QANTAS - WHERE TO NOW?
I think this thread is going to get locked.
But it all comes down to 2 simple things, that is there is so much capacity being dumped into Australia at the moment internationally that everyone is undercutting each other, past loyalty means nothing, everyone wants to fly for the lowest possible.
Margin has been reduced, non fixed costs are being targeted and staffing is the one that hits home the most.
The government is not interested in protectionism, justifying that more inbound traveling due to lower air fares will more then compensate for the loss of jobs that are no longer insulated with more jobs created in other industries like cleaners and reception desks at hotels.
Either that, or other airlines like Emirates which can increase and increase services to this country endless with no business sense at all, which in other industries would be considered dumping. I'm basing my assertions on the facts from BITRE
http://www.bitre.gov.au/publications...ivity_FY11.pdf
Which shows Emirates average a load factor of
65% to UAE and
55% to New Zealand
which is totally abysmal.
Compared to the major airlines that actually have profit and loss accountability:
Qantas 82%
Cathay Pacific 78%
Singapore Airlines 80%
British Airways 85%
Malaysian Airlines 80%
V Australia 85%
Air NZ 82%
Etihad 81%
Delta 83%
United Airlines 84%
Draw your own conclusions from the facts, not many countries allow capacity dumping.
But it all comes down to 2 simple things, that is there is so much capacity being dumped into Australia at the moment internationally that everyone is undercutting each other, past loyalty means nothing, everyone wants to fly for the lowest possible.
Margin has been reduced, non fixed costs are being targeted and staffing is the one that hits home the most.
The government is not interested in protectionism, justifying that more inbound traveling due to lower air fares will more then compensate for the loss of jobs that are no longer insulated with more jobs created in other industries like cleaners and reception desks at hotels.
Either that, or other airlines like Emirates which can increase and increase services to this country endless with no business sense at all, which in other industries would be considered dumping. I'm basing my assertions on the facts from BITRE
http://www.bitre.gov.au/publications...ivity_FY11.pdf
Which shows Emirates average a load factor of
65% to UAE and
55% to New Zealand
which is totally abysmal.
Compared to the major airlines that actually have profit and loss accountability:
Qantas 82%
Cathay Pacific 78%
Singapore Airlines 80%
British Airways 85%
Malaysian Airlines 80%
V Australia 85%
Air NZ 82%
Etihad 81%
Delta 83%
United Airlines 84%
Draw your own conclusions from the facts, not many countries allow capacity dumping.
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Exco Remuneration
In 2002 total Exco cost was $6.7mil
In 2012 total Exco cost is $17.2mill
In 2012 the shareprice is $1.45 and shareholders have not had a dividend in two years.
Every time management reduces wages of employees they reward themselves an increase which inturn negates the cost savings just made from reducing employee wages.
As a total % of running an aircraft to LAX and back to Sydney the cost of labour is less than 3 %.If Qantas is not making money on this route then it means that their yierld managment is down the crapper
If the $A was trading at US60 cents the Australian workforce would be cheap.
Australia has become a safe haven for investors and this in turn has pushed the $A up and made our workforce appear expensive.The rest of the world is stuffed and thats why we seem expensive.
Back to the original question.Answer: get rid of the entire board and Exco and employ people who know how to run an international airline.
No one currently has a god damn clue
In 2012 total Exco cost is $17.2mill
In 2012 the shareprice is $1.45 and shareholders have not had a dividend in two years.
Every time management reduces wages of employees they reward themselves an increase which inturn negates the cost savings just made from reducing employee wages.
As a total % of running an aircraft to LAX and back to Sydney the cost of labour is less than 3 %.If Qantas is not making money on this route then it means that their yierld managment is down the crapper
If the $A was trading at US60 cents the Australian workforce would be cheap.
Australia has become a safe haven for investors and this in turn has pushed the $A up and made our workforce appear expensive.The rest of the world is stuffed and thats why we seem expensive.
Back to the original question.Answer: get rid of the entire board and Exco and employ people who know how to run an international airline.
