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So you need a new fleet Leigh?

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So you need a new fleet Leigh?

Old 16th Dec 2018, 12:10
  #661 (permalink)  
 
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Would be interesting to trace the flow of money and to whom it flows with regards to the leases on all these new aircraft !
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Old 16th Dec 2018, 12:36
  #662 (permalink)  
 
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Originally Posted by blow.n.gasket View Post
Would be interesting to trace the flow of money and to whom it flows with regards to the leases on all these new aircraft !
It’s been well rumoured and alleged for years that Alan & co set up finance companies to buy aircraft and lease them to Qantas. Very few of the newer JQ 320’s and QF 737 are solely owned and financed by Qantas Airways Pty Ltd. I remember flying a relatively new 738 a few years back that had the ownership plaque on the back of the flight deck wall stating that the aircraft was owned by “Cello Leasing Plc” of Dublin Ireland and leased to Qantas Airways. Gee, I wonder who the director of Cello Leasing might be and whether they are allegedly associated to AJ? And then there was the big rumour that GD & PG’s aircraft leasing company bought the 767’s and leased them back to Qantas, hence QF were stuck with them longer them longer they needed them and were a financial burden way longer than they were ever engaged in revenue flying for the airline. Allegedly, AJ was aware of this deal and was happy to play along, hence he got the CEO gig and allegedly JB was not compliant hence he missed out and moved on to VA.

Last edited by CSTGuy; 16th Dec 2018 at 12:49.
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Old 16th Dec 2018, 14:07
  #663 (permalink)  
 
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traffic..

once again thanks for the clarification

Yes, I was comparing JQ to the total group (JQ + QF), and not JQ vs QF.

Yes, JQ, do fly 47% ASK (compared to QF and not the whole group as a total) for 29% revenue, but lets not forget what is important. Do we want profit or revenue ?

When we look at profit (EBIT), JQ make 40% profit (as a percentage of QF profit) for 47% ASK.

In the meantime, QF INTL only make 34% profit (as a percentage of QF profit) with 69% ASK (QF ASK). Is QF INTL better than JQ ?

JQ, $461 million profit vs QF INTL $399 million profit.

JQ, 48,736 ASK vs QF INTL 69,280 ASK ?

JQ made 15% more profit with only 70% of the ASK as QF INTL. Is JQ really such a basket case ? Is it really such a waste of resources ? Doesn't JQ provide the group a better return than QF INTL ? Shouldn't this be where more resources go ?

Last edited by a_pilot; 16th Dec 2018 at 22:52.
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Old 16th Dec 2018, 14:27
  #664 (permalink)  
 
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How’s Jetstar Asia going these days? 15 years and not a single dollar made. What a failure.

Whats the big secret up there. All very hush hush like it doesn’t exist.
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Old 16th Dec 2018, 19:04
  #665 (permalink)  
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Originally Posted by a_pilot View Post
traffic..

once again thanks for the clarification

Yes, I was comparing JQ to the total group (JQ + QF), and not JQ vs QF.

Yes, JQ, do fly 47% ASK (compared to QF and not the whole group as a total) for 29% revenue, but lets not forget what is important. Do we want profit or revenue ?

When we look at profit (EBIT), JQ make 40% profit (as a percentage of QF profit) for 47% ASK.

In the meantime, QF INTL only make 34% profit (as a percentage of QF profit) with 69% ASK (QF ASK). Is QF INTL better than JQ ?

JQ, $461 million profit vs QF INTL $399 million profit.

JQ, 48,736 ASK vs QF INTL 69,280 ASK ?

JQ made 15% more profit with only 70% of the ASK as QF INTL. Is JQ really such a basket case ? Is it really such a waste of resources ? Doesn't JQ provide the group a better return than QF INTL ? Shouldn't this be were more resources go ?
Clarification or correction? Comparing JQ to 'group' was not the calculation presented it was as you now clarify JQ to QF.

Reading a set of CONSOLIDATED financial statements that provide no detail on how Management apportion costs between the segments, means that whilst complying with the requisite standard, management have a 'low bar to clear' They are well aware of that. Qantas provide zero detail on costs between segments, nor does the standard require them to. However, the unique lack of detail about JQ necessitates one trusting Little Napoleon and his gang of robber barons, taking their claims at face value. Thus to have any confidence, other than the word of Little Napoleon requires a leap of faith.
  • This is the same Little Napoleon that on a Saturday morning in October 2011 claimed to have grounded an entire airline, apparently all by himself.
  • This is the same Little Napoleon that rushed to the ACCC stating Qantas International was 'in terminal decline' and needed an exception to the Competition laws. Show us where the 'amazing alliance' generated revenue for Qantas?
  • This is the same Little Napoleon that in December 2013 apparently needed $3 billion of tax payer funds. Only to rescind the requirement six weeks later. Within 18 months a 'transformation' had occurred. Amazing that his, and the insider options also vested at the same time!
If JQ really did all these amazing things, Qantas would segment their business into two operating segments; Domestic and International. They choose not to.
If JQ Asia was an 'amazing' business they would not need to hide it in JQ group.
If JQ in Vietnam was an amazing business, why was it necessary to classify the details surrounding the commercial terms of the release of two executives as 'for Australian eyes only"?


