AUGUST 24th - QANTAS
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Management to blame for
1. Greed and trough feeding
2. Wrong Fleet
1. Greed and trough feeding
2. Wrong Fleet
IE; I wonder if there were other motives for the fleet choice.
Last edited by Ngineer; 28th Aug 2011 at 11:06.
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From Saturday's full page ads, I particularly loved the 'faceless evil Union dudes destroying your beloved Qantas' who were represented by a generic Getty Image photo of blokes with their arms crossed shown from the neck down. 
I guess it's supposed to show that...they're FACELESS. 
Honestly, it made ALP election ads look positively subtle.
Most non-aviation people I talk to don't care about the Qantas As Icon so much, but they think that the 'Unavoidable Australian Job Losses + BTW there's a $500m profit' sounds a bit suss.
What sort of business takes out full page ads to say how their business strategy isn't working? Once again, there was no mention of the product. The same paper had ads for Etihad, Singapore, Emirates etc with glamourous photos of exotic locations, cute hosties and reasonable prices via Dar Es Salaam et al. If you were a newly arrived alien on Earth reading a copy of the paper, apart from the generic 'aircraft tails at airport' shot you'd be confused about what Qantas actually does.
It's a bit like running a bar and taking out an ad saying 'we're neck deep in yobs and our drink prices are through the roof. Also, our toilets smell. By the way...choose us'!
I guess it's supposed to show that...they're FACELESS. Honestly, it made ALP election ads look positively subtle.
Most non-aviation people I talk to don't care about the Qantas As Icon so much, but they think that the 'Unavoidable Australian Job Losses + BTW there's a $500m profit' sounds a bit suss.
What sort of business takes out full page ads to say how their business strategy isn't working? Once again, there was no mention of the product. The same paper had ads for Etihad, Singapore, Emirates etc with glamourous photos of exotic locations, cute hosties and reasonable prices via Dar Es Salaam et al. If you were a newly arrived alien on Earth reading a copy of the paper, apart from the generic 'aircraft tails at airport' shot you'd be confused about what Qantas actually does.
It's a bit like running a bar and taking out an ad saying 'we're neck deep in yobs and our drink prices are through the roof. Also, our toilets smell. By the way...choose us'!
Last edited by Worrals in the wilds; 28th Aug 2011 at 12:57.
Worrals, I think that photo was actually of Barry Jackson, Steve Purvinas, Tony Sheldon and one(?) other. It was taken in Canberra a couple of weeks ago and then the heads were photoshopped out for the QANTAS ad.
I thought it was a strange photo at the time - the "tough" unionists, arms crossed in Canberra. They looked like Joe McDonald of CFMEU fame. I'm not surprised QANTAS used the photo!
I thought it was a strange photo at the time - the "tough" unionists, arms crossed in Canberra. They looked like Joe McDonald of CFMEU fame. I'm not surprised QANTAS used the photo!
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Expert Commentary
Gents, just had to recap to "aviation expert" Geoffrey Thomas interviewing Peter "I know which side my bread is buttered" Harbison on the genius of the 2007 MBO proposed by GOD - sounds familiar I think:
"Qantas Deal is Do or Die, Says Think-tank
Enough said.
"Qantas Deal is Do or Die, Says Think-tank
Source: The Australian Author: Geoffrey Thomas 01/12/2007
The ambitious $11 billion buyout bid from Airline Partners Australia (APA) to take Qantas private will succeed, if only because of the dire consequences of failure, the region's leading aviation think-tank says.
Centre of Asia Pacific Aviation founder and executive chairman Peter Harbison says "the consequences of failure are too grotesque to imagine.
"If the deal is knocked back, there would be a massive loss of confidence and the share market would bale out of the stock sending the share price below last year's lows."
On January 11, Mr Harbison warned that Qantas is a child of regulation, and as that protection is removed through liberalisation so it would progressively wither on the vine.
"This is an international trend and beyond the control of the Australian Government, even if it wanted to prevent change," he said. "In the face of this evolutionary process, Qantas would be lucky to survive another 10 years in its current form.
"It would contract into a domestic airline and eventually be taken over by one of the post-2010 multinational airlines."
It has been Qantas's sluggish share price and the airline management's futile pleas to the Australian Government to ease foreign ownership restrictions to give it greater access to foreign capital at lower interest rates that set up the conditions for the buyout bid.
Many airline analysts, including Mr Harbison, believe that the share market, conditioned to quarterly reporting, does not understand the long-term nature of the airline market and Qantas's high standing in the global airline market. That lack of understanding is also reflected in the Roy Morgan research poll which found that a small majority of Australians did not want the buyout to proceed but that sentiment was based on the false premise that Qantas is either government-controlled or 100 per cent Australian-owned.
Mr Harbison added that there are many reasons why the Qantas buyout should be given the green light.
