How to Fix the Qantas International Business
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The fact that this passenger won't come back next year to our airline does not worry current managers in the slightest. They will have moved on with bonuses in the bank.
KPI's rule. They saved money by utilising the cheapest and most basic maintenance money could buy, and then haggled some more. Costs saved matter to their bonus. The fact future revenue is lost cannot be seen by short term minded accountants. In their eyes, the cost of fixing the plane matters only, and this is less than the savings generated by the cheap maintenance, hence we are doing well.
You have to spend money to save money. In the quest for the worlds lowest costs, this company is soon to be destroyed.
KPI's rule. They saved money by utilising the cheapest and most basic maintenance money could buy, and then haggled some more. Costs saved matter to their bonus. The fact future revenue is lost cannot be seen by short term minded accountants. In their eyes, the cost of fixing the plane matters only, and this is less than the savings generated by the cheap maintenance, hence we are doing well.
You have to spend money to save money. In the quest for the worlds lowest costs, this company is soon to be destroyed.
Another example of KPI driven idiocy that's destroying Qantas
A cabin services genius and ex [lazy as all get out] hostie has a mantra that goes like this.......
"no aircraft will land into any destination with unconsumed food on board"
The effect of which is as follows.
P/C and J/C cabins are catered exactly to the passenger load.
Main meal choices [per company policy] are offered to our top tier frequent flyers first.
These individuals are already tied to our airline via FF program and as such are unlikely to fly the competition. Great, everyone is happy.
Now the passengers who are left in many cases miss out on their choice of meal, are not tied to us via a loyalty program and feel [given the money they've spent] pissed off.
Genius. These people can fly four sectors to LHR and back and on every sector not get their choice of meal.
Does anyone really think they'll choose Qantas when next traveling to Europe?
Someones KPI is met, $7.00 hot meal component saved on a AUD $7000 J/C fare and a passenger and his wife never seen again on a Qantas aircraft.
Pure genius.
"no aircraft will land into any destination with unconsumed food on board"
The effect of which is as follows.
P/C and J/C cabins are catered exactly to the passenger load.
Main meal choices [per company policy] are offered to our top tier frequent flyers first.
These individuals are already tied to our airline via FF program and as such are unlikely to fly the competition. Great, everyone is happy.
Now the passengers who are left in many cases miss out on their choice of meal, are not tied to us via a loyalty program and feel [given the money they've spent] pissed off.
Genius. These people can fly four sectors to LHR and back and on every sector not get their choice of meal.
Does anyone really think they'll choose Qantas when next traveling to Europe?
Someones KPI is met, $7.00 hot meal component saved on a AUD $7000 J/C fare and a passenger and his wife never seen again on a Qantas aircraft.
Pure genius.
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Today was another day in paradise for our pax as well. The ADLDRW 767 return service goes US. 5 hour delay. They find a 73H. It's only 70 oversold on the return sector, but they found a 767 to put onto the SYDDRW return, so the 70 oversale only has to wait until 1.30 in the morning to leave DRW. What do you know? The 73H also goes US in ADL. Now a 13 hour delay!
Then the QF8 diverts to LAX(admittedly due to a medical offload). So due to crew hours, the DFWSYD pax are now going DFW/LAX/AKL/BNE/SYD.
On top of all that, my team is struggling to look after our QF pax, because all we have been doing the last week or so is recovering JQ disrupt pax because of all the cancellations they are having.
In my 15 years at the company, I have never felt so embarrassed for our customers. No one seems to give a sh!t around the network, and we are all really worried about 24 August, but what's worse it's starting to feel like when AN died.
Then the QF8 diverts to LAX(admittedly due to a medical offload). So due to crew hours, the DFWSYD pax are now going DFW/LAX/AKL/BNE/SYD.
On top of all that, my team is struggling to look after our QF pax, because all we have been doing the last week or so is recovering JQ disrupt pax because of all the cancellations they are having.
In my 15 years at the company, I have never felt so embarrassed for our customers. No one seems to give a sh!t around the network, and we are all really worried about 24 August, but what's worse it's starting to feel like when AN died.
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P/C and J/C cabins are catered exactly to the passenger load.
