MERGED: Alan's still not happy......
I heard that the only two airlines in the world with "investment grade" credit ratings are Southwest and Lufthansa?
Is this the case and, if so, why isn't basically every other airline in the world with "below investment grade" credit ratings facing the same gloom as Qantas, considering a very quick google search showed many major airlines that made losses this financial year (IAG, AF/KLM)?
Is this the case and, if so, why isn't basically every other airline in the world with "below investment grade" credit ratings facing the same gloom as Qantas, considering a very quick google search showed many major airlines that made losses this financial year (IAG, AF/KLM)?
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From the WA Today website:
Call for help: Leigh Clifford warns Qantas is in serious strife. Photo: Bohdan Warchomij
For Qantas chairman Leigh Clifford, free markets are good for everyone except the national carrier.
Hours after Qantas hollered for government help after revealing it would lose up to $300 million in the first half of the year, Clifford stood on the podium at the annual dinner for the conservative HR Nicholls Society and warned the airline was challenged.
Less than 12 hours later, the airline would be in a trading halt as credit ratings agency Standard & Poor's downgraded its credit rating to junk and its main shareholder Capital Group, which has stood with it through thick and thin, reduced its stake from just more than 10 per cent to 8.9 per cent.
If the share price falls below $1 there is talk it might attract hedge funds or private equity to form a consortium and attempt to buy the airline and its many parts to bust it up.
It seems hard to believe that a few weeks ago Qantas was in the market buying back its shares. Even harder to reconcile is that in August it was telling shareholders: ''We have many reasons to be optimistic. Our structural advantages as a group remain … And we have the right strategy for a bright, successful future.''
Speaking to an audience of like-minded economic purists, Clifford reconciled his views with the cries for help from Qantas boss Alan Joyce by saying the aviation industry is ''a little different … A purist can say let the market rule, but the airline industry is a little different and it is vital to Australia that it has a national carrier that is available and in times of crisis it is able to respond and evacuate people, as it did in the Middle East, Tripoli and Bangkok.''
The problem with this argument is it smacks of vested interest. The car industry, grain industry, mining industry and manufacturing all believe they are ''a little different'' and should be treated accordingly. In other words, turn to Canberra for a helping hand.
Qantas and aviation are not different from other industries. In Europe, many countries have realised the era of national carriers is over as the European Union has emerged.
But Clifford is right when he says Qantas is pressured. Besides the huge losses, the need to slash another 1000 staff and seek a further $2 billion in cost cutting over the next three years, it has been forced to look at all options to shore up its balance sheet.
This is speculated to include the partial or full sale of assets including its frequent flier business, its freight operation, the sale of equity in aircraft and the sale of its terminal at Sydney Airport, all of which could release billions of dollars to the airline.
The problem with this is it is ill-timed and smacks of desperation. All year the sharemarket has been strong and has had a good appetite for floats, yet Qantas has sat idly instead of getting ready to offer its frequent flier business. Now, when it is on the back foot, and has called on the government for help, it says it will look at ''all options''.
The brutal reality is Qantas could have raised equity when its share price was trading at $1.80 in April, instead of the $1.07 it closed at before being placed into a trading halt ahead of the S&P downgrade. Now, it has closed off that door unless it virtually gives the equity away. After the trading halt was lifted, the shares started to fall towards $1 a share.
But the downgrade is a body blow. If Moody's follows suit, it will reinforce the impact. On Thursday night, it placed its credit rating under review.
Until now, Qantas was one of three airlines in the world with the coveted investment-grade status. Now, there are two. From a financial perspective it increases the cost of Qantas' debt by a speculated $150 million, at a time when the carrier is facing potential full-year losses of $800 million.
Worse still, it has to place funds received for credit card bookings into restricted accounts. It can access the money only when the flight is taken.
It also raises questions whether there will be any impact on its frequent flyer business.
