MERGED: Alan's still not happy......
Do the one thing you are good at and do it well.
What is the 'core business' of Qantas that BGA keeps talking about... Lounges? Jetstar? Outsourcing? - we know it certainly isn't Qantas....
f&*(^ing IDIOT!
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Growth is critical to any business because without it costs overrun the bottom line, the key is to make sure it is either strategic and contributes to the overall bottom line. The world is scattered with carcasses of failed companies who just got out of their depth trying to feed individual egos, satisfying analyst expectations or just trying to play a game for which they did not know the rules (eg Asia and China). Inevitably Board failures were critical to this happening but their motivations (positional power and belonging to the club) were different to the Execs (short term $$$ and ego).
How often has it been shown that offshore expansion failed because too high a price was paid, justified on the basis of unrealistic revenue/profit projections or because they were just plain dumb. Critically however the moves bought more time for Execs to try and pull an houdini act and line up their next gig whilst the cards imploded.
There is nothing new about Qantas. It is textbook failure stuff that was completely unnecessary, but at the end of the day books will be written about the reasons, everyone will gasp in horror, a few low level staff will be blamed and then history will repeat itself while they all forget the lessons of history as analysts and investment bankers look for their next bucket of cash.
It is not too late but the decision makers have no interest in changing what is happening and that includes Govt who have really set the tone in Australia recently and sent a message to every business leader.
How often has it been shown that offshore expansion failed because too high a price was paid, justified on the basis of unrealistic revenue/profit projections or because they were just plain dumb. Critically however the moves bought more time for Execs to try and pull an houdini act and line up their next gig whilst the cards imploded.
There is nothing new about Qantas. It is textbook failure stuff that was completely unnecessary, but at the end of the day books will be written about the reasons, everyone will gasp in horror, a few low level staff will be blamed and then history will repeat itself while they all forget the lessons of history as analysts and investment bankers look for their next bucket of cash.
It is not too late but the decision makers have no interest in changing what is happening and that includes Govt who have really set the tone in Australia recently and sent a message to every business leader.
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How often has it been shown that offshore expansion failed because too high a price was paid, justified on the basis of unrealistic revenue/profit projections or because they were just plain dumb. Critically however the moves bought more time for Execs to try and pull an houdini act and line up their next gig whilst the cards imploded.
What's that old saying,... "a picture is worth a thousand words.."
and to think the current board endorses Joyce to stay in his job. Corporate Australia is sick as is this current lot in Canberra.
What's that old saying,... "a picture is worth a thousand words.."
It makes you sick.
Meanwhile..... In Byron Bay....
It makes you sick.
It makes you sick.
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I've tried to track down a source for my comment about Australia's manufacturing competitiveness without any luck, so take that statement with a grain of salt. Had I been listening more closely to the radio show, I would have been better prepared, but I was casually listening to the discussion until the mention of Australia compared to the USA was made at the end.
ohallen:
Lodown:
There are a number of perennial myths that are regularly trotted out about the dim prospects of doing business in Australia. They revolve around size and economy of scale. Then there is the one about high Australian labour costs. Then there is the one about lack of growth and small markets. All of them are poppycock.
Did you know that the world leader in tobacco processing equipment is a privately owned company operating out of a Victorian country town? Did you know that the most sophisticated tool and cutter grinders are designed and made in melbourne, not to mention a host of other special purpose machinery? Guess which country makes the worlds most sophisticated mining equipment? What do you think happened when Kodak got out of the 35mm film market? Thats right, it guaranteed profits in perpetuity for its competitors.Laminating machines? Yep. Automatic tyre changing machines for huge mining trucks the list goes on.
A friend of mine makes very sophisticated tools, some of which you can see on the shelves at Bunnings, but a lot more goes into the aerospace and similar industries. His big break came when a certain now defunct public company announced it was getting out of the tool business because there was no money in it, leaving him as sole australian manufacturer. His clientele is now worldwide.
So rule number one: If someone is making a lot of money, they aren't going to trumpet it from the rooftops, they are going to moan about labour costs and taxes with the rest of them.
As for economy of scale, this is BS. The entire focus of manufacturing technology for the last Forty years has been to remove economies of scale and achieve an economic order quantity of 1. This is what the quality movement and just in time (kanban) manufacturing is all about. CNC machines can make a gearbox housing one minute and an axle the next there is little or no special purpose tooling. Furthermore Australian firms excell in quick change tooling because our markets are quite small by American standards and that has resulted in us getting series production work that is too small for Europe and America to bother with. These are called "niche markets" - like NZ manufacturing replica aircraft and engines.
