Go Back  PPRuNe Forums > PPRuNe Worldwide > Australia, New Zealand & the Pacific
Reload this Page >

Qantas Group - New Airline Structure

Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

Qantas Group - New Airline Structure

Old 23rd May 2012, 04:53
  #81 (permalink)  
EWP
Guest
 
Posts: n/a
What a sad and sorry mess, no spin in the world will ever justify the reason why JB was let go - that was the moment Qantas died. It is dead.... The rot comes from the top down and permeates all departments...corruption, collaboration, vilification, malignment and fear. Backstabbing....need I go on?

The sooner it all merges, get's sold or disappears the better. The existing carcass and husk of what was a wonderful airline with wonderful workers is an embarassment to their testament as people with integrity and worth.

This is one of the most disgraceful chapters in Australian Aviation history...the death of another aviation icon. Could anyone imagine if JB was at the helm?

It was always predictable that the business would be split and cut and sold. Qantas International is finished, a pyrrhic victory for Joyce and the board.

People who are not prepared to stand up for something, stand to fall for anything. One of the biggest complaints I hear these days is that a single person can’t make a difference. I think that’s a cop-out, an excuse not to try. The trouble is, too many people believe it. Too many people are willing to ignore their principles because it’s the easy thing to do. EVERYONE can make a difference. If you believe in something, let it guide you. Don’t settle for less.


And don’t give up, just because it’s easier than trying. Sounds a bit like a JFK speech however current Qantas management need to be stood up to - the bullying and corruption make it the circus it is...beyond a laugh.
 
Old 23rd May 2012, 05:35
  #82 (permalink)  
 
Join Date: Jul 2008
Location: sydney
Posts: 57
Likes: 0
Received 0 Likes on 0 Posts
Who is paying for the $150-200million upgrade to the Sydney 'campus'. International perhaps? Is that the 200million loss that is never factually proven?
booglaboy is offline  
Old 23rd May 2012, 05:53
  #83 (permalink)  
 
Join Date: Aug 2011
Location: Darwin
Posts: 83
Likes: 0
Received 0 Likes on 0 Posts
I believe that the Sydney Campus was paid for with special government Tax concessions made to a company, maybe that was in exchange for something. Its great that organisations value education, isn't it?
LHLisa is offline  
Old 23rd May 2012, 06:14
  #84 (permalink)  
 
Join Date: Jun 2003
Location: Hicksville
Posts: 34
Likes: 0
Received 0 Likes on 0 Posts
The funding for the refurbishment was sourced from the 2010 sale of the campus from a property investment company to the Cromwell company, as an incentive to Qantas to sign a 22 year lease extension. This information is in the public domain.
Xatrix is offline  
Old 23rd May 2012, 06:58
  #85 (permalink)  
 
Join Date: Jun 2008
Location: Sydney
Posts: 498
Likes: 0
Received 0 Likes on 0 Posts
I believe that the Sydney Campus was paid for with special government Tax concessions
I didn't realise airlines operated out of a university.
QF94 is offline  
Old 23rd May 2012, 07:10
  #86 (permalink)  
 
Join Date: Jul 2006
Location: In the bone yard.
Posts: 207
Likes: 0
Received 0 Likes on 0 Posts
QF94, I'm sure if we did a lap of the room to see what the stakeholders have brought to the meeting the smartest person in the room would feel like they were in pity city.

Last edited by UPPERLOBE; 14th Jun 2012 at 00:16.
UPPERLOBE is offline  
Old 23rd May 2012, 07:21
  #87 (permalink)  
 
Join Date: Oct 2010
Location: new york
Posts: 14
Likes: 0
Received 0 Likes on 0 Posts
what an absurd idea?

As a long haul crew with 25 years flying experience, I just could not work out how a young guy like Hickey could suddenly become the CEO of Qantas International? He started with Qantas since 2004, he was an accountant by trade, never worked in airline industry before he joined Qantas. To say the least, his track record was problematic, why? Because he started his career at notorious Arthur Andersen, please follow this link to see the man yourself CEO CookOff - Simon Hickey Profile.

AJ previous job was at the failed incompetent management of Ansett, so a bad egg just appointed another worse egg in Qantas.

