MERGED: Alan's still not happy......
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Nick's not happy
Qantas chief Alan Joyce has many questions to answer
In his 2009 book, The Men Who Killed Qantas, Matthew Benns outlines how a cut-throat international aviation market had shifted the culture of Qantas away from aviators to bean counters by the late 1990s.
Ironically, Benns made what seemed to be a reasonable prediction at the time: that Jetstar wunderkind turned Qantas chief executive Alan Joyce would be the man to breathe new life into the airline.
Instead, five years on, it seems Joyce and his management team have given this national icon the kiss of death.
In the months before Joyce took over as Qantas boss in November 2008, Qantas posted a record $969 million profit. Sometime Thursday, Qantas is widely expected to announce a record loss that could approach $1 billion.
So, who really clipped Qantas' wings?
If you believe the Qantas spin machine (and believe me, it will be in frenzied overdrive) it's everyone else's fault, except, of course, that of Qantas.
Its excuses over the years have included an unlevel playing field, higher fuel costs, difficult unions, a high or low Australian dollar (Qantas has blamed both in recent years) to name but a few. Qantas' excuses for abysmal performance and grand plans for a turnaround just don't stack up.
Granted, the global financial crisis knocked international airlines hard in 2008/09, but why is it that three regional rivals have bounced back while Qantas has languished? From 2009 to 2013, Cathay Pacific made $3.8 billion in profit, Singapore Airlines $2.5 billion and Air New Zealand $358 million. In comparison, Qantas under Joyce's stewardship has made just $240 million, which will be more than wiped out by Thursday's expected losses.
Joyce has earned $22.2 million as chief executive and in the 2012-13 financial year his $5.1 million package matches the combined salaries of the Cathay, Singapore and Air New Zealand chiefs. Shareholder value seems inversely proportional to Joyce's pay packet. Qantas shares today are worth 40 per cent less than when Joyce took over.
And what about the plans to revive the Qantas Group? Jetstar domestically proved a treat; Jetstar internationally has been a toxic black hole. Idle planes sitting on the tarmac in France for a stalled Jetstar Hong Kong are the most recent symbol of a botched strategy in Asia.
At Senate inquiries, Qantas Group executives were defensive when I asked whether the Jetstar Asia offshoots would be technically insolvent were it not for multi-million dollar injections from the parent company.
Given current Australian accounting rules, which allow cost-shifting from one entity to another within group accounts, we may never know how much the Jetstar offspring has drained from its Qantas parent.
But we do know that in 2008 Jetstar had 36 aircraft to Qantas' 188planes. Today, it's 115 to 122. It seems that while Qantas could carry Jetstar, Jetstar cannot do the same for Qantas.
The Qantas/Emirates alliance, which finally took off on April 1, 2013, was a key part of the strategy that Joyce said would turn around the fortune of Qantas' international operations.
Government figures reveal that there indeed has been a turnaround since the deal. In the 12 months since April 1, 2013, compared to the previous year, Qantas has gained only 2 per cent of passengers entering Australia; Emirates' passenger numbers have jumped 18 per cent.
What sickens me the most is the impact on the rapidly shrinking workforce of 30,000 Qantas employees, whose loyalty has been rewarded with mass lay-offs. Those Qantas workers, together with the 117,000 small investors in Qantas (holding 10,000 shares or fewer) will bear the brunt of decisions made by management.
But the Qantas fiasco is really a three ring circus. It doesn't just involve management and the board that is meant to oversee it; it also involves institutional investors, who have been eerily silent as they have stood by Qantas management.
When I asked Qantas in a Senate inquiry this year whether institutional investors received special access to information, the answer was that such briefings were "commercial in confidence". This is an insult to every small investor in the country. In a sharemarket, all shareholders should have equal access to information about a company's future.
How could Joyce spruik that line at the October 2013 AGM, that Qantas had a "clear strategy" that was "delivering results", yet just seven weekslater, seemingly out of the blue, announce an expected loss of up to $300 million. What of the small investors who bought shares on the strength of those AGM comments, only to see a 30 per cent fall just weeks later? Did they get the same briefings as institutional investors?
