Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

JT leaving Virgin this week

Old 18th Jul 2017, 13:18
  #101 (permalink)  
 
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Rexxy, you forgot the debacle that was the ATR and got the ejet thing wrong.

Only a small number of ejets were leased the rest were owned. The purchase price of which was significantly less than a 737 (in the order of half).

The 170's were cheaper than the ATR's and the business owned them.

When I say owned I mean with debt financing not outright, and leased to themselves via the internal holding company. They might have been leased from themselves at high rates but that would be for accounting purposes and did not reflect the true cost of the machines.

The ejet removal marks a low point in alrline decision making, along with hideously expensive 330's, the decision to NOT take delivery of the additional ordered 777's, the decision to buy skywest, the ATR's and a raft of other cockups.
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Old 18th Jul 2017, 19:02
  #102 (permalink)  
 
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Both Snakecharma and Rexxy have indeed got some of the facts. Most of the E Jets (except for 6 I think) were owned and I expect that in this financial years accounts their sale will provide a big lift to the Cash on hand. Of course next Financial year will see the maintenance cost for selling them in the accounts and I am told that is most of the cash received. The A330 going to LA was the former COO's battle cry as he had been given incorrect payload numbers from a junior engineer who had not factored in catering load. When told the 210 pax number he was running with was actually more like 170 he wouldn't accept that and just kept on rolling. That was never going to happen and the manager that told him I hear no longer works at VA. With the widebodies all are leased until 2024 roughly so there was not going to be any order for new machines for some time although JT wanted some more B777's to offer a consistent schedule to LA from all major East Coast ports. Currently in the second hand market there are some really cheap machines as the bottom has fallen out of the wide body values.

As a side note there was only a marginal difference I am told between the E Jet leasing price on a 10 year old machine compared to a 12 year old B737 no matter what the initial sale price was. In hindsight I am sure that most in VA know the 170's were a more sensible solution than the ATRs'.
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Old 18th Jul 2017, 22:12
  #103 (permalink)  
 
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Virgin owns all the 777's except one.
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Old 19th Jul 2017, 19:37
  #104 (permalink)  
 
Join Date: Mar 2003
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Virgin Australia ex COO's keep popping up everywhere. It seems that the last one (August 2016) has secured a new job.

Gary Hammes is the new President of Delta Private Jets.

https://www.bizjournals.com/atlanta/...vate-jets.html
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Old 20th Jul 2017, 02:30
  #105 (permalink)  
 
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You'd think these places would do their due diligence on employing people into these kinds of jobs. Unless of course, you have a particular agenda.......
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Old 20th Jul 2017, 14:14
  #106 (permalink)  
 
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Originally Posted by JPJP View Post
Virgin Australia ex COO's keep popping up everywhere. It seems that the last one (August 2016) has secured a new job.

Gary Hammes is the new President of Delta Private Jets.

https://www.bizjournals.com/atlanta/...vate-jets.html
Can anyone think of anything he did of any value while at VA???

Seems just another transient executive who was 'flavor of the month' for a while before leaving, having fallen out of favor if JT being brought in over him is any indication.

This would indicate a degree of narcissism as someone observed above by showing a pattern.
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Old 20th Jul 2017, 23:13
  #107 (permalink)  
 
Join Date: Sep 2007
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rexxxxy,

Thanks for your insightful post, very interesting if even half of what you say is true, and I have no reason to believe that it wouldn't be, as it seems to fit in with what everyone else has been saying. It's tempting to walk away from this site as 90% of what is posted here is unjustified speculation or just ego's duelling it out like dim witted teenagers. But occasionally you get a diamond in the rough that makes it worthwhile trawling through the crap.

JT was doing some positive things at VA, so to hear that he was good friends with JB is very distressing. This guy was no usurper brought in by outside interests. He was chosen by the chosen one himself, and then quickly dispatched with a knife in the back when he showed his old friend up.

It's enough to make you look elsewhere...
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Old 20th Jul 2017, 23:55
  #108 (permalink)  
 
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Can anyone think of anything he did of any value while at VA???
He was brought in simply to cut costs. When it became clear that the previous CFO had given JB unfettered access to the lolly cabinet and JB had been spending "like a drunken sailor", Sankar was given the bullet and Hammes headhunted as a toecutter. That was the start of the austerity period where resources started being removed in earnest.

