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

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

Old 5th Mar 2014, 12:09
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Alan's cost reduction strategy is nothing new.

He's following Geoff Dixons strategy that didn't work anyway.

Lets cast our minds back to Geoff Dixon's 5 year 'Sustainable Future Program'.

The year is 2006, GD announced a plan to ensure the future success of the Qantas Group.

Australian Airlines (Cairns) was still operating a Jetstar with a small domestic fleet was yet to expand Internationally.

Qantas mainline held 31% of International market share.

Jet fuel prices where high & the airlines fuel costs where up $1.1 Billion on the previous year, an increase of 45%. An increase of $1.1 Billion in fuel costs was also forecast for the next full year.

Qantas had yet taken delivery of its first A380. However GD had declared it was the "optimum aircraft for hub flying"

The Chairwomen Margaret Jackson had stated the "fundamentals were strong" although there had been a 30% decrease in profit since the previous year. She would also go on to declare we have "the right aircraft for the future"

Jackson would also highlight the issues facing Qantas as an "end of the line carrier" & the immense pressure from expanding Asian & Middle Eastern Carriers.

The company was also sitting on $2.9 Billion in the bank.

Dixon's plan would see costs reduced by $1.5 Billion over the following 5 years.

Dixon had just reduced costs by $501 Million over the previous year. He'd been busy 'transforming' the engineering business into "worlds best practice efficiency"

Business segmentation was Dixon's plan. Each business unit would operate as individual silos to further reduce costs within the business. These individual businesses would allow greater transparency & clarity for each unit. Dixon would further declare each business unit must "stand on its own".

The 'Sustainable Future Program' would see the introduction and aggressive growth of Jetstar International.

A further reduction of 1000 staff numbers, there had already been 1250 management positions axed the previous year. The program would ensure the remaining 37,000 jobs at Qantas were protected.

The domestic dominance would be maintained with an aggressive focus on market share.

Qantas would pursue opportunities in Asia in the LCC market, which we would later see as Red Q and the expanding Jetstar franchises.

Where am I going with this?

Qantas has experienced a disastrous strategy over nearly 10 years.

A sustainable future program has done nothing but shrink the core airline business in the pursuit of fortunes elsewhere.

Joyce's structural review is nothing new. Its the same strategies used by Dixon. Axe staff, transform the business to worlds best efficiency practice, reduce costs and talk up the performance of the management and board.

Dixon & Jackson flagged high fuel prices, foreign competitors & end of the line carrier issues 8 years ago.

They have had 8 years to fix these issues and still nothing is done.
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Old 5th Mar 2014, 12:11
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Steve, if that's the case, why are they winding it back? If it were a cash cow it'd be expanded or at least maintained.

The reason the company has expanded Jetstar international is because it loses less than Qantas from what I understand.





They are winding International back so they can manufacture a loss and go cap in hand to the Gov't to change the Sale Act. It is deliberate.


Jetstar only make a small profit because Qantas are billed for Jetstar expenses.
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Old 5th Mar 2014, 14:38
  #3183 (permalink)  
 
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Ladies and Gentlemen, I present to you the end of Alan Joyce.

No one can continue after all this. Probably the sad part is Alan is the sacrificial lamb where it's also Clifford that should be taking a long walk off a short pier.

Anyway, one gone soon and a few more to follow.

Qantas chief Alan Joyce says airline now `extremely healthy'
ANTHONY KLAN AND ANDREW WHITE THE AUSTRALIAN MARCH 06, 2014 12:00

QANTAS chief executive Alan Joyce has started to reverse his rhetoric
dramatically on the future of the airline, playing down concerns about the national carrier's viability following the government's rejection of its plea for a debt guarantee.

Now Mr Joyce says the airline is "extremely healthy", just four months after warning of its possible demise.

