Qantas Sacking Tarmac Engineers
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Originally Posted by Nassensteins Monster
6. The co. has expressed it is limiting growth for JQ International and that once mainline provides a return on capital they'll reinvest in the business and start expanding again.
The "cost of capital" argument was simply a confected excuse to allow justification for whatever decision they had already made. It just need to sound plausible. It never passed the smell test. There was no sudden material change to the "International" business at the time this phrase was uttered. It was "Cherry Picking" a justification to suit a desired outcome. The alleged losses of "International" (a business segment that doesn't even exist) where in fact shown to be bogus in the August 2014 announcement. The losses where as a result of the large depreciation charges on aircraft that were significantly overvalued. This very question was asked of Alan Joyce in the Senate inquiry in March 2014.
Surprise surprise come August, the aircraft were written down to reflect market price, and the enormous burden of depreciation crushing the "International" business miraculously disappears and "International" returns to profitability in the future.
Time travel of capital (duration transformation) is one of the fundemental instruments of modern finance (examples, a loan is bringing future purchasing power to the present, a annuity is sending purchasing power to the future). Profits and losses can be shifted in time depending upon the need to do so. In this case losses where brought forward for industrial, political (seeking a debt guarentee) and possibly other reasons (Asian franchises losses being covered).
Why am I telling you this? To counter at every opportunity the mythology behind the "International" loss story of the last 4 years. If it continues to be repeated it, it becomes the truth.
The truth is only those with access to the full suite of company accounts actually know the true profitability of anything within QF. Consolidated accounts are the only published information and therefore provide very little internal information. The number of people who have access to the true picture is very very small. The QF accounts are opaque, and this allows scope for "trust me" bogus type statements, as there is no evidence (until admitted as per the August statement) to counter it. Now the evidence has been revealed, it is important to bury this myth, rather than repeat it.
It is important that everyone understands this process, and not to fall into the trap of allowing it to automatically become "a truth" that clouds judgments.
I covered this in a post just an hour after the August announcement Qantas Announcement: 28 AUG 14 post #58
Rural and Regional Affairs and Transport References Committee 14/03/2014
Senator XENOPHON: Can you just explain to me the contrast between the two. You are saying that there is a loss but you are now saying that Qantas international is cash flow positive.
Mr Joyce : There is a difference, as you know, between the P&L and the cash flow position. I will let Gareth talk about that.
Mr Evans : I think the difference that you are talking about is exactly that—the difference between the P&L and the cash flow. Our international business has about $800-$900 million worth of depreciation charge to it every year—the depreciation of the aircraft fleet primarily, and the other infrastructure that the international business uses. That is a non-cash charge because it relates to the depreciation of the assets. The businesses, the routes, do in the main generate cash. One route that has not been generating cash in the recent past is Perth-Singapore as an example. As a result of that, that is a route that we are terminating because we cannot afford to have routes where we actually do not even cover the cash costs of our business. The issue in the longer term for the international business is that it does need to spend some significant amounts of capital in the future to reinvest in its fleet. Today, we have a good fleet with great product, and in fact that fleet is moving into a simplification phase and part of the transformation is that it will need to reinvest at some points in the future.
Mr Joyce : That is an important issue. You can generate cash, but if the cash is not sufficient enough to generate the renewal and the replacement of the fleet, then the businesses in turn will decline. That is the definition of terminal decline. If you cannot replace the assets eventually, then that business is not going to be able to renew, it is not going to be ongoing. The requirement for us to turn the business around so it covers the cost of the replacement of its aircraft is critical. That is how the business can renew itself and continue to operate and to grow. At the moment, when the business is not covering the depreciation of those assets, it is in a business that cannot afford to replace those assets into the future.
Mr Joyce : There is a difference, as you know, between the P&L and the cash flow position. I will let Gareth talk about that.
Mr Evans : I think the difference that you are talking about is exactly that—the difference between the P&L and the cash flow. Our international business has about $800-$900 million worth of depreciation charge to it every year—the depreciation of the aircraft fleet primarily, and the other infrastructure that the international business uses. That is a non-cash charge because it relates to the depreciation of the assets. The businesses, the routes, do in the main generate cash. One route that has not been generating cash in the recent past is Perth-Singapore as an example. As a result of that, that is a route that we are terminating because we cannot afford to have routes where we actually do not even cover the cash costs of our business. The issue in the longer term for the international business is that it does need to spend some significant amounts of capital in the future to reinvest in its fleet. Today, we have a good fleet with great product, and in fact that fleet is moving into a simplification phase and part of the transformation is that it will need to reinvest at some points in the future.