Along the way, my guess is that he worked out that JB had no idea how to run an airline, evidenced by the outrageous leases and dysfunctional fleet/airline/shareholder mix. When that penny dropped, he started trying to make some changes. 330 to LAX or AUH, get rid of Ejet, pull triple out of AUH, single type wide body etc.

You can argue all you want about the veracity of those ideas, but at least they were ideas. JB on the other hand doesn't seem to have a single thought of his own. Nevertheless, Hammes was not of the right temperment or cultural background to be able to manage an australian airline, so he had to go.

Bring in JT who, as previously stated, was way too competent for JB's liking and also had to go.

What are the odds that RS from Tiger (ex QF) was always JB's pick as future CEO, but needed some time in a similar role before he could take over at VAA. JB moves him into Tiger to get him some experience, but pressure from board forced JB to look for someone before RS was ready. Install JT until RS ready then knife him to make way for Sharp.

I really don't think anything will improve from a morale perspective with Sharp at the helm, so lets hope he knows how to turn a profit.
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Old 21st Jul 2017, 06:14
  #109 (permalink)  
 
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Originally Posted by Vorsicht View Post
He was brought in simply to cut costs. When it became clear that the previous CFO had given JB unfettered access to the lolly cabinet and JB had been spending "like a drunken sailor", Sankar was given the bullet and Hammes headhunted as a toecutter. That was the start of the austerity period where resources started being removed in earnest.

Along the way, my guess is that he worked out that JB had no idea how to run an airline, evidenced by the outrageous leases and dysfunctional fleet/airline/shareholder mix. When that penny dropped, he started trying to make some changes. 330 to LAX or AUH, get rid of Ejet, pull triple out of AUH, single type wide body etc.

You can argue all you want about the veracity of those ideas, but at least they were ideas. JB on the other hand doesn't seem to have a single thought of his own. Nevertheless, Hammes was not of the right temperment or cultural background to be able to manage an australian airline, so he had to go.

Bring in JT who, as previously stated, was way too competent for JB's liking and also had to go.

What are the odds that RS from Tiger (ex QF) was always JB's pick as future CEO, but needed some time in a similar role before he could take over at VAA. JB moves him into Tiger to get him some experience, but pressure from board forced JB to look for someone before RS was ready. Install JT until RS ready then knife him to make way for Sharp.

I really don't think anything will improve from a morale perspective with Sharp at the helm, so lets hope he knows how to turn a profit.
The whole thing is just sad... it's taken what had the makings of a good airline and totally trashed it... spending months and thousands on people offline working on systems to make the place more efficient then canning the project after all the work had been done, poor choice of systems and processes, recruitment of people or worse, advertising of positions and recruitment that could save money, then canning the process or crippling it half way through.

It all reeks of an organization under stress and one that has no idea what it is doing, clutching at straws continually and being a the behest of a person with a pretty high opinion of himself who as others have observed seems to be narcissistic or interested in self-preservation.

As has been observed before, one may have their opinions of Joyce but it's like chalk and cheese between the two. Very sad, mostly for the people who will be hurt if it all collapses around them.

If that were to happen you'd need a pretty convincing argument why those responsible should not be breaking rocks for the rest of their lives.
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Old 21st Jul 2017, 13:35
  #110 (permalink)  
 
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Incredible reading and insights, especially for those prospective employees who are currently being courted by HR.
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Old 23rd Jul 2017, 04:32
  #111 (permalink)  
 
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Apparently we are an "aspirational employer", at least according to the survey.....
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Old 24th Jul 2017, 04:49
  #112 (permalink)  
 
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Originally Posted by porch monkey View Post
Apparently we are an "aspirational employer", at least according to the survey.....
As a VA employee once told me - if you work here, you very quickly realise that the external image of VA is diametrically opposed to the reality internally.
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Old 24th Jul 2017, 05:29
  #113 (permalink)  
 
Join Date: Feb 2002
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...someone needs to go back to the mail room methinks!