Last edited by timer88; 23rd May 2012 at 07:52.
timer88 is offline  
Old 23rd May 2012, 07:45
  #88 (permalink)  
 
Join Date: Oct 2010
Location: new york
Posts: 14
Likes: 0
Received 0 Likes on 0 Posts
track record

Mr Hickey began his career with Arthur Andersen as a business consultant working in Sydney, Melbourne and London.Mr Hickey is currently a director of Air Pacific Limited, flag carrier of Fiji. Arthur Andersen was a notorious accounting fraud firm closed down by USA government.CEO CookOff - Simon Hickey Profile

The previous Job for AJ was the failed AN due to management incompetency. A bad egg appointed another worse egg in Qantas!
timer88 is offline  
Old 23rd May 2012, 08:02
  #89 (permalink)  
 
Join Date: Apr 2007
Location: Sunny side up
Posts: 1,206
Likes: 0
Received 0 Likes on 0 Posts
he was an accountant by trade
All you need to know. Expect pineapples.
Worrals in the wilds is offline  
Old 23rd May 2012, 08:05
  #90 (permalink)  
 
Join Date: Dec 2007
Location: The Bubble
Posts: 642
Likes: 0
Received 2 Likes on 1 Post
Speculating as to why BB was let go, did he manage to convince those that count that a bigger Jetstar international A330 fleet would provide better returns to the group ?

Would the A330 resources diverted to Jetstar International flying to heavilyd iscounted to Japan 70% full, reduced flights SIN-MEL etc costing more for the fact that Qantas has lost the high yield (J) market share between the east and west coast to VA that probably won't come back ?

Last edited by 600ft-lb; 23rd May 2012 at 08:11.
600ft-lb is offline  
Old 23rd May 2012, 09:51
  #91 (permalink)  
Thread Starter
 
Join Date: Aug 2009
Posts: 509
Likes: 0
Received 0 Likes on 0 Posts
Hickey's role the toughest in Qantas split

I started at Qantas alongside Simon Hickey back in September 2004 in the strategy area.

Simon's a really smart, take-no-prisoners, hard-working guy. He has done a terrific job with Qantas Frequent Flyers but he has his work cut out for him in his new position as the CEO of Qantas International.

I say this because Qantas international hasn't consistently made money for 15 years. And this time interval is restricted to the past 15 years because I can't remember seeing any data on international profitability beyond this period.

What does Simon Hickey need to do to turn the international business around, and will the change in airline management structure enable him to do it?

The biggest problem Qantas faces in the international business is that the market is saturated with seats. While Qantas international has control over its own seats it has no direct control over those of its rivals.

If its rivals decide to expand capacity at four or five times the average growth rate, which is true of its Middle East rivals Emirates and Etihad, this action deeply and adversely affects Qantas international yields.

About the only thing Qantas can do in response is to lobby the government to reduce the rate at which it is granting new capacity rights to overseas carriers which are attempting to grow too quickly.

And the lobby message must be that extra seats may be good for international airfares, but it is terrible for Australian tourism at current exchange rates.

The tourism story would be quite different, however, at an exchange rate of 70 US cents, so Qantas would need to get into see the government at current exchange rates because its arguments would be more convincing than if or when the dollar dives.

Oil prices

The international business is more heavily impacted by the price of oil than the domestic business because international flights are over longer distances, and fuel burn is a direct function of distance.

The rapid increase in the price of oil since early 2000 has meant that international airlines should no longer think of growing at 5% per annum as the norm but more like 2% to 3%.

They should lose their preoccupation with market share, and their fear that they may lose market share if they grow at 2% to 3%, because market share doesn't equate to profitability.

And they should forget about fuel surcharges because they just don't work in isolation from lower capacity growth.

Simon Hickey should work more closely with the fuel hedging team in the Treasury Risk Management department, putting into place a framework that better meshes operational means for reducing the impact of higher oil prices with the use of financial instruments to reduce the exposure.

They should contemplate fuel and exchange rate hedging policies that are unique to the international business because the residual exposure of the international business to the price of oil differs from that of domestic operations.

Premium mix

The premium mix is the percentage of seats on the plane that are in first, business and premium economy classes. The higher the premium mix the more exposed an airline's earnings stream is to downturns in the economy.