) about special meal requirements. Unlike every other international carrier from Our Airlines to the mighty SQ, who can provide a basic allergy/religious meal with notice. The product sucks. It's largely not the fault of the frontline staff who do their best to compensate for the inadequacies. It's the fault of people in management who don't understand the 'customer service' concept but compete with a bunch of carriers who do. They can blame Aussie wages, unions, God hating them and every other excuse under the sun, but the fact remains that the product is average. They could fix this with a minimum of cost, but that would get in the way of the 'QF Intl is unviable' rhetoric. A lot of people would like to fly Qantas but have learned otherwise.
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Someone should approach the guy who set up the Vodafail website to create one for disgruntled Qantas customers to share thier bad experiences.
Vodafail had that much exposure it created a customer backlash and forced Vodafone to change their ways
Vodafail had that much exposure it created a customer backlash and forced Vodafone to change their ways
There is always going to be stories of people being hard done by thats a given.
But the simple fact is Qantas isn't losing money. Just need to look at the reports they must submit to the ASX, the numbers are juggled, shuffled to paint the perception that Qantas is losing money when in fact it isn't.
Just look at the numbers in the annual and half year reports. You can buy aircraft under one segment and lease them off to another segment to make them look good whilst taking the depreciation hit yourself, still doesn't change the fact that the cash is rolling in at a rate better then Singapore airlines.. and I'm talking about the Qantas segment only. Not counting the highly profitable muffin segment or the FF segment or the freight segment.
Just compare EBITDAR to Revenue which is the true measure of segment profitability before the fancy accountants get their hands on it to reduce the payable to tax to a fraction, at a few different airlines and you'll see for yourself.
But the simple fact is Qantas isn't losing money. Just need to look at the reports they must submit to the ASX, the numbers are juggled, shuffled to paint the perception that Qantas is losing money when in fact it isn't.
Just look at the numbers in the annual and half year reports. You can buy aircraft under one segment and lease them off to another segment to make them look good whilst taking the depreciation hit yourself, still doesn't change the fact that the cash is rolling in at a rate better then Singapore airlines.. and I'm talking about the Qantas segment only. Not counting the highly profitable muffin segment or the FF segment or the freight segment.
Just compare EBITDAR to Revenue which is the true measure of segment profitability before the fancy accountants get their hands on it to reduce the payable to tax to a fraction, at a few different airlines and you'll see for yourself.
Interesting to see poor QF slated in this way. QF is not the only carrier to suffer problems like this. You only have to look in the forums of FlyerTalk - The world's most popular frequent flyer community to see about service, there are some real beauties in there, and The Aviation Herald to see the tech reports that happen daily.
I remember when QF was way ahead of BA in service standards, but then I'm talking about B707 days!
I remember when QF was way ahead of BA in service standards, but then I'm talking about B707 days!
Last edited by crewmeal; 2nd Aug 2011 at 13:55.
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I'm a non professional pilot and qantas ff.
i dont mind service problems as long as service is not poor, and i get what i paid many months in advance for.
I fly qantas in the hope they apply he best possible safety standards, both in. maintenance, training, and pilot standards. As a general statement, once the cheap overseas pilots start with Qantas, I might start looking around.I have many friends who are pilots for Qantas, some military trained, and all highly professional in my opinion.
If anyone can tell me an airline that is consistently regarded as best for safety, then thats who I will make me several trips a year to Europe with.
As for now, its Singapore airlines or Qantas for me, but open to suggestions.
i dont mind service problems as long as service is not poor, and i get what i paid many months in advance for.
I fly qantas in the hope they apply he best possible safety standards, both in. maintenance, training, and pilot standards. As a general statement, once the cheap overseas pilots start with Qantas, I might start looking around.I have many friends who are pilots for Qantas, some military trained, and all highly professional in my opinion.
If anyone can tell me an airline that is consistently regarded as best for safety, then thats who I will make me several trips a year to Europe with.
As for now, its Singapore airlines or Qantas for me, but open to suggestions.
How about todays DFW-BNE-SYD QF8? Ordinarily due into SYD at 08:05 (Wed)
Now arriving 15:10 (Wed)
For whatever reason QF is now operating the flight DFW-LAX-AKL-BNE-SYD
This is the sort of obvious screw up that makes QF a second class airline.
Now arriving 15:10 (Wed)
For whatever reason QF is now operating the flight DFW-LAX-AKL-BNE-SYD
This is the sort of obvious screw up that makes QF a second class airline.
