else flows from that.
4. If you followed that logic Jetstar never would have been started and Virgin wouldn’t be spending a fortune relaunching and building the brand. If Virgin can do that, why cant Qantas?
5. Let’s look at the facts. This is marketing and business studies 101.
6. Qantas from the inception of the very first brand surveys decades ago consistently and without exception, year in year out, always lead the pack as the NUMBER ONE BRAND in Australia. This was not just in terms of brand recognition but also in relation to the more significant drivers of financial success in the market place; trust and emotional attachment for the brand.
7. The Qantas brand was pure 100%, 24 carrot, rolled gold.
8. This was Qantas’s number one asset. It still should be. Bigger than all the aircraft and other tangibles combined. Every airline has plant and equipment, but only Qantas had that number one position, the ultimate in brand power.
9. After sitting at number one for decades Qantas is no longer even in the top ten. But worse than that here’s a report from Readers Digest annual Most Trusted Brands survey way back in 2008.
10. ” … the iconic flying kangaroo, Qantas, dropped 47 spots in consumer confidence.”
11. You read right. In 2008 Qantas dropped 47 spots.
12. That massive drop in the brand if quantified in dollar terms is so much more than the net worth Jetstar has added to the Qantas group.
13. 
    So what happened. How did the best, most loved, number one brand in Australia for decades crash and burn. So quickly. So badly.
    There are two main reasons for this. And they have names, the first being Dixon, the other Joyce. The destruction of the brand has zippo to do with the current biffo with the unions.
    1/ When Dixon took over as CEO the Qantas brand was still riding high and proud at number one. It was untouchable. He was seen by many as marketing and PR genius. Yet the destruction of the Qantas brand can be traced back through these exact same brand surveys to having commenced during his tenure. It is no coincidence that this rapid decline coincides EXACTLY with the rise of Jetstar under the Qantas umbrella.
    BA when they held seats on the board warned Dixon an in house low cost carrier would cannibalize the parent brand. Dixon thought he knew better.
    We all know the story. As soon as Jetstar was launched Qantas pissed off many local communities with the haste it pulled out of so many key domestic and international markets and forced people who were used to, and wanted full service, onto Jetstar with an appalling lack of service.
    Everyone knows Jetstar is Qantas. Each and every time people feel ripped off or mishandled by Jetstar, which is often, the knife is dug deeper and twisted further into what is left of the Qantas brand.
    Just ask any of the tens of thousands of passengers forced to fly Jetstar (because Qantas has pulled out) to destinations like the Gold Coast, Sunshine Coast, Tasmania, Hamilton Island, Bali or Japan. They don’t blame Jetstar, they blame Qantas.
    2/ From the day Jetstar was conceived fleet renewal and investment in the mainline product ceased almost completely. While Jetstar got an entirely new fleet of fuel efficient A320/A330 aircraft “full fare” passengers on “full service” Qantas were stuck with clapped out, gas gusling, dirty and unreliable aircraft. The new Dallas debacle is a perfect example.
    As you point out Ben, when Qantas could have, should have been renewing its mainline fleet, such as buying 777 as did all of its main competitors, there was no money or motivation as all the focus and cash were thrown at Jetstar.
    Clifford and Joyce had already earmarked the first 787s for Jetstar, meaning Qantas mainline will not be seeing any new aircraft for many years. Just who has been subsidising who?This only serves to compound the destruction of the brand.
    Joyce is now the biggest most vocal detractor of Qantas brand, constantly screaming hysterically that long haul is in serious trouble.
    What would the books look like if Qantas had, as it should have as the premium brand, a fleet of all new and super efficient aircraft while the budget arm Jetstar was stuck with the old aircraft from the current mainline fleet.
    A/ Jetstar would no longer be making money
    B/ Qantas mainline would likely be making money
    C/ Qantas would have a product people expect of a full service carrier and it would be growing its market share.
    No one at Qantas either remembers nor understands these important lessons from history.
    The only player who appears to do so is John Borgettii. You can see he ‘gets it’ by his determination to invest substantially in a full service product, to grow markets such as this morning’s tie up with Singapore Airlines, the business and the Virgin brand.
    He knows where Qantas is vulnerable and it is insightful too that he is branding Virgin Australia as the Australian airline and he is vocal about returning jobs to Australia service his aircraft here.
14. interesting
    Posted June 7, 2011 at 1:14 pm l Well said SoB if only the mainstream media would actually invest some time in being journalists rather than merely being a conduit for media releases, we might actually be able to read the full picture.
15. Archer
    Posted June 7, 2011 at 2:15 pm | Qantas also handed Virgin the biggest free kick by overlooking John Borghetti

The Main Body of this commentary was made by an anonymous poster called SoB in response to Ben Sandilands piece on Joyce trashing the Qantas Brand in front of an IATA audience in Singapore

[HF3000]

No, Jetstar never reported through or to JB. JB was responsible for mainline.