He says greater airline liberalisation is coming, particularly in Asia, and Qantas needs to be able to access capital to implement its strategic push into Asia.
"The Airline Partners Australia investors may be money-hungry, but stupid they are not - they see the international emerging opportunities in much the same light as Qantas CEO Geoff Dixon does," Mr Harbison said.
"Their 'patient equity' - as APA chairman Bob Mansfield describes it - unconstrained by quarterly analyst scrutiny and therefore able to take long-term strategic positions, allows APA to make more aggressive financial plays, where such moves would see slumps in a listed Qantas's share price."
And it would appear that the Australian Government would be struggling to attach any meaningful conditions to the deal.
Earlier this week, Australia's Deputy Prime Minister and Transport Minister Mark Vaile said on ABC-TV that "on the commercial side of things it's a bit difficult to put overly restrictive requirements on (the deal), but certainly it would be in the national interest to maintain a high level of skill in the aviation industry in Australia".
However, Mr Vaile hinted that conditions might be applied similar to those imposed when Air New Zealand acquired Ansett Australia in 2000 - namely, that Ansett remained based in Australia, kept regional routes and did not reduce skilled employment. As it turned out, those conditions were utterly meaningless when the airline went into bankruptcy.
Not well known was an Ansett-Air New Zealand plan drawn up in May 2000 to abandon all intrastate and regional routes in Western Australia to stem savage losses.
While leading analysts, such as Mr Harbison, are backing the deal, there is enormous heat being applied to Qantas from around Australia by federal and state politicians and tourism bodies clamouring for better services from the airline.
However, the reality is that the public and the Government, as happens elsewhere in the world, believe that the "national airline" or any airline is a public utility with a duty to provide services when, where and at whatever price the sometimes unforgiving public demand.
Leading the charge for the public utility argument have been politicians in the Australian state of Victoria and Queensland, with Tasmanian politicians pitching in late this week for services to be increased or at least protected.
Not well understood is that the Qantas of today and its ability to serve Australia is in many cases a legacy of decisions taken - or not taken - in the 1990s.
Analysts point to the fact that the airline has withdrawn from European cities such as Rome, Athens and Paris because it doesn't have aircraft such as the 300-seat 777-200ER, which are perfectly matched for the passenger demand on those routes.
Qantas in fact is the only major long-haul airline that does not have a 300-seat jet in its fleet.
The airline's management in the 1990s was also slow to install seatback videos for all passengers, which is thought to have cost business.
Current Qantas chief Geoff Dixon took over in 2000, and with current chief financial officer Peter Gregg and general manager John Borghetti has moved aggressively to reposition the airline at the forefront of innovation both operationally and in market positioning with the launch of low-cost Jetstar.
Qantas has the second-largest order of 20 of the giant 500-seat A380 and is the second-largest customer for the 270-seat 787, with both aircraft slated for delivery in mid-2008.
The Australian Competition and Consumer Commission and the Foreign Investment Review Board are examining the Qantas deal on a range of complex issues, including the cross-ownership of Sydney Airport by bid leader Macquarie Bank and examination of how the bid parties have acted. The reports from both bodies to the Australian Government are expected late next month.
Treasurer Peter Costello will consider the case on national interest grounds, but the review may take some time. In 2001 Costello took six months to reject the bid by Anglo-Dutch oil giant Shell for Australia's Woodside Petroleum. (Australian dollar is the currency used in this report unless otherwise stated)"
Centre of Asia Pacific Aviation founder and executive chairman Peter Harbison says "the consequences of failure are too grotesque to imagine.
"If the deal is knocked back, there would be a massive loss of confidence and the share market would bale out of the stock sending the share price below last year's lows."
On January 11, Mr Harbison warned that Qantas is a child of regulation, and as that protection is removed through liberalisation so it would progressively wither on the vine.
"This is an international trend and beyond the control of the Australian Government, even if it wanted to prevent change," he said. "In the face of this evolutionary process, Qantas would be lucky to survive another 10 years in its current form.
"It would contract into a domestic airline and eventually be taken over by one of the post-2010 multinational airlines."
It has been Qantas's sluggish share price and the airline management's futile pleas to the Australian Government to ease foreign ownership restrictions to give it greater access to foreign capital at lower interest rates that set up the conditions for the buyout bid.
Many airline analysts, including Mr Harbison, believe that the share market, conditioned to quarterly reporting, does not understand the long-term nature of the airline market and Qantas's high standing in the global airline market. That lack of understanding is also reflected in the Roy Morgan research poll which found that a small majority of Australians did not want the buyout to proceed but that sentiment was based on the false premise that Qantas is either government-controlled or 100 per cent Australian-owned.
Mr Harbison added that there are many reasons why the Qantas buyout should be given the green light.
