Qantas Group - New Airline Structure
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Just a point on comparing the QF split up to the VA split up:
VA split Int'l and Dom into two separate companys to allow a foreign carrier to buy into the DOMESTIC airline.
QF Int'l is the company that needs the investment from a foreign carrier, yet as I understand it, QF Int'l must still remain not more than 49% foreign owned. Domestic is already immensely profitable, so why would you need a foreign investor??? Unless you can transfer that foreign capitol from Domestic to International, I don't see how this would work as a strategy.
I wouldn't get too excited about pilot jobs changing too much... there's already separate contracts/EBAs and I doubt this will change anything... yet.
VA split Int'l and Dom into two separate companys to allow a foreign carrier to buy into the DOMESTIC airline.
QF Int'l is the company that needs the investment from a foreign carrier, yet as I understand it, QF Int'l must still remain not more than 49% foreign owned. Domestic is already immensely profitable, so why would you need a foreign investor??? Unless you can transfer that foreign capitol from Domestic to International, I don't see how this would work as a strategy.
I wouldn't get too excited about pilot jobs changing too much... there's already separate contracts/EBAs and I doubt this will change anything... yet.
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Maybe they could call the Domestic business: Trans Australian Airlines (TAA) and QANTAS International just QANTAS and then nationalise the whole lot.
What I still cannot work out is why everytime I fly QANTAS (or TAA) the loadings are so close to 100% the spin (pardon the pun) is palpable.
What I still cannot work out is why everytime I fly QANTAS (or TAA) the loadings are so close to 100% the spin (pardon the pun) is palpable.
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Why is Bruce leaving? Could it be that:
1. The longhaul Jetstar services out of SIN are a failure? SIN-AKL is down to 3 weekly now from daily, and SQ is merrily still flying double daily to AKL and daily to CHC, despite earthquakes and what not? JQ's SIN-PEK fares are ridiculously low - SGD298 for business class one way these days, SGD220 for economy class. Definitely not making any money.
2. Jetstar Hong Kong has failed, and they need to find a scapegoat before announcing its failure
3. Keeping him as a consultant means that he won't run screaming to the press and/or join a competitor within the next 2 years
1. The longhaul Jetstar services out of SIN are a failure? SIN-AKL is down to 3 weekly now from daily, and SQ is merrily still flying double daily to AKL and daily to CHC, despite earthquakes and what not? JQ's SIN-PEK fares are ridiculously low - SGD298 for business class one way these days, SGD220 for economy class. Definitely not making any money.
2. Jetstar Hong Kong has failed, and they need to find a scapegoat before announcing its failure
3. Keeping him as a consultant means that he won't run screaming to the press and/or join a competitor within the next 2 years
Emirates could now be Qantas' longhaul carrier, the traditional longhaul is unprofitable... Sell them the 380's and retire/sell the 747's and 767's big profits all round, Joyce ends his rein as CEO on a massive wicket!
[Except for you young hotshots - you'll have to cut a deal with Mr Clark. Someone's still got to fly the metal that isn't going to Victorville]
Last edited by Captain Gidday; 22nd May 2012 at 11:32.
I reckon Bruce leaving just shows that he is actually a 'smart' businessman.
What he has done is drive down costs and in 'theory' created a profitable airline, he has 'record' staff engagement and has 'successfully' franchised the business across the globe. All of this has led to a big salary and a big bonus / profit sharing, he is going around gloating how good he has been, even Alan Joyce has told staff that he knows Bruce will be missed by ALL at Jetstar.
In reality, Jetstar Japan is just struggling by, Jetstar Hong Kong is rumoured to be dead in the water, the A330 AOC in Singapore is a non started and they have given up on this idea, Jetstar NZ services are being drastically cut and the operation is mainly being staffed by EBA pilots as no one wants to stay on the NZ contract, oh and lets not forget the massive expense of the failed Cadet experiment which has masterfully delivered really inexperienced pilots into the airline at double the cost of an experienced pilot
Thing is that all of these initiatives have delivered him massive pay and bonuses and by the time that they sink the ship he will be living it up large selling cosmetics from a market stall in Hong Kong with millions in the bank.
What he has done is drive down costs and in 'theory' created a profitable airline, he has 'record' staff engagement and has 'successfully' franchised the business across the globe. All of this has led to a big salary and a big bonus / profit sharing, he is going around gloating how good he has been, even Alan Joyce has told staff that he knows Bruce will be missed by ALL at Jetstar.
In reality, Jetstar Japan is just struggling by, Jetstar Hong Kong is rumoured to be dead in the water, the A330 AOC in Singapore is a non started and they have given up on this idea, Jetstar NZ services are being drastically cut and the operation is mainly being staffed by EBA pilots as no one wants to stay on the NZ contract, oh and lets not forget the massive expense of the failed Cadet experiment which has masterfully delivered really inexperienced pilots into the airline at double the cost of an experienced pilot
Thing is that all of these initiatives have delivered him massive pay and bonuses and by the time that they sink the ship he will be living it up large selling cosmetics from a market stall in Hong Kong with millions in the bank.
