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

[Variable Incidence]

Lets hope you're wrong SOPS because there'll be no government handout.
Merry Xmas then, Ho Ho f&$@ing Ho.

[spellcheck]

I'm with FPV Dude

[Ida down]

Spot on Variable. As a 89er, the last thing I wanted to do was create upheaval in the family, take kids out of school, leave aging parents, and try to find homes for the pets, to say nothing of selling or renting your house, and moving OS, with a family who wanted to do anything but. For some, they thrive on it, but for many its very traumatic, and trailing a pack of kids around the world, and a wife, who is homesick before you leave Sydney, is not much fun. To add to that we had a couple of close mates, top themselves, because it was a case of loss of job, wife, kids, home. I truly hope, this is not the lot of the next generation of pilots, once was enough.

[Big Balls]

I cannot see what AJ is on about. The company is in no immediate danger of collapse, with (reportedly) $2b in the bank, these losses can be sustained for a while. The problem is in the policies, direction and structure. These need to change in order to get the company back into profitability. Simply wanting more cash or government backing is just delaying the inevitable. The path that this management team have lead the company down is wrong. They need to admit they f$&@ed up and change direction. It's simple, what they are currently doing, DOES NOT WORK!

[hotnhigh]

65%line in the sand furphy.

The reason domestic is now rooted is the ridiculous notion that 65% is the holy grail.
Example. DRW-SYD red eye route. Example as I've seen.

Qantas 738 Jetstar A320 and Virgin 737.
Qantas pax about 120
Jetstar pax about 100
Virgin pax about 150
All flights leave within 10 minutes of each other.

By definition qantas group has 65% of seats available.

If the disproportion of passengers carried is to Virgin, which is increasingly happening, due to their increasing yield, and probably better product,
who's making money here?

[Angle of Attack]

I reckon there are 2 outcomes, whether Joyce stays or not, the current plan is continued and QF peters out / collapses in 5-7 years or there is a Strategy change and still another 3000 - 8000 job losses while the joint organises itself, either way brutal pain for a lot of QF Staff.

[FYSTI]

S-Curve

post#677

It is this obsession with 65 per cent market share - as well as some flawed strategies in Asia and a focus on Jetstar - that has got Joyce and the airline in the present situation. The concern is the 65 per cent market share line in the sand is based on the ''S-curve'' phenomenon, which measures capacity share against revenue share. The theory is there is a certain profit optimisation point where if you add more capacity, you get little in the way of increased revenue, but if you lose capacity, revenue can fall off a cliff. Joyce believes the figure that needs to be protected is 65 per cent.

According to a McKinsey paper published a few years ago, the S-curve is based on the premise that airlines providing a high frequency of flights attaining disproportionately high market shares. The high-margin corporate market flies with carriers that offer the most flights, lounges and loyalty programs.

There appears to be a subtle but deadly flaw in this logic if this argument is used above as the rational for the 65% dual-brand strategy. The second paragraph (implicitly) assumes a single entity (lounges, FF, frequency). This is the flaw - it is not a single entity but two entities offering a vastly different products (premium vs LCC) & operating philosophies (network vs point-to-point). If the McKinsey paper quote is correct, the 65% will only work with a single entity, either LCC or premium.

What it does do in reality is forces a significant reduction in frequency of each entity compared to its potential to prevent massive over capacity, and hence negates the rational for the 65% line in the sand logic. QF strong armed the punters by giving them no choice, simply pulling QF domestic out of certain ports.

Punters simply aren't going to jump on the next "Qantas Group"™ aircraft available - they are likely to want either the premium or LCC, not a mix and match of both, or walk to the "Group" opposition.

[sunnySA]

Big Balls

I cannot see what AJ is on about. The company is in no immediate danger of collapse, with (reportedly) $2b in the bank, these losses can be sustained for a while. The problem is in the policies, direction and structure.

I agree, although the market update from the Qantas group (profit warning) was required by the ASX, I believe it was more about ramping up pressure on the parliament to either change the Qantas Sale Act or to underwrite current and future borrowings.

Compare the level of support that Qantas is seeking with the level of support that was afforded the big 4 banks (ANZ, CBA, NAB, WBC). Is this any different?

QAN with 15.9 billion in revenue, 20.2 billion in assets and 33,000 employees is the 10th largest employer in Australia.
10. Qantas
9. Westpac
8. Telstra
7. Spotless
6. CBA
5. ANZ
4. Rio Tinto
3. BHP Billiton
2. Woolworths
1. Westfarmers

I'd like to see P/L statements for each business group. I also think that Qantas are playing the man (Borghetti) rather than focussing on a sustainable future.