He says greater airline liberalisation is coming, particularly in Asia, and Qantas needs to be able to access capital to implement its strategic push into Asia.
"The Airline Partners Australia investors may be money-hungry, but stupid they are not - they see the international emerging opportunities in much the same light as Qantas CEO Geoff Dixon does," Mr Harbison said.
"Their 'patient equity' - as APA chairman Bob Mansfield describes it - unconstrained by quarterly analyst scrutiny and therefore able to take long-term strategic positions, allows APA to make more aggressive financial plays, where such moves would see slumps in a listed Qantas's share price."
And it would appear that the Australian Government would be struggling to attach any meaningful conditions to the deal.
Earlier this week, Australia's Deputy Prime Minister and Transport Minister Mark Vaile said on ABC-TV that "on the commercial side of things it's a bit difficult to put overly restrictive requirements on (the deal), but certainly it would be in the national interest to maintain a high level of skill in the aviation industry in Australia".
However, Mr Vaile hinted that conditions might be applied similar to those imposed when Air New Zealand acquired Ansett Australia in 2000 - namely, that Ansett remained based in Australia, kept regional routes and did not reduce skilled employment. As it turned out, those conditions were utterly meaningless when the airline went into bankruptcy.
Not well known was an Ansett-Air New Zealand plan drawn up in May 2000 to abandon all intrastate and regional routes in Western Australia to stem savage losses.
While leading analysts, such as Mr Harbison, are backing the deal, there is enormous heat being applied to Qantas from around Australia by federal and state politicians and tourism bodies clamouring for better services from the airline.
However, the reality is that the public and the Government, as happens elsewhere in the world, believe that the "national airline" or any airline is a public utility with a duty to provide services when, where and at whatever price the sometimes unforgiving public demand.
Leading the charge for the public utility argument have been politicians in the Australian state of Victoria and Queensland, with Tasmanian politicians pitching in late this week for services to be increased or at least protected.
Not well understood is that the Qantas of today and its ability to serve Australia is in many cases a legacy of decisions taken - or not taken - in the 1990s.
Analysts point to the fact that the airline has withdrawn from European cities such as Rome, Athens and Paris because it doesn't have aircraft such as the 300-seat 777-200ER, which are perfectly matched for the passenger demand on those routes.
Qantas in fact is the only major long-haul airline that does not have a 300-seat jet in its fleet.
The airline's management in the 1990s was also slow to install seatback videos for all passengers, which is thought to have cost business.
Current Qantas chief Geoff Dixon took over in 2000, and with current chief financial officer Peter Gregg and general manager John Borghetti has moved aggressively to reposition the airline at the forefront of innovation both operationally and in market positioning with the launch of low-cost Jetstar.
Qantas has the second-largest order of 20 of the giant 500-seat A380 and is the second-largest customer for the 270-seat 787, with both aircraft slated for delivery in mid-2008.
The Australian Competition and Consumer Commission and the Foreign Investment Review Board are examining the Qantas deal on a range of complex issues, including the cross-ownership of Sydney Airport by bid leader Macquarie Bank and examination of how the bid parties have acted. The reports from both bodies to the Australian Government are expected late next month.
Treasurer Peter Costello will consider the case on national interest grounds, but the review may take some time. In 2001 Costello took six months to reject the bid by Anglo-Dutch oil giant Shell for Australia's Woodside Petroleum. (Australian dollar is the currency used in this report unless otherwise stated)"
Enough said.
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If the above doesn't give you nightmares, the following should.
The insight contained in Sandilands' latest Plane Talking article is breathtaking.
Source: http://blogs.crikey.com.au/planetalking/2011/08/29/what-happens-when-the-asian-carriers-retaliate-with-australia-based-international-entities/
.
The insight contained in Sandilands' latest Plane Talking article is breathtaking.
Using the precedent set when Qantas sets up (hypothetically) a China based enterprise, …the Qantas Asia project could totally destroy Qantas, and Virgin Australia; because (any) such reciprocity would set up unlimited access by Asia or China…(to) Australia-America and Sydney or Melbourne to London.
.
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Situation Report:
Unfortunately the reality is that the best efforts of the team at the AIPA are having little effect on Qantas Corporate Management and regardless of the "tripe" posted continuously into the media by Qantas Corporate and (New Chairman Lounge) Australian journalists, the Pilots supporting industrial inertia is being lost and individuals such as Mr. Xenophon will have little chance to force a review of Qantas Corporate behavior into the future.
The time to act industrially is Now! However the catch is the aircraft need to stop rolling on tarmacs to heighten the awareness of the junior Pilots future and associated unions’ plight. The catch is that this plays directly into Joyce / Clifford and Oldmeadow's evil industrial Plans.