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How about todays DFW-BNE-SYD QF8? Ordinarily due into SYD at 08:05 (Wed) Now arriving 15:10 (Wed)
For whatever reason QF is now operating the flight DFW-LAX-AKL-BNE-SYD
This is the sort of obvious screw up that makes QF a second class airline.
For whatever reason QF is now operating the flight DFW-LAX-AKL-BNE-SYD
This is the sort of obvious screw up that makes QF a second class airline.
Look higher up the thread 1A. If it was your son/daughter/father/ mother on death's door I'm sure you'd expect the same. There are a lot of guys and gals working very hard out there over the Pacific [and in the office - thanks Kotoyebe] to recover the situation.
What's your alternative plan, Goose? [To almost quote from Topgun].
What's your alternative plan, Goose? [To almost quote from Topgun].
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Actually I don't know if safety standards in different airlines can be ranked, but check out the Skytrax customer reviews of Etihad vs Qantas:
Etihad Airways Customer Reviews | SKYTRAX
Qantas Airways Customer Reviews | SKYTRAX
Actually some interesting comments on that website, and a lot of major QF competitors score much lower than QF.
Etihad Airways Customer Reviews | SKYTRAX
Qantas Airways Customer Reviews | SKYTRAX
Actually some interesting comments on that website, and a lot of major QF competitors score much lower than QF.
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Just got a chain letter from a fellow worried Qantas employee. I apologize if it's been posted previously.
QANTAS has managed to destroy 43% of it's brand value in just 2 short years.
In the 7 July issue of BRW it was stated that QANTAS has managed to destroy 43% of it's brand value in just 2 short years.
90 years to build a brand, 2 years to destroy 43% of it.
I would love to take credit for the following reply to one of Ben Sandilands blogs. I don't know who wrote it, and I apologise if it has been posted on here before, but I hadn't seen it until today. It provides a very inciteful synopsis of how we have found ourselves in this position of fighting for our very existence, and pulls no punches on who is to blame.
Read on.
----------
Some of you may be aware of the media attention recently coming upon Qantas- especially from it's CEO, Alan Joyce.
Joyce came to the Qantas Group to run Jetstar, and had a small stint in Ansett, and a large stint in Ryanair previous to joining Qantas. Joyce has in past few months called Qantas pilots "Recalcitrant", "Kamikaze", and "Rogue", as well as accusing them of "Living on cloud cuckoo land". The reason- Qantas pilots are asking to ensure Qantas pilot jobs remain in Australia, as there is gathering evidence that Qantas wants to move more of it's operations offshore. Qantas Engineers are also asking for the same guarantees. So far, Qantas has refused to negotiate at all on these asks from the pilots and engineers.
Joyce was the golden haired boy of the previous CEO Geoff Dixon, the man who masterminded the attempted private Equity buyout of Qantas in 2007. Thankfully that did not get through. If it did, Qantas would have defaulted on the debt it was going to be loaded with, and would most certainly not exist any more. Dixon stood to make $60m out of the deal, and Joyce in excess of $20m.
In the Dixon/Joyce years, decision have been made that have severely damaged the Qantas brand, including forcing passengers onto Jetstar without choice, closing in-house maintenance of engines which has resulted in a 180% increase in engine failures in the past 5 years, and not buying the right aircraft to modernise Qantas and allow route expansion. To add, Qantas has subisided the Jetstar operation from the start including paying for maintenance, payment of landing fees, fuel and terminal charges, and seat subsidies.
As a result, Qantas share prices are below their 1995 issue price of $2.00.
Joyce was in Singapore recently for the International Air Transport Association (IATA) conference and blasted the pilots and engineers as being to blame for the tanking share price. He also stated that there would be no more investment in Qantas until it "started to return it's cost of capital". As one commentator put it, this is akin to "not spending any money on your car to make it run until it starts".
To put some of this into context and to show how badly Qantas management have stuffed up, here is some quotes from Qantas management and what has subsquently happened:
"Jetstar will not operate more than 15 aircraft" G.Dixon 2004. It now operates more than 70 aircraft.
"Jetstar will never operate internationally" G Dixon 2004. It has taken many Qantas routes from it's parent company to Hawaii , Japan , Bali and other ports.
"Emirates is not a threat as it is not a growth model" G Dixon 2001. Emirates now operates more than 60 services per week to Australia and flies to 26 destinations in Europe .