[dr dre]

If Qantas were let fail the minimum outcome would be Jetstar sold off as a profit making concern, Qlink sold off as its probably the most profitable outfit in the country at the moment, QF international bought by the taxpayer and QF domestic fed to the wolves. That's my prediction.
SN

Why? I think it's well established that J* can't make a profit without help from big brother and I can't see a conservative government buying a loss making venture in International. Qf Dom (up until the recent capacity war) was by far the most successful part of the group, and it would be the thing I would definitely want to keep?

[Acute Instinct]

They Know Not What They Do.............

Yeah, well, and lets allow the ABC to repeat.
Reading between the lines has never been easier.

Insiders - 06/11/2011: Politicians dispute Qantas grounding timing - Insiders - ABC

[SOPS]

I could be wrong, but in my opinion 2 billion is not a lot of money in relative terms. Especially in the airline buisness. And if things start going wrong, I think it would be easy to burn through 2billion dollars in a relatively short period of time.

[itsnotthatbloodyhard]

Wasn't that $2 billion more like $3.5 billion not so very long ago?

[stubby jumbo]

Rumour

Hot Tip for the week.

'heard from a very reliable source....that there will be movement afoot from ye olde Darth Dixon. Apparently he was seen with a couple of financial heavies- having a very long lunch today with very solemn faces indeed.

I reckon Darth & Co. could make a tilt with the share price so low.

Wednesday ...could be interesting.

[OneDotLow]

Everyone just needs to stop and take a deep breath...

QF has just announced an expectation of an operating loss. It is not like they are not trading insolvent. The fact is the they are far from it! This is mostly just a show brought in by VA's announcement of a capital raising, to garner whatever government support they can either financially or legally. The process of restructure is continuing and would have continued regardless of VA's announcement or not.

Plenty of companies trade at a loss for periods short and long and airlines are no different. SOPS is correct that that it is easy to burn through $2B quickly in a capital intensive business, but there are many levers that management will pull to avoid that. Sale of assets, decreased depreciation etc.

The sky is not falling in just yet.

[PPRuNeUser0161]

SOPS
Dead right, 2B is bugger all to an airline the size of QF. If things go pear shaped they could burn that easily in two years and once that rate of loss is started its very hard to stop. Losing 1000 jobs is not gonna do it. QF needs fundamental change at all levels.


Dr dre
I think the taxpayer still wants a national carrier, by definition that is QF international, the original Qantas. Adding domestic into the equation would make it too expensive and the country can't afford it.

SN

[Bagus]

Overseas news Qantas is junk,bad reputation,now no one will fly.friends now now not using qantas,many are afraid that aircraft not require maintenance becoming reality >>>>quote AJ<<<.fly Garuda now.

[Cactusjack]

New 'S curve' - Share price of $1.00

My prediction is that Dixon and Associates will make a play for QF the minute the share price dips below $1.00, which could happen this week as every time Joyce opens his mouth the price dips. One more negative announcement this week and I reckon it's all over red rover. Scrotum Face and an assortment of sharks will dive in and the feathers will fly. And this would suit everybody, except the general staff of course. Dixon would get his prize and then slice and dice it , making hundred of millions for his bank account in the process. Joyce and Co get their payouts and fly off into the sunset to a small island where all you do is drink piņa coladas by the pool while being served by waiters in budgy smugglers, plus they leave with reputations in the business world intact. Joe Hockey Stick does not have to hand over a cent of taxpayer money and the spin doctors get busy blaming everything on overpaid pilots, pesky engineers, the world economy, Kim Jong Il, global warming etc etc etc. Life goes on, the rich get richer and everybody else cops it in the a#s as per usual.

Either way, once the war has finished, the dust settles and a new chapter commences one thing is for certain - the faces of Joyce, Clifford, Dixon and friends will not find a 'warm reception' around our great country should they have the balls to exit their secure ivory towers and mingle with the peasants.
I can already visualize the wanted posters on the Anonymous website!

[Bagus]

Load factors on the 484-seat Qantas A380s, which ply routes from Melbourne and Sydney to its new base in Dubai, have been weak. Crews have pointed to a large number of empty seats on the flights over the last month.


Read more: As storm clouds close in, Qantas' distress calls go unanswered

Emirates and Singapore airline now laughing,you can't buy a seat on this flight but qantas it is still available,good for staff travel.

[crewmeal]

Load factors on the 484-seat Qantas A380s, which ply routes from Melbourne and Sydney to its new base in Dubai, have been weak. Crews have pointed to a large number of empty seats on the flights over the last month.

Well coming up to the busiest period I hope for QF's sake the flights are full. I still feel it was bad news when QF jumped ship from BA and One World.

[spellcheck]

My reading of the information suggests sub 90c as the trigger.
As I said, the game has been in play for some time and ( to mix metaphors) Al is the lead player.
D'son and co will indeed find they can show their faces as they will ride into town as a rescue posse when all seems lost.
I hope I'm reading this all wrong, I really do.