Alas as time moves on the lay of the environment industrially, at this time, is becoming a boring rhetoric stalemate, however the Qantas Corporate Egomaniacs are still edging towards their Industrial Objectives and those of us within the skirmish can only watch events unfold on a daily basis with little to zero industrial proactive action available. Ties, PA’s and PIA to date, although creating a little media attention and discussion are not working to stop the Qantas Corporate Industrial Mechanism from moving forward.
No one really seems to care about the share-price other than a cursory “Oh, it’s now down there now”! As a shareholder I am stunned by the Corporate Greed and detachment from reality of Clifford, Joyce and the Qantas Board, yet they seem untouchable by Individual and Commercial shareholders to date.
The full tragedy is only just unfolding industrially for the junior Qantas Mainline Long-Haul Pilots. The EBA LWOP provisions are at best draconian and leave little leverage for any possible future return after three years outside Qantas. Consider if you will the larger picture that and once the bottom 180 Pilots are ousted the next 180 will move too (if not earlier) as the bottom of the Qantas Pilot lists on a shrinking fleet and shrinking route base is not the place to be in Airline Aviation.
This will save Qantas millions $$ in potential payouts as the Pilots skip the industrial leverage for retrenchment payments and packages and move early to the New opportunities throughout World -Wide Airline Aviation employment.
The next mammoth cost to Qantas Mainline Long-Haul will be when Pilots begin "bumping" Pilots through Fleet Shrinkage and through the Pilots EBA Seniority system adding to the costs of the Mainline Long-Haul operation and creating the resentment that comes from such industrial mechanisms.
According to Joyce we are in the First phase of this restructuring of Mainline Long-Haul Qantas, the Second Phase given the programmed Five Hour transits in BKK for a BA flight to London will not be far away!
Some 55 year old Captains are hedging their bets that they will make 60 years of age prior to the total collapse of Mainline Long-Haul. The best bet is about Five-Years. Some 45 year old Captains see the future as a "shot duck" with the slow bleed of Mainline-Long-Haul operations and no relevant future as they will be on the wrong side of the employment curve if they do not move now as Captains!
There is likely to be left a small International entity of A380’s and at best some B-744-400ER’s that is the shell for the Qantas Corporate Headquarters overseeing multiple cellular Jetstar Operations across the globe and giving Qantas Corporate Accountants the Qantas Board a greedy free-ride into the future.
Alas, the AIPA team need a revelation, be it Political, Industrial or an Australian Public uprising and they need it right-now!
I pray they have the ultimate solution (and yet to be released) otherwise time has just about run out for the Pilots in this Industrial battle.
The loss of a future by our young Professional Aviators is inexcusable as a trade-off to Asia and Corporate Greed the further unpalatable tragedy is that Australians are now losing their Aviation heritage, Flag Carrier and Aviation icon as well!
The time to act industrially is Now! However the catch is the aircraft need to stop rolling on tarmacs to heighten the awareness of the junior Pilots future and associated unions’ plight. The catch is that this plays directly into Joyce / Clifford and Oldmeadow's evil industrial Plans.
Alas as time moves on the lay of the environment industrially, at this time, is becoming a boring rhetoric stalemate, however the Qantas Corporate Egomaniacs are still edging towards their Industrial Objectives and those of us within the skirmish can only watch events unfold on a daily basis with little to zero industrial proactive action available. Ties, PA’s and PIA to date, although creating a little media attention and discussion are not working to stop the Qantas Corporate Industrial Mechanism from moving forward.
No one really seems to care about the share-price other than a cursory “Oh, it’s now down there now”! As a shareholder I am stunned by the Corporate Greed and detachment from reality of Clifford, Joyce and the Qantas Board, yet they seem untouchable by Individual and Commercial shareholders to date.
The full tragedy is only just unfolding industrially for the junior Qantas Mainline Long-Haul Pilots. The EBA LWOP provisions are at best draconian and leave little leverage for any possible future return after three years outside Qantas. Consider if you will the larger picture that and once the bottom 180 Pilots are ousted the next 180 will move too (if not earlier) as the bottom of the Qantas Pilot lists on a shrinking fleet and shrinking route base is not the place to be in Airline Aviation.
This will save Qantas millions $$ in potential payouts as the Pilots skip the industrial leverage for retrenchment payments and packages and move early to the New opportunities throughout World -Wide Airline Aviation employment.
The next mammoth cost to Qantas Mainline Long-Haul will be when Pilots begin "bumping" Pilots through Fleet Shrinkage and through the Pilots EBA Seniority system adding to the costs of the Mainline Long-Haul operation and creating the resentment that comes from such industrial mechanisms.
According to Joyce we are in the First phase of this restructuring of Mainline Long-Haul Qantas, the Second Phase given the programmed Five Hour transits in BKK for a BA flight to London will not be far away!