I hope our corporate watchdog ASIC has a forensic look at that, because what we are witnessing is not just the demise of a national icon. It is a system stacked against small investors who deserve to be better informed.
Nick Xenophon is an independent senator for South Australia.
Read more: Qantas chief Alan Joyce has many questions to answer
In his 2009 book, The Men Who Killed Qantas, Matthew Benns outlines how a cut-throat international aviation market had shifted the culture of Qantas away from aviators to bean counters by the late 1990s.
Ironically, Benns made what seemed to be a reasonable prediction at the time: that Jetstar wunderkind turned Qantas chief executive Alan Joyce would be the man to breathe new life into the airline.
Instead, five years on, it seems Joyce and his management team have given this national icon the kiss of death.
In the months before Joyce took over as Qantas boss in November 2008, Qantas posted a record $969 million profit. Sometime Thursday, Qantas is widely expected to announce a record loss that could approach $1 billion.
So, who really clipped Qantas' wings?
If you believe the Qantas spin machine (and believe me, it will be in frenzied overdrive) it's everyone else's fault, except, of course, that of Qantas.
Its excuses over the years have included an unlevel playing field, higher fuel costs, difficult unions, a high or low Australian dollar (Qantas has blamed both in recent years) to name but a few. Qantas' excuses for abysmal performance and grand plans for a turnaround just don't stack up.
Granted, the global financial crisis knocked international airlines hard in 2008/09, but why is it that three regional rivals have bounced back while Qantas has languished? From 2009 to 2013, Cathay Pacific made $3.8 billion in profit, Singapore Airlines $2.5 billion and Air New Zealand $358 million. In comparison, Qantas under Joyce's stewardship has made just $240 million, which will be more than wiped out by Thursday's expected losses.
Joyce has earned $22.2 million as chief executive and in the 2012-13 financial year his $5.1 million package matches the combined salaries of the Cathay, Singapore and Air New Zealand chiefs. Shareholder value seems inversely proportional to Joyce's pay packet. Qantas shares today are worth 40 per cent less than when Joyce took over.
And what about the plans to revive the Qantas Group? Jetstar domestically proved a treat; Jetstar internationally has been a toxic black hole. Idle planes sitting on the tarmac in France for a stalled Jetstar Hong Kong are the most recent symbol of a botched strategy in Asia.
At Senate inquiries, Qantas Group executives were defensive when I asked whether the Jetstar Asia offshoots would be technically insolvent were it not for multi-million dollar injections from the parent company.
Given current Australian accounting rules, which allow cost-shifting from one entity to another within group accounts, we may never know how much the Jetstar offspring has drained from its Qantas parent.
But we do know that in 2008 Jetstar had 36 aircraft to Qantas' 188planes. Today, it's 115 to 122. It seems that while Qantas could carry Jetstar, Jetstar cannot do the same for Qantas.
The Qantas/Emirates alliance, which finally took off on April 1, 2013, was a key part of the strategy that Joyce said would turn around the fortune of Qantas' international operations.
Government figures reveal that there indeed has been a turnaround since the deal. In the 12 months since April 1, 2013, compared to the previous year, Qantas has gained only 2 per cent of passengers entering Australia; Emirates' passenger numbers have jumped 18 per cent.
What sickens me the most is the impact on the rapidly shrinking workforce of 30,000 Qantas employees, whose loyalty has been rewarded with mass lay-offs. Those Qantas workers, together with the 117,000 small investors in Qantas (holding 10,000 shares or fewer) will bear the brunt of decisions made by management.
But the Qantas fiasco is really a three ring circus. It doesn't just involve management and the board that is meant to oversee it; it also involves institutional investors, who have been eerily silent as they have stood by Qantas management.
When I asked Qantas in a Senate inquiry this year whether institutional investors received special access to information, the answer was that such briefings were "commercial in confidence". This is an insult to every small investor in the country. In a sharemarket, all shareholders should have equal access to information about a company's future.
