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

[1A_Please]

Qantas needs to restructure, that is evident. That involves a lot of pain for a significant number of people. Prolonging it does no favours, a plan should be formulated, laid out and enacted.

This requires a deliverable cohesive strategic plan. So far, this has been completely beyond AJ.

[nitpicker330]

Oh Joyce has a plan alright and so far he and the board are following it.

[Livs Hairdresser]

Romulus

What I have called you on is your claim that the answer to QF issues is to simply raise ticket prices

You seem to like cold, hard numbers so here's some more for you. There have been 2 recent price increases. The most recent was on Aug 12, 2013 when the fuel surcharge increased by up to $65 on international sectors. The following month QF's share of international pax rose from 17.7% to 17.9%.

Prior to that, on Apr 12, 2012 the fuel surcharge increased by $10-$30. The following month QF's share of international pax fell from 20.1% to 19.9% BUT :

This equates to about 400 pax out of a total of 200000 carried that month.
400 pax at $2000 a ticket = $800K in lost revenue
199600 pax at $20 increased fuel surcharge = almost $4 mil in gained revenue.

So it appears that QF have had a win in both these instances.

I'd say you were being a bit prematurely dismissive of what Fedsec is saying. I'm not saying increasing ticket prices is the best answer, far from it. With the clowns we currently have running the company it would be like putting a bandaid on a shark bite. But neither is it the end of the known world you make it out to be.

[hotnhigh]

Romulus,
good luck with trying to explain the unexplainable.
I always refer back to this piece to think of why Qantas, Joyce and Clifford are so wrong……https://www.youtube.com/watch?v=kGch...layer_embedded

Move onto 4.55-5.23 in the link. This bloke is onto something.

Now back to Qantas managements winning strategies, can you explain, despite their reduced yield, their reduced load factor and reduced passenger numbers for Qantas the head honchos continue to brag about great net promoter scores?
Perhaps its the perfect tool to tie short term investment plan bonuses too?
And you don't have to worry about the reduction in passenger numbers as the bonus is unaffected. Brilliant.

Maybe the bain consultants in the room can explain?

Unfortunately, as has been expressed by all and sundry here. Alan and his team have nothing.
Can you imagine Michael Clarke, having captained a team to regain the ashes, turning around and telling them to all go and get stuffed?
That would equal about the same level of love in the room between Joyce and his"team" at the moment.
Joyce isn't a winning captain.

[Romulus]

About to run for a bit so a broad answer to those asking about AJ and Co strategy - please note I have previously stated, including in this thread, that they are not worth their salaries. I cannot explain their thinking becuase it is not evident, and worst of all it appears to be inconsistent.

In any corporation consistency is key, a very clearly defined path for all to see, regardless of whether they agree with it or not, will at least give a sense of purpose. I'm not sure AJ has got that or if he has he certainly hasn't communicated it well.

It must include the bad news. Set out your goals no matter how much they hurt e.g. "The global benchmark for AMEs and LAME's per aircraft in a full service environment is X and Y, we aim to achieve this by XX/YY/ZZZZ and yes, there will be job losses totalling Z, we will be providing full support for people who will be leaving us."

Give people the honest facts, no matter how unpalatable, and they can plan to deal with it. Uncertainty is a killer.

And then do it.

Look for efficiency opportunities in non operating environments eg how many training schools does QF have? How many MCCs? How many layers of redundancy in every environment? How can we simplify processes without losing efficacy?

And one of the best ways to find that last one is to ask the staff who do the job. Get to know your people and establish that whilst you are not trying to be their friend you will always be friendly and totally honest and build from there. A lot of people won't like you, and that's fine, you're not there to be liked. You're there to do a job. If you can't put aside the need to be liked then YOU need to reevaluate your position as a manager.

Anyhow, have to run, apologies for not individually replying to all.

[TIMA9X]

Now back to Qantas managements winning strategies, can you explain, despite their reduced yield, their reduced load factor and reduced passenger numbers for Qantas the head honchos continue to brag about great net promoter scores?
Perhaps its the perfect tool to tie short term investment plan bonuses too?

hotnhigh, well said, and if you have the time watch the above video containing the reporting seasons from 2011 - 2013, it's all over the place...