Relative to other airlines, Qantas international has a high premium mix, which means its exposure to downturns is high.

Given that Qantas international is highly exposed to countries that are likely to experience slow and volatile growth over a long period of time, most notably Europe, the USA and Japan, then it should consider reducing its premium mix. Such a move, though, is likely to be too late for the current batch of aircraft that are due for arrival at Mascot.

Management

I can't help but think that the new CEO of Qantas international will struggle to implement the changes indicated above, even if he does agree with them.

The Group has had the opportunity in the past to implement these strategies and they have chosen not to. Their senior executive group and the board is essentially the same – they are just two fewer.

The one part of the Qantas announcement that is a concern is that they will manage Qantas domestic and international as “two distinct businesses”.

The domestic and international flying segments can't be managed as two distinct businesses. There is enormous overlap between the two.

Around 10% of domestic air travel involves international connecting travel or foreign visitors who fly into a major port and want a domestic side-trip. Successful airline businesses are able to link their international services with these types of domestic connecting and side trip customers.

There is also a large subset of the international market that competes with travel in the domestic market.

Australian resident travel to international leisure destinations such as New Zealand, Fiji, Phuket, Bali, Vanuatu, Tahiti, Honolulu and New Caledonia competes with domestic travel to Coolangatta, Maroochydore, Cairns, Ballina and Margaret River.

The domestic and international CEOs can't make capacity decisions independently in markets such as those just mentioned – but I'd imagine that the Flying Committee at Qantas will have the final say anyway.

Let's hope for the sake of Qantas shareholders that it's the correct say.

Tony Webber was Qantas Group chief economist between 2004 and 2011. He is now managing director of Webber Quantitative Consulting and Associate Professor at the University of Sydney Business School, and contributed this article to BusinessDay.

Last edited by PPRuNeUser0198; 23rd May 2012 at 11:50.
PPRuNeUser0198 is offline  
Old 23rd May 2012, 10:07
  #92 (permalink)  
 
Join Date: Nov 2007
Location: Bexley
Posts: 1,792
Likes: 0
Received 0 Likes on 0 Posts
The international business is more heavily impacted by the price of oil than the domestic business because international flights are over longer distances, and fuel burn is a direct function of distance.
I would have thought International flights were at cruise altitudes for longer where they burn less fuel than the more cyclic domestic sectors?
ALAEA Fed Sec is offline  
Old 23rd May 2012, 10:20
  #93 (permalink)  
 
Join Date: Oct 2010
Location: new york
Posts: 14
Likes: 0
Received 0 Likes on 0 Posts
an accounting trick

track record of New Star of QF Hickey: He has been turning 'frequent flyer' into the most profitable business of Qantas.

1. This statement lacks the most basic reason of logic, people forget to ask the following question: Can Frequent Flyer be called a business ? How can Qantas Flyer Scheme make a cent profit if there is not an airline with major international and domestic networks behind it ?
2. The new kid Hickey can!, a kid straight from Arthur Andersen, which was the auditor accounting firm of Enron.

Fasten your seat belt, if this kind of absurdity keeps going.........

Last edited by timer88; 23rd May 2012 at 10:25.
timer88 is offline  
Old 23rd May 2012, 11:44
  #94 (permalink)  
 
Join Date: Sep 2003
Location: Somewhere on the Australian Coast
Posts: 1,088
Received 147 Likes on 33 Posts
Steve, to fly longer takes more fuel to carry the fuel you need.

For example, for every 1000 kgs extra of fuel you put on a -400 for a 14 hour sector, you'll arrive at destination with about an extra 600 kgs. ie. you burn about 40% of the fuel just to carry it.
DirectAnywhere is offline  
Old 23rd May 2012, 12:35
  #95 (permalink)  
 
Join Date: Oct 2009
Location: Alabama, then Wyoming, then Idaho and now staying with Kharon on Styx houseboat
Age: 61
Posts: 1,437
Likes: 0
Received 0 Likes on 0 Posts
Aren't "Hickeys and Hindlicka's" something you pay $3 for at a rubsy joint in Pattaya?
Besides, as all can see, choosing decent CEO's for QF has never been a 'strong point', so anything can happen in all of this mish mash.