Clifford believes the Qantas Sales Act contributes to an unlevel playing field. He says: ''Australia is one of the most open markets in the world for airlines to operate. You can be 100 per cent foreign-owned and operate in Australia.''
Indeed, it is one of the issues the company has raised with the government. The sales act prevents foreign ownership of the airline creeping above 49 per cent and prevents a single foreign airline owning more than 25 per cent.
Clifford and Joyce are right, the act is antiquated, but it is questionable whether the airline would attract more foreign interest if the law was changed. Currently, no foreign airline has an investment in Qantas, and foreign investors have not reached the 49 per cent limit. As of last week, foreign investors held an estimated 40 per cent of the stock.
Qantas announced a major alliance with Emirates in September 2012, which resulted in it cutting ties with British Airways and Air France. It has also shed many staff, despite a comment by Joyce in November 2012 that he ''can absolutely say that this [Emirates partnership] is not going to be a risk to employment at Qantas''.
In August 2012, Qantas announced plans to cut 2800 jobs, weeks before putting the final touches to the Emirates alliance. It announced a further 300 staff cuts in November 2013 and, in December, said that figure would blow out to 1000.
In sharp contrast, Qantas' nemesis Virgin Australia has grown its workforce from 6400 to more than 9500.
When Joyce took the top job five years ago, he had an $8 billion merger deal on the table with British Airways. The deal had been brokered by his predecessor Geoff Dixon and if it had gone ahead Qantas would have had 55 per cent and British Airways 45 per cent. Clifford would have been chairman and Willie Walsh would have run the merged entity, with Joyce the boss of the Australian enterprise.
Joyce decided to harpoon the deal and, later, British Airways joined forces with Spain's Iberia airline to create Europe's third-biggest airline. The rest is history.
If Joyce had done the deal with British Airways, things might have been different. Instead, he finds himself battling Virgin Australia, which has resulted in a fare war and the resultant sacrificing of profits to protect Qantas' 65 per cent market share.
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 attain disproportionately high market shares. The high-margin corporate market flies with carriers that offer the most flights, lounges and loyalty programs.
The 2006 report said management needed to move on from the theory: ''The S-curve principle has been hard wired in the heads of many network planners for decades. Nevertheless, times are changing and airlines need to take stock of what does and doesn't work.''
Against a backdrop of woes and a tough competitor in Virgin Australia, which has just raised $350 million in fresh equity, Qantas has backed itself into a corner and is left to blame its predicament on an unlevel playing field. If it does not get a handout from the government it will be forced to rethink its S-curve obsession and back down on the excess capacity it is pouring into the market.
Virgin's key shareholders - Singapore Airlines, Etihad and Air New Zealand - have sent a strong message to Qantas that they back Virgin and its boss John Borghetti in his quest to reinvent the airline from a low-cost carrier to a full-service airline. They are also not about to go away. They see Virgin as an investment. Two of the three are listed companies whose masters are their shareholders.
At some stage Virgin will be kicked out of the S&P/ASX 200 Index as its free float is already below the 30 per cent threshold. That, combined with creeping rules, suggests that within the next year Virgin will be removed from the stock exchange, which will make it harder for Qantas to know how it is going.
The battle between the two airlines has cost both a fortune. Virgin posted a $150 million pre-tax loss for the year and Qantas is likely to post a full-year loss of $800 million, or more.
It has prompted calls for the heads of Joyce and the board. But Clifford shrugs it off. ''I have a scrapbook full of that,'' he says.
Read more: Trapped in a downward spiral, Qantas is fighting for its life as it slashes jobs and seeks to save billions in costs
My bolding.
Call for help: Leigh Clifford warns Qantas is in serious strife. Photo: Bohdan Warchomij
For Qantas chairman Leigh Clifford, free markets are good for everyone except the national carrier.
Hours after Qantas hollered for government help after revealing it would lose up to $300 million in the first half of the year, Clifford stood on the podium at the annual dinner for the conservative HR Nicholls Society and warned the airline was challenged.