JQ made 15% more profit with only 70% of the ASK as QF INTL. Is JQ really such a basket case ? Is it really such a waste of resources ? Doesn't JQ provide the group a better return than QF INTL ? Shouldn't this be were more resources go ?
Just how much of the resources are actually consumed by JQ to generate that 'profit' is very fortunately for the gang at KPMG a question they do not have to address.


Qantas need a new fleet.

Last edited by Rated De; 16th Dec 2018 at 20:34.
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Old 16th Dec 2018, 20:28
  #666 (permalink)  
 
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On top of the foregoing, the stated profitability of JQ has always been a joke.

There is a typical airline economic pie chart which shows that typical airlines pay about a third of their overhead in fuel, and about a third in leases, charges, fees, insurance etc. The remaining third of the cost pie is staff.

At one stage QF were claiming that JQ was 20% more profitable per passenger after getting less revenue from each due to discount pricing. The only way that would be true is is the staff all worked for 33% of Qantas pay or if <gasp!> someone was hiding other costs in oher areas of the “group” accounts.

JQ Hong Kong, Viet Nam, Asia and International all are acknowledged money losers.

Regarding Qantas International ASK metrics: Longhaul flies their (big) aircraft around 18 hours a day, each, with only one stop. While a smaller domestic aircraft might do 12 hours. While a 737 is doing a 45 minute turn, the 330 is flying 180,000 ASKs. In fact, a 330 can do 4.3 million or more seat kilometres in a day whereas a 737 would do only just over a million. The tyranny of distance and the math of lots of seats grinding out the miles all day.

The reason that long haul suffers in comparison to shorthaul in revenue per ASK is a simple matter of efficiency and competition. Looking at flights in mid January for a MEL-SYD return shows that the cheapest QF flight costs $0.17/km. The cheapest BNE-NRT on the other hand is $0.11/km. BNE-LAX goes for $0.074/km. And its often much cheaper.

International is a tough business because you almost always have a capable flag carrier as competition on any route. And try running a Qantas group without its international feed. Oh! That's right! We did try that when the geniuses thought that they could be a lounge & code share business. How'd that work out again?

Qantas needs more than just a new fleet.
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Old 17th Dec 2018, 00:39
  #667 (permalink)  
 
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All very interesting.
The following , as best as I can remember , relayed to me at a dinner party sometime ago might be worth running up the flag pole to check veracity.
If any of the following is anyway close to truth , it paints the “wee one” in a very poor light.

Alledgedly, so the story goes , when the smartest guys in the room created the Terminal decline myth in order to destroy the share price (only genius’ could achieve that with high load factors ,apparently !)
Then locking in future performance bonus’ at the created depressed price , they got a bit nervous about a potential hostile takeover due to the now favourable price / equity ratio for such an attempt.
Apparently there was a group , the same old suspects , Dixon,Gregg, Carniege , Singo et al ,alledgedly trying to borrow Dubai money to finance a hostile takeover.
Some months after this group started circling , old Clark from Qantas’ mates ? at Emirates came a calling with a summons for the Wee One to meet at their Hidden Valley resort , in the Blue Mountains.
From that meeting Qantas ended up with the Emirates /Qantas overlord alliance ?
Low and behold the hostile takeover group faded away .
From all that , one can only assume Clarke used the information to leverage a deal that the Wee One couldn’t say no to , in exchange for pulling the finance on the takeover deal for Dixon and his mates.
Around this time the media released pictures of the little fellow and old scroats having quite a heated tęte-ŕ-tęte.
Soon after the transformation started in earnest and the International section that was in terminal decline and their fleet was wound back quite dramatically.
It was alledged that all the aircraft that were disposed of for this transformation ( the 747 + 767’s) were all aircraft leased by the fellow with the saggy ball sack monicker.
Was this a vindictive payback by the Wee One for the attempted hostile takeover and the untenable position this placed him in with his new middle eastern overlord masters ?
Who knows , but makes for interesting conjecture, non the less !