How could Joyce spruik that line at the October 2013 AGM, that Qantas had a "clear strategy" that was "delivering results", yet just seven weekslater, seemingly out of the blue, announce an expected loss of up to $300 million. What of the small investors who bought shares on the strength of those AGM comments, only to see a 30 per cent fall just weeks later? Did they get the same briefings as institutional investors?
I hope our corporate watchdog ASIC has a forensic look at that, because what we are witnessing is not just the demise of a national icon. It is a system stacked against small investors who deserve to be better informed.
Nick Xenophon is an independent senator for South Australia.
Read more: Qantas chief Alan Joyce has many questions to answer
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He knows, I suggest he just cannot prove it
There is no transparency, no ability to actually determine the true financial state of a public company if it chooses to hide it. There are sufficient devices "commercial in confidence" to allow the true state of affairs to be obscured.
That is why collapses occur. Unsuspecting shareholders, creditors, customers & employees are unable to access the financial state, and must rely on the imprecise public utterances & statements of company officers & officials. Note very very carefully the language of such statements, they are almost always meaningless in the concrete & factual information they convey. It is just as important to access what is left out, what is not talked about. That conveys much more information as what is actually said in a lot of cases.
I use some simple rules to determine if the information conveyed has any validity or meaning. Was the language precise? Does the language give sufficient wiggle room to alter the meaning later? Are key phrases defined? Can facts be independently validated). Most importantly, what is the penalty or punishment if a precise statement is an untruth? (this includes actual meaningful enforcement)
If you go back over statements and apply these simple rules, you will quickly come to that the conclusion that the vast bulk of corporate communications is absolutely meaningless in terms of genuine information conveyed, just the way they want it.
Last edited by FYSTI; 27th Aug 2014 at 22:22.
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BREAKING: Qantas posts a loss of $2.84 billion
by Daniel Franklin 6:41 AM
Source: http://www.abc.net.au/news/2014-08-2...esults/5702174
by Daniel Franklin 6:41 AM
Source: http://www.abc.net.au/news/2014-08-2...esults/5702174
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Summary
Keep an eye on the share price today...
Source: Qantas Group Financial Result
- Underlying Loss Before Tax: $646 million
- Non-cash fleet writedown post-structural review: $2.6 billion
- Statutory Loss After Tax: $2.8 billion
- Underlying fuel costs: $4.5 billion, up $253 million
- Qantas Transformation benefits: $440 million
- Operating cash flow: $1.1 billion
- Group comparable unit costs down 3 per cent
- Liquidity: $3.6 billion
- Underlying Profit Before Tax expected in first half FY15
- No final dividend
Keep an eye on the share price today...
Source: Qantas Group Financial Result
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Qantas posts 'confronting' $2.8b loss after hefty writedowns
A terrible result... I didn't think it would be this bad..
Qantas has reported a lower than expected full-year underlying loss before tax of $646 million, but booked a statutory loss of $2.8 billion as a result of hefty restructuring charges and writedowns to its fleet.
The airline has decided to hold on to its frequent flyer program, as expected, but will form a new holding company that will allow its international business to participate in future consolidation opportunities.
"There is no doubt today's numbers are confronting, but they represent the year that was past," Qantas chief executive Alan Joyce said.
"We have now come through the worst. There is a clear and significant easing of both international and domestic capacity growth."
Analysts had expected the airline to report an underlying pre-tax loss of around $750 million but had not expected the airline would take such heavy write-downs on its fleet
Read more: Qantas posts 'confronting' $2.8b loss after hefty writedowns
The airline has decided to hold on to its frequent flyer program, as expected, but will form a new holding company that will allow its international business to participate in future consolidation opportunities.
"There is no doubt today's numbers are confronting, but they represent the year that was past," Qantas chief executive Alan Joyce said.
"We have now come through the worst. There is a clear and significant easing of both international and domestic capacity growth."