Mr Joyce : That is an important issue. You can generate cash, but if the cash is not sufficient enough to generate the renewal and the replacement of the fleet, then the businesses in turn will decline. That is the definition of terminal decline. If you cannot replace the assets eventually, then that business is not going to be able to renew, it is not going to be ongoing. The requirement for us to turn the business around so it covers the cost of the replacement of its aircraft is critical. That is how the business can renew itself and continue to operate and to grow. At the moment, when the business is not covering the depreciation of those assets, it is in a business that cannot afford to replace those assets into the future.
QANTAS GROUP FINANCIAL RESULTS ALAN JOYCE OPENING REMARKS SYDNEY, 28 AUGUST 2014
Fleet Write-down
The decision to create a separate holding structure and entity for Qantas International has triggered an accounting requirement to test the value of Qantas International assets on a stand-alone basis.
The international fleet was purchased when the value of the Australian dollar averaged 68 cents against the US dollar, and in the case of the B747s, 57 cents.
Today the Australian dollar is trading at 93 cents.
The value of these aircraft on our books has therefore been written down by $2.6 billion to their current market value.
As a result future Qantas International depreciation expenses will be lower by around $200 million per year.
Importantly, this is a non-cash charge – a book write-down to the carrying value of aircraft that Qantas has no intention to sell, and will retain in its fleet.
It will have no impact on the economics of the business or change cash flow forecasts.
The decision to create a separate holding structure and entity for Qantas International has triggered an accounting requirement to test the value of Qantas International assets on a stand-alone basis.
The international fleet was purchased when the value of the Australian dollar averaged 68 cents against the US dollar, and in the case of the B747s, 57 cents.
Today the Australian dollar is trading at 93 cents.
The value of these aircraft on our books has therefore been written down by $2.6 billion to their current market value.
As a result future Qantas International depreciation expenses will be lower by around $200 million per year.
Importantly, this is a non-cash charge – a book write-down to the carrying value of aircraft that Qantas has no intention to sell, and will retain in its fleet.
It will have no impact on the economics of the business or change cash flow forecasts.
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No consultation is required for movements within a port. CoolB is correct. If you work in SAM and they say "in two weeks you are moving to the SDT" and you refuse, that could be unprotected industrial action. If they wanted to transfer you to another city, then thats a whole different kettle of fish.
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I'm not sure if that's entirely correct! But if they force people back to the terminals.. I'm sure those guys won't be busting their guts to get a/c out on time! Lots of guys still have a bitter taste in their month! OTP will suffer... Management have to go first before any loyalty can be restored!
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I'm no management stooge,but if they decide to move you to an area that they need more man power in,you move.What's the problem ? didn't they just bring back 65 lame's that where forced out the door.Suck it up and get on with the job.
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FYSTI, I think you're missing the Big Picture. My point is even by their own definition QFI is getting to the point where it justifies investing in the business. When they do, there may be flow-on consequences for manpower.
Really? Then how am I to interpret the following clause?
61. CONSULTATION ABOUT CHANGES TO ROSTERS OF HOURS OF WORK
61.1 Where an employer proposes to change an employee’s regular roster or ordinary
hours of work, the employer must consult with the employee or employees affected and their representatives, if any, about the proposed change.
61.2 The employer must:
61.2.1 provide to the employee or employees affected and their representatives, if
any, information about the proposed change (for example, information about
the nature of the change to the employee’s regular roster or ordinary hours of
work and when that change is proposed to commence);
61.2.2 invite the employee or employees affected and their representatives, if any, to
give their views about the impact of the proposed change (including any
impact in relation to their family or caring responsibilities); and
61.2.3 give consideration to any views about the impact of the proposed change that
are given by the employee or employees concerned and/or their
representatives.
61.3 The requirement to consult under this clause does not apply where an employee has
irregular, sporadic or unpredictable working hours.
61.4 These provisions are to be read in conjunction with other Agreement provisions
concerning the scheduling of work and notice requirements.
61.5 For the avoidance of doubt, nothing in this clause 61 operates to reduce or restrict
the rights of employees under clauses 22, 24, 41, 42, 43 and 44A of this Agreement.
No consultation is required for movements within a port.
61. CONSULTATION ABOUT CHANGES TO ROSTERS OF HOURS OF WORK
61.1 Where an employer proposes to change an employee’s regular roster or ordinary
hours of work, the employer must consult with the employee or employees affected and their representatives, if any, about the proposed change.
61.2 The employer must:
61.2.1 provide to the employee or employees affected and their representatives, if
any, information about the proposed change (for example, information about
the nature of the change to the employee’s regular roster or ordinary hours of
work and when that change is proposed to commence);
61.2.2 invite the employee or employees affected and their representatives, if any, to
give their views about the impact of the proposed change (including any
impact in relation to their family or caring responsibilities); and
61.2.3 give consideration to any views about the impact of the proposed change that
are given by the employee or employees concerned and/or their
representatives.