Less than 12 hours later, the airline would be in a trading halt as credit ratings agency Standard & Poor's downgraded its credit rating to junk and its main shareholder Capital Group, which has stood with it through thick and thin, reduced its stake from just more than 10 per cent to 8.9 per cent.
If the share price falls below $1 there is talk it might attract hedge funds or private equity to form a consortium and attempt to buy the airline and its many parts to bust it up.
It seems hard to believe that a few weeks ago Qantas was in the market buying back its shares. Even harder to reconcile is that in August it was telling shareholders: ''We have many reasons to be optimistic. Our structural advantages as a group remain … And we have the right strategy for a bright, successful future.''
Speaking to an audience of like-minded economic purists, Clifford reconciled his views with the cries for help from Qantas boss Alan Joyce by saying the aviation industry is ''a little different … A purist can say let the market rule, but the airline industry is a little different and it is vital to Australia that it has a national carrier that is available and in times of crisis it is able to respond and evacuate people, as it did in the Middle East, Tripoli and Bangkok.''
The problem with this argument is it smacks of vested interest. The car industry, grain industry, mining industry and manufacturing all believe they are ''a little different'' and should be treated accordingly. In other words, turn to Canberra for a helping hand.
Qantas and aviation are not different from other industries. In Europe, many countries have realised the era of national carriers is over as the European Union has emerged.
But Clifford is right when he says Qantas is pressured. Besides the huge losses, the need to slash another 1000 staff and seek a further $2 billion in cost cutting over the next three years, it has been forced to look at all options to shore up its balance sheet.
This is speculated to include the partial or full sale of assets including its frequent flier business, its freight operation, the sale of equity in aircraft and the sale of its terminal at Sydney Airport, all of which could release billions of dollars to the airline.
The problem with this is it is ill-timed and smacks of desperation. All year the sharemarket has been strong and has had a good appetite for floats, yet Qantas has sat idly instead of getting ready to offer its frequent flier business. Now, when it is on the back foot, and has called on the government for help, it says it will look at ''all options''.
The brutal reality is Qantas could have raised equity when its share price was trading at $1.80 in April, instead of the $1.07 it closed at before being placed into a trading halt ahead of the S&P downgrade. Now, it has closed off that door unless it virtually gives the equity away. After the trading halt was lifted, the shares started to fall towards $1 a share.
But the downgrade is a body blow. If Moody's follows suit, it will reinforce the impact. On Thursday night, it placed its credit rating under review.
Until now, Qantas was one of three airlines in the world with the coveted investment-grade status. Now, there are two. From a financial perspective it increases the cost of Qantas' debt by a speculated $150 million, at a time when the carrier is facing potential full-year losses of $800 million.
Worse still, it has to place funds received for credit card bookings into restricted accounts. It can access the money only when the flight is taken.
It also raises questions whether there will be any impact on its frequent flyer business.
Clifford believes the Qantas Sales Act contributes to an unlevel playing field. He says: ''Australia is one of the most open markets in the world for airlines to operate. You can be 100 per cent foreign-owned and operate in Australia.''
Indeed, it is one of the issues the company has raised with the government. The sales act prevents foreign ownership of the airline creeping above 49 per cent and prevents a single foreign airline owning more than 25 per cent.
Clifford and Joyce are right, the act is antiquated, but it is questionable whether the airline would attract more foreign interest if the law was changed. Currently, no foreign airline has an investment in Qantas, and foreign investors have not reached the 49 per cent limit. As of last week, foreign investors held an estimated 40 per cent of the stock.
Qantas announced a major alliance with Emirates in September 2012, which resulted in it cutting ties with British Airways and Air France. It has also shed many staff, despite a comment by Joyce in November 2012 that he ''can absolutely say that this [Emirates partnership] is not going to be a risk to employment at Qantas''.
In August 2012, Qantas announced plans to cut 2800 jobs, weeks before putting the final touches to the Emirates alliance. It announced a further 300 staff cuts in November 2013 and, in December, said that figure would blow out to 1000.