No one currently has a god damn clue
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Empire4 :read my message before reply
Empire4, a slave driver! read my message before you reply,( I would like to start the following two historical facts:
1. Mr James Strong,our CEO between 1994-2000, took the job of merging TN and QF and floated the Qantas on the market. During his tenure, Qantas expanded its network (China, SFO, South America), Qantas did not employe one overseas pilot, one overseas cabin crew, one overseas flight engineer during his 6 years tenure and Qantas made real profit as QF paid dividend every year during his tenure.
2. Using the labor cost in China as a benchmark, the wage cost of pilots and cabin crew in 1994 was probably 10 times lower than the wage cost of today in China, so economically, does it make more sense to outsourcing all those jobs in 1994 instead of outsourcing them today?
however, I do not have much hope to persuade people like you. Make it simple, let me ask you a very basic question? Shall we go back to slavery in order to be more productive and profitable? I mean let's make people work for nothing, does that make you happy now? Real Human wealth is created by advancement of technology not by slavery , a decent civil society should have decent standard labor law to ensure the working people can get a fair share of the wealth they create. Name me one country which is civil and wealthy but has no decent labor law.
1. Mr James Strong,our CEO between 1994-2000, took the job of merging TN and QF and floated the Qantas on the market. During his tenure, Qantas expanded its network (China, SFO, South America), Qantas did not employe one overseas pilot, one overseas cabin crew, one overseas flight engineer during his 6 years tenure and Qantas made real profit as QF paid dividend every year during his tenure.
2. Using the labor cost in China as a benchmark, the wage cost of pilots and cabin crew in 1994 was probably 10 times lower than the wage cost of today in China, so economically, does it make more sense to outsourcing all those jobs in 1994 instead of outsourcing them today?
however, I do not have much hope to persuade people like you. Make it simple, let me ask you a very basic question? Shall we go back to slavery in order to be more productive and profitable? I mean let's make people work for nothing, does that make you happy now? Real Human wealth is created by advancement of technology not by slavery , a decent civil society should have decent standard labor law to ensure the working people can get a fair share of the wealth they create. Name me one country which is civil and wealthy but has no decent labor law.
Last edited by timer88; 23rd May 2012 at 14:57.
Name me one country which is civil and wealthy but has no decent labor law.
Countries like Japan actively push their currency down, other like Australia are hands off. Pros and Cons for both exist, its for governments to decide how they approach it all.
Labour laws, OH&S, minimum wages in countries will push up the cost relative to the Philippine's and when unrestrained capitalism comes into play you have a breed of management/consultants like today who see big bonuses in it for themselves to make as much as possible before their tenure runs out. It all comes down to someones huge pay packet.
600ft-lb
You seemed to have missed the amount of freight carried by Emirates on these routes.
You seemed to have missed the amount of freight carried by Emirates on these routes.
Qantas 150,000 tonnes 18.2%
Singapore Airlines 120,000 tonnes 14.5%
Emirates 82,400 tonnes 10.0%
Cathay Pacific 78,000 tonnes 9%
EK has a twice per week dedicated 777 freighter doing Dubai-Singapore-Sydney-Hong Kong-Dubai.
Qantas has a 3x 747s and 1x 767
Syd-Akl total freight for 2010/2011 is 59,000 tonnes or 7.2% of total.
4 flights a day @ 55% load factor from OZ to NZ in 777's and A380's, to account for a portion of the 7.2% portion of the total freight market.
I call that dumping.
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what is a civil society?
1. Compared to countries like China, and other developing countries, people in countries like Australia and USA, are not less productive as all technologies are very easy to transfer to any countries due to the internet, the only difference is a worker in China producing $10 wealth, he or she only gets paid $1, but in developed nations, because of the labor law, the worker in the same situation will get paid $4, only $3 difference? but that $3 dollars makes the difference between a civil society and an uncivil society. A civil society does not only know how to be more productive but also knows how to justly share the wealth with the working people who produce the wealth.
2. All Western companies can engage productions in overseas, but the law of all western countries should restrict them to sell those goods only in overseas, unless there are comparable wage standards between the two countries. Otherwise, we are building an evil economical system based on outsourcing slavery.
2. All Western companies can engage productions in overseas, but the law of all western countries should restrict them to sell those goods only in overseas, unless there are comparable wage standards between the two countries. Otherwise, we are building an evil economical system based on outsourcing slavery.
Last edited by timer88; 23rd May 2012 at 15:43.
