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MERGED: Alan's still not happy......

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MERGED: Alan's still not happy......

Old 18th Mar 2014, 20:40
  #3541 (permalink)  
 
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Gold !!!!!
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Old 18th Mar 2014, 23:27
  #3542 (permalink)  
 
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Qantas responses here, here, and here.
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Old 19th Mar 2014, 00:52
  #3543 (permalink)  
 
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CLAIM: Qantas has been shifting costs within the airline to make Jetstar look better and make Qantas International look worse financially.
FACT: This is a baseless claim that has never been substantiated. Qantas’ financial accounts are independently audited by KPMG and lodged with the Australian Securities Exchange. We have a legal, regulatory and moral responsibility to report accurate accounts. The claim that we would deliberately distort financial results is wrong.
source: Qantas

Note the language, its very subtle, and its all about the language. This has been very carefully worded. This is not a direct denial that cost shifting occurs, rather, the claim is not based on any facts presented thus far by any party.

This answer, however, does not preclude the possibility that cost shifting is occurring. It is simply saying that no evidence has been produced to support that claim. Of course, by not releasing vital piece of information (complete accounts) on the basis of "commercial in confidence" it is impossible to obtain the information to prove a case. They are well aware that it is impossible to test the claims. However, this statement is telling in that they have not issued a direct denial.

They could issue a statement that there is no revenue of cost shifting between entities, however they have chosen not to. Why not?

The current standard (AASB 114 Segment Reporting) allow revenues and costs to be allocated between companies within a group structure, as noted in the accounts of each segment.

I have absolutely no doubt whatsoever that the accounts meet the Australian Standards and any audit would find this. However, without offering the complete accounts, it is impossible to validate or falsify the claims of legal cost shifting between entities within the group.

Until there is an express denial that there is no allocation of cost & revenues between entities this remains an unanswered question.
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Old 19th Mar 2014, 00:58
  #3544 (permalink)  
 
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Its the right colour, but wrong spelling. PRAVDA is not spelt with a 'Q'.

Refute the Engineering claims then (we would all be happier with that) without resorting to the 'Yes Minister' circular argument of 'We investigated and there is nothing to worry about'.

If Fed Sec is correct (and given there will soon only be one LAME at Qantas it seems likely) then Qantas either doesn't have or is fast losing the skill to oversee maintenance. Qantas should be able to provide details and qualifications of LAME's who are accompanying these aircraft overseas.

Allow forensic accounting and you will find staff bending over backwards to help - but staff need to know ACCURATELY where there is a problem. Especially so given the suspicions. Saying your accounts are audited is again avoiding the question. Qantas is a publicly listed company. They HAVE to be audited. Just like ENRON's were, except ENRON's were audited to arguably far higher accounting standards.

Licence should be spelt with a "c"

A. Milne wrote Winnie the Pooh. I am not sure he is the person I would use to comment on the maintenance standards of Heavy Jets.
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Old 19th Mar 2014, 01:27
  #3545 (permalink)  
 
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Originally Posted by Qantas
This is a baseless claim that has never been substantiated
Jetconnect Fair Work Jetconnect transcript - Examine the Testimony of Mr Paul Daff and his lack of knowledge of its own accounting, despite being the CEO.

Alan Joyce admits Jetconnect does not pay for its own fuel.
Senator XENOPHON: But, again, Mr Joyce, I just want to get a clarification so I can understand this: in terms of aircraft operating variable cost, does that include fuel?


Mr Joyce : The operating aircraft cost we do covers fuel. We have to check it on this occasion, but it is irrelevant to the reporting of this segment, because this segment makes its reports. It is a wet lease provider and as part of the wet lease provision it provides that capacity to Qantas and the profitability of those operations are reported in the Qantas segment. The purpose of this is not like Jetstar in Asia—

...

Senator XENOPHON: But Mr Joyce said a minute ago that it does include fuel or it does not include fuel.


Mr Joyce : Aircraft operating variables, we usually report those, but we are checking on this one because it may not include fuel in Jetconnect's case.


...

Senator XENOPHON: I am just trying to sort this out—and I am not suggesting anything improper. Regarding the revenue from operating activities of NZ$73.4 million in 2011, you have manpower and staff related costs of $37 million, aircraft operating variable costs of $23.9 million and 'other' costs of $5.3 million. That is $66 million. And you had some other revenue, so it is $77 million in revenue, $66 million in expenditure and profit before related income tax expense of $11.2 million. Is fuel not included in that?


Mr Joyce : No, it is not.

Who pays for the fuel, because some entity is? Could it be Qantas International, or perhaps another entity within the business? Therefore, by Mr Joyce's own statements, is this not cost shifting between entities within the group?
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Old 19th Mar 2014, 01:36
  #3546 (permalink)  
 
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Forensic accounting will do nothing....

Consider the following situation.

Jetstar A330 gets heavy maintenance at QF Engineering facility (note unsure if this sits under QF Dom or QF Int for reporting in any event so will just call it Engineering).

What is the appropriate charge for this work.
-- Cost of employees doing the work only - effectively marginal cost, facilities not being used otherwise.
-- Cost of employees plus allocation of QF management overheads and lease/depreciation cost of buildings
-- Above plus say 10% for some profit
-- Direct benchmark versus what someone else - say HAECO charges.

