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QANTAS - WHERE TO NOW?

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Old 3rd May 2012, 06:36
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QF94 said:
QANTAS has JQ which is gutting it. JQ is made to be the saviour of QANTAS, when in fact it is white-anting it from within.
Which is why British Airways quickly offloaded their LCC 'Go' when their management realised how a LCC interacts adversely with the 'mother ship'.
Which is also why BA offloaded their Qantas stake a few years ago when they saw the same pattern emerging, but they had insufficient numbers or influence on the Qantas board to do anything about it.
You can just hear them laughing back in Waterside; 'Well we tried to tell those stupid Aussie 'Bruces' how it would end, but they knew better!'.

Last edited by Captain Gidday; 3rd May 2012 at 10:02. Reason: British Airways headquarters has moved to Waterside from Speedbird House
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Old 3rd May 2012, 06:56
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@The The

All these numbers are based on the financials provided by QF in the annual results including the $200m international losses, I have made NO assumptions, just broken down the numbers. Even if we did say QF had exaggerated the international losses and say said that QF international lost only $50m and so QF domestic made $278m, the QF domestic business still far outperforms the Jetstar business in profit per ASK and profit per passenger.
The $200m International "losses" include the hissy fit shut down of mainstream QANTAS for two days last October by AJ, the continuous problems with A380 aircraft and dwindling international sectors. I've said this on other posts, but when QANTAS International only flies to about 21 destinations, is it any wonder that only 18/100 choose to fly QANTAS? They have no choice. Out of the destinations we fly to:

4 are to the US (HNL, LAX, DFW & JFK),
1 to South America (Santiago),
1 to South Africa (JNB)
2 to Europe (LHR and FRA),
3 to NZ (WLG, CHC, and AKL with the occasional seasonal to Queenstown) 3 to SE Asia (SIN, BKK and HKG), of which the only through-fare to London is via SIN,
1 flight to mainland China and
1 to Japan
1 to MNL

We don't fly to Canada, Fiji, or much of China, or much of Europe and nothing in the Middle East, or even Malaysia.

The QF board figures show QANTAS can't compete, but yet we manage to make more profit than SIA last year, which included our worldwide shutdown for a couple of days and our International loads are north of 80%.

Hopefully, the next 747 we send to Victorville for retirement, we can have 12 spare spaces for the board to be cut up with it.

End of this rant, but more to follow.
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Old 3rd May 2012, 07:27
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History repetes

You can just hear them laughing back in Speedbird House; 'Well we tried to tell those stupid Aussie 'Bruces' how it would end, but they knew better!'.
Spot on CG and they did try to tell Dixon but he obviously had other plans... leasing?


BA puts its budget airline Go up for sale - Business News - Business - The Independent
Go, set up in 1998 with a £25m investment from BA, flies to 21 destinations from its base at Stansted. Yesterday BA said Go had made a profit every month so far this year and was on track to break even in 2001. Lord Marshall, BA's chairman, said: "We do not feel that Go is a part of the future strategy of BA, particularly with short-haul operations. So it is sensible for BA and Go to go their separate ways."

Asked if the no-frills airline had been a mistake, he said: "I don't think it was a mistake to launch it. We've gained a lot of knowledge and experience." But he admitted Go had cannibalised customers from BA as it flies many of the same routes.
Analysts supported the decision which, together with better-than-expected half-year profits, pushed BA shares 6 per cent higher to 351p. Ian Wilde, airline analyst at SG Securities, said: "They've been clear right from the start that it was a bit of an experiment."
BA yesterday reported second-quarter profits of £200m compared with £40m a year ago, despite huge fuel price rises. Rod Eddington, who took over as chief executive in May, warned of further restructuring to come in operations. Schedule changes next summer, combined with the introduction of more, smaller new aircraft, will see year-on-year capacity cut by 10 per cent.
Plans for a wholesale shake-up of BA's Gatwick operation will be announced in the next few weeks. These could include several hundred job losses as duplication with Heathrow is cut. Mr Eddington said he planned to integrate BA's European businesses, now split into 10 groups and franchises. The programme to drop routes that do not make money will continue.
BA's second-quarter results, which follow the collapse of its merger talks with KLM in September, showed that its strategy of dropping uneconomic routes and passengers is bearing fruit. Yields, a measure of how much an airline makes on each passenger, rose 8.7 per cent in the quarter, BA's biggest ever year-on-year improvement. Innovations such as beds in business class helped premium traffic rise 7.7 per cent.
Costs were steady despite a £61m rise in fuel costs. The dividend was held at 5.1p per share.
At least BA still could still come up with a dividend at the time..

