MERGED: Alan's still not happy......
VH-ABC, I agree with what you said, but from what I saw in the post from Dragon Man is that they were talking about their Lounges is what I read, not the Terminals (Wouldn't that be up to the Terminal Owners?), and as such shouldn't be too much of a hassle just in the lounge areas?
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Financial review reporting this morning.
UBS analysts reckon Qantas Airways will have only marginal free cashflow generation in the current financial year, which could weigh on the company’s all-important investment grade rating.
The broker cut its free cashflow forecast from $300 million to a “flattish” outcome, because of ongoing revenue pressure.
“Although we do not see a current liquidity problem for Qantas, we expect downward pressure to weigh on its current investment grade credit rating,” UBS analysts told clients on Wednesday morning.
“The public debate over a government guarantee or equity investment offers relief, subject to any attached strings. In our opinion, being classed as a Government Related Entity (like the four banks) would sustain and possibly enhance the credit rating.”
Qantas has been unofficially seeking a guarantee to maintain its credit rating and to allow it to compete against foreign-owned Virgin Australia Holdings while *constrained by the Sale Act.
The company has effectively ruled out an equity raising to shore up its rating, but could other options such as selling a stake in its frequent flyer division or Jetstar’s Asian arm.
UBS analysts stuck by their “buy” rating, but trimmed the 12-month target price to $1.45 from $1.70.
The broker cut its free cashflow forecast from $300 million to a “flattish” outcome, because of ongoing revenue pressure.
“Although we do not see a current liquidity problem for Qantas, we expect downward pressure to weigh on its current investment grade credit rating,” UBS analysts told clients on Wednesday morning.
“The public debate over a government guarantee or equity investment offers relief, subject to any attached strings. In our opinion, being classed as a Government Related Entity (like the four banks) would sustain and possibly enhance the credit rating.”
Qantas has been unofficially seeking a guarantee to maintain its credit rating and to allow it to compete against foreign-owned Virgin Australia Holdings while *constrained by the Sale Act.
The company has effectively ruled out an equity raising to shore up its rating, but could other options such as selling a stake in its frequent flyer division or Jetstar’s Asian arm.
UBS analysts stuck by their “buy” rating, but trimmed the 12-month target price to $1.45 from $1.70.
The worlds best aviation expert has posted the latest.
Branson blasts Qantas management and service - The West Australian
Im wondering, does anyone have the analysis available? The only thing close was the one produced awhile ago by AIPA which didn't necessarily reflect those numbers.
Branson blasts Qantas management and service - The West Australian
Mr Branson's comments comes as an analysis shows that Virgin Australia's costs are 17 per cent lower than Qantas', reinforcing commentators' views that the Australian icon needs to address inefficiencies.
At the core of the problem Qantas's cost structure is too high compared with virtually all its major competitors, just as Ansett's was well above Virgin when it first entered the Australian market in 2000.
From The Australian October 8, 2013
QANTAS boss Alan Joyce believes the arrival of its new Boeing 787 Dreamliners can help the airline slash domestic mainline costs by 10 percentage points and narrow the competitive gap with rival Virgin Australia.
The cost base of the mainline Qantas operations is 10-15 per cent higher than Virgin's, and Mr Joyce hopes he can reduce the differential to about 5 per cent.
The first 787 is due to land in Melbourne tomorrow and the decision to send the fleet of 14 aircraft to Jetstar will see Qantas receive the low-cost carrier's 11 Airbus A330-200s between now and late 2015. This will allow Qantas Domestic to retire ageing, fuel-guzzling Boeing 767s and simplify its domestic fleet to two types: the A330-200s and Boeing 737-800s. "And that means it has a clean fleet," Mr Joyce said. "Qantas mainline will only be operating A330-200s and 737-800s by 2015 when this is all done, and that gives us a huge cost reduction. We think our cost base will get down to below 5 per cent compared to where Virgin is and that's a big movement."
Mr Joyce said the arrival of the 787s would put the lowest cost aircraft into Jetstar, allowing it to offer lower airfares and giving it a competitive advantage over other low-cost carriers.
Jetstar group chief executive Jayne Hrdlicka said the new aircraft, which burn less fuel and are cheaper to maintain, would deliver savings across the board of about 20 per cent.