Last edited by blow.n.gasket; 17th Dec 2018 at 01:28.
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Old 17th Dec 2018, 02:21
  #668 (permalink)  
 
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JQ, $461 million profit vs QF INTL $399 million profit.
JQ needed 93 aircraft doing domestic and international legs to achieve that. How many of QF's 214 aircraft fleet are international? I reckon from that Annual Report - 27 - not counting any of the 737's and disregarding that the 787's do some domestic legs. So on a per aircraft basis, QF International is far more profitable.
From the Report:
Jetstar International had strong earnings with ROIC>WACC whilst all Jetstar’s branded airlines in Asia were profitable. Jetstar Japan maintained its domestic Low Cost Carrier (LCC) leadership position, Jetstar Pacific improved its domestic position as capacity discipline returned to the market and Jetstar Asia contributed to benefits from the Singapore hub switch.
They won't say how profitable Jetstar's branded airlines in Asia are though, will they. They don't even say that Jetstar International is profitable. It only has to be $1, but that wouldn't be much of a return on investment would it?
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Old 17th Dec 2018, 03:04
  #669 (permalink)  
 
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Are the QF profit figures inclusive of the numerous domestic sub-operations who wear the red and white and who contribute to the overall QF revenue?
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Old 17th Dec 2018, 03:55
  #670 (permalink)  
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Originally Posted by bazza stub View Post
Are the QF profit figures inclusive of the numerous domestic sub-operations who wear the red and white and who contribute to the overall QF revenue?
An interesting question.
Effectively yes, with certain caveats.
That is under AASB 127 whereby control is presumed to exist where certain conditions are met.
Something like Cobham, where a contractor in which QF does not have a controlling interest (although owns the aircraft-assuming there is lease charges) ought not be included in a consolidated segment. As stated a few caveats exist.



Allegedly, so the story goes , when the smartest guys in the room created the Terminal decline myth in order to destroy the share price (only genius’ could achieve that with high load factors ,apparently !)
Then locking in future performance bonus’ at the created depressed price , they got a bit nervous about a potential hostile takeover due to the now favourable price / equity ratio for such an attempt.
Apparently there was a group , the same old suspects , Dixon,Gregg, Carniege , Singo et al ,alledgedly trying to borrow Dubai money to finance a hostile takeover.
Some months after this group started circling , old Clark from Qantas’ mates ? at Emirates came a calling with a summons for the Wee One to meet at their Hidden Valley resort , in the Blue Mountains.
From that meeting Qantas ended up with the Emirates /Qantas overlord alliance ?
Low and behold the hostile takeover group faded away .
Yes blown.
The terminal decline narrative emerged from nowhere. It required at the core a controlling shareholder, in effect somebody with a substantial enough shareholding to block hostile activity, control the foreign ownership restrictions, but be closely aligned with management.
Taking the share price south was risky. Is it any wonder that the interests referred to above are no longer substantial interests?
Little Napoleon's options were rather 'amazingly' issued right at the low water mark.
Interestingly in confronting the 'biggest loss in Qantas' history, he (Little Napoleon) with conviction in his voice, incredibly predicted that the very next year, Qantas would be profitable...Incredibly it was. What dates did those very cheap options vest?

Amazing set of coincidences isn't it?
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Old 17th Dec 2018, 05:22
  #671 (permalink)  
 
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That was basically where I was going with the question. How do Qlink fleets appear on the balance sheet? And the 717, an extremely lucrative fleet by all accounts, where/how does that factor into the wider bottom line I wonder.
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Old 17th Dec 2018, 06:04
  #672 (permalink)  
 
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reminds me of a joke...
A businessman was interviewing applicants for the position of divisional manager. He devised a simple test to select the most suitable person for the job. He asked each applicant the question, "What is two and two?" The first interviewee was a journalist. His answer was "Twenty-two." The second was a social worker. She said, "I don't know the answer but I'm glad we had time to discuss this important question." The third applicant was an engineer. He pulled out a slide rule and showed the answer to be between 3.999 and 4.001. The next person was a lawyer. He stated that in the case of Jenkins v. Commr of Stamp Duties (Qld), two and two was proven to be four. The last applicant was an accountant. The business man asked him, "How much is two and two?" The accountant got up from his chair, went over to the door and closed it, then came back and sat down. He leaned across the desk and said in a low voice, "How much do you want it to be?" He got the job.
https://www.proformative.com/questio...countant-jokes
Originally Posted by bazza stub View Post
where/how does that factor into the wider bottom line I wonder.
Wherever it is most useful to the required narrative is the answer.
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Old 17th Dec 2018, 06:29
  #673 (permalink)  
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Originally Posted by CurtainTwitcher View Post
reminds me of a joke...

https://www.proformative.com/questio...countant-jokes

Wherever it is most useful to the required narrative is the answer.
This precisely is the problem with over reliance on financial statements that provide no detail of materiality. This threshold is management chosen.
Some analysts accept fanciful measures of 'Underlying Profit Before Tax', management chosen measures of profit neglecting things that lower the 'number'. Management chosen 'preferred measures' are neither statutory, measured or even commented on during a general purpose audit. Those with experience of the 'herd of analysts' might be interested why would a management chosen measure be that which upon an analyst relies to make a recommendation of buy, sell or hold? The answer is disturbing in that many of the models that spit out the recommendations are set up that way.