As for labour costs, the competitive companies ive seen give the lie to that. Of course if we are talking totally unskilled mindless labouring its true, but you need to account for skills and efficiency first and then I don't believe the difference is signifigant.
Last but not least is the "growth" argument. It is axiomatic in business that a legacy manufacturing operation can be very profitable because all your competitors have given the game away, allowing you to charge what you like.
There are scads of these legacy businesses. Would it surprise you to know that shoe polish tins are used as containers in parts of Africa? Guess where key components are made? Tinned butter for tropical countries? Yep. Buggies for horse drawn transport... The list is endless.
Of course what is endless is the supply of stupid managers who don't understand where the real value of their product resides - witness Qantas.
Growth is critical to any business because without it costs overrun the bottom line, the key is to make sure it is either strategic and contributes to the overall bottom line
I've tried to track down a source for my comment about Australia's manufacturing competitiveness without any luck, so take that statement with a grain of salt. Had I been listening more closely to the radio show, I would have been better prepared, but I was casually listening to the discussion until the mention of Australia compared to the USA was made at the end.
There are a number of perennial myths that are regularly trotted out about the dim prospects of doing business in Australia. They revolve around size and economy of scale. Then there is the one about high Australian labour costs. Then there is the one about lack of growth and small markets. All of them are poppycock.
Did you know that the world leader in tobacco processing equipment is a privately owned company operating out of a Victorian country town? Did you know that the most sophisticated tool and cutter grinders are designed and made in melbourne, not to mention a host of other special purpose machinery? Guess which country makes the worlds most sophisticated mining equipment? What do you think happened when Kodak got out of the 35mm film market? Thats right, it guaranteed profits in perpetuity for its competitors.Laminating machines? Yep. Automatic tyre changing machines for huge mining trucks the list goes on.
A friend of mine makes very sophisticated tools, some of which you can see on the shelves at Bunnings, but a lot more goes into the aerospace and similar industries. His big break came when a certain now defunct public company announced it was getting out of the tool business because there was no money in it, leaving him as sole australian manufacturer. His clientele is now worldwide.
So rule number one: If someone is making a lot of money, they aren't going to trumpet it from the rooftops, they are going to moan about labour costs and taxes with the rest of them.
As for economy of scale, this is BS. The entire focus of manufacturing technology for the last Forty years has been to remove economies of scale and achieve an economic order quantity of 1. This is what the quality movement and just in time (kanban) manufacturing is all about. CNC machines can make a gearbox housing one minute and an axle the next there is little or no special purpose tooling. Furthermore Australian firms excell in quick change tooling because our markets are quite small by American standards and that has resulted in us getting series production work that is too small for Europe and America to bother with. These are called "niche markets" - like NZ manufacturing replica aircraft and engines.
As for labour costs, the competitive companies ive seen give the lie to that. Of course if we are talking totally unskilled mindless labouring its true, but you need to account for skills and efficiency first and then I don't believe the difference is signifigant.
Last but not least is the "growth" argument. It is axiomatic in business that a legacy manufacturing operation can be very profitable because all your competitors have given the game away, allowing you to charge what you like.
There are scads of these legacy businesses. Would it surprise you to know that shoe polish tins are used as containers in parts of Africa? Guess where key components are made? Tinned butter for tropical countries? Yep. Buggies for horse drawn transport... The list is endless.
Of course what is endless is the supply of stupid managers who don't understand where the real value of their product resides - witness Qantas.
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What these dimwits running QF fail to realise is an airline is part of the travel experience.
QF use to employ the Thai flight attendants based in Bangkok. They'd run these flight attendants between Thailand, Europe and Australia.
Pax use to get on an with a puzzled look, wondering why the cabin crew were Thai.
Part of the travel experience was an introduction to the culture they were about to visit on their Australian trip. Maybe a discussion on points of interest to visit at their destination.
All that was lost with the Thai cabin crew.
What made QF different was brand Australia & the morons running the joint thought they could 'copy' that with cheap Thai labour.
Once the product differentiation was gone, there was less a motivation for pax to choose QF.
MC.
QF use to employ the Thai flight attendants based in Bangkok. They'd run these flight attendants between Thailand, Europe and Australia.
Pax use to get on an with a puzzled look, wondering why the cabin crew were Thai.
Part of the travel experience was an introduction to the culture they were about to visit on their Australian trip. Maybe a discussion on points of interest to visit at their destination.
All that was lost with the Thai cabin crew.