My friend works in accounts and tells me it is chaos and she and others are out looking for other positions..
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Old 24th Jul 2017, 10:12
  #114 (permalink)  
 
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so what is the outcome when the annual comes out reporting another multi million loss? Should we be concerned enough to look for employment elsewhere or will our new investors keep injecting their cash? .
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Old 24th Jul 2017, 11:20
  #115 (permalink)  
 
Join Date: Feb 2002
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cash will still come. Investors will come and go. The original public stock holders have expensive wallpaper. The Chinese mob will swoop and all employees will be employed under their terms. The airline will change a lot but not do an Ansett..
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Old 24th Jul 2017, 13:22
  #116 (permalink)  
 
Join Date: May 2017
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I've never met JB and can only judge on the events that are currently happening at VA.

As a frequent flyer of theirs, they have a good product but one can sense that they are trying too hard to replicate Qantas and they've pushed hard to do so. Trying to compete with a 90 year old company with a fiercely loyal customer base was never going to be easy.

VA isn't Qantas and it was never going to be. The CEO has misread the situation or has been caught up in trying to outdo Qantas so much that's he has completely lost his business sense and almost made it personal.

And that, amongst other factors as outlined by others is why in my opinion VA is not making money.
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Old 24th Jul 2017, 14:08
  #117 (permalink)  
 
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VA isn't Qantas and it was never going to be
And never will be. Why they tried to mimic Qantas in the first place is unfathomable. Originality will always win.
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Old 27th Jul 2017, 07:05
  #118 (permalink)  
 
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Unions were quick to jump on the JB bandwagon in the early days, demanding QF rates to match QF service
You'd have to be more specific. Is this in reference to Pilots and/or Cabin Crew? I'll assume pilots given its a pilot forum.

What one of the unions had in their log of claims in 2011 and what was delivered and voted up was a vastly different thing. What was voted up and what exists today is also quite different today from 2011. I noted this line/tone in the Fin Review when ANZ pulled out last year. Something along the lines of "JB arrived and lavish hotels followed for the crew etc". The public would have loved that line! Good wind up.

I suspect this argument would be shut down fairly quickly with a hotel and crew food comparison QF vs VA. It is what it is but to hear that the pilots are living in the lap of luxury bleeding the company dry is a bit over the top.

I would suspect the increase in cost base possibly...juuuuust possibly might be due to maybe one or two other factors.

Has the cost base risen? You bet.
Is it the same as QF? Possibly, and might worsen as their fleet evolves.
Is this due to pilots? Unlikely.

Pilots if anything have become more efficient over the last 7 years.

Anyway the topic is getting old, its not news anymore.
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Old 27th Jul 2017, 12:25
  #119 (permalink)  
 
Join Date: Feb 2006
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The most expensive direct cost for an airline is fuel - 49% (ish). JB and his band of merry men and women, including the ex-chairman of Caltex, couldn't hedge fuel correctly if their lives depended on it and thus that would probably be a good place to start. For the record, flight crew costs are around 8% of direct costs for a legacy carrier - you wouldn't know it though JB seems to blame pilots for everything!

One can only hope that the influx of Chinese board members can influence improved decisions all round and eventually get the share price heading north of 17c again.

For those of you playing at home, reference for the above here...

Doganis, R 2012, Flying Off Course: The Economics of International Airlines.

Last edited by romeocharlie; 27th Jul 2017 at 22:19. Reason: Additional info... and spelling. Can't spell.
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Old 27th Jul 2017, 21:36
  #120 (permalink)  
 
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Originally Posted by longjohn View Post
The one thing VA have successfully managed to mimic is the Qantas cost structure. In fact, from what I hear in some instances they have managed to exceed it.

Unions were quick to jump on the JB bandwagon in the early days, demanding QF rates to match QF service, thereby helping to bake in an unsustainable cost structure. Combined with strategic lunacy, VA are left in the middle as a poor mini-me.

Judging by the flood of applications coming out of VA, I suspect many staff are worried about the future.

Similar to Ansett - Absolutely!
You can include in that people being brought in to conclude one particular EBA to save the company money which by all reports has ended up costing millions more but for no difference in work practices and no efficiencies gained... and they still have their job because JB supposedly 'trusts' them.
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