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Crikey's Take: From an Insider
Qantas split could be a prelude to cutting and running
Ben Sandilands
The strategic potential for the Qantas restructure to precede the unlocking of assets by the board and sale of part or parts of the group appears to be very real in this analysis from an inside source in Qantas.
At the very least, it means a big increase in management costs, and an inevitable expansion of new positions and reporting lines to conform to the very serious and arguably sometimes overlooked business of being a safe and compliant airline group.
Some thoughts on Joyce’s latest shuffling of the deckchairs on the Titanic, which was a good ship badly piloted.
Alan Joyce may not realise it now but his latest shuffling of the deckchairs has the potential to double its management costs. In previous years under past CEO Geoff Dixon about 2002 the Qantas business was split into airline, frequent flyer, Jetstar, Line Engineering, Heavy engineering, Stores and Logistics etc, each with the imprimatur for management to run their own business. The effect of that was that each business entity started to build their own little empire putting in place more levels of management and increasing salary costs. Then in 2008 Dixon brought in consultants to prune down the organisations management that had grown exponentially. The one factor overlooked by Dixon and Joyce was the Civil Aviation Act and its regs which require certain statutory management structures for the airline and the maintenance organisation. CASA came in and did an audit which triggered further management restructuring to ensure compliance with the Act. Joyce arrived and proceeded to undo the ‘separate business mentality’ and now in a strange twist of managerial prerogative has reinstigated the same type of structure Dixon put in place, albeit more fragmented by separating the airline in two, International and Domestic.
But the Civil Aviation Act and the new CASRs (regulations) imposes its own structure and accountabilities forcing a mandatory management structure. If you add the two together, that is Joyce’s new organisation structure and the structure required by the regulator then Joyce may have just effectively doubled his management costs for the future. CASA requires the aircraft operator to have a CASR 121 organisation with a dedicated CEO who controls the pursestrings to ensure aircraft operate safely and the organisation complies with certain safety requirements and provides the resources to do so. The CEO of the CASR121 organisation has to be a competent person and can be prosecuted for breaches. In addition CASA requires the CASR 121 organisation to use a CASR145 maintenance organisation which is required to have a dedicated CEO who controls the pursestrings to ensure aircraft are maintained correctly and safely and the organisation complies with certain safety requirements and provides the resources to do so. The interface between the two organisations is a CASR42 quality assurance organisation which has its own management structure that is required to be put in place by the CASR121 organisation. Currently Qantas mainline and Jetstar are setting up duplicate structures based on the premise they are two separate legal entities and aircraft operators. What this does though is duplicate positions in Qantas Group management which would not happen if the Qantas Group was under one CASR 121 organisation. But now throw in the latest Joyce reorganisation where not only is Qantas Group having Jetstar under a separate CASR121 organisation, they split the Domestic part of the airline and International part of the airline under two separate management structures and CEOS controlling the pursestrings separately for each new empire, coupled with the fact they have to have the CASR121 organisation in place as well. What Joyce has done cannot work unless each CEO Domestic and International are appointed as CASR121 or another level of management is put in i.e. a CASR 121 CEO who the Domestic and International have to obey and be resourced by which is effectively back where we were before the Joyce restructure and therefore it was pointless and impractical.
The prospect then is that this restructure is just the first step to having two separate legal entities for the International and Domestic airlines and two separate CASR121 organisations to enable one or the other entities to be sold off, or not covered by the Qantas sale Act 1992 as Qantas currently maintains Jetstar is not covered by the Qantas Sale Act.
What makes the whole exercise even more distasteful for the employees who are about to be sacrificed to the cost saving God is that Joyce is now creating duplicate structures which will only grow in management numbers as they strive to have bigger empires.
Alan Joyce may not realise it now but his latest shuffling of the deckchairs has the potential to double its management costs. In previous years under past CEO Geoff Dixon about 2002 the Qantas business was split into airline, frequent flyer, Jetstar, Line Engineering, Heavy engineering, Stores and Logistics etc, each with the imprimatur for management to run their own business. The effect of that was that each business entity started to build their own little empire putting in place more levels of management and increasing salary costs. Then in 2008 Dixon brought in consultants to prune down the organisations management that had grown exponentially. The one factor overlooked by Dixon and Joyce was the Civil Aviation Act and its regs which require certain statutory management structures for the airline and the maintenance organisation. CASA came in and did an audit which triggered further management restructuring to ensure compliance with the Act. Joyce arrived and proceeded to undo the ‘separate business mentality’ and now in a strange twist of managerial prerogative has reinstigated the same type of structure Dixon put in place, albeit more fragmented by separating the airline in two, International and Domestic.