HISTORIC BATTLE
Management Today
Joyce is fighting a battle over the future of the airline. Ultimately, it is about a fundamental philosophical divide between staff and management. The role of management is to act primarily in the interests of shareholders while staff (including, in the case of Qantas, highly paid pilots and engineers) want job security, higher incomes and better working conditions.
Employees would prefer Qantas remain overwhelmingly a domestic airline with a modest international operation flying out of Australia. Joyce has much more ambitious plans. He wants to establish Qantas as a major player in the Asia-Pacific, the world's fastest growing aviation market. But, as he and Qantas employees know, that will require a further cut in the cost base of the airline that eventually will spill over to the Australian operations.
Joyce may be a rocket scientist (a science graduate specialising in mathematics and physics) but the future is not that hard to predict. Pan Am was the world's largest carrier for 44 years until its collapse in 1991. Ansett Australia was a key Australian domestic airline for 66 years until it disappeared in 2001.
In 2010, United Airlines and Continental merged in the United States. This followed the merger of Delta and Northwest in 2008. In 2011, British Airways responded to growing global competition by merging with Spanish carrier Iberia to form IAG. Air France and KLM have merged, so too Chile's LAN and Brazil's TAM airlines.
On the flip side, a decade ago who had heard of airlines such as Emirates, Etihad, Singapore Airline's cut-price airline Scoot, AirAsia X and China Southern Airlines, Asia's largest airline which is starting to make inroads into Australia. As one senior airline executive told Mt, Qantas is having its "lunch cut" on the international routes. The international Qantas business, once a profit driver, is now losing money. The reasons are complex and include its inability to compete on a cost-effective basis with Asian and Middle-East carriers, the high Australian dollar (making Australia a less popular destination) and the capacity of international airlines to offer cut-price airfares in Australia because they are able to link up through significant international hubs. The problem for Qantas is Australia (and New Zealand) is a spoke, not a hub. It is literally the end of the line.
The real strength of Qantas has been its domestic market where, for the past decade, it has been able to generate large profits supported by the success of its frequent flyer program. It has also benefited from the success of cut-price Jetstar, founded by Joyce in 2003 and which is highly successful here and overseas.
Aviation consultant Stephen Pearse, former head of United Airlines in Australia and later vice president of Emirates in this country, is convinced Qantas will survive even if it does not expand into Asia.
"It has a strong position in Australia and a powerful domestic franchise," he says.
Pearse said Qantas was still well-placed to serve the direct non-stop traffic out of Australia although it had lost about half its share of international traffic in a very competitive market.
BScMEng, MSIA

Independent Non-Executive Director


William Meaney was appointed to the Qantas Board in February 2012.
Mr Meaney has extensive international experience in advisory and executive roles. Mr Meaney is a Director of moksha8 Pharmaceuticals, Inc and until recently, Mr Meaney served as Chief Executive Officer of The Zuellig Group. He is also a Member of the Asia Business Council and serves as a Trustee of both Carnegie Mellon University and Rensselaer Polytechnic Institute.
Mr Meaney has had broad airline experience having been the Managing Director and Chief Commercial Officer of Swiss International Airlines and Executive Vice President of South African Airways responsible for sales, alliances and network management.
Prior to these roles, Mr Meaney spent 11 years providing strategic advisory services at Genhro Management Consultancy, as the Founder and Managing Director, and as a Principal with Strategic Planning Associates.
Age: 52
A lot of people believe Meaney made a complete mess of Swiss International and the reason why he departed from the airline quickly... So what do Clifford & board do in 2012, invite him to join the list of famous failed airline brand managers... (Ansett?)