Cookies must be enabled. | The Australian
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Old 5th Mar 2014, 14:48
  #3184 (permalink)  
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What? Hang on? I really don't understand.!! I think he may have really lost it. A day ago he wanted 3 billion, now everything is ok? He gas to go, if only for the sake of his own health.
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Old 5th Mar 2014, 14:53
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by mickjoebill; Acquire another airline to make the economies of scale work?
Hard to argue on face value until you consider the "symptom of the cause," QI was deliberately run down in favour of the Jetstar model.. Dixon started it, but AJ has been there long enough to do something about it, it is my view he accelerated the decline of QI under his watch.

Clearly Oz wages are not competitive, so servicing aircraft from other airlines doesn't stack up?
The Oz dollar is down roughly 10% since the closure of Avalon was first hinted..

The Dixon, Joyce, Jackson & Clifford combo has left QI with not enough suitable new airframes for it to have any chance of competing. Basically QI has been destroyed and urgently needs a new management team before it's too late, in my humble opinion. Another six months of this management team I fear not even superman will be able to reverse the decline. Clifford's dogged support for the strategy has also added to the mess we now see the Qantas group in. His airline experience is limited to Qantas as are some members on the board, clueless, otherwise Qantas would not be in the mess we see it in today. The board is responsible and the Abbott government so far are letting them off the hook, again my view only. here http://youtu.be/cWgyIyJAVnc



MC's wonderful post above explains things much better I can..

There is something else going on though... I think the Elizabeth Knight is on to it,

Qantas mystery as one shareholder sells, the other buys


A year ago Qantas had two large shareholders - Franklin Resources and Capital Group. But these two giants of the global investment market have clearly taken different views on the prospects for the Australian national carrier. Franklin has virtually doubled its shareholding over the past year (accelerating this trend over the past couple of months) while Capital has almost halved its investment.

Capital's decision to sell down appears to be the correct strategy given the trajectory of Qantas' share price - which has fallen 40 per cent since last March.

What is more curious is why Franklin - and in particular its Australian associate, Balanced Equity Management - has taken the view that there was some hidden upside in Qantas that the rest of the market hadn't recognised.

Perhaps Franklin took the view that the government guarantee of Qantas' debt was a bagged deal. Or perhaps it thought Qantas was likely to float its frequent-flyer business - either of these outcomes would have provided some positive momentum to Qantas' share price.

Its worth noting that despite comments by Treasurer Joe Hockey a few weeks ago that the debt guarantee was being actively considered and Qantas might be a ''special case'' when it came to government help, Virgin boss John Borghetti said that in his conversations with numerous ministers he was not given the impression the help was a ''done deal''.
Had the government suggested this was the likely outcome he would not have wasted time on conversations with Canberra.

The part-sale of Qantas' Frequent Flyer was a possibility floated by the company at the end of last year, but did not form part of the strategic change agenda outlined by Qantas last week. Instead, Qantas confirmed the sale of its Brisbane terminal and the sacking of 5000 positions - without any information on where these cuts could come from. And analysts are now questioning how Qantas will be able to cut $2 billion from its costs based on the information it has outlined to date. Had Qantas tackled the revenue issues, maybe the market would have been more assuaged.


The potential lifting of the foreign investment restrictions in the Qantas Sale Act are near-impossible to get through the Senate and are at best a poor third prize for Qantas. And more significantly the rhetoric from Alan Joyce on Wednesday in his speech to the Australia Israel Chamber of Commerce was that Qantas would not budge from the market share-induced capacity war and the 65 per cent line in the sand was safe under his stewardship. He said he had the support of shareholders and the board.
Now all the major business writers are showing signs of digging deeper than ever before which is not before time...

.

Last edited by TIMA9X; 5th Mar 2014 at 22:18. Reason: include link to the Canberra debate on the Qantas issue of the day
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Old 5th Mar 2014, 15:10
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A couple of interesting observations for me over the last few days:

1. After years of supporting Labor policies and thinking it might leverage back room demands from the new gov. based on corporate size and bully-boy tactics, Qantas is getting a public black eye from the Lib/Nats to toe the line and keep out of the affairs of government. Special access to the corridors and ears of Canberra will not be available under the Lib/Nats. Take the whining about unions and employee costs elsewhere. Every other company has the same issues and Qantas isn't special. (:0 (Hand clapping.)