61.3 The requirement to consult under this clause does not apply where an employee has
irregular, sporadic or unpredictable working hours.
61.4 These provisions are to be read in conjunction with other Agreement provisions
concerning the scheduling of work and notice requirements.
61.5 For the avoidance of doubt, nothing in this clause 61 operates to reduce or restrict
the rights of employees under clauses 22, 24, 41, 42, 43 and 44A of this Agreement.
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Consultation is required to vary an extended hour shift over the normal 8hrs, however where an extended hour shift is already being worked (9hr 10hr 11hr etc) it is considered to be already agreed, for instance the one individual moving into a section is not consulted/votes because the 80 who work that roster have already voted on and accepted it. They can collectively however decide to revert to an 8hr shift for any or no reason at any time.
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Thank you ampclamp. It confirms what I've heard.
However the last I heard, even returning LAMEs ad-hoc on a daily basis may be difficult, as the decision to release said LAMEs from SAM depends on the labour requirements in SAM. And as a certain acting ops manager told an SIT DMM in no uncertain terms, SAM will not be told by people at the terminals how to run its business, or who it cares to release to the terminals regardless of the license type and experience requested by the terminals.
sys 4 apparently. He and others see no problem with the company putting people through 5 months of turmoil in a faux consultation process, making it up as it goes along, disregarding some of the valid input of those it professed to be consulting, then disregarding its own selection criteria, cutting to the marrow, telling people they're "not good enough" for the terminals, changing peoples rosters, the impact that has on their family lives, forcing them to remake all their plans around childcare, spouses work arrangements, leave etc etc, giving them the time to settle in to the new roster, acknowledging that maybe some of that input they disregarded had merit, and then moving people back to their old sections with one week's notice, forcing them to unmake all the plans etc they have gone to great effort to remake over the last couple of months, force them to work 3 months straight without the opportunity to take leave in order to allow others to take their leave, and expecting them to
If that happens I guarantee you there will be a few calls to HR and rightly so. Better a volunteer than a conscript. Frankly given all the above, I wouldn't blame them either if they came back to the terminals and required a cattle prod to motivate them.
However the last I heard, even returning LAMEs ad-hoc on a daily basis may be difficult, as the decision to release said LAMEs from SAM depends on the labour requirements in SAM. And as a certain acting ops manager told an SIT DMM in no uncertain terms, SAM will not be told by people at the terminals how to run its business, or who it cares to release to the terminals regardless of the license type and experience requested by the terminals.
Frankly, who could blame them?
Suck it up and get on with the job.
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CoolB1, agreed. I won't need HR to do anything for me personally, but try motivating someone to work in a location under the circumstances outlined, circumstances that they feel so strongly about that they would go to HR for some kind of redress, knowing in all likelihood the futility of it. If they don't get redress and they're forced to return, it'll be "star star star TSR", work to rule and delay delay delay. They will go out of their way to make the company pay. And the company won't be able to do a good goddamn about it. Like I said, better a volunteer than a conscript.
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I suspect that some of the Engineering managers they have appointed wouldn't even know the difference between their left and right hands.
One of them in Cabin Interior did not know what aircraft regos were or what AOG stood for. She is now telling LAMEs how to do their jobs.....
One of them in Cabin Interior did not know what aircraft regos were or what AOG stood for. She is now telling LAMEs how to do their jobs.....
One of them in Cabin Interior did not know what aircraft regos were or what AOG stood for. She is now telling LAMEs how to do their jobs.....
God help Qantas and all who sail in her..... sad to watch what was once such a great airline in its death throes....
McHale.
God help Qantas and all who sail in her..... sad to watch what was once such a great airline in its death throes....
McHale.
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Are there delays ?
Problem is that the reporting system for delays (and the delay code system) will not adequately reflect the true reason behind engineering delays, and many DMM's do not want to draw attention to the real issues either. And when the managers get together to discuss delays they will not admit fact that this latest mis-management in manpower and resources is causing serious issues (And also partly because they are so far removed from ops that they cannot see what is going on).
In short they have really stuffed this operation.
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So now the leave burn will start 1st Jan.
GJ specifically said in the feedback meeting that "leave burn started the day the guys came back"
People have taken leave in December thinking it would count towards their allocated leave to be burnt.
Another cluster f#ck!
GJ specifically said in the feedback meeting that "leave burn started the day the guys came back"
People have taken leave in December thinking it would count towards their allocated leave to be burnt.
Another cluster f#ck!