It appears the institutional investors in Australia still can't see through it... the mind boggles.
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Old 3rd May 2012, 07:45
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World Business Briefing | Europe: Switzerland: Airline Scales Back
By Alison Langley (NYT)
Published: May 03, 2003

Acknowledging that its initial strategy of focusing on first-class and business-class travelers failed, Swiss International Air said that it would drop more routes, lay off more workers and set up a new discount short-haul subsidiary. Swiss International, cobbled together late in 2001 by the Swiss business establishment to replace the bankrupt Swissair, is losing 40 million Swiss francs a month and has been told by both its lenders and the Swiss government not to expect any fresh aid. William L. Meaney, the airline's chief financial officer, said that the airline had to direct its efforts ''not to what we think the customer wants, but what the market is telling us the customer is willing to pay for.'' Alison Langley (NYT)
Yes Mr Meaney has the experience QF are looking for. At least the Swiss saw the light quickly (he lasted about 9mths) and dumped him.
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Old 3rd May 2012, 08:25
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New Roy Morgan Air Travel Report Keeping an Eye on the Sky

NewsMaker - New Roy Morgan Air Travel Report Keeping an Eye on the Sky

Thursday, May 03, 2012 - Roy Morgan Research

Roy Morgan Research has released a new report focusing on the domestic and international air travel of Australians aged 14+. The Roy Morgan Air Travel Report looks at the incidence and frequency of Australians’ air travel, the differences between business and leisure travel, and branded airline information relating to usage and loyalty.



According to the new Air Travel report, Qantas is the most popular international airline for overseas holidays.

In the twelve months to December 2011, 15% of Australians flew Qantas International on their last overseas holidays, followed by Singapore Airlines (13%), Emirates (11%), Jetstar International (9%) and AirAsia X (8%).


International Airlines Used for Last Overseas Holiday


Source: Roy Morgan Single Source, January – December 2011, Total used international airline on last holiday, sample n=1,677.


Jane Ianniello, Roy Morgan Research International Director of Tourism, Travel & Leisure, says:

“Although Qantas is the most popular international airline it has lost share over the past two years to its key competitors such as Singapore Airlines and Emirates. Customers of Singapore Airlines have consistently high satisfaction levels, and Emirates has steadily increased its satisfaction ratings to now be ahead of Qantas International.

“The challenge for Qantas and other major international airlines will be to understand, and therefore satisfy, their customers better.
In support of my previous post, More proof the Qantas brand is very resilient considering the management favouring the J* product funded by you know who....
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Old 3rd May 2012, 10:57
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Grrr High Court Ruling on James Hardie

One would hope the assorted QF Board/Directors would be choking on their caviar canape's and Bollinger in the Board Room on QCA/9 tonight when they saw the result of the High Court decision on Hardie's-who lied to their shareholders over the state of play.... way back in 2002 when they were trying to dodge the litigation 747 rumbling down the payout runway.

A scandalous litany of lies,deceit and treachery of the highest order.

Enough said. . . . . . . . . . . . . . . . . .

JOIN THE'n dots.
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Old 3rd May 2012, 19:54
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Qantas doesn't have "a strong franchise" with its customers. It has a strong franchise on the minds of politicians.

Remember the Australian car industry in the 1970's - where all you could by was a Ford or a Holden because everything else that was any good was ridiculously expensive?

I want open skies. That is the only way you will get rid of Joyce and co. The airline is profitable because we are stuck at the arse end of the world and nobody elses seems interested in taking Qantas on except Branson.