"The B777 is an old technology aircraft" G Dixon 2006. The B777 could fly 90% of the routes currently flown by the B747 with a 30% reduction in fuel burn and is flown by every major airline in the world.
"There is no money in freight" G Dixon 2004. Qantas now operates a full freighter B767 aircraft flown by contract pilots as well as full time contracts with Atlas Air Cargo.
All the while Qantas pilots get assigned Long Service Leave because of a surplus in pilot numbers due to the outsourcing of flying previously done by Qantas pilots to Jetstar, Atlas cargo, Jetconnect across the Tasman, and Jetstar Asia.
You will find below a succienct, precise, summary of where and why Qantas finds itself- losing money and losing market share. This was written as a response to a blog by Ben Sandilands on crikey.com <http://crikey.com> .
------------------------------------------
Qantas pilots and engineers ask for your support and patience this year while we try to end the rot, keep Australian jobs in Australia and attempt to save a national icon from corporate greed.
--------------------------------------------
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.
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.
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?
Let’s look at the facts. This is marketing and business studies 101.
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.
The Qantas brand was pure 100%, 24 carat, rolled gold.
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.
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.
” … the iconic flying kangaroo, Qantas, dropped 47 spots in consumer confidence.”
You read right. In 2008 Qantas dropped 47 spots.
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.
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 ****ed 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 B777 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 B787s 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 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 management either remembers, nor understands, these important lessons from history.
The only player who appears to do so is John Borghetti. 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.
QANTAS has managed to destroy 43% of it's brand value in just 2 short years.
In the 7 July issue of BRW it was stated that QANTAS has managed to destroy 43% of it's brand value in just 2 short years.
90 years to build a brand, 2 years to destroy 43% of it.
I would love to take credit for the following reply to one of Ben Sandilands blogs. I don't know who wrote it, and I apologise if it has been posted on here before, but I hadn't seen it until today. It provides a very inciteful synopsis of how we have found ourselves in this position of fighting for our very existence, and pulls no punches on who is to blame.
Read on.
----------
Some of you may be aware of the media attention recently coming upon Qantas- especially from it's CEO, Alan Joyce.
Joyce came to the Qantas Group to run Jetstar, and had a small stint in Ansett, and a large stint in Ryanair previous to joining Qantas. Joyce has in past few months called Qantas pilots "Recalcitrant", "Kamikaze", and "Rogue", as well as accusing them of "Living on cloud cuckoo land". The reason- Qantas pilots are asking to ensure Qantas pilot jobs remain in Australia, as there is gathering evidence that Qantas wants to move more of it's operations offshore. Qantas Engineers are also asking for the same guarantees. So far, Qantas has refused to negotiate at all on these asks from the pilots and engineers.
Joyce was the golden haired boy of the previous CEO Geoff Dixon, the man who masterminded the attempted private Equity buyout of Qantas in 2007. Thankfully that did not get through. If it did, Qantas would have defaulted on the debt it was going to be loaded with, and would most certainly not exist any more. Dixon stood to make $60m out of the deal, and Joyce in excess of $20m.
In the Dixon/Joyce years, decision have been made that have severely damaged the Qantas brand, including forcing passengers onto Jetstar without choice, closing in-house maintenance of engines which has resulted in a 180% increase in engine failures in the past 5 years, and not buying the right aircraft to modernise Qantas and allow route expansion. To add, Qantas has subisided the Jetstar operation from the start including paying for maintenance, payment of landing fees, fuel and terminal charges, and seat subsidies.
As a result, Qantas share prices are below their 1995 issue price of $2.00.
Joyce was in Singapore recently for the International Air Transport Association (IATA) conference and blasted the pilots and engineers as being to blame for the tanking share price. He also stated that there would be no more investment in Qantas until it "started to return it's cost of capital". As one commentator put it, this is akin to "not spending any money on your car to make it run until it starts".
To put some of this into context and to show how badly Qantas management have stuffed up, here is some quotes from Qantas management and what has subsquently happened:
"Jetstar will not operate more than 15 aircraft" G.Dixon 2004. It now operates more than 70 aircraft.
"Jetstar will never operate internationally" G Dixon 2004. It has taken many Qantas routes from it's parent company to Hawaii , Japan , Bali and other ports.