2. Any inquiry into Qantas proposed by the Libs/Nats is a transparent threat directed at Qantas and I doubt any further action will eventuate. Significant and irreversible damage to brand names can be accomplished with relative ease during a drawn out government inquiry even if there is nothing illegal to be discovered. (Some might argue: even better!) Hints and innuendos can be used to wonderful effect at an inquiry and the media loves it. Surely Qantas management isn't stupid? :P

Message: Stand on your own two feet Joyce and Clifford. No more sympathetic government ear. (Sounds of raucous applause and cheering from the stadium!)

If it hasn't done so already, the Qantas board surely must be starting to realise that Joyce's strategies of cost cutting and union confrontations followed by media swooning, have been far more damaging than beneficial. When it steps back for a holistic view, the board might notice that cost cutting and bluster is all Joyce has in his bag of tricks. The rest is fluff. There's nothing else. I doubt Joyce and to a lesser extent, Clifford, have much in the way of business or political credibility remaining with which to advance the causes of Qantas. I wonder when the board will take action: forced, if necessary.

Last edited by Lodown; 5th Mar 2014 at 16:05.
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Old 5th Mar 2014, 16:01
  #3187 (permalink)  
 
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I sincerely hope '5000 jobs' was not chosen simply as a big enough round number to try to force the Govt into giving a spoilt little brat what he wanted (more cash to boast about his brilliance).

'5000' concerns me because it appears unplanned, meets no strategic ideal and seems to be at best a back of envelope calculation.

Please let nothing like that be the truth.
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Old 5th Mar 2014, 16:04
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Lyell Strambi, Simon Hickey and Matt Lee. Gawn p!ss off your out. And don't let the door hit your butt on the way.
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Old 5th Mar 2014, 16:32
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I sincerely hope '5000 jobs' was not chosen simply as a big enough round number to try to force the Govt into giving a spoilt little brat what he wanted (more cash to boast about his brilliance).

'5000' concerns me because it appears unplanned, meets no strategic ideal and seems to be at best a back of envelope calculation.

Please let nothing like that be the truth.
V-jet,
It appears that this number was a suitable number that management came up with to shock the government into a debt guarantee. Their bluff has been called and they(management) have lost.

This is how low this little prick is that he would sacrifice and stress thousands of Australian jobs and families to try to win his own personal game of chess.

Today, to now state all things are healthy, well do I need to state the obvious?

Joyce is finished.
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Old 5th Mar 2014, 16:49
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It took me a while to think that through enough to convince myself it might be the case. It was a pretty nasty and potentially inflammatory criticism to make.

If that really is the case (and I really cant see any other likely reason) then I am appalled. I am desperately sorry for all who are affected, which, I suppose is everyone at Qf in one way or another.

Please let this nightmare end. It's not funny anymore.
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Old 5th Mar 2014, 16:58
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So all the announcements yesterday afternoon.........everyone can read them but the bottom line is they have chopped level 2 but all the direct reports to the CEO remain. So in other words, the people responsible for our 'strategy' etc and getting us into the mess are safe, they are just sacking people below me.

You would think they should be addressing the problem - clearly they aren't. Look after yourselves but sack people below you.

That'll do me.
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Old 5th Mar 2014, 18:40
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Lyell Strambi, Simon Hickey and Matt Lee. Gawn p!ss off your out. And don't let the door hit your butt on the way.
Did I miss something, where did these two get a mention of being sent on there way?
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Old 5th Mar 2014, 20:20
  #3193 (permalink)  
 
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QF Management

Chief Pilot
Today we have announced changes to the top levels of our organisational structure as part of our transformation program.

We have made the decision to maintain separate business structures for Qantas International and Domestic due to the unique strategic challenges we all know these businesses continue to face. However, I can confirm that we have decided to put on hold our application to obtain a separate AOC for Qantas Domestic as a conservative measure to limit the amount of operational change as we move along the transformation process. The work done to date will be saved so that we can pick up where we left off should we decide to go down this path in the future.