"For Jetstar it's fantastic,"she said. "Three things matter to us. One is meeting our low costs, the other is ensuring that customers enjoy their experience and they want to come back for more; and the third is we've got really happy engaged people who are committed to our model. Now the 787 does all three things."
Mr Joyce said the Qantas fleet this year would be the youngest it had ever been and the average age of its aircraft fleet would drop below that of Singapore Airlines as it retired the 767s.
Fleet renewal was proceeding at its quickest pace, he said.
A presentation to analysts by chief financial officer Gareth Evans showed Qantas plans to take delivery of 96 narrow-body and 13 widebody aircraft in the next five years. It also has 37 options and 268 purchase rights through to December 2025. It expects to retire up to 37 aircraft in the next five years to bring the average fleet age to 7.9 years.
"Since I've been CEO we've taken delivery now of 160 new aircraft -- this will be 161, I think, of the total," Mr Joyce said. "So of a fleet of 300 aircraft in the group, we've replaced half of them in the last four years."
A decision on whether Qantas would take the bigger 787-9 from 2016 would be made once it was clear the international arm was returning to profitability, he said. The options would be considered on an individual basis to give the airline maximum flexibility.
The analysts' presentation showed 787 options would fall due from fiscal year 2017 and fiscal 2020 but purchase rights would go to fiscal 2025. Five would fall due in FY2017, six the following year, seven in FY2019 and two in fiscal 2020. "Those aircraft have amazing range," Mr Joyce said.
"They can fly just about anywhere in Asia, so they'll give us a lot more opportunities to set up and operate new routes. But we will not have to make a decision until 2016 and it is part of our plan to turn around Qantas International and get it back to break even in 2015. When that has been achieved we make a decision on when we take the 787-9s."
Steve Creedy travelled to Seattle courtesy of Boeing and Qantas.
- See more at: Cookies must be enabled. | The Australian
The cost base of the mainline Qantas operations is 10-15 per cent higher than Virgin's, and Mr Joyce hopes he can reduce the differential to about 5 per cent.
The first 787 is due to land in Melbourne tomorrow and the decision to send the fleet of 14 aircraft to Jetstar will see Qantas receive the low-cost carrier's 11 Airbus A330-200s between now and late 2015. This will allow Qantas Domestic to retire ageing, fuel-guzzling Boeing 767s and simplify its domestic fleet to two types: the A330-200s and Boeing 737-800s. "And that means it has a clean fleet," Mr Joyce said. "Qantas mainline will only be operating A330-200s and 737-800s by 2015 when this is all done, and that gives us a huge cost reduction. We think our cost base will get down to below 5 per cent compared to where Virgin is and that's a big movement."
Mr Joyce said the arrival of the 787s would put the lowest cost aircraft into Jetstar, allowing it to offer lower airfares and giving it a competitive advantage over other low-cost carriers.
Jetstar group chief executive Jayne Hrdlicka said the new aircraft, which burn less fuel and are cheaper to maintain, would deliver savings across the board of about 20 per cent.
"For Jetstar it's fantastic,"she said. "Three things matter to us. One is meeting our low costs, the other is ensuring that customers enjoy their experience and they want to come back for more; and the third is we've got really happy engaged people who are committed to our model. Now the 787 does all three things."
Mr Joyce said the Qantas fleet this year would be the youngest it had ever been and the average age of its aircraft fleet would drop below that of Singapore Airlines as it retired the 767s.
Fleet renewal was proceeding at its quickest pace, he said.
A presentation to analysts by chief financial officer Gareth Evans showed Qantas plans to take delivery of 96 narrow-body and 13 widebody aircraft in the next five years. It also has 37 options and 268 purchase rights through to December 2025. It expects to retire up to 37 aircraft in the next five years to bring the average fleet age to 7.9 years.
"Since I've been CEO we've taken delivery now of 160 new aircraft -- this will be 161, I think, of the total," Mr Joyce said. "So of a fleet of 300 aircraft in the group, we've replaced half of them in the last four years."
A decision on whether Qantas would take the bigger 787-9 from 2016 would be made once it was clear the international arm was returning to profitability, he said. The options would be considered on an individual basis to give the airline maximum flexibility.