"Emirates is not a threat as it is not a growth model" G Dixon 2001. Emirates now operates more than 60 services per week to Australia and flies to 26 destinations in Europe .
"The B777 is an old technology aircraft" G Dixon 2006. The B777 could fly 90% of the routes currently flown by the B747 with a 30% reduction in fuel burn and is flown by every major airline in the world.
"There is no money in freight" G Dixon 2004. Qantas now operates a full freighter B767 aircraft flown by contract pilots as well as full time contracts with Atlas Air Cargo.
All the while Qantas pilots get assigned Long Service Leave because of a surplus in pilot numbers due to the outsourcing of flying previously done by Qantas pilots to Jetstar, Atlas cargo, Jetconnect across the Tasman, and Jetstar Asia.
You will find below a succienct, precise, summary of where and why Qantas finds itself- losing money and losing market share. This was written as a response to a blog by Ben Sandilands on crikey.com <http://crikey.com> .
------------------------------------------
Qantas pilots and engineers ask for your support and patience this year while we try to end the rot, keep Australian jobs in Australia and attempt to save a national icon from corporate greed.
--------------------------------------------
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.
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.
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?
Let’s look at the facts. This is marketing and business studies 101.
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.
The Qantas brand was pure 100%, 24 carat, rolled gold.
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.
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.
” … the iconic flying kangaroo, Qantas, dropped 47 spots in consumer confidence.”
You read right. In 2008 Qantas dropped 47 spots.
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.
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 ****ed 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 B777 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 B787s 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 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 management either remembers, nor understands, these important lessons from history.
The only player who appears to do so is John Borghetti. 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.
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Cathay, Singapore,British, along with all the middle eastern airlines are making huge profits with a premium product.But no little AL thinks we need to downsize the product.Hes the greatest pretender of all.Just look at the share price and lack of dividend.Its time to get rid of them all.
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How a 70K bonus killed an airline.
Ever wondered what the segmentation of a business would do? About 15 years ago it was all the rage in the States. A few years later, the business school that invented the concept has changed its mind and now is against the concept.
Well GD Split Qantas into the business units. AJ said he was going to combine it back into one, but Qantas is still split in so many units, that it is literally ripping itself apart in the struggle for managers to get their bonuses.
There are two units that are killing the airline. And Jetstar is not one of them. The First is freight. A famous statement was made by a former QF CEO "there is no money in freight" - well we all know how wrong that is....
The problem with QF Freight is the fee that it has to pay Qantas for the use of belly space. It is a simple paper shuffle form one department to another. No money exits the company but the amount QF freight pays to Qantas determines which manager gets the 70K bonus for making the most money. The freight charge was set at standard industry rates - all good so far. That should work, shouldn't it?
Well no. To make more money, QF freight now uses a external cheep operator in the US to move its freight from JFK to LAX.
QF freight is making more money now and the manager is getting his 70K bonus
Big problem.... QF operates an A330 on the run with 30,000kg of belly space not being used. The actual cost to the airline is the extra fuel if this space was being used. On this run it is 180Kg extra fuel burn per 1000Kg of freight. That is about 20c/kg to use belly space.
Qantas is charging QF freight much much more than this, so in its company smashing wisdom freight are chartering aircraft to take the freight rather than send it on the Qantas jet.
This now makes the LAX JFK run look unprofitable for Qantas - well it is QF Freight are chartering another jet to fly along side the A330 with its freight.
Now any CEO worth his salt (or exorbitant pay) would sack the freight manager and get the freight back on their aircraft. - But no Not the clown that is in charge. He has no idea what freight is doing.
Remember the $200,000,000 fine that QF Freight cost the company for illegal activities last year??? The old CEO said he had no idea what freight does (I suppose he had to say that otherwise he would be in jail). Well the new CEO is no better.
So what is the CEO going to do? On the 24 of this month he is going to announce that Qantas is pulling out of the LAX JFK run - becaust it is loosing money. (the load pax factor is over 85% so where is the problem????)
QF Freight in the last few year has cost the company over $300,000,000 - But according to the segmented business model that they operate under, they have made lots of money, and Qantas international is the one that is loosing money.
As a Qantas Shareholder I am appalled at the lack of over site that the current management team has.
I am sick of hearing about the greedy pilots. It is the segmentation of this company, and one persons 70K bonus that has killed another Qantas route.