[noip]

Lester ...

JB ran Qantas.
Joyce ran Jetstar.
They each reported to Dixon.

It is my understanding that JB had frequent disagreements with Dixon, and his NOT getting the CEO position to replace Dixon was directly related to his views on Jetstar's place in the Universe.

I believe my sources to be reliable.

N

[Mstr Caution]

Everyone knows Jetstar is Qantas. Each and every time people feel ripped off or mishandled by Jetstar, which is often, the knife is dug deeper and twisted further into what is left of the Qantas brand.

Search Jetstar on Google & the 5th link is:

Don't Fly Jetstar - A place to share your Jetstar complaints

A great association, for the premium brand's image.

[psycho joe]

Pfft. That's nothing. Try googling:

Jetstar Serena Chen

And see what you get.

[blueloo]

Lucky the larvae wasn't in the muffins! - Jetstar wouldn't survive if the muffins were removed from the menu, after all Bruce Buchanan is (I believe) on record saying that Jetstar only makes money from the sale of muffins.

[Sunfish]

Very astute comments.

I would like to draw your attention to the following documents:

CEO's speech calling Qantas a "Legacy Airline".

http://www.qantas.com.au/infodetail/...essAGM2004.pdf

It would be instructive to compare the salaries and conditions of QF pilots and engineers vs. the others around the world. Are they excessive? I don't believe so.


Qantas Advice to shareholders regarding the APA bid.

http://www.qantas.com.au/infodetail/...sStatement.pdf

This raises the question the market asked about why a private operator would wish to buy a "Legacy Airline"?

I would also refer you to this article - about the blurring of the divide between the LCC model and the "Legacy" model.

When the low-cost airlines entered the European market in the mid-1990s they brought a complete change in business philosophy. By keeping their costs to a minimum they aimed to bring low-fares to the travelling public, achieving this by taking away many of the traditional services offered by the full-service carriers. First went the free in-flight service, then the free checked bag allowance; but the legacy carriers were quick to react as they lost traffic to their new rivals. This has caused what we have today, a major blurring of the divide between the low-cost and traditional airlines, with a new hybrid model between the two extremes now being adopted by almost all.

Hmmmm, do we see the glimmer of a very different corporate strategy from the "Them and us" Jetstar/Qantas model? I think we do...more at the link:

Blurring the Low-Cost and Legacy Airline Divide :: Routesonline

As an aside, Air New Zealand was branded a "Legacy Airline", look at it now. They may not yet be profitable, but everyone from top to bottom appears to be aligned and working their backsides off for the shareholder.

It appears to me that the Board and Management of Qantas are "stuck on stupid" and totally focused on demonising unions. This is the last centurys battle. Margaret Jackson would have absorbed it from her economics lectures in the Old Pathology building. Dixon would have read about "Legacy Airlines" in an American context which is very different.

Meanwhile the world has moved on from that argument. The Board and management of QANTAS are fighting yesterdays battles with yesterdays weapons. They can't deliver and they won't change. They have to go.

[noip]

As far as QF Mainline pilots go, their salaries are "middle of the pack" worldwide.

N

[Sunfish]

....And this just to hand, while hearsay, if true, confirms my previous opinion, Two posts back, that the QF Board and Management strategy is backward looking, set in concrete, and totally wrong:

Yesterday I was contacted by a Qantas pilot. He gave me details of a friend who had been engaged by the airline as a consultant to do some work around the outsourcing of Qantas aircraft components. After looking at all the figures and reviewing the benefits/negatives of outsourcing the work, he advised them that the best option was to keep the work in-house. His consultancy with Qantas was thereby terminated because it was not the answer they were seeking. He claimed to be the third consultant to come to that conclusion, they were all terminated. From this example it has confirmed with us the problem we face negotiating an outcome with another party that appears not, or does not want to listen. However tight we can construct maintenance proposals that offer the best and most viable solution to the Qantas business, they want to take it to another place regardless of the evidence before them.