To put that another way, the reason Qantas is more profitable than other airlines is because it has us by the short and curlies, not because it offers a superior product.
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Old 3rd May 2012, 22:23
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How much more open can Australian skies be?
Internationally, every man and his dog can apply for virtually unlimited capacity and get it. Can't see the difference between what we have now and open skies.
Domestically, even foreign owned airlines can start up. If they ask nicely, some State Government will even subsidise their headquarters. Could you see an Australian owned airline being able to start up in North America or Europe?
When you sit down and think about it the Qantas domestic product still isn't too damned bad, especially for frequently flying business people with no baggage. Generally on time, dependable, fast in and out of terminals, nice frills like optional valet parking, meals in business class on an 85 minute sector etc. It may not be the high water mark for domestic airline service, but it's a mile ahead of anything you'll find these days in North America or Europe.
So it's not the product that's the problem. The product can, and is, competing on its own terms, despite the obstacles put in its path. It's the management who can't see the value of what they have and are 'Absolutely' committed to destroying that product by deliberate act mostly and neglect sometimes that is the problem. White-anting the airline for ideological and possibly narcissistic reasons.

Last edited by Captain Gidday; 4th May 2012 at 05:33.
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Old 3rd May 2012, 23:31
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It's the management who can't see the value of what they have and are 'Absolutely' committed to destroying that product by deliberate act mostly and neglect sometimes that is the problem. White-anting the airline for ideological and possibly narcissistic reasons.
More evidence of the "clinical bean counters" shifting revenue around to fund the J* Airbus acquisition is my guess... it is my view, by the time we get to 2018/19 these A380s will come factory painted in the orange cancer colours and the Qantas brand will be a domestic outfit only.. vale Q international. This fraud of a board have got to go.... it is all about "ideological narcissistic" styled management, that's for sure. I don't know how Gareth Evans the CFO sleeps at night... since he got the gig it appears the plans to destroy the Qantas brand have accelerated, a "compliant quiet achiever" following destructive orders me thinks...

QANTAS has elected for stability in its senior management ranks after appointing Gareth Evans, an 11-year veteran of the airline, as its chief financial officer.
Mr Evans has been the favourite for the role since Qantas announced in March the sudden departure of its chief financial officer, Colin Storrie, for ''personal and health reasons'' after 18 months in the job. Mr Evans has been acting in the role.
The head of Qantas's loyalty program, Simon Hickey, had been tipped as the other leading candidate.

Qantas delays A380 deliveries to cut spending by $400m



Qantas will postpone A380 deliveries to cut capital outlays. Photo: Getty Images

Qantas will cut spending by a further $400 million next financial year by delaying delivery of new A380 aircraft.
A review of the airline's maintenance operations had concluded, but a decision would not be announced until mid-May, Qantas said in a statement today.
The reduction cuts the carrier's planned expenditure on equipment in 2012-13 to $1.9 billion.
Advertisement: Story continues below
Qantas was to receive two new super jumbo A380s in early 2013, but will now take delivery of the aircraft in the 2016/17 financial year.
Another six A380s will be delivered to Qantas from 2018/19.
The spending reductions follow a previously announced $500 million worth of cuts, which included staff cuts in its catering, cabin crew, pilots, engineering and ground operations.
Qantas has also been reviewing its maintenance operations to identify cost savings, which is likely to result in job losses.
Chief executive Alan Joyce has previously said keeping three maintenance sites - Melbourne, Avalon and Brisbane - was not viable

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Old 4th May 2012, 00:06
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Isn't this just a recycling of the August announcement last year?
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Old 4th May 2012, 03:47
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Don't think so. That announcement was about the delay of the last 6 ( I think it was 6). QF were still supposed to get another two to add to the current 12. Those two have now been delayed.

