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Old 14th Oct 2011, 01:35
  #1181 (permalink)  
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Nationalise QF International

Just three international airlines, Singapore Airlines, Emirates and Air New Zealand, operate one-quarter of the seats that are flown into Australia. What do they have in common? They are all majority-owned by governments.

Qantas cannot sustainably compete against these airlines in the international market, particularly Singapore and Emirates. There are two reasons for this.

Cost advantages
The first is that these airlines have a significant cost advantage over Qantas.

According to information in the most recent annual reports, Qantas's costs (defined on a cents-per-available-seat kilometre basis) are 14 per cent higher than Singapore’s; 25 per cent higher than Air New Zealand’s; and 49 per cent higher than Emirates. (These figures haven’t been adjusted for differences in average sector lengths.)

At the back of the plane, where price is the only thing that matters, a cost advantage is critical. Qantas simply cannot profitably compete for this growing segment of passengers.

Strong growth motivations
The second reason why Qantas can’t compete with these airlines is that the government-owned airlines are motivated to grow the number of seats they operate at two to four times the rate at which Qantas is motivated to grow its seats.

What is behind this stronger motivation? The return that government-owned airlines see when making their seat decisions is the return they get from the airline and from the tourists they bring into Singapore, Dubai, and Auckland. The return that Qantas sees is just the return it gets from the airline.

(Air New Zealand, to be fair, is less likely to be influenced by the return from tourists than is Singapore Airlines, and both are less concerned about tourism numbers than Emirates.)

Over the most recent financial year, Qantas earned around $10 per passenger; Singapore Airlines $60; Emirates $47; and Air New Zealand $39.

The economies of Dubai, Singapore and Auckland, however, stand to gain around $200 per day for each Aussie tourist that they bring into the country. And if those Aussies stay on average 19 nights they stand to gain around $4000 per tourist.

Government-owned airlines see a potential return of around $4050 when contemplating increasing the seats they fly while Qantas sees just $10.

Nationalisation of Qantas International
What does Qantas need to do to compete against these airlines? If the Australian government is not willing or able to provide support, they should split out the international business and sell it to the government.

Under government ownership, the new international business will "internalise" the considerable benefits associated with inbound tourism.

They will significantly increase the number of seats added to the market and the number of ports to which they fly, including ports that they gave up on under private ownership, such as Rome, Paris, Zurich and Mumbai.

To protect domestic tourism, the new airline would quarantine a certain number of seats for travel by foreign residents to Australia, setting average airfares at much lower levels for foreigners.

This is not a new strategy – it happens now. For example, a one-way flight booked on October 13, at 9.17pm on BA flight 7372 for travel from London Heathrow to Sydney on October 30 costs an adult economy passenger booking from the UK 724 pounds or $1149. Conversely, an adult economy passenger booking at the same time from Australia on exactly the same flight has to pay $1428.

The new Qantas International would not contemplate a start-up business in Asia. Engineering, pilots, cabin crew and ground handling jobs in Australia would be saved. The major source of antagonism in the current conflict between Qantas and the unions is the large-scale shift of jobs offshore – this wouldn’t be an issue under nationalisation.

Teaming up with Tourism Australia
The new Qantas International would team up with Tourism Australia to market Australia to the rest of the world rather than adopting strategies that are not as in sync as they are under private ownership.

Tourism Australia could help the new Qantas in shaping strategies to direct more capacity to routes where the inbound tourism benefits are currently greatest, and to those routes where there is greatest promise for strong tourism growth.

They could also help in ensuring that the benefits are shared equally around Australia, with more of the growth in capacity allocated to regions where tourism is a bigger share of regional income and job creation, such as Cairns.

Other Australian carriers
Of course, Qantas is not the only Australian-domiciled carrier that flies international Australian services. These carriers will need to be supported so that they are not unfairly impacted.

It’s not unusual for privately-owned carriers to compete alongside government-owned carriers. The Air-Asia brand does precisely this in Indonesia, Malaysia and Thailand, while Jetstar Asia does the same in Singapore.

A plan to nationalise Qantas is a little pie in the sky, and the government's modus operandi in recent times is to sell not buy assets, but Qantas International’s problems run so deep that all options should be on the table. Let’s consider them all.

Tony Webber was Qantas Group general manager microeconomics and then chief economist between 2004 and April 2011. He is now managing director of Webber Quantitative Consulting, and contributed this article to BusinessDay.