What made QF different was brand Australia & the morons running the joint thought they could 'copy' that with cheap Thai labour.
Once the product differentiation was gone, there was less a motivation for pax to choose QF.
MC.
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Sunfish for Qantas CEO!
It might be a poisoned chalice, but with his incisiveness and inability to suffer fools gladly, you would think he would have all the makings of a great turnaround CEO!
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Fruet Mich, http://www.pprune.org/8482362-post4327.html hit the nail on the head a couple a days back with this post, and well said Sunfish...
I think Ben Sandilands hit a nerve yesterday on another front which is a must read,
Jetstar's NZ fail might mean more than gold for others | Plane Talking
and a back up what Sunfish has been saying for a long time now... just check the replies from the usual suspects defending AJ's J* dream which is slowly killing the Qantas brand, a view I have held for a long time now..
BA puts its budget airline Go up for sale - Business News - Business - The Independent
Seen it all before...
Some interesting reply snippets to Ben's story.. in fact, all of the replies interesting....
It appears the business cycle has turned against the J* off-shore ventures in all the markets propped up by Q.. something has got to give soon, it can't keep going the way it is, that's for sure..
.
I think Ben Sandilands hit a nerve yesterday on another front which is a must read,
Jetstar's NZ fail might mean more than gold for others | Plane Talking
and a back up what Sunfish has been saying for a long time now... just check the replies from the usual suspects defending AJ's J* dream which is slowly killing the Qantas brand, a view I have held for a long time now..
BA puts its budget airline Go up for sale - Business News - Business - The Independent
Seen it all before...
Some interesting reply snippets to Ben's story.. in fact, all of the replies interesting....
There are rumours circulating that things are grim in Singapore from pilots flying around Asia. A couple of years ago Jetstar Asia was being propped up by Jetstar in Australia to the tune of 20 million per year. Anecdotal evidence suggests the new Jetstar 787 service from Brisbane to Bali is bleeding big time with sub 100 passenger loads being the norm.
“Fewer than 1 per cent of Qantas’s shares are owned by individual Australians. More than 90 per cent of Qantas’s shares are owned by investment funds.”
.
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There are rumours circulating that things are grim in Singapore from pilots flying around Asia. A couple of years ago Jetstar Asia was being propped up by Jetstar in Australia to the tune of 20 million per year. Anecdotal evidence suggests the new Jetstar 787 service from Brisbane to Bali is bleeding big time with sub 100 passenger loads being the norm.
As well, the nature of the market most likely means that they wouldn't pay more for a 787.
Big brother QF on the other hand has clapped out 744 and 333 aircraft on the HKG/SIN runs and anecdotal evidence suggests that loads are hurting..
Imagine where QF would be if they were marketing these brand new 787s in mainline colours against SQ and CX.. to a market who is prepared to pay a price premium for service, safety and new aircraft.
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For all the reasons above and more, gifting the 787s to J* instead of using them to support the premium mainline international product must go down as one of the least intelligent decisions ever.
Oh wait, there's actually huge competition at Coward St for the least intelligent decision competition, I forgot.
Oh wait, there's actually huge competition at Coward St for the least intelligent decision competition, I forgot.
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All that was lost with the Thai cabin crew.
What made QF different was brand Australia & the morons running the joint thought they could 'copy' that with cheap Thai labour.
Once the product differentiation was gone, there was less a motivation for pax to choose QF.
What made QF different was brand Australia & the morons running the joint thought they could 'copy' that with cheap Thai labour.
Once the product differentiation was gone, there was less a motivation for pax to choose QF.
My little story along the same line..... a few years ago, london to singapore on the famous QF kangaroo route, got talking to the customer service manager who was london based. I was explaining where I lived by reference to well known spots like manly beach but the CSM said she didn't know where that was, surprised I asked her what places she did know in Sydney....her answer was none as she had never been to Sydney or indeed Australia.
Turns out there was not one aussie cabin crew on board and most had never been to oz.