In sharp contrast, Qantas' nemesis Virgin Australia has grown its workforce from 6400 to more than 9500.
When Joyce took the top job five years ago, he had an $8 billion merger deal on the table with British Airways. The deal had been brokered by his predecessor Geoff Dixon and if it had gone ahead Qantas would have had 55 per cent and British Airways 45 per cent. Clifford would have been chairman and Willie Walsh would have run the merged entity, with Joyce the boss of the Australian enterprise.
Joyce decided to harpoon the deal and, later, British Airways joined forces with Spain's Iberia airline to create Europe's third-biggest airline. The rest is history.
If Joyce had done the deal with British Airways, things might have been different. Instead, he finds himself battling Virgin Australia, which has resulted in a fare war and the resultant sacrificing of profits to protect Qantas' 65 per cent market share.
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 attain disproportionately high market shares. The high-margin corporate market flies with carriers that offer the most flights, lounges and loyalty programs.
The 2006 report said management needed to move on from the theory: ''The S-curve principle has been hard wired in the heads of many network planners for decades. Nevertheless, times are changing and airlines need to take stock of what does and doesn't work.''
Against a backdrop of woes and a tough competitor in Virgin Australia, which has just raised $350 million in fresh equity, Qantas has backed itself into a corner and is left to blame its predicament on an unlevel playing field. If it does not get a handout from the government it will be forced to rethink its S-curve obsession and back down on the excess capacity it is pouring into the market.
Virgin's key shareholders - Singapore Airlines, Etihad and Air New Zealand - have sent a strong message to Qantas that they back Virgin and its boss John Borghetti in his quest to reinvent the airline from a low-cost carrier to a full-service airline. They are also not about to go away. They see Virgin as an investment. Two of the three are listed companies whose masters are their shareholders.
At some stage Virgin will be kicked out of the S&P/ASX 200 Index as its free float is already below the 30 per cent threshold. That, combined with creeping rules, suggests that within the next year Virgin will be removed from the stock exchange, which will make it harder for Qantas to know how it is going.
The battle between the two airlines has cost both a fortune. Virgin posted a $150 million pre-tax loss for the year and Qantas is likely to post a full-year loss of $800 million, or more.
It has prompted calls for the heads of Joyce and the board. But Clifford shrugs it off. ''I have a scrapbook full of that,'' he says.
Read more: Trapped in a downward spiral, Qantas is fighting for its life as it slashes jobs and seeks to save billions in costs
My bolding.
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Vorsicht
Precisely with the situation at Virgin JB can achieve what he desires to do like you mentioned - to burn Qantas and the CEO to ground. With cash injections like this he does not really have to worry about the sustainability of Virgin the way AJ has with Qantas? Not to mention that the fundamental problems are indeed there for Qantas like it or not - Australia not being a world hub like Singapore or Emirates, Qantas has a significantly higher cost base... Etc.
I agree with your point, but I am not convinced that if we swap AJ and JB's shoes with each other AJ would not be able to do what JB has done today.
I agree with your point, but I am not convinced that if we swap AJ and JB's shoes with each other AJ would not be able to do what JB has done today.
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Point taken but what has me confused with the level playing field smokescreen is that unless Joyce is hoping to find a benefactor (as JB has done) that is willing to fund massive losses until EY, SQ and NZ give up, he has to make the Company profitable. Pinning his hopes on a white knight arriving through changes to the QSA are probably all he has left, but it's unlikely he will find one that is willing to take on the deep pockets of Abu Dhabi and Singapore.
Selling the furniture is just a stay of execution, or perhaps a double bluff that if he refills the coffers through asset sales he will continue to fight the war of attrition, but that would be a massive gamble against the Virgin Shareholders.
The only way out is through profitability. Decreased capacity and increased yield.