I think you will agree with me when you see it all together, AJ has a lot of holes in his presentations to the media, for me he appears to be making it up as he goes along using the word "pillar" to hold up his "creative accounting" in my view, and probably why it is predicted in 2014 big Al won't survive another year as CEO at Qantas.

Romulus, you have gone to a lot of trouble to make some very good points, you can put together a great post (many of them) defending the managers, but none of your posts explains why Jetstar can't go it alone without the mother-ship Qantas.. it has been five years now.. It's about bums on seats, Japan routes for example, JAL is cleaning up, Q holding its own but the last three years J* is losing "bum's on seats" because people don't like flying LH on the J* product particularly one stop via Cairns ex Sydney etc.... they have done it once, not again. I hear it all the time.... and I am writing to you from Northern Asia today..

The two model strategy for the Qantas group is the problem and with respect, all your "fancy number crunching examples with a lot of big management words attached" the last few posts, sounds a lot like AJ in the above video... all over the place.... and leading to nowhere, again.. and the winner is...? Not Qantas mainline and the management, why? It's simple, big Al & LC and their supporters breed negativity all the time, it's all the staff's high cost etc, etc, even though the Aussie dollar is heading back towards US$.80c the punters are jumping ship because of the confusing product offerings, all the "creative number jumbling in the world" from from management types won't change that if the current strategy is allowed to prevail. Alan fiddles while QANTAS "burns" - Airline Hub Buzz | Airline news and Information

Merging J* Int back into Qantas Int would go a long way in fixing Qantas International, hell, I'm pretty certain Q have been paying for J* Int all along otherwise it probably wouldn't survive on its own.. I'm sure Romulus will come up with some "projective figures" pointing out I too have got it all wrong..

[halfmanhalfbiscuit]

Interesting article on BA stating why they sold GO.

BBC News | BUSINESS | BA sells Go for Ł100m

GO was later bought by Easyjet.

[Nassensteins Monster]

One of the keys to a Qantas revival is a very direct and if need be blunt level of communication. It must be honest. It must not be sugar coated. It must be consistent with all other communication.

Qantas needs to restructure, that is evident. That involves a lot of pain for a significant number of people. Prolonging it does no favours, a plan should be formulated, laid out and enacted.

Agreed. However there is an agenda and a strategy at play. The latest hysterics are about conflating a sense of crisis in order to create an appetite for ongoing change (or if nothing else - to justify change) among a battle-weary staff and union exec.

And I don't disagree that change is necessary. We are carrying way too much dead wood - some of it in the form of unnecessary exco and their furniture - but the whole way down the over-long chain.

For those that remain after the latest 1,000 are gone, the CEO et al are leading by example with a pay freeze. Expect the same demand in future EBA negotiations.

[Jetsbest]

Hmmm...

the CEO et al are leading by example with a pay freeze. Expect the same demand in future EBA negotiations.

I think you're correct; that's what they'll want. But I also heard that the last time such a measure was announced, with great fanfare by GD, there was a near revolt among middle-managers; the bonuses were paid after all, in a very low-key way, so as not to upset the announced perception during EBA negotiations.

I believe current management are entirely capable of such deceptive and misleading conduct; they'll take a pay freeze then, later on after EBAs are finalised, receive a "retention bounty" (not a bonus!) or some such for staying through the pay-freeze.

Someone prove me wrong; please!

[Mstr Caution]

Timax

Reminds me of the Beijing IATA AGM of airline CEO's. Richard Quest asked the meeting who believes Low Cost Long Haul can work. Guess which table was the only one from a group of world wide CEO's to raise their hands. Yep. AJ.

NM.

Is AJ actually taking a pay freeze? I thought it was he failed to achieve his bonuses and has sold it as a pay cut.