To channel Gordon Gekko, 'Most analysts don't know preferred stock from livestock'

Accounting is but another dark art.

That was basically where I was going with the question. How do Qlink fleets appear on the balance sheet? And the 717, an extremely lucrative fleet by all accounts, where/how does that factor into the wider bottom line I wonder.
Is a great question. The fleet is an asset. It is now owned by Qantas. Book value another question. Whether there is actually a lease charge most likely tied up in commercial-in-confidence. Whether they actually are reported in Qantas or another segment is a good question. These assignments have been known to shift, depending on the preferred narrative.



Qantas still need a new fleet.
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Old 17th Dec 2018, 22:23
  #674 (permalink)  
 
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Originally Posted by a_pilot View Post

JQ made 15% more profit with only 70% of the ASK as QF INTL. Is JQ really such a basket case ? Is it really such a waste of resources ? Doesn't JQ provide the group a better return than QF INTL ? Shouldn't this be where more resources go ?
By your logic, shouldn't the resources be directed and Qantas domestic?
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Old 17th Dec 2018, 23:17
  #675 (permalink)  
 
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No doubt there is subterfuge....

But...what gets lost in the intra-company rivalry is that Qantas needs Jetstar, and Jetstar needs Qantas.

Each would be severely hobbled without the other and so imagining ROIs without the 2 being conjoined is completely hypothetical and ultimately pointless.

PG
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Old 18th Dec 2018, 01:29
  #676 (permalink)  
 
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Originally Posted by Popgun View Post
No doubt there is subterfuge....

But...what gets lost in the intra-company rivalry is that Qantas needs Jetstar, and Jetstar needs Qantas.

Each would be severely hobbled without the other and so imagining ROIs without the 2 being conjoined is completely hypothetical and ultimately pointless.

PG
I agree with you about the symbiotic relationship but the thing that really pisses mainline staff off is the ongoing subsidy of Jetstar and the way the books are manipulated to hide the real state of JQ operations - especially JQ International. For example, all the fuel that is uplifted by QF group aircraft in HNL is billed to QF International. Joyce decides which section of the group that he wants to look good and the section that he wants to sacrifice.

The public branding of QF International as being in “terminal decline” 18 months after Joyce took over justified his decision to cancel the last 8 A380’s and 50 B787 orders. This freed up the money to purchase 110 A320’s for Jetstar in its many guises. Those orders have been delayed a couple of times because Jetstar expansion has not met “predictions”. How much money in fuel would have been saved if those B787’s had been delivered to QF International on time (not to mention how many pilots careers would not have suffered such significant stagnation).
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Old 18th Dec 2018, 03:29
  #677 (permalink)  
 
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Qantas needs Jetstar, and Jetstar needs Qantas.
Maybe, for a passenger on-carriage point of view. From a stand alone view point? Qantas, from a "pays the bills" viewpoint pays it's own bills and still makes money. Jetstar? Where would they be if they were buying their own aircraft, or perhaps paying their own fuel bills? I certainly think Jetstar needs Qantas far more than Qantas needs Jetstar.
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Old 18th Dec 2018, 07:07
  #678 (permalink)  
 
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Originally Posted by Traffic_Is_Er_Was View Post
Maybe, for a passenger on-carriage point of view. From a stand alone view point? Qantas, from a "pays the bills" viewpoint pays it's own bills and still makes money. Jetstar? Where would they be if they were buying their own aircraft, or perhaps paying their own fuel bills? I certainly think Jetstar needs Qantas far more than Qantas needs Jetstar.

I seem to vaguely recall , quite awhile ago now , a pilot getting stood down off a training course in Qantas for having a similar argument with a management pilot .
Seems like nothing’s changed with people’s perceptions regarding the true amazingness of the amazing business !
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Old 18th Dec 2018, 07:13
  #679 (permalink)  
 
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I wonder if we’re about to find out the truth, once Gregg squeals?
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Old 18th Dec 2018, 07:21
  #680 (permalink)  
 
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Originally Posted by blow.n.gasket View Post



I seem to vaguely recall , quite awhile ago now , a pilot getting stood down off a training course in Qantas for having a similar argument with a management pilot .
Seems like nothing’s changed with people’s perceptions regarding the true amazingness of the amazing business !
He wasn’t stood fown for long! (As sressful that must have been)
Wrongful dismissal case in court could have been interesting.
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