I suspect any of the four can be justified to an auditer - each would have a different impact on the bottom lines of the Jetstar / QF Engineering division.
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Old 19th Mar 2014, 02:02
  #3547 (permalink)  
 
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Moa,
The problem I see it now is that its not Auditing that have to be satisfied, but the staff. The legal issues with 'standard' auditing are (as you say) easy to pass with flying colours. There are specific questions that are being asked as forcefully as possible by staff that have been ignored now for years.

Wouldn't it be so much easier to answer them and make the problem go away?

Or can't they be answered????

If CEO of an airline can't remember what it is costing to store 11? brand new aircraft at a total cost of some USD$4.4m per MONTH then I would suspect he can't/won't.

And thats the problem. He is a liar, incompetent businessman and has no understanding of company culture or the airline industry as a whole.
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Old 19th Mar 2014, 02:03
  #3548 (permalink)  
 
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Having watched the actions of Edwards last night. I could only think of one thing.....

Finally, it becomes apparent the arrogance that certain members of qantas senior management run with, holds no bounds.
One day they will be held to account. Unfortunately though, qantas will no longer exist.

The corporate culture in the place is toxic.
And now its migrating to other organisations...
Helloworld board orders probe of "management style" | Travel Weekly
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Old 19th Mar 2014, 02:43
  #3549 (permalink)  
 
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Just for the record, Senator Sean Edwards is NOT 'unrepresentative swill' as claimed for he was actually elected to the Senate by South Australian voters in General Election of 2010. Certain here may not have liked or appreciated it, but he did a wonderful job skewering a vocal but uninformed union official last night in Canberra. Said union official was sadly found to be wanting.

On the other hand, Nathan Safe and his colleague shone a bright light on matters outside Qantas' control that have adversely affected it in recent years. I hope the Senators listened carefully to what they said as there were really on the money, unlike a certain other witness who appeared just before them.
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Old 19th Mar 2014, 03:42
  #3550 (permalink)  
 
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Ken

The Senator got 8.76% of the vote (0.61 of a quota) - he was therefore dragged across into the Senate on Party lines.

Voting in the Senate is "unrepresentative swill" since, as you know perfectly well, a drover's dog can become a Senator because of a numerical accident - look at the WA Senate (about to be re-voted upon) but a candidate for motoring enthusiasts actually elected before this upcoming new vote?

Yes there are many worthy members of the Senate, but some of the questions the other night were crap and pure politicking.
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Old 19th Mar 2014, 04:03
  #3551 (permalink)  
 
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buying up v parking up

Qantas' biggest shareholder buys up amid price dip



Jetstar Hong Kong planes stay grounded as wait continues

Last edited by TIMA9X; 19th Mar 2014 at 05:17. Reason: add pic
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Old 19th Mar 2014, 04:19
  #3552 (permalink)  
 
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es there are many worthy members of the Senate, but some of the questions the other night were crap and pure politicking
Yep, but only a few! And the questions asked last night, and the behaviour of many of the inquisitors, was just appalling. Unfortunately, they are a microcosm of Oz society: uninformed, boorish and shallow. We are poorly served by our many politicians.
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Old 19th Mar 2014, 05:21
  #3553 (permalink)  
 
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Not sure which union official Edwards was supposed to have skewed last night but I had no problems answering his questions.
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Old 19th Mar 2014, 05:50
  #3554 (permalink)  
 
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ALAEA Fed Sec Not sure which union official Edwards was supposed to have skewed last night but I had no problems answering his questions.
Herein is a problem! I am sure glad that none of my money is being paid towards any representation that you may offer. BTW, the word is 'skewered'.

Also, if the majority of your membership is with Qantas, wouldn't and shouldn't it be appropriate for most of your travel be with that Company? Or does VA offer you upgrades and access to 'The Club' or whatever it is that they call their lounge?
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Old 19th Mar 2014, 06:03
  #3555 (permalink)  
 
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I've never stepped foot into the Virgin invitational club or been invited. I almost always travel economy even on 14 hour sectors.


I guess that leaves you to attack my spelling. Good luck with that.
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Old 19th Mar 2014, 06:04
  #3556 (permalink)  
 
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......or whatever it is that they call their lounge?
Ummmm..... Lounge. Tricky name isn't it!
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Old 19th Mar 2014, 06:12
  #3557 (permalink)  
 
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Trent,

I'm confident that I've used the right word, so no requirement to check the book of words!

PS. Just noticed that you've removed your post. Is that a retreat?
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Old 19th Mar 2014, 06:31
  #3558 (permalink)  
 
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Hansard from last night released. Happy reading!

ParlInfo - Economics Legislation Committee : 18/03/2014 : Qantas Sale Amendment Bill 2014
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Old 19th Mar 2014, 06:35
  #3559 (permalink)  
 
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Steve,

I watched the other night and I reckon you did an amazing job on your own considering some of the complete tossers who were asking questions. Well done in not rising to some of the baits that were thrown at you.

You gave them FACTS and not platitudes which was blatantly obvious from others and now if they can be bothered to check the truth wont be that hard to find.

Between you and AIPA, succinct, fact based and well considered submissions were made and the outcome will be interesting. I sense some have already made up their minds and are now seeking to justify it but there you go. Hopefully some will listen to the actual evidence.

The travelling public owe you a lot for trying to expose this lot for what they are doing.


(I am not involved in aviation or any company so have no interest beyond slf and commercial ethics)
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Old 19th Mar 2014, 07:17
  #3560 (permalink)  
 
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Thnx for the support guys. I find answering them very simple. You see every Politician expects you to be part of the same very big game they are in and the last thing the expect is a straight answer to a question. It baffles them.


They don't know how to deal with people like me.
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