The other aspect that I find interesting is the different strategies that JB and Joyce are following. JB is improving the product to attract market share, mostly in the high yield sectors. Joyce on the other hand has decided to maintain market share through increased capacity, with seemingly not as much emphasis on product.
JB's shareholders have backed his strategy by putting their money where their mouths are, time will tell if Joyce gets the same support.
Selling the furniture is just a stay of execution, or perhaps a double bluff that if he refills the coffers through asset sales he will continue to fight the war of attrition, but that would be a massive gamble against the Virgin Shareholders.
The only way out is through profitability. Decreased capacity and increased yield.
The other aspect that I find interesting is the different strategies that JB and Joyce are following. JB is improving the product to attract market share, mostly in the high yield sectors. Joyce on the other hand has decided to maintain market share through increased capacity, with seemingly not as much emphasis on product.
JB's shareholders have backed his strategy by putting their money where their mouths are, time will tell if Joyce gets the same support.
Last edited by Vorsicht; 7th Dec 2013 at 20:12.
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Dream 747, are you saying that AJ could've done the same as JB? You are kidding, aren't you? If AJ had taken the VA job, it would still be VB, that is, if it existed at all now......(Very, very, unlikely.) His record at QF speaks for itself...... Had JB been given the QF job? QF would be a lot stronger than it appears to be today. The difference is mindset and playing to your strengths. JB does, and AJ spouts his low cost mantra. At a full service airline...... Part of the reason JB has been able to get airlines like Etihad, Singapore, and ANZ to the table to benefit VA is because of his contacts and business sense. Do you really think AJ has the same ability? Not that I blame AJ alone. The board have a lot to answer for here, too. Maybe more. While the structure and costs of the QF mainline structure aren't the greatest, throwing millions after millions at Asian windmills was never going to work. Wasted money, and he's managed to alienate pretty much every employee he has.
Is JB perfect? No sireee Bob. But he gets how the industry and business has to work. I don't think AJ does.
Is JB perfect? No sireee Bob. But he gets how the industry and business has to work. I don't think AJ does.
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another active forum i'm on (nothing to do with aviation) has a wide cross section of aus participants. all talk about holden, ford, toyota, graincorp etc. not one mention of qf. doesnt even register
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.....way out is through profitability. Decreased capacity and increased yield.......
Unfortunately, much, much harder to achieve than to articulate – especially given the circumstances QF has got itself into.
Nevertheless, airlines elsewhere have faced just as big, or even bigger challenges and pulled through OK.
Holy Grail is how does Qantas, rejig its strategy and fund a new business plan requiring a productive and engaged workforce?
The sooner the Board and the Institutional Shareholders 'kick start' the process, the greater the chances of survival I reckon.
Government can only help those who help themselves.
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While comparing performance between AJ and JB suggest you think about what was promised and what was delivered.
If anyone wants to attract investors then it is fundamental that there is some credibility and totalling blindsiding the govt for an egotistic manufactured crisis and Red Q alone should be enough to make any potential investor unsettled for a very long time.
If anyone wants to attract investors then it is fundamental that there is some credibility and totalling blindsiding the govt for an egotistic manufactured crisis and Red Q alone should be enough to make any potential investor unsettled for a very long time.
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A fundamental problem human beings have is we are "good" at seeing maximisation, we are not so good at seeing "optimisation".
Couple that with the fabled "S-curve" airlines seem to believe is the Holy Grail and you start to see why QF want to protect their market share at all costs. Above 65% the profit improvement plateaus on a return for market share basis because it costs so much to obtain that additional share, just below 65% there is a very steep growth in profitability as the fixed costs required to run the airline have been covered and there is a section where pure profit growth occurs on a marginal basis per growth in market share.
Not certain I believe it, seems a little to neatly "Consultant Packaged" to be believed as strongly as certain elements do but it is, and has, been a key driver of the airline industry (in Australia a least) for a long time. Protect that 65% share at all costs until your competitor goes away. The alternative is to shrink the airline.