The analysts' presentation showed 787 options would fall due from fiscal year 2017 and fiscal 2020 but purchase rights would go to fiscal 2025. Five would fall due in FY2017, six the following year, seven in FY2019 and two in fiscal 2020. "Those aircraft have amazing range," Mr Joyce said.
"They can fly just about anywhere in Asia, so they'll give us a lot more opportunities to set up and operate new routes. But we will not have to make a decision until 2016 and it is part of our plan to turn around Qantas International and get it back to break even in 2015. When that has been achieved we make a decision on when we take the 787-9s."
Steve Creedy travelled to Seattle courtesy of Boeing and Qantas.
- See more at: Cookies must be enabled. | The Australian
QANTAS boss Alan Joyce believes the arrival of its new Boeing 787 Dreamliners can help the airline slash domestic mainline costs by 10 percentage points and narrow the competitive gap with rival Virgin Australia.
The cost base of the mainline Qantas operations is 10-15 per cent higher than Virgin's, and Mr Joyce hopes he can reduce the differential to about 5 per cent.
The first 787 is due to land in Melbourne tomorrow and the decision to send the fleet of 14 aircraft to Jetstar will see Qantas receive the low-cost carrier's 11 Airbus A330-200s between now and late 2015. This will allow Qantas Domestic to retire ageing, fuel-guzzling Boeing 767s and simplify its domestic fleet to two types: the A330-200s and Boeing 737-800s. "And that means it has a clean fleet," Mr Joyce said. "Qantas mainline will only be operating A330-200s and 737-800s by 2015 when this is all done, and that gives us a huge cost reduction. We think our cost base will get down to below 5 per cent compared to where Virgin is and that's a big movement."
The cost base of the mainline Qantas operations is 10-15 per cent higher than Virgin's, and Mr Joyce hopes he can reduce the differential to about 5 per cent.
The first 787 is due to land in Melbourne tomorrow and the decision to send the fleet of 14 aircraft to Jetstar will see Qantas receive the low-cost carrier's 11 Airbus A330-200s between now and late 2015. This will allow Qantas Domestic to retire ageing, fuel-guzzling Boeing 767s and simplify its domestic fleet to two types: the A330-200s and Boeing 737-800s. "And that means it has a clean fleet," Mr Joyce said. "Qantas mainline will only be operating A330-200s and 737-800s by 2015 when this is all done, and that gives us a huge cost reduction. We think our cost base will get down to below 5 per cent compared to where Virgin is and that's a big movement."
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A presentation to analysts by chief financial officer Gareth Evans showed Qantas plans to take delivery of 96 narrow-body and 13 widebody aircraft in the next five years. It also has 37 options and 268 purchase rights through to December 2025. It expects to retire up to 37 aircraft in the next five years to bring the average fleet age to 7.9 years.
A net gain of 72 aircraft?
WTF?
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I don't get it. The smart idea would be get your premium paying customers into the newer quieter, lower cabin altitude and hopefully more comfortable aircraft. At the same time not lower prices but charge a small amount more. That is margin management.
Then look after them properly. Don't piss them off at every turn.
Leave the A332's at JQ and let the entry level price hunters have them instead as they have nothing to gain/lose.
I must be dreaming the above makes sense. Surely AJ and co would have thought that through :roll eyes:
Let me see….how does my P&L look compared to QF?
Then look after them properly. Don't piss them off at every turn.
Leave the A332's at JQ and let the entry level price hunters have them instead as they have nothing to gain/lose.
I must be dreaming the above makes sense. Surely AJ and co would have thought that through :roll eyes:
Let me see….how does my P&L look compared to QF?
That's the bit I don't understand. Surely from a piloting and engineering view its cheaper to run a similar fleet (albeit 737s are older gen, 787s brand spankers), the A320, A330 have similar systems and philosophies. That was the whole point of them. Q seems to have thrown that straight out the window, god knows why! Does common sense not enter into this?!