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fantasy of retards
The whole purpose for those advocating budget airlines is to reduce the cost of travel, so more people can afford air travels. However, there are two fundamental problems as follows:
1. The main reasons why there is still not one major budget long haul airline yet are (a) As it burns a lot more jet fuel to fly long haul route than short haul route as it need more fuel to just carry the extra fuel. (b) therefore, the primary cost of a long haul flight is fuel cost, simply it will make little difference if you try to save on the cost of labor, airport charges and other non-fuel costs.
2. One very important thing which most bean counters forget is airlines do not produce jet fuels, airlines have no control over the market price of jet fuels. The oil companies have the power to raise the price according to the demand for jet fuels. Say example, if every air traveler flies one more overseas trip a year because of the success of budget airlines, then the jet fuels demand will increase 100% and the price will be skyrocketing by say 30%, then you do not need an accounting degree to know how the hell the budget airlines can make a cent?
3. Unless airplanes can fly using water as fuel, then the whole idea of Jetstar will remain as a fantasy of a retarded. At least, BB wakes up to this reality and swaps his water dream with a cream dream, now the lady star JH steps in his role to be the CEO of flying with water.
1. The main reasons why there is still not one major budget long haul airline yet are (a) As it burns a lot more jet fuel to fly long haul route than short haul route as it need more fuel to just carry the extra fuel. (b) therefore, the primary cost of a long haul flight is fuel cost, simply it will make little difference if you try to save on the cost of labor, airport charges and other non-fuel costs.
2. One very important thing which most bean counters forget is airlines do not produce jet fuels, airlines have no control over the market price of jet fuels. The oil companies have the power to raise the price according to the demand for jet fuels. Say example, if every air traveler flies one more overseas trip a year because of the success of budget airlines, then the jet fuels demand will increase 100% and the price will be skyrocketing by say 30%, then you do not need an accounting degree to know how the hell the budget airlines can make a cent?
3. Unless airplanes can fly using water as fuel, then the whole idea of Jetstar will remain as a fantasy of a retarded. At least, BB wakes up to this reality and swaps his water dream with a cream dream, now the lady star JH steps in his role to be the CEO of flying with water.
Plazbot
http://www.bitre.gov.au/publications...ivity_FY11.pdf
TABLE 3 AIRLINE PASSENGER CAPACITY AND UTILISATION TO AND FROM AUSTRALIA BY OPERATOR: Year ended June 2011
Emirates (f) New Zealand 1 453 298 592 541 410 55.2
United Arab Emirates 3 408 814 308 1 170 808 69.6
I admit, I looked at the wrong figure, its 69.6% not 65%. Still abysmal. Half empty flights to NZ, a joke.
LR 3
Bureau of Infrastructure, Transport and Regional Economics.
http://www.bitre.gov.au/publications...ivity_FY11.pdf
TABLE 3 AIRLINE PASSENGER CAPACITY AND UTILISATION TO AND FROM AUSTRALIA BY OPERATOR: Year ended June 2011
Emirates (f) New Zealand 1 453 298 592 541 410 55.2
United Arab Emirates 3 408 814 308 1 170 808 69.6
I admit, I looked at the wrong figure, its 69.6% not 65%. Still abysmal. Half empty flights to NZ, a joke.
LR 3
Bureau of Infrastructure, Transport and Regional Economics.
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“The government is not interested in protectionism”
Nor should it be. Protectionism is what drove QF into being a monolithic sheltered workshop hobbled by high labor costs and outdated work practices to begin with. Please, not more of the same!
“As a total % of running an aircraft to LAX and back to Sydney the cost of labour is less than 3 %”
No, you will find it is more than 3%, much more. But more importantly it is one of the few costs that can be controlled by the airline.
“Australia has become a safe haven for investors and this in turn has pushed the $A up and made our workforce appear expensive”
No, by nearly every measure, the Australian workforce IS expensive.
“A civil society does not only know how to be more productive but also knows how to justly share the wealth with the working people who produce the wealth.”
Can you provide an example of such a utopian state?
“The main reasons why there is still not one major budget long haul airline yet are….”
There are plenty of budget long haul airlines.
“simply it will make little difference if you try to save on the cost of labor”
No, in the airline game, sometimes it is the ONLY difference you can make.