Those calling for AJ to leave because he is cutting jobs need to realise that his appetite for market share is what is keeping as many jobs around as there are, if he was happy to focus on percentage profitability then he would simply have to slash 10,000 jobs, not 1,000 and outsource the balance.
And if you want the QSA repealed make sure you check what that would really mean. Section 7 for instance requires facilities used in aggregate to be in Australia. You sure you want that repealed? Would certainly help to make QF profitable but beware the cost of how that would be achieved.
Couple that with the fabled "S-curve" airlines seem to believe is the Holy Grail and you start to see why QF want to protect their market share at all costs. Above 65% the profit improvement plateaus on a return for market share basis because it costs so much to obtain that additional share, just below 65% there is a very steep growth in profitability as the fixed costs required to run the airline have been covered and there is a section where pure profit growth occurs on a marginal basis per growth in market share.
Not certain I believe it, seems a little to neatly "Consultant Packaged" to be believed as strongly as certain elements do but it is, and has, been a key driver of the airline industry (in Australia a least) for a long time. Protect that 65% share at all costs until your competitor goes away. The alternative is to shrink the airline.
Those calling for AJ to leave because he is cutting jobs need to realise that his appetite for market share is what is keeping as many jobs around as there are, if he was happy to focus on percentage profitability then he would simply have to slash 10,000 jobs, not 1,000 and outsource the balance.
And if you want the QSA repealed make sure you check what that would really mean. Section 7 for instance requires facilities used in aggregate to be in Australia. You sure you want that repealed? Would certainly help to make QF profitable but beware the cost of how that would be achieved.
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It has prompted calls for the heads of Joyce and the board. But Clifford shrugs it off. ''I have a scrapbook full of that,'' he says.
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Those calling for AJ to leave because he is cutting jobs
need to realise that his appetite for market share is what is keeping as many jobs around as there are, if he was happy to focus on percentage profitability then he would simply have to slash 10,000 jobs, not 1,000 and outsource the balance.
need to realise that his appetite for market share is what is keeping as many jobs around as there are, if he was happy to focus on percentage profitability then he would simply have to slash 10,000 jobs, not 1,000 and outsource the balance.
- Pulling out of Frankfurt when it had load factors above 90%
- Handing the Adl and Per routes to Europe to Emirates
- Giving profitable Hnl sectors to Jetstar
- Blowing an additional $60m on Jetstar Japan because the wages bill could not be met
- Pretending he could break into the Hkg market forgetting that the Chinese know a fair bit about business themselves
- Red Q
- Spending what I have heard to be $200m on the new head offices in Syd
- Putting Jetstar fuel bills on Qantas
- Routing Qantas European customers through the sand pit
- Putting 8 hour delays in between the two Aus-Lhr sectors whilst pax sit in the sand pit
- Assuring that none of the Sin flights line up with viable connections
- Blowing $200m when he grounded the fleet wondering why many of these customers have not returned
- Running big boozy parties such as the one in Dubai for Politicians, some union leaders and his circuit of celebrities
- Driving the share price down from $3.50 to $1
- Delivering junk status to the Qantas credit rating
- Never once providing dividends to shareholders
- Telling people that new aircraft do not require as much maintenance
- Closing Avalon maintenance saying that there is not enough work when there is so much work that they would need to employ more people to complete it all
- Employing flight attendants in Thailand at $100 a week through labour hire outfits owned fully by Qantas
- Lying to people like me (said he would treat employees better than Geoff Dixon did)
- Handing the new 787 aircraft to Jetstar whilst the premium Qantas pax are still flying around in 767s
- Running 90% of the Groups advertising on Jetstar
- Allowing Jetstar pax to use the Qantas lounges and not charging Jetstar for the privilege
- Knowingly breaching workers contracts because the fines are less than the money he thinks he is saving (see ALAEA v Qantas Fed Court Oct 2013)
- Buying A380s in the wrong configuration
- Giving Jetstar the new A330s and returning them to Qantas when heavy maint checks are due
- Jetstar Pacific based in Vietnam, never turning a profit
- Jetstar Asia based in Sin, only marginal profit because they leased planes back to the Qantas Group
- Sooking like a girl when another carrier does exactly what he is trying to do in countless other Asian countries
- Adding managers in the same sections where he is making employees redundant
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The rationalist response to that SP is there will be far more cost cutting and outsourcing if QSA goes away and QF focusses on domestic only.