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angryrat,
Perfectly correct analyis,
but ignoring the 50 787-9 options which undoubtedly have to go to QF unless there is a substantial reduction on domestic routes served by 767 (eg golden triangle where the 330 is a dog) or some of the remaining 747 routes (albeit expect some 330 replacements here)
Perfectly correct analyis,
but ignoring the 50 787-9 options which undoubtedly have to go to QF unless there is a substantial reduction on domestic routes served by 767 (eg golden triangle where the 330 is a dog) or some of the remaining 747 routes (albeit expect some 330 replacements here)
Nunc est bibendum
14 787-8s would be an orphan fleet for QF and they can't afford to get rid of the 30 A330s in the group and replace it with the 787 in the short term as many of the A330s are nqiote new. Nor can they send 30 A330s to J*. So it's case of working out where you can put 14 787s that you bought at a bargain price and get the best rationalisation for the rest of the fleet. Whilst the spin around the 787 for J* is nauseating and contradictory when they spin the benefits of it whislt continuing to operate the 767 domestically, it actually does make sense.
What doesn't make sense is why we haven't yet firmed up 787 slots for QF. There is no doubt it is the future of QF opening up SFO from SYD, MEL and BNE. DFW from SYD, MEL. CDG and other European ports from Adelaide, Perth, Brissie via Dubai, etc, as well as replacing older A330s in about 8-9 years. In fact, I can see 50 being nowhere near enough or an order for 777Xs in the future to supplement the 787 and replace the 744s due to retire after 2020.
It only starts to make sense when you remember that there are still a few hurdles to cross. At a function I was at a while back I asked AJ why Dixon hadn't addressed all the 'structural issues' that AJ was now trying to sort out. His response was that as QF was making money, there was no appetite to do the hard yards. Thus, were QF to announce new aeroplanes, new routes, etc then plainly there are good times ahead and the ability to do those hard things is diminished.
As I've said before, this is part of a wider narrative of QF needing 'fixing'. Whether the end game is to set it up for EK or private equity, I don't know but anything AJ says must be read understanding that its intended for a specific audience and for a specific reason. The fact it doesn't make sense (on the surface) to the rest of us is entirely irrelevant. Once you start to view his comments within the wider framework, only then can you see the 'sense' in them.
So if he ordered 787s now, then they wold need engineering support in a few years time. That gives the ALAEA leverage to prevent being downsized in the short term- something that goes against what AJ wants to achieve with engineering. So instead, he'll retire a bunch of aeroplanes, lose critical mass to do the remainder, send them off shore, and then not have the capability to maintain the new fleet in house. A bunch of pesky engineers gone, more fixed costs for maintenance (short term), easier to budget for, etc.
I sometimes wonder whether he's actually fooled us all and his grand plan, whilst heinous in what it's doing to a dedicated and highly skilled work force, is actually quite brilliant in achieving what he wants to achieve. Whether he actually achieves it remains to be seen and by then it may be all too late for those of us still around. Still, I'm not sure what it is that any of us can do about it.
What doesn't make sense is why we haven't yet firmed up 787 slots for QF. There is no doubt it is the future of QF opening up SFO from SYD, MEL and BNE. DFW from SYD, MEL. CDG and other European ports from Adelaide, Perth, Brissie via Dubai, etc, as well as replacing older A330s in about 8-9 years. In fact, I can see 50 being nowhere near enough or an order for 777Xs in the future to supplement the 787 and replace the 744s due to retire after 2020.
It only starts to make sense when you remember that there are still a few hurdles to cross. At a function I was at a while back I asked AJ why Dixon hadn't addressed all the 'structural issues' that AJ was now trying to sort out. His response was that as QF was making money, there was no appetite to do the hard yards. Thus, were QF to announce new aeroplanes, new routes, etc then plainly there are good times ahead and the ability to do those hard things is diminished.
As I've said before, this is part of a wider narrative of QF needing 'fixing'. Whether the end game is to set it up for EK or private equity, I don't know but anything AJ says must be read understanding that its intended for a specific audience and for a specific reason. The fact it doesn't make sense (on the surface) to the rest of us is entirely irrelevant. Once you start to view his comments within the wider framework, only then can you see the 'sense' in them.