Post 1092:

http://www.pprune.org/dg-p-reporting...-begin-55.html

[Sunfish]

Can anyone confirm Shovels "helpful" assertion?

[aussie_herb]

Hi Shovel ,

If you want to quote the figure for the highest paid longest serving second officer in Qantas doing only high overtime LA flying you may get close to a figure of 180 with allowances and super etc . The average Qantas 2nd Officer gets nowhere near that amount ( they also arent 200 hour cadets ) . In fact most Qantas first officers dont get that amount and I know 737 Capts who dont get that much anymore . Sorry to burst your bubble champ but you have no idea what you are talking about . I apologise for trashing your statement with actual facts.

[noip]

Sunfish,

Shovel's assertion can be safely discarded.

N

[Capt Kremin]

To compare apples with apples, a year one S/O, on all fleets in QF, has a base pay of around 75k.

[mach2male]

He Shovels ****e

So you've backed off from $180k then you come up $100k in allowances.
Qualify "allowances' for us please.It should prove to be most interesting
You should change your PPrune location to QCA9
Another management troll is born.Do you guys ever do any work ?
How much does the CEO of Cathay earn?
Compare it to the wage of Dixon's illegitimate Irish son.I think you find that salary excessive
You sure know a lot of people who are prepared to discuss their salaries with you

[Capt Kremin]

Great post there Shovel. I don't know anyone on this forum who has so clearly demonstrated their total ignorance and bias with such lightning speed.

Tax is a benefit? Dry cleaning? 100K in allowances?!?!?

You told us the base pay of a Cathay SO. Well not quite because you didn't mention the size of the housing allowance. No matter; are you telling us the Cathay SO doesn't get any allowances, provident fund, overtime?

When I tell you the base pay of a first year QF SO is 75k a year, it doesn't mean they can't earn more. But on 160 credited hours a bid period and no overtime, that is what they earn.

You are so far off in the allowances thing I can't be bothered shooting you down. I think my time would be better spent hitting the ignore button.

[nitpicker330]

Would you guys stop saying that CX gets much more than QF

I just looked at our pay scales and a year 4 SO gets $71000 AUD plus maybe another $10000 in hourly pay.

He is an expat so he gets a small housing allowance to allow him to buy/rent a
small flat comparable to what he was used to living in back home.
HK has some if the most expensive rental property in the world.


Keg and I compared our A330 Aussie base Captain pay and we are about the same.

So stop saying CX are way better paid.

[virgindriver]

I just looked at our pay scales and a year 4 SO gets $71000 AUD plus maybe another $10000 in hourly pay.

He is an expat so he gets a small housing allowance to allow him to buy/rent a
small flat.

As far as I know Australian airlines don't pay housing allowance to allow you to buy your own house.

And sorry, how much tax does your mate pay? Maybe 15% and that's it. No medicare levies, flood levies, etc.

[maggot]

Originally Posted by The Spade

A Qf S/O base pay is $75000 for the first year.
I assume that is without tax, holiday, sick days, super, drycleaning, and every other benefit taken out.

And you guys claim Qantas management is full of **** and make up numbers.

As an A330 S/O starting in 2007 the base was $85000.
Another S/O I know on the 747 got close to $160 000 last year. So he made nearly $100 000 in allowances.

Yep, your pay is not excessive.

So, what's your beef? You're obviously out to prove something... How much tax do they pay up in CX? Took me 10 years to crack 160 @ QF, then the tax man robs me of a fair chunk of that to pay for baby bonus' and whatnot.
apples, oranges and all that....

[ALAEA Fed Sec]

The Engineers I know who work at CX have got sizeable yearly bonuses as well.

[nitpicker330]

Irrelevant.

I'm based and I get the same money as a QF A330 skipper and without any expat allownances AND I pay full tax.

I have a veery good mate of mine on the 744 with QF as a SO that pulled in 160k easily every year after only 5 or 6 years. A SO in CX would only ever dream of that including any expat allowances and reduced tax.

Anyway don't get me wrong, I wish you guys all the best with your fight against the rot of AJ. I hope you all get a pay rise because CX compare us to you guys......... We need a target too!!