Nor should it be. Protectionism is what drove QF into being a monolithic sheltered workshop hobbled by high labor costs and outdated work practices to begin with. Please, not more of the same!
“As a total % of running an aircraft to LAX and back to Sydney the cost of labour is less than 3 %”
No, you will find it is more than 3%, much more. But more importantly it is one of the few costs that can be controlled by the airline.
“Australia has become a safe haven for investors and this in turn has pushed the $A up and made our workforce appear expensive”
No, by nearly every measure, the Australian workforce IS expensive.
“A civil society does not only know how to be more productive but also knows how to justly share the wealth with the working people who produce the wealth.”
Can you provide an example of such a utopian state?
“The main reasons why there is still not one major budget long haul airline yet are….”
There are plenty of budget long haul airlines.
“simply it will make little difference if you try to save on the cost of labor”
No, in the airline game, sometimes it is the ONLY difference you can make.
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The professor of free market extremist
The main reasons why there is still not one major budget long haul airline yet are….”
There are plenty of budget long haul airlines. Give us the names of those budget long haul airlines, Professor?
“A civil society does not only know how to be more productive but also knows how to justly share the wealth with the working people who produce the wealth.”
Can you provide an example of such a utopian state? Germany, the only economically sustainable nation in Europe, major German firms like Siemens all have trade union leaders as supervisory board members. Supervisory Board - Siemens Global Website
The civil war in USA cost almost half of million lives to get rid of slavery, but the intent to use slaves is still well alive today in the minds of many like The Professors from CA, the only difference they know they can only exploit the slaves in overseas not in USA. the professor of CA, stop selling your evil slavery idea, it already bankrupt USA, stop ruining other nations.
There are plenty of budget long haul airlines. Give us the names of those budget long haul airlines, Professor?
“A civil society does not only know how to be more productive but also knows how to justly share the wealth with the working people who produce the wealth.”
Can you provide an example of such a utopian state? Germany, the only economically sustainable nation in Europe, major German firms like Siemens all have trade union leaders as supervisory board members. Supervisory Board - Siemens Global Website
The civil war in USA cost almost half of million lives to get rid of slavery, but the intent to use slaves is still well alive today in the minds of many like The Professors from CA, the only difference they know they can only exploit the slaves in overseas not in USA. the professor of CA, stop selling your evil slavery idea, it already bankrupt USA, stop ruining other nations.
timer88, i understand your frustration but i think you need to realise that times have changed since Strong was at the helm. There is very little brand loyalty anymore (which isn't helped of course by grounding an airline!) and unfortunately the majority of people don't see travelling on an airline as an adventure anymore...but as a chore to get somewhere. Most people won't pay extra to fly on QANTAS, they see the cabin crew as old and rude, the ground staff as old and rude...and the aircraft as even older. Of course this isn't the reality but thats just the way QANTAS is seen these days. I think in a way its actually how AJ and co. want the airline to be seen.
You pay cheap money for a LCC you know the service etc will be crap, but at least you got a ticket for cheaper than it costs to park your car at the airport. Thats all most people care for at the moment. Is it wrong? Of course but thats just competition, the internet and the way people are these days.
Qantas needed something to be done, it is a rudderless ship at the moment, and i believe AJ is under increasing pressure to do something. The best thing at the moment would be a strong alliance with Emirates, It would end the capacity dumping into and around Australia, provide a big boost to domestic and give the airline a massive network out of the middle east.
It also needs a change in CEO, no airline can prosper in a service industry when the staff have the level of disrespect, disengagement and mistrust in its leader as exists in Qantas at the moment.
You pay cheap money for a LCC you know the service etc will be crap, but at least you got a ticket for cheaper than it costs to park your car at the airport. Thats all most people care for at the moment. Is it wrong? Of course but thats just competition, the internet and the way people are these days.
Qantas needed something to be done, it is a rudderless ship at the moment, and i believe AJ is under increasing pressure to do something. The best thing at the moment would be a strong alliance with Emirates, It would end the capacity dumping into and around Australia, provide a big boost to domestic and give the airline a massive network out of the middle east.
It also needs a change in CEO, no airline can prosper in a service industry when the staff have the level of disrespect, disengagement and mistrust in its leader as exists in Qantas at the moment.
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More companies = more troughs for more snouts
Bottom feeders greedily sucking the profits created by their once dedicated staff.