Analysts had expected the airline to report an underlying pre-tax loss of around $750 million but had not expected the airline would take such heavy write-downs on its fleet
Read more: Qantas posts 'confronting' $2.8b loss after hefty writedowns
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And yet the share price goes up...
Qantas Airways Limited
ASX: QAN - 28 Aug 11:06 am AEST
1.40 up 0.11 (8.11%)
Bernoulli's Theorem must apply differently to the finance world. Wait till Newton catches up with it. (i.e. Gravity)
Qantas Airways Limited
ASX: QAN - 28 Aug 11:06 am AEST
1.40 up 0.11 (8.11%)
Bernoulli's Theorem must apply differently to the finance world. Wait till Newton catches up with it. (i.e. Gravity)
And yet the share price goes up...
Qantas Airways Limited
ASX: QAN - 28 Aug 11:06 am AEST
1.40 up 0.11 (8.11%)
Qantas Airways Limited
ASX: QAN - 28 Aug 11:06 am AEST
1.40 up 0.11 (8.11%)
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And yet the share price goes up...Qantas Airways Limited ASX- QAN - 28 Aug 11-06 am AEST1.40 up 0.11 (8.11%)
If they'd known this, they should've reported a $10Bn loss. The share price could've doubled.
short flights long nights
I see Alan is still saying that none of it is his fault.
Qantas shocks with $2.8bn full-year loss, analysts call for management spill - ABC News (Australian Broadcasting Corporation)
Qantas shocks with $2.8bn full-year loss, analysts call for management spill - ABC News (Australian Broadcasting Corporation)
Alan Joyce has no credibility and has spent all political capital
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Today's events will take a few days to sink in for many in the media as the numbers were a bit of a shock.. already signs that $22.2 million in wages for Joyce so far as CEO are probably getting up some peoples nose's. 
and
AJ was rattled by Chris Uhlmann's questions... long babbling answers over and over the same ground..
Not surprisingly, Joyce has become one of the most disliked chief executives since Telstra's Sol Trujillo.
But with the backing of the board and the airline's largest shareholder, Balanced Equity Management investment manager Andrew Sisson, who has stuck with the company through thick and thin, Joyce has managed to hang on.
In a series of focus groups conducted in February in Sydney's central business district, one of the participants said each of the eight people in his group agreed "Joyce and his team have ruined Qantas for their own ends" and "Qantas needs to heal the rift between its staff and management to gain more confidence and thus more patronage from the public".
But with the backing of the board and the airline's largest shareholder, Balanced Equity Management investment manager Andrew Sisson, who has stuck with the company through thick and thin, Joyce has managed to hang on.
In a series of focus groups conducted in February in Sydney's central business district, one of the participants said each of the eight people in his group agreed "Joyce and his team have ruined Qantas for their own ends" and "Qantas needs to heal the rift between its staff and management to gain more confidence and thus more patronage from the public".
AJ was rattled by Chris Uhlmann's questions... long babbling answers over and over the same ground..
short flights long nights
That interview was complete drivel. Fuel costs high...you have gas guzzlers Alan, that you failed to replace ( magic number? 777). He says he is renewing the fleet...you gave the 787 to Bogan Air Alan. Jetstar Japan is a mess, Jetstar Hong Kong a unmitigated disaster. Jetstar Singapore is not far behind.
The guy is dillusional, and has been payed 22 million to live in his own version of fairy land....I really don't get it anymore.
It would be like me being on a flight to Heathrow, but landing at Gatwick instead, and saying don't worry, I will get it right next year, and there were outside influences I could not control, ATC gave me an incorrect vector, but can I please keep my job, oh and get a bonus because I did remember to put the wheels down for landing.
I am totally gobsmacked.
The guy is dillusional, and has been payed 22 million to live in his own version of fairy land....I really don't get it anymore.
It would be like me being on a flight to Heathrow, but landing at Gatwick instead, and saying don't worry, I will get it right next year, and there were outside influences I could not control, ATC gave me an incorrect vector, but can I please keep my job, oh and get a bonus because I did remember to put the wheels down for landing.
I am totally gobsmacked.