I was having a cleanup on the weekend and came across the book,
The Longest Hop
Celebrating 50 Years of the QANTAS Kangaroo Route
1947 – 1997
After reading the above comments re, JQ, the 787 etc, I went back to find what I thought was interesting. Interesting in regards to what you guys and girls at QF have today as leaders, I think you might find interesting.
from page 42:
The Longest Hop
Celebrating 50 Years of the QANTAS Kangaroo Route
1947 – 1997
After reading the above comments re, JQ, the 787 etc, I went back to find what I thought was interesting. Interesting in regards to what you guys and girls at QF have today as leaders, I think you might find interesting.
from page 42:
Growing from the professional skills of McMaster, Fysh and McGinness was an experience in aircraft evaluation and an ability to understand and take advantage of the huge changes emanating from aviation technology after World War II. In many ways this defined the airline: being able to assess rival aircraft's designs and choosing the equipment most closely matched to the needs of Qantas while delivering safety, reliability and the resulting commercial success. This era that began with the selection of the Constellation ran through the choice of Boeing jets in the 1950s and the 747 family in the early 1970s. It drove home to Qantas that aircraft evaluation and the correct choice, regardless of political and other pressures that were so often brought to bear, were the key to success.
It was no accident that this clutch of professional skills, bringing together airmanship, engineering and hard-nosed commercial instincts, was to yield three future senior executives of Qantas: Captain ‘Scotty’ Allan, a deputy chief executive, Captain Bert Ritchie, a chief executive and Ron Yates, the first Australian graduate engineer to join the airline after the war, who succeeded Ritchie. They headed a strong and aggressive management team which developed from the earlier succession of the founder, (Sir) Hudson Fysh, to the chairmanship and the emergence of C O (later Sir Cedric) Turner as managing director.
It was no accident that this clutch of professional skills, bringing together airmanship, engineering and hard-nosed commercial instincts, was to yield three future senior executives of Qantas: Captain ‘Scotty’ Allan, a deputy chief executive, Captain Bert Ritchie, a chief executive and Ron Yates, the first Australian graduate engineer to join the airline after the war, who succeeded Ritchie. They headed a strong and aggressive management team which developed from the earlier succession of the founder, (Sir) Hudson Fysh, to the chairmanship and the emergence of C O (later Sir Cedric) Turner as managing director.
Fruet Mich:
A very simple and currently insoluble problem: Who is going to bell the cat?
The past and current Board and Senoir managment invested in the Jetstar strategic direction. The current CEO is the architect of Jetstar and arguably knows nothing but low cost carrier tactics anyway.
The simple fact is that anyone in QF management who questions that strategic direction is going to be fired or at best marginalised.
This is "group think" at its worst, they do not want to hear, they do not want questions or heart searching.
What happens next is either the sale of assets like the frequent flyer scheme to keep the strategy alive a little longer, or Alan has to go.
Qantas needs a change of direction at the top. Unfortunately, the management at Qantas strongly believe you can operate a low cost carrier in unison to your full cost carrier. It has been a total failure, no full cost/low cost airline has ever worked before, and is certainly never going to work here. You simply cannot expect your premium passenger to board a low cost carrier which has replaced your premium service. It's time to fall on his sword and except it was a gamble that just didn't pay off, lesson learnt, move on and rebuild with a new strategy before it's too late.
The past and current Board and Senoir managment invested in the Jetstar strategic direction. The current CEO is the architect of Jetstar and arguably knows nothing but low cost carrier tactics anyway.
The simple fact is that anyone in QF management who questions that strategic direction is going to be fired or at best marginalised.
This is "group think" at its worst, they do not want to hear, they do not want questions or heart searching.
What happens next is either the sale of assets like the frequent flyer scheme to keep the strategy alive a little longer, or Alan has to go.
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What happens next is either the sale of assets like the frequent flyer scheme to keep the strategy alive a little longer, or Alan has to go.
Alan has to go. When is "the market" going to understand that simple, cold-water reality?
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Well, we're all put our two cents worth on this many times and Joyce and Clifford are still there.
Believing fervently in what you do and how you do it is normally an admirable trait, but not when it results adversely for the company and it's employees. Offsetting the benefit of such a trait is the firm belief that nobody else can be right
The board, unfortunately, believes in these two and that they are right, and that they will be there to the end.
There is nothing that will change that except intervention by the shareholders or a takeover.
Perhaps some political influence will "shake the tree", but these guys have an iron grip on the branches.
Believing fervently in what you do and how you do it is normally an admirable trait, but not when it results adversely for the company and it's employees. Offsetting the benefit of such a trait is the firm belief that nobody else can be right
The board, unfortunately, believes in these two and that they are right, and that they will be there to the end.
There is nothing that will change that except intervention by the shareholders or a takeover.
Perhaps some political influence will "shake the tree", but these guys have an iron grip on the branches.
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There are rumours circulating that things are grim in Singapore from pilots flying around Asia. A couple of years ago Jetstar Asia was being propped up by Jetstar in Australia to the tune of 20 million per year. Anecdotal evidence suggests the new Jetstar 787 service from Brisbane to Bali is bleeding big time with sub 100 passenger loads being the norm.