Maybe they will even name one of the eventual Asian entities RedEnron?
Face cream anyone?

Product: "Face Creme el Bruce"
Available: Online or in all good LCC's
Cost : As per industry conultancy rates

Before and After

Last edited by gobbledock; 24th May 2012 at 01:04.
gobbledock is offline  
Old 23rd May 2012, 12:45
  #96 (permalink)  
 
Join Date: Oct 2010
Location: new york
Posts: 14
Likes: 0
Received 0 Likes on 0 Posts
why budget airlines is an absurd idea?

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.

Last edited by timer88; 23rd May 2012 at 14:21.
timer88 is offline  
Old 23rd May 2012, 12:54
  #97 (permalink)  
 
Join Date: Jun 2001
Location: Australia
Posts: 308
Received 0 Likes on 0 Posts
Steve, to fly longer takes more fuel to carry the fuel you need.
For example, for every 1000 kgs extra of fuel you put on a -400 for a 14 hour sector, you'll arrive at destination with about an extra 600 kgs. ie. you burn about 40% of the fuel just to carry it.
Quite correct. Two seven hour sectors are much more fuel efficient than a single 14 hour sector. But an Anderson accountant would never know that. * [Of course there are other considerations. Landing fees, crew duty limits, handling fees etc.]
* Because an accountant would never know anyone who knows. They don't share, we don't share.
This is a big reason why the A380 is such a dog at its Max Range, hauling that extra 100 tonnes of metal structure over to LAX each day compared to a 747, let alone a 777, means it has to really stack the fuel on for the second half of the sector. But as the canny airlines are finding out, the A380 is pretty competitive at about the seven hour mark.
Anyway, sheesh, a Longhaul CEO who hasn't been around long enough for a ten year badge. The Shorthaul CEO, Class of 2001, only just makes that milestone, too. And all the while the real expertise is rapidly being pushed out the door.

Last edited by Captain Gidday; 23rd May 2012 at 13:00.
Captain Gidday is offline  
Old 23rd May 2012, 13:04
  #98 (permalink)  
 
Join Date: May 2009
Location: Hazard a Guess
Posts: 39
Likes: 0
Received 0 Likes on 0 Posts
Bingo !!!

And all the while the real expertise is rapidly being pushed out the door.
.....and making its way to Virgin Australia
Race Bannon is offline  
Old 23rd May 2012, 14:43
  #99 (permalink)  
 
Join Date: Oct 2010
Location: new york
Posts: 14
Likes: 0
Received 0 Likes on 0 Posts
unqualified rule the qualified, students start to teach the teachers

Sadly, let alone Qantas, the whole world is upside down, first time in human history, we are entering into an era of absurdity: To become an CEO or a leader of a nation, no relevant experiences and qualifications needed, only the skill of bean counters and oratory are necessary. Would you hire a dentist to fix your plumbing leaking in your bathroom? would you hire a bean counter to fly an airplane?

Last edited by timer88; 23rd May 2012 at 15:46.
timer88 is offline  
Old 23rd May 2012, 15:35
  #100 (permalink)  
 
Join Date: May 2001
Location: Back again.
Posts: 1,140
Likes: 0
Received 0 Likes on 0 Posts
Quite correct. Two seven hour sectors are much more fuel efficient than a single 14 hour sector. But an Anderson accountant would never know that. * [Of course there are other considerations. Landing fees, crew duty limits, handling fees etc.]
And a 7 hour flight, puts the A380 in direct competition with smaller twins that can appeal to the traveller with faster turnarounds and greater frequency of operations. There has to be an appeal to the customer. Many years ago, Airbus wanted to emphasize capacity: ala A380. Boeing wanted to emphasize frequency: ala 787. Airbus is appealing to the airline beancounters. Boeing is appealing to the airline customer. We'll see which one bears out. One flight per day with 500+ pax with maybe one or two intermediate stops and a crushed check-in and waiting area at both end terminals, or a choice of several direct flights per day to and from terminals with a comfortable number of fellow travellers. I know which option I favour. The flight in the middle is just part of the consideration.

Last edited by Lodown; 23rd May 2012 at 15:48.
Lodown is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.