[Worrals in the wilds]

And one of the best ways to find that last one is to ask the staff who do the job. Get to know your people and establish that whilst you are not trying to be their friend you will always be friendly and totally honest and build from there. A lot of people won't like you, and that's fine, you're not there to be liked. You're there to do a job. If you can't put aside the need to be liked then YOU need to reevaluate your position as a manager.

Absolutely, but this is not the Qantas way and hasn't been for a long time. From the outside looking in (over a decade and a half), it seems that all too frequently the Qantas management way has been to ignore and/or despise the staff, cultivate a few willing grovellers and treat the rest as the enemy who know nothing and should not be trusted. As many staff see management in the same light the whole thing becomes completely disfunctional.

[Goddamnslacker]

Pay Freeze?

All staff took a pay freeze back years ago & then management didnt and all took at huge pay rise & bonus due to getting all the staff to take the freeze due to hard times.....Fat chance of staff buying this donkey again.....Every EBA will be a wage rise regardless, the pay cuts or freeze should come from management, after all, management has increased by 10 fold.....a classic example Engineering, how many ops managers, all on 170k+.....
Dont ask staff to take a pay freeze it wont happen...
If the Airline goes bust, its not the staff thats for sure....

[cattletruck]

If you can't put aside the need to be liked then YOU need to reevaluate your position as a manager.

Yep, the new schools of management leave a lot to be desired with the modern day corporate flunkies they produce.

Better offer them another pay rise otherwise they'll be jumping out the windows of tall buildings in protest.

[busdriver007]

Remind me again where John Borghetti did his MBA/Degree? "Running rings around Alan Joyce over and over again" as described in the AFR. Nothing like learning on the job with actual people, Never let a Mathematician, Miner or Accountant get anywhere near running an airline and you will be fine!

[halfmanhalfbiscuit]

I'm certain this has been said before.

AJ views staff as a cost and Borghetti views staff as an asset.

[V-Jet]

I'm not saying increasing ticket prices is the best answer, far from it. With the clowns we currently have running the company it would be like putting a bandaid on a shark bite.

A very succinct summation of Qantas' ills. Qantas has forgotten it is an airline because quite clearly, management don't (and haven't for years) known what you actually do with an airline. IE: It isn't 'the best' at what it does do, because the guys leading at the top don't know what 'the best' is. Their plan is limited to room renovation, logo and uniform changes, because those are the skills they are comfortable with. The logo was a disgrace, new offices outrageous (but all too familiar in failing companies) and the least said about the uniforms the better! He does seem to be able to create nice lounges to ensure nice press write-ups though! Probably not what you would want to see on a CV if you were interviewing CEO's for an airline position though, but then again, you probably aren't a Publican trying to run an airline...

[27/09]

Romulus, your post # 1505 is pretty well spot on.

halfmanhalfbiscuit

AJ views staff as a cost and Borghetti views staff as an asset.

There's the saying with respect to accountants, cost and value. It goes something like this, accountants know the value of nothing and the cost of everything.

[Animalclub]

My old boss in the 70s at TN LAX, Mervyn McMillan, told me of two premises he worked on...
- all females are ladies until proved other wise; and
- look after your staff (no matter where you are in the hierarchy) and the staff will look after the job.
Both are true to this day.

[airsupport]

My old boss in the 70s at TN LAX, Mervyn McMillan, told me of two premises he worked on...
- all females are ladies until proved other wise; and
- look after your staff (no matter where you are in the hierarchy) and the staff will look after the job.
Both are true to this day.

YES, agree 100%, but I am of that vintage too, sadly the Managements of today are not aware of these excellent guidelines.

[Goddamnslacker]

Management!

But that's just it isn't it...QF hasn't any management that are managers, from the CEO down....they are all people who worm or weasel there way into positions where they are totally out of their depth...Just look at One Star Management, then look at IOC, followed by MOC and Engineering...all the way down to Operations Managers and Duty Managers....Gone are the days of actually having a capable person in the right position....now its a day of who's lawn or Ass you can lick!
QF has more Managers now than it ever has, positions created for no reason....time to axe all these rubbish positions. the ivory towers of QCA/B/C/D are full of them....corporate leeches..