I did not see one holiday photo in the posts that I read, just angry holidayers bagging out the company and vowing never to fly them again.
I would personally prefer to fly full fare with another carrier to a few destinations given the options. I know many of my colleagues do as well. However I have heard a few say the 787 is a better travelling experience.
Maybe they should put a couple of QF A330's on the Bali run each week to test the waters.
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I wrote this on Ben's blog but thought it was pertinent to this one too. I've tidied up the spelling a little
"..........no matter how far above the clouds Flying High might be, unless he is able and willing to feed untold $M’s into QF coffers, then he might have egg on his face sooner than later.
He simply is an apologist for a company which, with AJ in shining armour and with his lady’s favour tied to his lance, is valiantly fighting its way through:
government red tape;
uneven playing fields;
the arrogance of the Hong Kong authorities for having laws;
the dastardly behaviour of Boeing/Airbus for not holding up to their end of the bargain to deliver on time;
the sheer arrogance of QF staff wanting a living wage; etc.
Oh, and the handing over of routes that were profitable or could have been profitable with some decent promotion to JQ and EK. Not everyone wants to sit with their legs under their chin or fly via the sandpit.
What’s to go wrong? Winning business plan there I would have thought, so of course QF will be profitable by about the end of the century! Move along folks, nothing to see here!"
Obviously its heavy with sarcasm but I truly fear for QF long term with this ******** (or an entire board of ********) in charge. I fear that the situation will eventually reach a momentum where confidence wanes, forward bookings decline and the airline goes into a metaphorical spin.
I've never had the skills or the health to be a pilot but I am a flying geek. I've flown QF internationally since the 70's and, since they took over TAA/Australian, domestically - all at my own expense so I'm not Platinum 1 (and thus not worthy of AJ's time) but I do consider myself a "loyal" customer, making many trips a year, and choosing QF over its competitors.
I now have fewer opportunities to do that since they have cut back so dramatically on their routes - I don't want to fly JQ to SIN or EK from DXB, even if I can land in such exotic places such as Newcastle, UK. (Sorry to any Scousers - I'm actually from not that far north of there myself and it is a much improved city in more recent times)
My opinion of AJ is unprintable but I do despair at where he is taking the airline.
"..........no matter how far above the clouds Flying High might be, unless he is able and willing to feed untold $M’s into QF coffers, then he might have egg on his face sooner than later.
He simply is an apologist for a company which, with AJ in shining armour and with his lady’s favour tied to his lance, is valiantly fighting its way through:
government red tape;
uneven playing fields;
the arrogance of the Hong Kong authorities for having laws;
the dastardly behaviour of Boeing/Airbus for not holding up to their end of the bargain to deliver on time;
the sheer arrogance of QF staff wanting a living wage; etc.
Oh, and the handing over of routes that were profitable or could have been profitable with some decent promotion to JQ and EK. Not everyone wants to sit with their legs under their chin or fly via the sandpit.
What’s to go wrong? Winning business plan there I would have thought, so of course QF will be profitable by about the end of the century! Move along folks, nothing to see here!"
Obviously its heavy with sarcasm but I truly fear for QF long term with this ******** (or an entire board of ********) in charge. I fear that the situation will eventually reach a momentum where confidence wanes, forward bookings decline and the airline goes into a metaphorical spin.
I've never had the skills or the health to be a pilot but I am a flying geek. I've flown QF internationally since the 70's and, since they took over TAA/Australian, domestically - all at my own expense so I'm not Platinum 1 (and thus not worthy of AJ's time) but I do consider myself a "loyal" customer, making many trips a year, and choosing QF over its competitors.
I now have fewer opportunities to do that since they have cut back so dramatically on their routes - I don't want to fly JQ to SIN or EK from DXB, even if I can land in such exotic places such as Newcastle, UK. (Sorry to any Scousers - I'm actually from not that far north of there myself and it is a much improved city in more recent times)
My opinion of AJ is unprintable but I do despair at where he is taking the airline.
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I now have fewer opportunities to do that since they have cut back so dramatically on their routes - I don't want to fly JQ to SIN or EK from DXB, even if I can land in such exotic places such as Newcastle, UK. (Sorry to any Scousers - I'm actually from not that far north of there myself and it is a much improved city in more recent times)
Residents of Newcastle, UK, a city in North East England (actually, practically in South East Scotland) usually refer to themselves, somewhat unintelligibly, as Geordies. Like the Scots, you have to read the subtitles.