And an inept CEO that is incapable of running a complex company.
Well GD Split Qantas into the business units. AJ said he was going to combine it back into one, but Qantas is still split in so many units, that it is literally ripping itself apart in the struggle for managers to get their bonuses.
There are two units that are killing the airline. And Jetstar is not one of them. The First is freight. A famous statement was made by a former QF CEO "there is no money in freight" - well we all know how wrong that is....
The problem with QF Freight is the fee that it has to pay Qantas for the use of belly space. It is a simple paper shuffle form one department to another. No money exits the company but the amount QF freight pays to Qantas determines which manager gets the 70K bonus for making the most money. The freight charge was set at standard industry rates - all good so far. That should work, shouldn't it?
Well no. To make more money, QF freight now uses a external cheep operator in the US to move its freight from JFK to LAX.
QF freight is making more money now and the manager is getting his 70K bonus
Big problem.... QF operates an A330 on the run with 30,000kg of belly space not being used. The actual cost to the airline is the extra fuel if this space was being used. On this run it is 180Kg extra fuel burn per 1000Kg of freight. That is about 20c/kg to use belly space.
Qantas is charging QF freight much much more than this, so in its company smashing wisdom freight are chartering aircraft to take the freight rather than send it on the Qantas jet.
This now makes the LAX JFK run look unprofitable for Qantas - well it is QF Freight are chartering another jet to fly along side the A330 with its freight.
Now any CEO worth his salt (or exorbitant pay) would sack the freight manager and get the freight back on their aircraft. - But no Not the clown that is in charge. He has no idea what freight is doing.
Remember the $200,000,000 fine that QF Freight cost the company for illegal activities last year??? The old CEO said he had no idea what freight does (I suppose he had to say that otherwise he would be in jail). Well the new CEO is no better.
So what is the CEO going to do? On the 24 of this month he is going to announce that Qantas is pulling out of the LAX JFK run - becaust it is loosing money. (the load pax factor is over 85% so where is the problem????)
QF Freight in the last few year has cost the company over $300,000,000 - But according to the segmented business model that they operate under, they have made lots of money, and Qantas international is the one that is loosing money.
As a Qantas Shareholder I am appalled at the lack of over site that the current management team has.
I am sick of hearing about the greedy pilots. It is the segmentation of this company, and one persons 70K bonus that has killed another Qantas route.
And an inept CEO that is incapable of running a complex company.
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Thanks They, this deserves to be forwarded on to all shareholders to explain how incompetent the top levels of Qantas are. What you describe would be replicated across many segments of the business.
All their time is spent trying to aggressively grow Jetstar, they do not realise what is happening in the core business.
The share price performance and dividends are a direct result of this misdirected management.
All their time is spent trying to aggressively grow Jetstar, they do not realise what is happening in the core business.
The share price performance and dividends are a direct result of this misdirected management.
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They sure do know what is happening to the core business because they planned every last step....... step by step.
They don't give a rats about any of the consequences because they know more than anyone else.
Atleast there is one shareholder who now knows what is going on...at last but probably too late to save his investment from the saracens.
They don't give a rats about any of the consequences because they know more than anyone else.
Atleast there is one shareholder who now knows what is going on...at last but probably too late to save his investment from the saracens.
They.
I agree with your synopsis apart from the origin of the policy.
That poonsie little prick with the bow tie did exactly that to TAA before he came to Q. Set up the silos then make them all compete for profit.
Vividly recall asking why I could see trolleys of freight for LST outside the freight shed as we taxied for LST with an empty hold. "IPEC can do it cheaper" was the answer.
Point is, don't give Scrotum Face all the credit. The Bow tie taught him all he knew. As he still holds a board position he is probably still up to his armpits in it.
Let your rage be heard.
Maui
I agree with your synopsis apart from the origin of the policy.
That poonsie little prick with the bow tie did exactly that to TAA before he came to Q. Set up the silos then make them all compete for profit.
Vividly recall asking why I could see trolleys of freight for LST outside the freight shed as we taxied for LST with an empty hold. "IPEC can do it cheaper" was the answer.
Point is, don't give Scrotum Face all the credit. The Bow tie taught him all he knew. As he still holds a board position he is probably still up to his armpits in it.
Let your rage be heard.
Maui