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Old 14th Oct 2011, 02:01
  #1182 (permalink)  
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quitting australia now touring asian skies
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Old 14th Oct 2011, 02:14
  #1183 (permalink)  
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I wasn't quite sure where this was heading or who it was written by but now it all makes sense. Anyone who has been to one of Mr Webber's presentations (always involving the Magnum icecream examples) over the years knows that he is a great communicator and an absolute gentleman. He also took a bullet when it was decided that the economics department was a luxury the group couldn't afford.

His analysis of the costs is a sobering reminder of the external enviroment that Qantas is attempting to compete in.
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Old 14th Oct 2011, 02:21
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This government can't even run a government, let alone an airline. They're not even any good at being socialists. It's an interesting argument, but I can't see it happening while the current mob of idiots in Canberra are busy schmoozing up to their corporate friends and ignoring the people who put them there in the first place.
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Old 14th Oct 2011, 02:56
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Well if that poorly informed twit Ferguson and the PM step into the dispute to bash a few unions to get a decent headline in the very biased Murdoch press they'll lose the few votes they have left.
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Old 14th Oct 2011, 08:07
  #1186 (permalink)  
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Regarding Mr Webbers pstory in the SMH today about nationalising Qantas.

This is a very important story.

Many on here and elsewhere don't know that Mr Webber was actually a very senior executive at Qantas,before leaving recently. He was in charge of the department that mostly dealt with government.

He knows more about the plight of Qantas than anyone.

For him to put this statement out in the press is a huge move,it shows he is still passionate about our National Icon.

Unions: Involve him as soon as you can. He is a wealth of knowledge.Get him onside
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Old 14th Oct 2011, 10:05
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JB sticks it to AJ's lies

As Qantas loses millions due to industrial strife, Virgin chief executive John Borghetti used a business luncheon on Friday to highlight how well the nation's second-biggest airline was travelling.

Thousands of Australian passengers had their travel plans disrupted on Friday, due to Qantas flight cancellations, delays and union disputes on pay and job cuts.

Meanwhile, on Thursday Virgin moved a step closer to a proposed alliance that would give it access to Singapore Airlines' vast Asia network, with the competition regulator clearing it in a draft ruling.

It also won the `most admired' category of the International Customer Service Professionals awards this week.

On a day the overall market was down nearly one per cent, Virgin shares closed up two cents, or 6.15 per cent, at 34.5 cents.

Qantas fell half a cent to $1.56.

Mr Borghetti said pay differences between Virgin and Qantas pilots were only "single digit" and often existed because Qantas used larger aeroplanes.

They were available on industrial umpire Fair Work Australia's website, he said.

"I saw that line and must admit I did have a bit of a chuckle to myself," Mr Borghetti told an Australian British Chamber of Commerce lunch.

"If we were able to keep pilots or any part of the workforce and pay them 50 per cent less than the other guy: gee, we must be really good.

Mr Borghetti said it was important to get the comparison right.

"We don't pay the same salaries for A380 and 747 pilots because we don't have A380s and 747s ... you've got to compare like for like, the bigger the aeroplane is, the more the salary is."

Virgin's pilots union were reported as being delighted with the agreement struck in August, which filled some of the pay differentials with Qantas.

A check of the Fair Work Australia website by AAP showed a level 1 captain with Virgin Australia would be paid a fixed remuneration of $217,500 per year.

Mr Borghetti said Virgin was flying extra hours to cater for disrupted Qantas passengers this month but was otherwise focussed on its own plans to capture more of the corporate travel market.

It already has won regulatory approval for partnerships with Etihad Airways, Air New Zealand and America's Delta Air Lines.

The alliances meant it now offered more flights across the Tasman Sea and in North America than its major competitor, he said, without naming Qantas.
Stick it to em JB
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Old 14th Oct 2011, 10:12
  #1188 (permalink)  
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In JB's speech, shouldn't that read Etihad

The Computer changes the "Abu Dhabi-based airline company Name to what is shown here - stupid computer!!

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Old 14th Oct 2011, 10:13
  #1189 (permalink)  
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Yes well done and it is also nice to see him stick it so very carefully to AJ in a way that few others have achieved and with such style.

To the victor goes the spoils I say and I know who my money is on long term.

Now if only SQ could lend him some metal to really stick it to the Rat. Anything would do.
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Old 14th Oct 2011, 16:37
  #1190 (permalink)  
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QANTAS has received a rap over the knuckles

Qantas bans no-confidence move

Matt O'Sullivan

October 15, 2011

QANTAS has received a rap over the knuckles for not allowing a motion of no confidence in chief executive Alan Joyce and the board to be put to shareholders later this month.