Outsource everything to do with International, heck, run the thing entirely out of Dubai after EK buy it. Keep all the feeder network domestically and let the long hour higher cost sections be handled by the $100 a week Thai flight crew you mentioned.
Fly the 73X and 320 fleet to Air NZ for work. Short hop, effectively a domestic route in most people's eyes anyway. That is even worse than the previously proposed regional solution where one did 73 work and the other 320s.
Outsource all terminal staff to cheaper competitors, same wages will be paid but benefits like staff travel etc disappear.
Management also disappears to a great extent, all you need are purchasing officers and contact administrators to ensure the subcontractors deliver.
Maintenance on demand, LAMEless tarmac, all those things will happen in as close to no time at all as they can possibly do it.
That optimises the profitability, at least in a spreadsheet. And do you think a new team free of QSA would listen to "we can make it better internally" or would they go "you lot have had forever and you've ballsed it up so now we're outsourcing"?
Outsource everything to do with International, heck, run the thing entirely out of Dubai after EK buy it. Keep all the feeder network domestically and let the long hour higher cost sections be handled by the $100 a week Thai flight crew you mentioned.
Fly the 73X and 320 fleet to Air NZ for work. Short hop, effectively a domestic route in most people's eyes anyway. That is even worse than the previously proposed regional solution where one did 73 work and the other 320s.
Outsource all terminal staff to cheaper competitors, same wages will be paid but benefits like staff travel etc disappear.
Management also disappears to a great extent, all you need are purchasing officers and contact administrators to ensure the subcontractors deliver.
Maintenance on demand, LAMEless tarmac, all those things will happen in as close to no time at all as they can possibly do it.
That optimises the profitability, at least in a spreadsheet. And do you think a new team free of QSA would listen to "we can make it better internally" or would they go "you lot have had forever and you've ballsed it up so now we're outsourcing"?
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I will be doing all I can to make sure the QSA remains in place. I hope AIPA are smart enough to understand the implications of its removal also.
The real problem needs to be addressed. Woeful mismanagement.
The real problem needs to be addressed. Woeful mismanagement.
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Why has an extraordinary meeting of shareholders to call for resignations of ceo and board not been called for?…can it be that that everyone is happy with the status quo or has at least inside knowledge of what is about to happen..anyone like to speculate?
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Networks involvement.
Although no way near as big as Jetstar I wonder what the cost impost of Network Aviation is on Qantas.
The gift of 12 F100 aircraft and the current mentality of winning contracts at all costs (ie; quoting at less then cost just to stop competitors getting the work). To allow this they must be supported financially by the group.
Maybe that is one of the non core assets that could be sold off!
The gift of 12 F100 aircraft and the current mentality of winning contracts at all costs (ie; quoting at less then cost just to stop competitors getting the work). To allow this they must be supported financially by the group.
Maybe that is one of the non core assets that could be sold off!
Has anyone considered that the big shareholders may actually be happy with AJ's performance and that they 'believe' in his strategy and plans going ahead. This would seem to be the only explanation for the lack of action from the Shareholders.
Join Date: Dec 2013
Location: Hunter Valley NSW
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First time I have ever agreed with Bowen, or indeed the Labor Party, in my life. The present Govt. needs to be showing doing something, like a cash injection of some sort, to convince other investors, QF is worth saving. Either that, or ending, or loosening, the foreign investment policy. To do nothing is fatal to the company, one way or another. Oh, and they should ask for the resignation of the present board and management, as part of the deal. Without doubt.