So if he ordered 787s now, then they wold need engineering support in a few years time. That gives the ALAEA leverage to prevent being downsized in the short term- something that goes against what AJ wants to achieve with engineering. So instead, he'll retire a bunch of aeroplanes, lose critical mass to do the remainder, send them off shore, and then not have the capability to maintain the new fleet in house. A bunch of pesky engineers gone, more fixed costs for maintenance (short term), easier to budget for, etc.
I sometimes wonder whether he's actually fooled us all and his grand plan, whilst heinous in what it's doing to a dedicated and highly skilled work force, is actually quite brilliant in achieving what he wants to achieve. Whether he actually achieves it remains to be seen and by then it may be all too late for those of us still around. Still, I'm not sure what it is that any of us can do about it.
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Im no airline expert but there seems to be some fundamental strategy problems within the Q group. The segmentation of the business is contributing to a fall in margins and profits. Qantas International is losing economies of scale as routes are dropped and this is creating a vicious downward spiral. Conversely Jetstar International is growing albeit in a segment of the industry where the margins are a lot lower. Meanwhile Jetstar Domestic is canabalising Qantas Domestic whilst management is more worried about market share rather than revenue share.
If management were to focus on group profit rather than segment profits they could get their minds into a better area. Where practicable get rid of duplication, including management structure, and stop cross accounting costs and revenues. Keep the product differentiated and put the right product into the right market. Some markets will pay more for quality but the quality has to be delivered. Aim for a single group of employees and equipment with the flexibility to work across all segments.
Ok so this is somewhat pie in the sky but doesnt it give a better direction than the one now? Where do I go for my $5M?
If management were to focus on group profit rather than segment profits they could get their minds into a better area. Where practicable get rid of duplication, including management structure, and stop cross accounting costs and revenues. Keep the product differentiated and put the right product into the right market. Some markets will pay more for quality but the quality has to be delivered. Aim for a single group of employees and equipment with the flexibility to work across all segments.
Ok so this is somewhat pie in the sky but doesnt it give a better direction than the one now? Where do I go for my $5M?
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Pavement.
A perfect example is the SYD-HTI route.
Qantas withdrew from the route, gifted to JQ.
For the QF passengers that don't want to fly JQ, a suitable alternative was VA.
Multiply this over a network wide basis & its no wonder QF is under pressure to maintain its Domestic market share.
The last four family holidays ive taken, QF don't fly to the destinations I wanted to travel to. So I've flown with alternative carriers rather than be forced to fly with JQ. Namely Virgin, Garuda, Singapore Airlines & Fiji Air.
A perfect example is the SYD-HTI route.
Qantas withdrew from the route, gifted to JQ.
For the QF passengers that don't want to fly JQ, a suitable alternative was VA.
Multiply this over a network wide basis & its no wonder QF is under pressure to maintain its Domestic market share.
The last four family holidays ive taken, QF don't fly to the destinations I wanted to travel to. So I've flown with alternative carriers rather than be forced to fly with JQ. Namely Virgin, Garuda, Singapore Airlines & Fiji Air.
"Three things matter to us. One is meeting our low costs, the other is ensuring that customers enjoy their experience and they want to come back for more; and the third is we've got really happy engaged people who are committed to our model. Now the 787 does all three things."
) said years ago one aeroplane is much like the rest for a passenger, the EXPERIENCE for them is more about the staff interaction, website ease of use, on time ARRIVAL (no one cares about late departure if the arrival is on time). So if this man thinks the 787 will fix the highly flawed Jetstar experience for passengers then he has no clue.Slightly off topic but still relates to the "group."
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Those speeches above just show how full of himself and out of touch with the commercial reality of type variations, he is.
B787 being their savior... the been-counters look like they've stuffed it up again!
B787 being their savior... the been-counters look like they've stuffed it up again!
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As Mstr caution says, they are driving QF customers away due to JQ. I refuse to fly them--was looking at QF options into NZ for the new year, all the times I wished to fly involved some JQ travel, and it wasn't even cheap!! So I will stick to ANZ, and VA. And QLink, on the -400.
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Qantas in trouble
Looks like another loss of 300 mil for 6 months for the Qf group.Looks like their management style is coming back to finally bite them on the bum,as per Richard Brandson dig this morning.Good luck to all at Qf,your going to need it.
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