But the Civil Aviation Act and the new CASRs (regulations) imposes its own structure and accountabilities forcing a mandatory management structure. If you add the two together, that is Joyce’s new organisation structure and the structure required by the regulator then Joyce may have just effectively doubled his management costs for the future. CASA requires the aircraft operator to have a CASR 121 organisation with a dedicated CEO who controls the pursestrings to ensure aircraft operate safely and the organisation complies with certain safety requirements and provides the resources to do so. The CEO of the CASR121 organisation has to be a competent person and can be prosecuted for breaches. In addition CASA requires the CASR 121 organisation to use a CASR145 maintenance organisation which is required to have a dedicated CEO who controls the pursestrings to ensure aircraft are maintained correctly and safely and the organisation complies with certain safety requirements and provides the resources to do so. The interface between the two organisations is a CASR42 quality assurance organisation which has its own management structure that is required to be put in place by the CASR121 organisation. Currently Qantas mainline and Jetstar are setting up duplicate structures based on the premise they are two separate legal entities and aircraft operators. What this does though is duplicate positions in Qantas Group management which would not happen if the Qantas Group was under one CASR 121 organisation. But now throw in the latest Joyce reorganisation where not only is Qantas Group having Jetstar under a separate CASR121 organisation, they split the Domestic part of the airline and International part of the airline under two separate management structures and CEOS controlling the pursestrings separately for each new empire, coupled with the fact they have to have the CASR121 organisation in place as well. What Joyce has done cannot work unless each CEO Domestic and International are appointed as CASR121 or another level of management is put in i.e. a CASR 121 CEO who the Domestic and International have to obey and be resourced by which is effectively back where we were before the Joyce restructure and therefore it was pointless and impractical.
The prospect then is that this restructure is just the first step to having two separate legal entities for the International and Domestic airlines and two separate CASR121 organisations to enable one or the other entities to be sold off, or not covered by the Qantas sale Act 1992 as Qantas currently maintains Jetstar is not covered by the Qantas Sale Act.
What makes the whole exercise even more distasteful for the employees who are about to be sacrificed to the cost saving God is that Joyce is now creating duplicate structures which will only grow in management numbers as they strive to have bigger empires.
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VA split Int'l and Dom into two separate companys to allow a foreign carrier to buy into the DOMESTIC airline.
QF Int'l is the company that needs the investment from a foreign carrier, yet as I understand it, QF Int'l must still remain not more than 49% foreign owned. Domestic is already immensely profitable, so why would you need a foreign investor??? Unless you can transfer that foreign capitol from Domestic to International, I don't see how this would work as a strategy.
QF Int'l is the company that needs the investment from a foreign carrier, yet as I understand it, QF Int'l must still remain not more than 49% foreign owned. Domestic is already immensely profitable, so why would you need a foreign investor??? Unless you can transfer that foreign capitol from Domestic to International, I don't see how this would work as a strategy.
Did anyone notice as per Chris Nassenstein's email that Qantas Engineering will be a part of Qantas Domestic.
Qantas International is going to be after its engineering services at the best tender prices soon enough.
Even more evidence that the business is being geared up for an unencumbered sale
Qantas International is going to be after its engineering services at the best tender prices soon enough.
Even more evidence that the business is being geared up for an unencumbered sale
Last edited by 600ft-lb; 22nd May 2012 at 10:16.
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Bets on, how long before a "private equity group" make a bid for Qantas International then rip the cash reserves out and go on their merry way back to their pubs and ad' agencies??
Role on ....
Role on ....
So now domestic pays for the maintenance on the A380s. That makes sense... What a sham!
Because of the little mans talents, he has single handedly turned international into the profit centre for the company.
Alarmingly, domestic has taken a turn for the worse and is now losing over 200 million dollars a year! This just can't continue. They can't continue to inject capital into such a flawed business.
Expect it to be announced around the time the short haul EBA negotiations begin.
What did you expect?
Joyce will be gone shortly after and it will be group hugs and lattes.
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Money, face cream and nuptys
Well well, executives and 'face cream', not that new really is it??
This is a pre-sale restructure. Half will stay and half will go. Ben Sandilands nailed it perfectly, read his article if you haven't already, spells it out nicely.
As for Herr Bruce, perhaps he will pop up beside Darth and Gregg down the track to assist in the sell off? Although I don't think so. His payday is leaving now and getting paid a huge multi million dollar consultant package for a bit longer, money for jam.
Also has anybody considered that Xenophon may have BB by the dusters and a pineappling is coming, care of the senate inquiry? Jump ship before it hits the fan? Perhaps the Regulator is also, but unlikely, about to drop the hammer on some key people? Of course not that they would give advanced notice of such action!
And Bruce, it will take a damn lot of that cream and probably cost you all your consultancy money to fix your face!
This is a pre-sale restructure. Half will stay and half will go. Ben Sandilands nailed it perfectly, read his article if you haven't already, spells it out nicely.
As for Herr Bruce, perhaps he will pop up beside Darth and Gregg down the track to assist in the sell off? Although I don't think so. His payday is leaving now and getting paid a huge multi million dollar consultant package for a bit longer, money for jam.
Also has anybody considered that Xenophon may have BB by the dusters and a pineappling is coming, care of the senate inquiry? Jump ship before it hits the fan? Perhaps the Regulator is also, but unlikely, about to drop the hammer on some key people? Of course not that they would give advanced notice of such action!
And Bruce, it will take a damn lot of that cream and probably cost you all your consultancy money to fix your face!
Last edited by gobbledock; 22nd May 2012 at 10:56.