First QF B787s to be given to Jetstar Asia under Singapore AOC

[ejectx3]

Something pigs something something fly

[1a sound asleep]

Jetstar to get a $2 billion boost to profits from Boeing 787?????????

INDIA'S aviation ministry has asked Boeing to pay just under $1 billion to flag carrier Air India as compensation for delays in delivering the 787 Dreamliner aircraft, a ministry official said today.
"We met Boeing two weeks ago and they agreed to a [compensation] amount of up to $500 million, but we have asked for more,


Read more: Boeing asked to pay Air India nearly $1bn after Dreamliner delay | News.com.au

So considering Qantas has double the Air India order where is this little bounus going??????????????????????

[DJ737]

The little bonus won't actually exist as Boeing won't actually pay any real money, it will be used to pay for the aircraft, so the QANTAS group won't have to borrow any money to pay for $2 Billion worth of airplanes, so Jetstar will get the aircraft for nothing, if and when the QF airframes are delivered then QANTAS will pay for them.

More free aircraft for Jetstar.

[Captain Gidday]

Now there's a good business model. Outsource everything, move your core business offshore. Disband your loyal workforce at home, who up till now have done a sterling job. Then when it all goes pear shaped, start giving your product away for free.
Ahhggh, the business model describes both Boeing and the Jetstar/Qantas Group. They both have a management disconnected from the workplace, too. Funny that.
[Boeing corporate headquarters are in Chicago].

[neville_nobody]

The irony for Boeing is that it would have been cheaper to do it themselves than outsource the 787.

[Captain Gidday]

Exactly. Just as it would ultimately be cheaper and more efficient for Qantas management to do the same, rather than outsource to Asia.

[Taildragger67]

However Boeing appears to have learnt something of a lesson:

After the painful supply chain woes of the 787, Commercial Airplanes chief executive Jim Albaugh has suggested that Boeing should "never outsource" wing design and manufacturing to protect its intellectual property.

[Longbow25]

Pity we can't outsource those management parasites and their obscene pay packets to a third world entity.

Maybe the little Irishman and his friend might head back from whence he came.

[LeadSled]

Folks,
Expect all the QF group B787 to be based in Singapore, with any on the VH- register still administered by CAAS under a Singapore-Australia ICAO 83bis agreement.
Tootle pip!!

[...still single]

After the painful supply chain woes of the 787, Commercial Airplanes chief executive Jim Albaugh has suggested that Boeing should "never outsource" wing design and manufacturing to protect its intellectual property.

Our next contestant is Mr Jim Albaugh from Chicago. Specialist subject -the bleeding obvious.

[maggot]

Originally Posted by Captain Gidday

Exactly. Just as it would ultimately be cheaper and more efficient for Qantas management to do the same, rather than outsource to Asia.

onshoring is the new trend, as usual, we are a decade behind the world - hey, look how cheap china is!
The reality is that onshoring is being taken very seriously by many companies. The cost benefits of the whole china project for many are evaporating and the headaches that come with the territory are proving to not be worth it. I know someone personally involved with a project doing exactly this for a fairly large corp.

[neville_nobody]

This article would suggest that everyone in Boeing was telling management to keep the 787 inhouse however it was all the senior management who wanted the project outsourced.

Boeing 787 | 787 Dreamliner teaches Boeing costly lesson on outsourcing - Los Angeles Times

[Iver]

Clarification please

So, let me make sure I understand this situation.

Is the article saying that Jetstar Asia pilots (i.e., those based and living in Singapore) will be trained on and fly the first 3 787s? Does it imply that all 15 original 787 orders for Jetstar will eventually be based and flown out of Singapore? How many are expected to be flown by Aussie pilots out of Melbourne/Sydney?

The article claims that more 787s will be added in Singapore over time - does that mean that the current dedicated A330s used out of Singapore will be transferred down to Australia and used from there (with Aussie pilots)? Confusing!!!! Are the current A330s flown out of Singapore flown by Aussie Jetstar pilots or flown by Singapore-based pilots? Will Aussie Jetstar pilots gain more A330 flying seats as a result?

I realise it is confusing and probably not set in stone. Thanks for any clarification.

[Sunfish]

The problems associated with basing the B787 and their crews in Singapore, as well as offshoring A380 and engine maintenance are going to be fatal to Qantas.

In summary, Qantas will lose control of its core competencies. The result of that will be financial roo rape by its suppliers.

