QF management asleep at the wheel?
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QF management asleep at the wheel?
Apologies if this has already been posted, but makes an interesting read. A good summation of the state of play.
China Southern and Virgin Australia keen to take what Qantas doesn’t want or can’t keep
January 17, 2012 – 5:00 pm, by Ben Sandilands
This is today’s occasional column from the Crikey Daily Mail
Qantas took a lot of flak from financial analysts over its faltering Asia initiatives last week, making this week’s aggressive business travel initiatives by Virgin Australia and a left of field grab for its shrinking UK and Europe market from China Southern even more stressful for a brand that can be seen as having lost its way.
At home, Virgin Australia confirmed what is only the first substantial addition of wide bodied A330 capacity to key interstate markets that it will make in the nearer term.
By mid May there will be daily double Virgin Australia A330-200s between Melbourne and Perth, and an initial morning peak hour rotation of the large Airbus between Melbourne and Sydney.
Less widely known is the ambush the Virgins will spring on the Canberra routes next month, with a new business class on all of the Embraer E-jet services to the national capital, as well as to Hobart, which Qantas neglects in favor of Jetstar, and on important Adelaide and Perth routes among others.
This is not a matter of gratuitous Qantas bashing but a simple matter of geometry and cabin amenity. The Qantas domestic configured A330s and aged 767s are in terms of space and style, inferior in internal specs to the Virgin jets, whether up front or in the main cabins.
The head scratcher for Qantas observers, and quite a few insiders, is why Qantas allowed this to happen, since it knows anything material that is decided within Virgin Australia faster than most of those working for it.
The not so funny joke within Virgin Australia and before it, Virgin Blue, was that Qantas knew more about how its challenger was tracking than it did, because it invested more in the analysis of its operations than Brett Godfrey or Richard Branson could afford.
Yet the result is Qantas conceding a superior configuration for business travellers that it has taken no steps to counter, and in Canberra, the use by Virgin Australia of a truly spacious small jet with no middle seats that makes Qantaslink turbo-props seem like riding hard class.
Maybe Qantas kept believing the hype about the 787 Dreamliner, which turns out to be late and heavy and for some of the purposes it originally had in mind for it, close to useless. Compared to the very young fleet of jets flown by Virgin Australia, through a policy of churning leases, Qantas is burdened with aged 747s and 767s that drag back the gains it has made with A380s, A330s, and some recently delivered and much improved 737-800s.
Most of the emphasis in Qantas in recent years has been on the development of the Jetstar low cost franchise, a product that Qantas full service customers despise, giving ex Qantas executive GM, John Borghetti, rich pickings in his new role as CEO of Virgin Australia.
On Sunday night, at the Sydney Festival for which it has become a major sponsor, China Southern’s ruling cadre, in the form of president and CEO, Tan Wangeng and executive Vice President He Zongkai rocked up to declare open season on what’s left of the Qantas kangaroo route services to London and Europe, declaring that a ‘Canton route’ would provide additional frequent capacity to London, Amsterdam and Paris, via their shiny modern airport at Guangzhou, which they intend to make even larger than Singapore, Bangkok and Dubai.
It is China Southern’s policy to eclipse the size of today’s stake in the Australian international market held by Emirates by the end of 2015, an ambition that is already provided for in the Australia-China air traffic agreement and the mind-boggling consequences for air travel demand of 1.2 billion people making a new long march to their place in the sun in the Asian century.
This comes amid persistent rumors that Qantas will quit its services to Frankfurt, its last destination in Europe, following its decision last year to slash London flights in half in order to invest in a single aisle carrier somewhere in Asia that would make so much money that it in five years time it could start reinvesting in the long haul Qantas brand CEO Alan Joyce says the airline can no longer afford to support.
The obvious logical disconnections in this policy have recently started to alarm finance sector analysts, especially as there is no sign of such an airline in that form taking shape, and the shareholders are in their third year without dividends and wearing a pathetic share price.
It is all converging on Qantas. Unhappy shareholders, unhappy customers, shrinking services, and sharp competitors, at home and abroad, who are making much smarter moves in terms of fleet, product and network without resorting to hiring a lingerie model to lift (!) brand perceptions.
China Southern and Virgin Australia keen to take what Qantas doesn’t want or can’t keep
January 17, 2012 – 5:00 pm, by Ben Sandilands
This is today’s occasional column from the Crikey Daily Mail
Qantas took a lot of flak from financial analysts over its faltering Asia initiatives last week, making this week’s aggressive business travel initiatives by Virgin Australia and a left of field grab for its shrinking UK and Europe market from China Southern even more stressful for a brand that can be seen as having lost its way.
At home, Virgin Australia confirmed what is only the first substantial addition of wide bodied A330 capacity to key interstate markets that it will make in the nearer term.
By mid May there will be daily double Virgin Australia A330-200s between Melbourne and Perth, and an initial morning peak hour rotation of the large Airbus between Melbourne and Sydney.
Less widely known is the ambush the Virgins will spring on the Canberra routes next month, with a new business class on all of the Embraer E-jet services to the national capital, as well as to Hobart, which Qantas neglects in favor of Jetstar, and on important Adelaide and Perth routes among others.
This is not a matter of gratuitous Qantas bashing but a simple matter of geometry and cabin amenity. The Qantas domestic configured A330s and aged 767s are in terms of space and style, inferior in internal specs to the Virgin jets, whether up front or in the main cabins.
The head scratcher for Qantas observers, and quite a few insiders, is why Qantas allowed this to happen, since it knows anything material that is decided within Virgin Australia faster than most of those working for it.