Some 55 year old Captains are hedging their bets that they will make 60 years of age prior to the total collapse of Mainline Long-Haul. The best bet is about Five-Years. Some 45 year old Captains see the future as a "shot duck" with the slow bleed of Mainline-Long-Haul operations and no relevant future as they will be on the wrong side of the employment curve if they do not move now as Captains!
There is likely to be left a small International entity of A380’s and at best some B-744-400ER’s that is the shell for the Qantas Corporate Headquarters overseeing multiple cellular Jetstar Operations across the globe and giving Qantas Corporate Accountants the Qantas Board a greedy free-ride into the future.
Alas, the AIPA team need a revelation, be it Political, Industrial or an Australian Public uprising and they need it right-now!
I pray they have the ultimate solution (and yet to be released) otherwise time has just about run out for the Pilots in this Industrial battle.
The loss of a future by our young Professional Aviators is inexcusable as a trade-off to Asia and Corporate Greed the further unpalatable tragedy is that Australians are now losing their Aviation heritage, Flag Carrier and Aviation icon as well!
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http://blogs.crikey.com.au/planetalk...onal-entities/
What happens when the Asian carriers retaliate with Australia based international entities?
August 29, 2011 – 9:48 am, by Ben Sandilands
There is a ‘problem’ with the Qantas pursuit of an Asia based premium carrier to provide new connections between Australia and Asia, within Asia, and between Asia and Europe, namely the expectation of far reaching reciprocal benefits in Australia.
It could cost Qantas, and for that matter Virgin Australia, their investment in Australia-America flights.
Qantas is asking Singapore, Malaysia and China to host a Qantas financed and directed carrier that would require recognition as a Singaporean, Malaysian or Chinese flag carrier in order to fly beyond their borders to other states.
But what if those states make participation in their international markets by an Australian airline enterprise claiming to be a Singaporean, Malaysian or Chinese flag carrier conditional on reciprocal participation in the US-Australia, or South America-Australia or even future Australia-Europe non-stop markets by similar entities operating as Australian flag carriers?
Basically, it means that the cost of the Qantas Asia project could be to totally destroy Qantas, and Virgin Australia as a collateral casualty, because such reciprocity would set up unlimited access by Asia or China directed Australia based carriers to the non-stop Australia-Europe market once the technology to make such ultra long range flights viable is perfected, which is an inevitability in the medium term.
In fact Singapore Airlines could tomorrow finance and direct a Singapore-Pacific Airline notionally owned 51% by an Australian entity, and apply for an allocation of flights on the Australia-US routes under the term of the open skies agreement between Canberra and DC, because that agreement sets no limits on national flag carriers or capacity at either end.
However not all of the routes a Qantas directed entity based in Singapore, or Malaysia or China are as wide open in terms of air traffic agreements as Australia-America.
And this is where it is important to note that air traffic access is not negotiated by carriers but governments, meaning that it is the governments of Singapore, China and Malaysia who have to consider their national interest in allowing an Australian financed and directed operation to assume the rights, privileges and obligations of carrying their flags, and their trading partners, who have to decide whether they would accept such an entity as truly Singaporean, Chinese or Malaysian.
They will neither give away, nor recognize, those rights for nothing.
The fact that Australia allows 100% foreign ownership of domestic operations, and is notably liberal in allowing international access to its gateways, is not going to cut any slack if, for example, Qantas were to fantasise about its China based carrier kicking open the door to vastly more traffic rights into Europe as a China flag carrier compared to the more limited opportunities Qantas has an Australian flag carrier under the Australia-EU treaty.
This is about Australia to the world, but wrapped in the flag of Singapore, China or Malaysia, and not about Australia domestic or Singapore Airlines or Hainan Airlines operating flights from Australia as Singapore or China flagged carriers.
It is about, for example, a reciprocally Australia based China directed carrier using the precedent set when Qantas sets up (hypothetically) a China based enterprise once the technology delivers versions of the Airbus A380 or Boeing 777, or whatever, that can fly right over China going non-stop from Sydney or Melbourne to London, because, after all, the Qantas-China operation will also be able to fly non-stop to Rio de Janeiro or the post 2030 mining boom towns established in Antarctica if it survives that long, which is implausible.
It is a fair bet, given the superb and visionary achievements of Qantas managements this century, that Qantas hasn’t considered exactly what its target Asia states for the new venture would seek in return for it being free to set up shop and get done over in its attempts to carve itself a slice of their international air travel markets.
The six year record of Jetstar’s adventures in Asia are irrelevant to anything that smacks of an Australian directed airline claiming a place in their long haul links to Europe or North America. Yet this is what Qantas is after, because Joyce said in multiple interviews, that the new Asia based carrier would give Australia new links to Europe.
These issues are a reminder that doing business in Asia is a long game, not a short game, and that the Qantas approach to these matters is so shortsighted and lacking in rigor that it would end in its destruction, a fate not unknown to ill-conceived short term Australian business forays into Asia and China.