The problem will manifest itself in a very simple way:

(1) Qantas head office in Sydney will find that it is writing larger and larger monthly cheques to Singapore to cover the costs of the operation.

(2) At some point the bean counters will become alarmed, especially when revenues received do not cover the increasing costs.

(3) The response to the bean counters queries will be "Thronomister failures", "Operational anomalies", "infant mortality", "crew hour limits", "pushing down the learning curve", etc. The accounts they receive will be as impenetrable to them as your Telstra bill. The "one simple hourly charge" mantra will quickly prove to be untrue, as will the performance guarantees.

(4) More detailed technical analysis of costs will be attempted by operations and maintenance specialists. After a long struggle with the suppliers the truth might appear ie: "we are being screwed".

I say "might" because the suppliers will attempt to suppress this conclusion by pressuring the original Qantas sponsors of the outsourcing. "The outsourcing must be perceived to be successful or your career is in danger" will be the message. The usual result in this situation is to shoot the messenger - the firing or resignation of the Qantas cost analysts - the airline wilfully blinds itself by removing anyone technically competent enough to criticize managements decisions.

(5) If Qantas is very, very lucky, the shortage of "in come" to match "out go" will trigger alarm bells, Qantas then reasserts detailed control over its costs by onshoring and begins the long process of re-establishing its corporate knowledge base.

This process is going to be amplified by the falling value of the Australian dollar as Chinese demand dries up and the world goes back into recession this Northern summer.

[Algie]

And yet, Sunfish et al......they will go ahead and do it anyway.

Why

Because its "In Their Nature". Just Google the zillion versions of the "The Scorpion and the Frog" fable and you'll find yourself nodding away in sad agreement.

How we ever got into this mess is not quite a mystery-read Jonathon Raulston Saul's book "The Unconscious Civilization" for starters. Sad though. Very sad. Like the story of the curfew at Sydney and the absence of a decent Hong Kong/Singapore/Denver/KL/Bangkok/Incheon style 24/7 international airport. Just sad.

I personally like the "Do your research, make your decisions, do it once, do it right, learn your lessons, refine the programme and enjoy the rewards" approach. But then I am a simple man.

Algie

[Iver]

Who will fly the 787s - Singapore-based or Aussie-based pilots?

Please excuse my primitive mind and my inability to read between the lines, but who will fly the incoming 787s - Singapore-based pilots or Aussie-based pilots?

And, based on new 787s coming into the system, will the current Singapore-based A330s be reallocated to Australian bases thus providing more A330 flying opportunities for the Aussies (or will the 787s replace the A330s altogether)? Any idea/estimate on eventual proportion of Singapore-based 787s to Aussie-based and Aussie-flown 787s?

Your points about outsourcing and bean-counter decision making is well taken - all professional airline pilots need to be worried about this assault on our profession.

Cheers

[Keg]

The plan at Qantas changes frequently according to industrial imperatives at the time.

The current articulated plan is for the J* A330s to return to the Qantas mainline fold and thus allow the 767s to be progressively retired from early next year. I don't know what that means as to who will be flying the 787 (J* Asia or J* Australia) or what destinations they'll be flying them to. I just know that the 'cost of capital' will be going to a subsidiary that supposedly makes all it's profit from selling muffins.

[Artificial Horizon]

There is no way in hell that any EBA pilots will be getting their hands on the 787. Why would they when J* can base these aircraft up in SIN where the pilots are so much cheaper??

Also KEG, why is it hard to believe that J* does make a profit with its current business model. You just need to look at the northern hemisphere to see that it is possible to make a profit with the 'muffin selling' model:

Ryanair: 487 million euro profit last year (270 aircraft)
FlyBe: 14.3 million pound profit last year (67 aircraft)
EasyJet: 248 million pound profit last year (183 aircraft)
Southwest Airlines: 459 million USD profit last year (559 aircraft)

No of these airlines are 'subsidised' in any way but managed nice healthy profits for their size even though the majority of that profit comes from ancillary sales. Why not Jetstar??

[Capt Kremin]

Because Bruce Buchanan told everyone last year that muffins were the only reason they were making a profit at the time.

[Dash1]

A 5 year old could run a company that makes a profit if said company doesn't pay it's bills. Maintenance, pushback tugs, faxing documents, check in staff, Jetstar pax on loaded to Qantas flights - what's the delay code for that one? etc, etc, etc.