A revised NTFS has already been issued canceling the 8 380 s/o slots that were advertised a few weeks ago and that speaks volumes. There are now a total of 8 commands and 8 FO slots in Per for the next year. Happy days.
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Old 4th May 2012, 04:01
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When international routes are being cut, no need for additional aircraft, particularly the A380 as they can't be used at all airports just yet.
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Old 4th May 2012, 05:24
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QF94, you make today's announcement sound almost upbeat.
I feel that this is disastrous for the already oversubscribed numbers
On the 380. Also, it doesn't say too much for the long term prospects
Of the 380 fleet. If they are as good as the company claims, wouldn't
You be rushing them in instead of delaying(perhaps cancelling) them.
Our current 12 may well be the final number. Does that even constitute
A fleet? Barely
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Old 4th May 2012, 05:50
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I heard they can't cancel them...penalty for all those freebie 330's comes back to roost perhaps
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Old 4th May 2012, 06:01
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Delayed to post selloff date perhaps?
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Old 4th May 2012, 06:27
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@Nigel747

QF94, you make today's announcement sound almost upbeat.
I feel that this is disastrous for the already oversubscribed numbers
On the 380. Also, it doesn't say too much for the long term prospects
Of the 380 fleet. If they are as good as the company claims, wouldn't
You be rushing them in instead of delaying(perhaps cancelling) them.
Our current 12 may well be the final number. Does that even constitute
A fleet? Barely
I don't know how that sounds upbeat. The reality is that you don't need so many aircraft when international routes are being wiped from under us. The 747's are clearly the best money-spinner we have with a much better break-even point than the 380's. We will be losing another two 747's in the near future as part of the "accelerated retirement programme", and flying inefficient 380's in their place. The management will try to have you believe that the 380 is the best aircraft ever invented. Nothing could be further from the truth. They require much more manpower per turnaround than a 747, and only carry about 40 or so more passengers than a 747, but require a lot more fuel for the privelage.

As for the sell-off, I'd be watching this space. When QANTAS is made to look as bad as the current federal government, the share price will fall and you can bet Dixon and Singleton will be in there to buy it up and finish it off. Remember what Dick Smith said last year. If he had QANTAS, he would have sold it years ago.

The 380 was never meant to make QANTAS turn around and become more profitable. If the management were true to growing QANTAS (I know this has been beaten to death) we would have had 777's and the 747-800 aircraft for international operations.

If it wasn't for the staff within QANTAS to make the airline run, QANTAS would have disappeared long ago. Somehow the staff (at all levels) seem to be able to make a strawberry jam sandwich out of a pile of crap. It doesn't taste the best, but the company is till a chosen airline to fly with.
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Old 4th May 2012, 07:01
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From a glass-half-full perspective... one rumour doing the rounds is that the Virgin push and the denouement of Red Q has convinced management of the need to have the 787 in mainline ASAP.

Would make sense if it is true. What better way to regain lustre domestically than to put the brand new aircraft on the premium service.

AIPA has been quiet lately. Maybe there is something in this one.
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Old 4th May 2012, 07:20
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If you believe the rumours Buchanan doesn't want it and the business model for it is very weak. Any J* pilots started their training for the introduction yet? You would expect some sort of planning pending its arrival yet I am not aware of any. Make sense for Qf domestic under the short haul contract as per the intergration document.
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Old 4th May 2012, 08:28
  #279 (permalink)  
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Yes, but where will they park it domestically in SYD, MEL and BNE? Even at PER it would constrain the gates. DRW? ADL? All get regular or semi regular 767 services that would (hopefully) be replaced by the 787.

Schlong, is the 787 a 'new type' or a 'replacement aircraft' for the 767? It could get very interesting.
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Old 4th May 2012, 08:40
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@Keg

Schlong, is the 787 a 'new type' or a 'replacement aircraft' for the 767? It could get very interesting.
It's both, but not for the 767, but for the JQ 330's that we will get back once the 787's start entering JQ service. We'll be left with the old clangers that have had their rings flown off them.
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