But two influential advisers to some of Qantas's largest institutional investors have recommended shareholders vote in favour of the airline's pay card for the senior executives.

The voting advice from CGI Glass Lewis and ISS Governance takes the wind out of the sails of attempts by unions and the Australian Shareholders Association to have investors vote against the pay packages for Mr Joyce and the rest of his senior management team.

Although CGI has urged a vote in favour of all the resolutions at Qantas's annual meeting on October 28, it has taken exception to the company not allowing a motion of no confidence in Mr Joyce, chairman Leigh Clifford and the rest of the board to be put to shareholders.
Qantas objected to the motion from a group of more than 100 shareholders to be aired on the basis that it would have ''no operative effect'' under company law.
But the proxy adviser said Qantas had not given a good reason for not allowing it to be put to the AGM, adding that ''we do not agree that having 'no operative effect' is adequate justification''.
The chance for shareholders to have proposals raised at annual meetings was a core right and ''any challenge to or derogation from that right by boards is a serious matter'', CGI said.

Despite the government threatening to intervene in Qantas's damaging industrial relations dispute, unions are stepping up their action in the lead-up to the AGM.

Their attacks on Mr Joyce's pay have been central to their campaign for job-security clauses to be inserted into new enterprise agreements. His total pay this year rose from $2.92 million to $5 million, due largely to share-based payments increasing from $964,000 to $2.72 million.
But in urging a vote in favour, CGI said Qantas had aligned executive pay and the company's performance over the past year, and Mr Joyce's pay was in line with that of his peers.
The proxy adviser described the accounting-based reporting of share-based pay for Mr Joyce as ''misleading'' because, while his reported pay was $5 million, ''his actual remuneration'' was just over $3 million.
Well, good and bad news, the good news AJ and LC got a rap over the knuckles, the bad news, they are still getting away with it...
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Old 15th Oct 2011, 05:03
  #1191 (permalink)  
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Those who see Olivia Wirth as merely a mouthpiece, and not a very effective one may be interested in this. Seems she may not just speak the Co message but also assist in its formulation.

Olivia Wirth
Group Executive Government and Corporate Affairs, Qantas Airways Limited

Olivia Wirth is the Qantas Group Executive, Government and Corporate Affairs responsible for the company’s external and internal communication, stakeholder relationships and is the company spokesperson. She is also a member of the Qantas Group Executive Committee.

Olivia was previously the Head of Corporate Communication for the Qantas Group, appointed in 2009. Olivia has over 15 years of experience in public affairs, most recently as the Executive Director of industry association and lobby group, the Transport and Tourism Forum (TTF).

She has worked in a range of public and corporate affairs roles including the London based, Business in the Community (part of the Prince's Trust), the Australian Tourist Commission (now Tourism Australia) and the former Minister for Small Business and Tourism, the Hon. Joe Hockey MP. Olivia is a Board member of the European Australian Business Council and the Qantas Foundation.
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Old 15th Oct 2011, 07:34
  #1192 (permalink)  
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Gor blimy, it just goes to show that you dont have to be partiularly good at anything to get a job in the spin industry. If this is the best they have to offer, I might consider changing occupations.
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Old 15th Oct 2011, 08:35
  #1193 (permalink)  
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...and, as we have all discovered in recent years, due to freedom of information laws, there are many people who have gone straight from High School to : Local Council, State Politics, Federal Politics, the ACTU, unions within the ACTU, civil rights groups, tree hugging groups, greenie groups, biosphere groups and sundry other "gravy train" occupations where they bleed the tax payers dry, enjoy an over inflated salary, massive PUBLIC superannuation benefits and usually are married or partners to similar types with different names!?

Is that rorting the system, or is that rorting the system.

Has anyone checked out Olivia?

If not, do so.

I bet you a useless ticket on a Qantas flight that she has never had, what we would all call, a proper job since leaving high school!

And I bet she's also married to another government bludger rorting the system!

By another name!
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Old 16th Oct 2011, 03:41
  #1194 (permalink)  
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Give the directors' club a kick over soaring salaries

worth a read
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Old 16th Oct 2011, 05:12
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what a top web site start digging you don't know what you may find Are your Representatives and Senators working for you in Australia's Parliament?