It should also be a reminder that the qualities needed to successfully deliver an Asia strategy as recently outlined by Qantas Group CEO Alan Joyce are not evident in his company, which has dismally failed to manage staff engagement, fleet strategy, product and networks, and left its shareholders without dividends for three years.
There is something deeply unsettling about the direction of Qantas in seeking Asianisation when it cannot get the fundamentals of being competitive in long haul operations right, and persists in blaming others for its failure to stop customers fleeing en mass to competitors with better and more relevant single airline links to Europe and the UK.
If the Asia based premium carrier fails to get off the ground, where will that leave a company that has justified hacking into its long haul full service operation to focus more on the Asian markets, deliberately driving even more customers over to the likes of Singapore Airlines and Emirates?
It will be a lot of pain for no gain. And among the obvious consequences of such a failure would be its coming under siege from an opportunistic buy and split up bid, or totally renewing its management.
August 29, 2011 – 9:48 am, by Ben Sandilands
There is a ‘problem’ with the Qantas pursuit of an Asia based premium carrier to provide new connections between Australia and Asia, within Asia, and between Asia and Europe, namely the expectation of far reaching reciprocal benefits in Australia.
It could cost Qantas, and for that matter Virgin Australia, their investment in Australia-America flights.
Qantas is asking Singapore, Malaysia and China to host a Qantas financed and directed carrier that would require recognition as a Singaporean, Malaysian or Chinese flag carrier in order to fly beyond their borders to other states.
But what if those states make participation in their international markets by an Australian airline enterprise claiming to be a Singaporean, Malaysian or Chinese flag carrier conditional on reciprocal participation in the US-Australia, or South America-Australia or even future Australia-Europe non-stop markets by similar entities operating as Australian flag carriers?
Basically, it means that the cost of the Qantas Asia project could be to totally destroy Qantas, and Virgin Australia as a collateral casualty, because such reciprocity would set up unlimited access by Asia or China directed Australia based carriers to the non-stop Australia-Europe market once the technology to make such ultra long range flights viable is perfected, which is an inevitability in the medium term.
In fact Singapore Airlines could tomorrow finance and direct a Singapore-Pacific Airline notionally owned 51% by an Australian entity, and apply for an allocation of flights on the Australia-US routes under the term of the open skies agreement between Canberra and DC, because that agreement sets no limits on national flag carriers or capacity at either end.
However not all of the routes a Qantas directed entity based in Singapore, or Malaysia or China are as wide open in terms of air traffic agreements as Australia-America.
And this is where it is important to note that air traffic access is not negotiated by carriers but governments, meaning that it is the governments of Singapore, China and Malaysia who have to consider their national interest in allowing an Australian financed and directed operation to assume the rights, privileges and obligations of carrying their flags, and their trading partners, who have to decide whether they would accept such an entity as truly Singaporean, Chinese or Malaysian.
They will neither give away, nor recognize, those rights for nothing.
The fact that Australia allows 100% foreign ownership of domestic operations, and is notably liberal in allowing international access to its gateways, is not going to cut any slack if, for example, Qantas were to fantasise about its China based carrier kicking open the door to vastly more traffic rights into Europe as a China flag carrier compared to the more limited opportunities Qantas has an Australian flag carrier under the Australia-EU treaty.
This is about Australia to the world, but wrapped in the flag of Singapore, China or Malaysia, and not about Australia domestic or Singapore Airlines or Hainan Airlines operating flights from Australia as Singapore or China flagged carriers.
It is about, for example, a reciprocally Australia based China directed carrier using the precedent set when Qantas sets up (hypothetically) a China based enterprise once the technology delivers versions of the Airbus A380 or Boeing 777, or whatever, that can fly right over China going non-stop from Sydney or Melbourne to London, because, after all, the Qantas-China operation will also be able to fly non-stop to Rio de Janeiro or the post 2030 mining boom towns established in Antarctica if it survives that long, which is implausible.
It is a fair bet, given the superb and visionary achievements of Qantas managements this century, that Qantas hasn’t considered exactly what its target Asia states for the new venture would seek in return for it being free to set up shop and get done over in its attempts to carve itself a slice of their international air travel markets.
The six year record of Jetstar’s adventures in Asia are irrelevant to anything that smacks of an Australian directed airline claiming a place in their long haul links to Europe or North America. Yet this is what Qantas is after, because Joyce said in multiple interviews, that the new Asia based carrier would give Australia new links to Europe.
These issues are a reminder that doing business in Asia is a long game, not a short game, and that the Qantas approach to these matters is so shortsighted and lacking in rigor that it would end in its destruction, a fate not unknown to ill-conceived short term Australian business forays into Asia and China.
It should also be a reminder that the qualities needed to successfully deliver an Asia strategy as recently outlined by Qantas Group CEO Alan Joyce are not evident in his company, which has dismally failed to manage staff engagement, fleet strategy, product and networks, and left its shareholders without dividends for three years.