As a result of this, the Flight Operations department will report to a single Chief Operating Officer supporting both the International and Domestic businesses as a shared function. This will also assist with our cost reduction goals and deliver efficiencies through our shared services.

Mid-year, Andrew David, currently Executive Director Jetstar will commence in the role of COO for Qantas Airlines. Andrew has extensive aviation experience in Australia and overseas, having also worked for Air New Zealand, been Chief Operating Officer for Virgin Australia and CEO of Tigerair.

As a result of these changes, the roles of Peter Wilson (COO International) and Matt Lee (COO Domestic) will be impacted. Peter has agreed to remain on as the Accountable Manager for the AOC and will work with Andrew when he begins to transition into the COO role. Matt will be leaving Qantas with his last day being 15 March. I know more will be said, but I’d like to acknowledge and thank Matt for the tremendous contribution he has made to Qantas and our Flight Operations department.

Work will continue on transformation throughout the Group. The timeline will vary based on department and role. We must remain focused on our safety, operations, and service for our customers through this transformation. As I wrote yesterday, we’re not expecting a new flying program until later this month, this will give us a clearer view of our pilot requirements. Any required changes will be in accordance with the various industrial agreements and in consultation with AIPA.

I appreciate your dedication and professionalism through this period of change, and I know, as always, each of us will continue to focus on our customers by maintaining a safe and efficient operation.

I will continue to provide further updates as more information comes to hand.


What a JOKE!!!!!
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Old 5th Mar 2014, 20:24
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Rumour around Cairns this morning Strambi and Hickey have resigned.
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Old 5th Mar 2014, 20:33
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V-Jet:

Occam's razor - Wikipedia, the free encyclopedia

I agree with you.
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Old 5th Mar 2014, 20:39
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I hope the same degree of integrity, openness & honesty is afforded to a particular senior manager departing the Group.


It would be terrible news for him/her to learn of his/her departure by an incorrectly addressed email as experienced by some of his/her former staff.

MC.
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Old 5th Mar 2014, 21:01
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Andrew David to COO

Interesting move, Borghetti sacked him twice. Once from Virgin and once from Tiger, and he didn't waste any time doing it either.

What a change of fortune where Qantas are employing failed execs from Virgin. Who would have ever predicted that?

This self destructive path Joyce is on really is going to destroy some lives and families before it is over and feel for those families, it is a f*%#en tragedy.

I recently dusted off Gordon Bethune's account of turning Continental around and how quickly he did it by engaging staff. That was a business that had only weeks to avoid bankruptcy. He asked staff to forgo pay-rises too, but in return he instigated profit share schemes and promised (and delivered) industry leading salaries when the business returned to profitability.

Stark contrast to Joyce's plan to return to profitability. And Qantas is in nowhere near as much trouble as Continental was.
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Old 5th Mar 2014, 21:11
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Chief Pilot
Today we have announced changes to the top levels of our organisational structure as part of our transformation program.
Joke indeed. Imagine writing that stuff??

As per SDT above, it cannot be anything other than no-one has a clue! This is not a cheesecake shop, there are thousands of people's lives in Qantas' hands at any given moment and the powers that be produce that nonsensical, disorganised drivel as an official communique!

It takes raw panic at the top to create rubbish like that. There is no other explanation.

They are grabbing staff from anywhere whose experience may be that they once watched n aircraft take off. It is tragic, embarrassing and .... how could anyone, even in Flight Ops Management support such nonsensical garbage???? These are smart guys (and girls) - surely this is approaching the realm of the Chief Pilot saying 'STOP - this simply cannot go on!'

For the love of god/allah there has to be someone with some idea somewhere who can pull out of this death spiral!
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Old 5th Mar 2014, 21:19
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Peter has agreed to remain on as the Accountable Manager for the AOC and will work with Andrew when he begins to transition into the COO role
Might be hard to get the regulator to accept the accountable manager not being the coo or CEO?
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Old 5th Mar 2014, 21:28
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That's odd phrasing. Parsing it out, it sounds like he was about to walk. Correct me if I'm wrong here, but with this chaos in Flt Ops management is QF not skating on thin ice with CASA?
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