That the time for the presentation of the report of the Rural Affairs and Transport Legislation Committee on the Qantas Sale Amendment (Still Call Australia Home) Bill 2011 be extended to 21 November 2011

Search: the word 'qantas' (

at least Mr swann gave the grange back

Last edited by MR WOBBLES; 16th Oct 2011 at 05:40.
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Old 16th Oct 2011, 05:45
  #1196 (permalink)  
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Classic filler, read my mind

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Old 16th Oct 2011, 06:23
  #1197 (permalink)  
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Now this would definitely cause a flat spin

The Parliament of the
Commonwealth of Australia


Presented and read a first time

Qantas Sale Amendment (Still Call Australia Home) Bill 2011

No. , 2011

(Senators Xenophon and Bob Brown)

A Bill for an Act to amend the Qantas Sale Act 1992, and for related purposes

1............ Short title....................................................... ...................................... 1
2............ Commencement................................................ ................................... 1
3............ Schedule(s)................................................. ........................................ 2
Schedule 1—Amendments 3
Qantas Sale Act 1992 3

A Bill for an Act to amend the Qantas Sale Act 1992, and for related purposes
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Qantas Sale Amendment (Still Call Australia Home) Act 2011.
2 Commencement
This Act commences on the day this Act receives the Royal Assent.
3 Schedule(s)
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendments

Qantas Sale Act 1992
1 Subsection 3(1)
associated entity has the same meaning as in the Corporations Act 2001.
2 Paragraph 7(1)(h)
Omit “(for example, facilities for the maintenance and housing of aircraft, catering, flight operations, training and administration)”.
3 After paragraph 7(1)(h)
(ha) require that Qantas ensure that, of the facilities, taken in aggregate, which are used by Qantas subsidiaries and any associated entities in the provision of scheduled international air transport services, the facilities located in Australia, when compared with those located in any other country, must represent the principal operational centre for the subsidiary or associated entity; and
(hb) require that the majority of heavy maintenance of aircraft and the majority of flight operations and training conducted by, or on behalf of, Qantas is conducted in Australia; and
(hc) require that the majority of heavy maintenance of aircraft and the majority of flight operations and training conducted by, or on behalf of, Qantas subsidiaries and any associated entities is conducted in Australia; and
4 After paragraph 7(1)(i)
(ia) require that at least one of the directors of Qantas has a minimum of 5 years’ professional flight operations experience; and
(ib) require that at least one of the directors of Qantas has a minimum of 5 years’ aircraft engineering experience; and
5 Subsection 10(1)
After “application of the Minister,”, insert “100 shareholder members or shareholder members who hold at least 5% of the shares in Qantas,”.
6 Subsection 10(2)
After “application of the Minister,”, insert “100 shareholder members or shareholder members who hold at least 5% of the shares in Qantas,”.
Quick, upgrades, grange a grand finals tickets all round!
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Old 16th Oct 2011, 10:11
  #1198 (permalink)  
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Save our Qantas Nick

Save our Qantas Nick.
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Old 17th Oct 2011, 03:34
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Borghetti didn't mention the Q word

It was the airline whose name they darned not speak. Guests who came to listen to Virgin Australia chief executive Jonh Borghetti at a well-attended lunch in Melbourne organised by the Australian British Chamber of Commerce surely would have expected the guest of honour to at least mention rival Qantas every so often.

But no, Borghetti insisted on calling it "that airline" or "a certain rival" and so on and so forth.

It was all a bit light-hearted and Borghetti did his best not to revel in the industrial dramas Qantas is experiencing.

But in the end he couldn't resist on subtle dig while clarifying that Virgin didn't actually pay its pilots substantially less that Qantas does [my bold BB] (Qantas has more of the bigger planes and, basically pilot who fly those get paid more), as Qantas had claimed.

Lunch host: "Here was I reading Qantas saying your pilots are paid 50 per cent less than Qantas pilots - poor blokes, I want to give them some money." Quick as a flash, Borghetti replied: "Maybe he [Qantas boss Alan Joyce] was comparing CEO salaries at the time." (To be fair, Borghetti's wage was actually 44 per cent less than that of the Qantas boss.)

Borghetti also go some laughs when one questioner asked him why he should buy Virgin shares. "I'm not a stockbroker... so you should discuss that with your financial advisor," said Borghetti. "Oh, they don't know what they're talking about," came the reply. "Do you want me to go to jail? Will you visit me?" said Borghetti, as the crowd roared with laughter.

He got a similar response when asked about Virgin's culture. "When I arrived they called customers 'guests'. I said why, you can't get guests to pay when they come to your house. But it turns out they really want to treat the people who fly with us as guests."
AFR: Rear Window, page 38 Monday 17 October 2011
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Old 17th Oct 2011, 11:41
  #1200 (permalink)  
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...and a good position for you too, AF?
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