There is something deeply unsettling about the direction of Qantas in seeking Asianisation when it cannot get the fundamentals of being competitive in long haul operations right, and persists in blaming others for its failure to stop customers fleeing en mass to competitors with better and more relevant single airline links to Europe and the UK.
If the Asia based premium carrier fails to get off the ground, where will that leave a company that has justified hacking into its long haul full service operation to focus more on the Asian markets, deliberately driving even more customers over to the likes of Singapore Airlines and Emirates?
It will be a lot of pain for no gain. And among the obvious consequences of such a failure would be its coming under siege from an opportunistic buy and split up bid, or totally renewing its management.
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Chinese "Premium Airline" To Save Qantas?
Mr. Harbison has published his views on Qantas at the link below:
I only wish to comment on one matter he has raised. If it is true, then Qantas is in a deeper mess than I thought.
Harbison has reported that Mr. Joyce said :
1. At least the article and Mr. Joyce appear to acknowledge that Qantas is losing money in Asia.
2. The idea of targeting the high net worth leisure traveler and the corporate market as Lesley Grant apparently referred to in the briefing is "interesting".
It's interesting to me because I recall the same sentiments being advanced by the then owners of Crown Casino - they were going to target the "High Rollers", and invested hundreds of millions of dollars in golf courses, Rolls Royces, lavish apartments and God knows what else to lure these whales to their gambling tables.
...There was only one problem with that; the whales knew they were whales. They were very picky because they knew every other casino in the world was after their custom. They played one Casino off against the other. Crown went broke and Kerry Packer bought it for a song.
So what has this got to do with Qantas?
Simple really, why do you think that mega rich Chinese are going to favor Qantas over the other offerings in this market? Where are you going to get the sensual young blonde, Mandarin speaking, Europeans to do the cabin service? You did say you were going to launch a premium product in China right?
Furthermore, guess where groceries and petrol are cheapest in Australian Capital cities? Here is a hint, its not in the poorest parts of town. The rich are picky and they are good at sniffing for bargains.
But wait there is more; how is the Board and Senior Management of Qantas going to get its head around reconciling the contradictions and circumlocutions inherent in running one airline for the rich and another for Australians, who they will no doubt shortly regard as the poor white trash of Asia?
This "premium" airline gambit in my opinion, is clutching at straws and pinning the company's fortunes on a desperate gamble to grab at the same market segment that everyone else will want.
The question for me know is whether the big shareholders or the company financiers nerves will break first. I note that National Bank has now become a substantial shareholder in Qantas. This is not a good sign. Merv Lincoln, God bless him, has been proved right time and again.
Qantas profit doubling and strategic developments overshadowed by change resistance | Centre for Asia Pacific Aviation - CAPA
I only wish to comment on one matter he has raised. If it is true, then Qantas is in a deeper mess than I thought.
Harbison has reported that Mr. Joyce said :
“In Asia we have a plan with the launch of our new full-service airline to really turnaround the economics of the existing operation and to add more destinations and frequencies to the existing operation, which we think creates a rising tide,” Mr Joyce said. “That plan gets us to a sustainable position within Asia to have a very valuable network we need for our corporate accounts in the biggest, fastest-growing and most profitable aviation market in the world.”
..........As for the carrier’s product, it is promised to be a “very exclusive, executive jet-type style operation that we believe very much will have a strong capability of working in this market,” Mr Joyce said. “There are a lot of airlines around the world getting into this space.”
..........As for the carrier’s product, it is promised to be a “very exclusive, executive jet-type style operation that we believe very much will have a strong capability of working in this market,” Mr Joyce said. “There are a lot of airlines around the world getting into this space.”
2. The idea of targeting the high net worth leisure traveler and the corporate market as Lesley Grant apparently referred to in the briefing is "interesting".
It's interesting to me because I recall the same sentiments being advanced by the then owners of Crown Casino - they were going to target the "High Rollers", and invested hundreds of millions of dollars in golf courses, Rolls Royces, lavish apartments and God knows what else to lure these whales to their gambling tables.
...There was only one problem with that; the whales knew they were whales. They were very picky because they knew every other casino in the world was after their custom. They played one Casino off against the other. Crown went broke and Kerry Packer bought it for a song.
So what has this got to do with Qantas?
Simple really, why do you think that mega rich Chinese are going to favor Qantas over the other offerings in this market? Where are you going to get the sensual young blonde, Mandarin speaking, Europeans to do the cabin service? You did say you were going to launch a premium product in China right?
Furthermore, guess where groceries and petrol are cheapest in Australian Capital cities? Here is a hint, its not in the poorest parts of town. The rich are picky and they are good at sniffing for bargains.