These CEOs jump on board an already fully functioning company and think that they have an automatic entitlement to massive remuneration.
Bottom feeders greedily sucking the profits created by their once dedicated staff.
These CEOs jump on board an already fully functioning company and think that they have an automatic entitlement to massive remuneration.
Finally some question being asked in the mainstream media.
Questions raised over Qantas's split CEOs - Business (Australian Broadcasting Corporation)
Questions raised over Qantas's split CEOs - Business (Australian Broadcasting Corporation)
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Originally Posted by T88
Can you provide an example of such a utopian state? Germany, the only economically sustainable nation in Europe, major German firms like Siemens all have trade union leaders as supervisory board members
The reason for this is that German "efficiency" is largely the result of a severely deflated currency. The Euro represents a package of national currencies, the Greek Drachma, the German Mark, the French Franc etc. But because it is a single currency the natural market forces of currency fluctuation depending on the issuing nation's fiscal policies is severley restricted, the currency must reflect the Euro zone as a whole. Thus the weaker economies such as Greece have long had an effectively inflated currency as the Drachma would normally have fallen in line with their inefficiencies whilst the stonger economies, and Germany is certainly the strongest, have benefitted from a currency that is effectively weaker than that which they would have if their national currency, the Mark, was floated. In short, the Euro represents an average, those above the average get the benefits of an artificially devalued currency at the expense of those below the average who have to live with the consequences (ability to borrow short term thus creating a debt trap as well as reduced competitiveness making it hard to pay off that debt) of an artificially inflated currency.
If the Euro is abandoned suddenly Germany will be faced with a rapid and massive appreciation in the value of their currency, I would suggest in the order of 30%. All of a sudden those powerhouses of German manufacturing might and the general population will find out that those fantastic working conditions are no longer affordable because they simply cannot sell enough cars or electronic goods at the prices needed to sustain the businesses.
As it is BMW and Mercedes are outsourcing manufacturing to China and S Africa, if the German currency is allowed to float independently of Europe it will skyrocket and make outsouring production even more compelling with the result of increased unemployment at home.
This is the ONLY reason Germany is propping up the Euro, they simply cannot afford not to because a failed Euro will actually harm them far more than anyone else in the Euro zone. And as long as they can force the pain of austerity onto other countries they can keep the Euro going hoping to wait it out until a recovery occurs. In short, German support for the Euro is a given, all the poor countries should be demanding massive concessions from Germany because the poor are already screwed, they should accept that and tell the Germans that the bluff is being called. If Germany wants to collapse then they can choose not to support economic stimulus measures across Europe, their non support will make bugger all difference to the poor nations as they're already broke, but the Germans have a standard of living to lose.
Make them sweat and put everything on the line. The Euro has been an exercise in German dominance by other means, what they failed to realise was that dominance would always incur a long term collapse of weaker nations as they could not afford to pay their way out of the inevitable crunch which would have occurred at some point regardless of the current GFC trigger. Had subprime and all those events not occurred then sooner or later, probably about now in fact compared to approx 2009, the excessive borrowings of poor nations with a strong currency (i.e. the Euro members) would have come home to roost and the clear focus would have been on that situation with disbandment of the Euro as the only solution.
As it now stands the Euro might continue due to the mess in the USA taking a focus off Europe's structural issues. It will still collapse (unless all of Europe suddenly becomes very Germanic in attitude and efficiency and everything else) in the longer term and the pain will be all the greater.
The piper must now be paid, and the only people who have anything left to pay him are the Germans. They miscalcualted badly and assumed they were the piper to be paid by everyone else, the problem now is that they have all the money they can get, there is no more income for anyone else to keep paying them so now the German piper must pay the ultimate piper, the Eurozone, the very creation that they championed so that they could become what they thought was the ultimate piper, otherwise they themselves will suffer massively as the real ultimate piper fails and takes them and their investemnts down with it.
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Interesting but...And the thread is about ??? Mods......please.
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Indeed. Back on topic, thanks. This is about the direction of QF - NOT a debate on the Euro zone.
I'm sure there are plenty of forums other than PPRuNe where you may discuss the Euro to your heart's content.
I'm sure there are plenty of forums other than PPRuNe where you may discuss the Euro to your heart's content.