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The Alleged $200m mainline loss

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The Alleged $200m mainline loss

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Old 4th Jul 2011, 06:39
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The Alleged $200m mainline loss

Just what detail did the little fella give. I find details very scant, why didn't he make it a gazillion?

When you duck shove all sorts of costs through your consolidated accounts you can sort of make it say what you like, but there appears very little scrutiny in the financial industry and the media. Surely they all can't be Chairman's lounge members?
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Old 4th Jul 2011, 07:16
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When you duck shove all sorts of costs through your consolidated accounts you can sort of make it say what you like
Yes my view as well. Q mainline has a 4,7% higher load factor than Jetstar till march this year, just doesn't make sense. Someone is creative with the figures.
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Old 4th Jul 2011, 07:44
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Yes, but load factors are only one piece of the puzzle. What are the costs of Qantas compared to Jetstar. Qantas aircraft could be full and not making a profit if the costs are high enough.
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Old 4th Jul 2011, 07:53
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Hmmm. Let's see.

Freight cartel charges ($200 mill)? "Commercial arrangement" to get Jetstar Pacific QF executives out of Vietnam (don't know how much that would have cost)? Wonder how Jitconnict are doing after all the cancelled Tasman flying? Wonder if they ever make a profit at all (their CEO doesn't even know if they have a bank acocunt)! Hmmm. Wonder how J* have been going with Japan post-Tsunami/earthquakes?

Aaaaaahhhh doesn't matter anyway cause it can all be billed to that terrible entity - Qantas mainline. After all, Muffins and Coffee Airlines (sorry .... J*) is such an AMAAAAZZZZING business!
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Old 4th Jul 2011, 07:53
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If the Qantas flights are full and not making money then i dont think you should blame the pilots, maybe the man at the top has some explaining to do..
check out the loads to Frankfurt or Bangkok, and only one flight a day???
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Old 4th Jul 2011, 08:03
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Worth keeping a tab

Someone with more intelligence than me should keep a running tab of the 'cross-subsidies' that exist ready for August 24th.

My one:
- I use FF points to (unfortunately) fly J* to holiday destination. What's the bet QF reimburses J* the full cost of a full fare seat for my ticket?
- What's the bet J* don't pay QF anything for FF points earned on J* flights

UTR
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Old 4th Jul 2011, 08:04
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I totally agree, Qantas has a business that should almost be capable of printing money. Some would say though that AJ has started to try and streamline the operation starting with staff costs. I am just fed up with people saying that it is 'impossible' for Jetstar to actually be making a profit when all the evidence from around the world shows that LCC's can be highly profitable without the support of a big brother carrier e.g. Southwest, EasyJet, FlyBe, Ryanair etc. Not to mention they have been one of the only highly profitable areas of the airline industry through the recession out performing most legacy carriers..... except for maybe Qantas who have also sustained a profitable business in bad times...... maybe it hasn't been so badly managed afterall.
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Old 4th Jul 2011, 08:25
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Qantas are known for not issuing separate accounts for the parts of the business. The ONLY reason it has been issued this time is FOR EFFECT and softening up the market for what is coming.
I do not believe it for a nano second. If indeed international has failed to turn a profit for most of the last 15 years it speaks volumes for their management ability.
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Old 4th Jul 2011, 08:32
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except for maybe Qantas who have also sustained a profitable business in bad times...... maybe it hasn't been so badly managed afterall.
AH
Although you make a good point, Qantas did have a free kick since the demise of Ansett. I thought J* was a good move domestically but strongly believe the J* model long haul does not suit all the traditional Q punters hence the slow decline in mainline market share internationally, accelerating since the implication of J* international routes.
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Old 4th Jul 2011, 08:56
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So how did they justify all the capital investment with A380s?

They cannot have it both ways or suddenly say oops we got it wrong.

This is all a game of smoke and mirrors.
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Old 4th Jul 2011, 09:04
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10 days or so since this went to air the more contrived the Q spin sounds. The storyline was fed convincingly to lateline by AJ in my view. Worth a listen again, something is not quite right.

Last edited by TIMA9X; 4th Jul 2011 at 12:58. Reason: typo
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Old 4th Jul 2011, 10:09
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Something smells bad, it almost sounds like they are getting set to close international altogether
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Old 4th Jul 2011, 10:39
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Who else is thinking that Qantas 'International' will become Jetstar?
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Old 4th Jul 2011, 10:57
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ampclamp,

If indeed international has failed to turn a profit for most of the last 15 years it speaks volumes for their management ability.
I think the comment was that International had only made an adequate return on capital 3 times in 15 years, not profit. If International has $5bn of capital employed it needs to earn, conservatively, $500m to justify the investment.

rodchucker,

So how did they justify all the capital investment with A380s?
Maybe because the LAX and LHR routes have been fairly profitable over the long term but dragged down by numerous loss making routes.
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Old 4th Jul 2011, 11:30
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Yes you are correct on recent statements re return on invested capital qan holder but AJ's recent quote of losing 200 million I believe is a very selective piece of info released for effect and conditioning.

My point stands. If Int is so bad what the hell have they done about it? Nothing that has worked according to their numbers.
Why sink the 380 into it? The LAX and LHR routes are not businesses in isolation and dont require 20 or even 12 380s.
I trust them as far as I could drag a loaded 380 as evidenced by their statements regarding the ALAEA and pilot's claims.
If these people were straight with us just maybe they'd get somewhere in getting the changes they want. AJ had a perfect opportunity to capitalise on GDs sad record with staff relations but has been extremely disappointing. The unions exist and are stronger than ever because of them. They could make them irrelevant if they really wanted to try to take us with them.
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Old 4th Jul 2011, 11:41
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The big problem for mainline is the strength of the $A. For years with a near monopoly on the pacific routes to the USA QF basically printed $A from revenue from a very strong $USD and single handedly propped up the business.

Unfortunately the monopoly is over as is the weak $A, add to that the new competition from EK et al and its not hard to see that currently QF mainline is probably losing money.

2 points on this, the $A won't be so strong forever and more importantly why wasn't mainline given the chance to be able to make $$ with a more efficient fleet.
After all, fuel costs are by far the biggest part of overall operating costs...
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Old 4th Jul 2011, 11:44
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Ampclamp,

AJ's recent quote of losing 200 million I believe is a very selective piece of info released for effect and conditioning.
You're probably right, however, International does seem to have been a dog for the last decade and doing something about it is long overdue. The fleet reconfiguration looks like a step in the right direction and on August 24th I guess we see whether Joyce has found the solution.

Last edited by QAN_Shareholder; 4th Jul 2011 at 11:44. Reason: typo
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Old 4th Jul 2011, 11:49
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Cash on Hand

Qantas has $3 Billion in cash.Invest that at 6.5% without flying any aircraft anywhere and you still get a tidy profit.Makes you wonder why they bother with aircraft at all
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Old 4th Jul 2011, 12:31
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And how did they get that cash? Wasn't through 6.5%

(yes they floated but that money was spent on aircraft and regained)

Perhaps if they opened qantas bank they would do ok... Their greed and cost cutting turns billions in profits every year... Can't be shutdown by casa and outsource all you like... The economics of the world baffle me!!
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Old 4th Jul 2011, 19:02
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i remember when i was there in 2001 that the low Australian dollar was

causing them a problem,now it's the high dollar,so which is it
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