But wait there is more; how is the Board and Senior Management of Qantas going to get its head around reconciling the contradictions and circumlocutions inherent in running one airline for the rich and another for Australians, who they will no doubt shortly regard as the poor white trash of Asia?
This "premium" airline gambit in my opinion, is clutching at straws and pinning the company's fortunes on a desperate gamble to grab at the same market segment that everyone else will want.
The question for me know is whether the big shareholders or the company financiers nerves will break first. I note that National Bank has now become a substantial shareholder in Qantas. This is not a good sign. Merv Lincoln, God bless him, has been proved right time and again.
Qantas profit doubling and strategic developments overshadowed by change resistance | Centre for Asia Pacific Aviation - CAPA
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Irish joke
why is it that the QF board appoint an Irishman to be their spokeman?
Everything that comes out of his mouth comes across as an "Irish joke" Under his stewardship an internationally recognised, iconic Australian brand is relegated to a name share some where in Asia.
sad times indeed...!!!
Everything that comes out of his mouth comes across as an "Irish joke" Under his stewardship an internationally recognised, iconic Australian brand is relegated to a name share some where in Asia.
sad times indeed...!!!
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AA Spins off favoured son.
Will no doubt help AA reequip its cash strapped mainline business.
American Eagle is not expected to surrender its status as an affiliate member of Oneworld, despite its owner having given notice that it wishes to spin off the business, by selling stock to existing shareholders or separately to another party. (Aviation International News)
American has said that there is no reason why the regional should not continue to provide it with short-haul feed traffic to its five cornerstone U.S. hubs–services that will preserve the affiliate membership of the alliance.
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...international division lost approximately AUD200 million (USD209 million), putting the mainline domestic division’s profit at AUD428 million (USD447 million) – a staggering figure for a country with a population of 22 million.
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The real cash flow at QANTAS
Could everyone please do me a favour and refer to the correct profit figures.
As we know the accounts are audited and therfore beyond question !!!!
And the real profit last year is
“Operating cash flows grew to $1,782 million, an increase of 32 per cent on the prior year result of $1,351 million”
http://www.asx.com.au/asxpdf/20110824/pdf/420l5cs8mtnq60.pdf
You see a company does not pay bills with an EBIT it pays bills with its cash flow. So not the tiny figure of $500M we earn real hard earned $$$$$$$$$$$$$$$$$$$$$ after all tax's and costs wages fuel interest leases and everything to do with Jetstar we still made nearly $1.8 BILLION dollars a year.
Be proud of that figure because this is what they are after. We hold over $3B in cash and make nearly $2B a year, run the share price down to the value of the cash by creating a fight with everyone, talk down the brand and then steal it for less than its worth in cash and one years cash operating profit.
thats the real game here !!!!!!!
Ohh and guess what Jetstar makes as a contribution to the $1.8 BILLION ......... less than $200m and then minus the subsidies already exposed more likely a negative cash contribution.
This is the real story, no matter how they try and hide the truth, cash flow is king.
I asked 6 year old child last night a question. If you had a four engine plane burning 190 Ton of fuel and a two engine plane burning 110 ton of fuel and you paid for each engine hour seperatly which one would you make more money with !!!!! He answer correctly, shame he is not the CEO !!!!
As we know the accounts are audited and therfore beyond question !!!!
And the real profit last year is
“Operating cash flows grew to $1,782 million, an increase of 32 per cent on the prior year result of $1,351 million”
http://www.asx.com.au/asxpdf/20110824/pdf/420l5cs8mtnq60.pdf
You see a company does not pay bills with an EBIT it pays bills with its cash flow. So not the tiny figure of $500M we earn real hard earned $$$$$$$$$$$$$$$$$$$$$ after all tax's and costs wages fuel interest leases and everything to do with Jetstar we still made nearly $1.8 BILLION dollars a year.
Be proud of that figure because this is what they are after. We hold over $3B in cash and make nearly $2B a year, run the share price down to the value of the cash by creating a fight with everyone, talk down the brand and then steal it for less than its worth in cash and one years cash operating profit.
thats the real game here !!!!!!!
Ohh and guess what Jetstar makes as a contribution to the $1.8 BILLION ......... less than $200m and then minus the subsidies already exposed more likely a negative cash contribution.
This is the real story, no matter how they try and hide the truth, cash flow is king.
I asked 6 year old child last night a question. If you had a four engine plane burning 190 Ton of fuel and a two engine plane burning 110 ton of fuel and you paid for each engine hour seperatly which one would you make more money with !!!!! He answer correctly, shame he is not the CEO !!!!
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I can see this guy applying for something somewhere soon...
Chinese Pilot refuses to allow mayday aircraft land ahead of him
I am guessing Chief Pilot??
Chinese Pilot refuses to allow mayday aircraft land ahead of him
I am guessing Chief Pilot??