The not so funny joke within Virgin Australia and before it, Virgin Blue, was that Qantas knew more about how its challenger was tracking than it did, because it invested more in the analysis of its operations than Brett Godfrey or Richard Branson could afford.
Yet the result is Qantas conceding a superior configuration for business travellers that it has taken no steps to counter, and in Canberra, the use by Virgin Australia of a truly spacious small jet with no middle seats that makes Qantaslink turbo-props seem like riding hard class.
Maybe Qantas kept believing the hype about the 787 Dreamliner, which turns out to be late and heavy and for some of the purposes it originally had in mind for it, close to useless. Compared to the very young fleet of jets flown by Virgin Australia, through a policy of churning leases, Qantas is burdened with aged 747s and 767s that drag back the gains it has made with A380s, A330s, and some recently delivered and much improved 737-800s.
Most of the emphasis in Qantas in recent years has been on the development of the Jetstar low cost franchise, a product that Qantas full service customers despise, giving ex Qantas executive GM, John Borghetti, rich pickings in his new role as CEO of Virgin Australia.
On Sunday night, at the Sydney Festival for which it has become a major sponsor, China Southern’s ruling cadre, in the form of president and CEO, Tan Wangeng and executive Vice President He Zongkai rocked up to declare open season on what’s left of the Qantas kangaroo route services to London and Europe, declaring that a ‘Canton route’ would provide additional frequent capacity to London, Amsterdam and Paris, via their shiny modern airport at Guangzhou, which they intend to make even larger than Singapore, Bangkok and Dubai.
It is China Southern’s policy to eclipse the size of today’s stake in the Australian international market held by Emirates by the end of 2015, an ambition that is already provided for in the Australia-China air traffic agreement and the mind-boggling consequences for air travel demand of 1.2 billion people making a new long march to their place in the sun in the Asian century.
This comes amid persistent rumors that Qantas will quit its services to Frankfurt, its last destination in Europe, following its decision last year to slash London flights in half in order to invest in a single aisle carrier somewhere in Asia that would make so much money that it in five years time it could start reinvesting in the long haul Qantas brand CEO Alan Joyce says the airline can no longer afford to support.
The obvious logical disconnections in this policy have recently started to alarm finance sector analysts, especially as there is no sign of such an airline in that form taking shape, and the shareholders are in their third year without dividends and wearing a pathetic share price.
It is all converging on Qantas. Unhappy shareholders, unhappy customers, shrinking services, and sharp competitors, at home and abroad, who are making much smarter moves in terms of fleet, product and network without resorting to hiring a lingerie model to lift (!) brand perceptions.
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Are you implying that QF management are even within reach of "the wheel"?
The board have "the wheel" the wheelhouse is locked and "deny" is selected anytime the right questions get asked!
Just ride her to the ground kids!
Bbbbbbbzbzbzbzbzzzzzzzzzzz
The board have "the wheel" the wheelhouse is locked and "deny" is selected anytime the right questions get asked!
Just ride her to the ground kids!
Bbbbbbbzbzbzbzbzzzzzzzzzzz
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That is what is totally confusing about this whole situation, why is there so much uncertainty and spin from a once great Company when they clearly once had a superior market position that they seem to be walking away from.
Blind freddy can see the competition circling and in some cases they have even arrived, while the public stance is to continue to sprout about some strategy that lacks detail or even partial delivery other than shut down of parts of the whole and some have assessed is a complete roll of the dice strategy.
If you take a completely objective look at what has occurred (route closures, capital expenditure canned, staff conflict etc etc) it would be possible to interpret that the company is in distress but that is totally at odds with the public statements and financials.
The absence of media scrutiny is adding to the confused state of the nation.
If anyone can work out what is happening I would certainly like to know.
Blind freddy can see the competition circling and in some cases they have even arrived, while the public stance is to continue to sprout about some strategy that lacks detail or even partial delivery other than shut down of parts of the whole and some have assessed is a complete roll of the dice strategy.
If you take a completely objective look at what has occurred (route closures, capital expenditure canned, staff conflict etc etc) it would be possible to interpret that the company is in distress but that is totally at odds with the public statements and financials.
The absence of media scrutiny is adding to the confused state of the nation.
If anyone can work out what is happening I would certainly like to know.
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Agree, the 'obvious' management re Board mistakes have long been canvassed by this site and by Ben. The lack of any mainstream media, stakeholder or Government action to correct this obvious corporate CFIT is beyond me.
When A***** failed many at the coal face of my employer at the time said that the 'wrong' airline failed and no good would come of this.
Perhaps it's the red roo's turn to 'fail'?
When A***** failed many at the coal face of my employer at the time said that the 'wrong' airline failed and no good would come of this.
Perhaps it's the red roo's turn to 'fail'?
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Ohallen;
Ive said it before.. I think someone in or close to Qantas has bought a massive amount of shares in VB, and rather than have shares in QF and spend capital investing in the product to make money, destroy and rip out assets while driving up the share price of the immediate competitor.
Sounds too bizarre to be true.
Ive said it before.. I think someone in or close to Qantas has bought a massive amount of shares in VB, and rather than have shares in QF and spend capital investing in the product to make money, destroy and rip out assets while driving up the share price of the immediate competitor.
Sounds too bizarre to be true.
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I wonder if the ACCC will let Virgin buy Qantas for $1 when it goes into receivership? Then at least we will get JB in charge to fix things up.
Oh, I forgot, the QF sale act prevents that.
Oh, I forgot, the QF sale act prevents that.
short flights long nights
Wedcue..think about this...
"When you remove anything that is impossible, the anything else, however improbable, must be true"
"When you remove anything that is impossible, the anything else, however improbable, must be true"
