Dixon's daring but dangerous strategy
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Dixon's daring but dangerous strategy
This is just one of 3 articles in todays (Sat) Australian Financial Review relating to QANTAS, the other 2 which are locked and
you will need to get a copy at your favorite newsagency, the 2
not pasted headers are:
1. Why Qantas really needs to cut it
Qantas faces the challenge of slashing costs by $1 billion as it strives to respond to the daily exigencies of global aviation. By Jane Boyle (Jul 05) »
2. Geoff Dixon: oxygen is required
Growing competition, ageing aircraft, union and bureaucratic hangovers, punctuality and satisfaction issues ... are the Qantas chief's Wagga-nomics up to the job? By Adam Shand (Jul 05) »
Update: Have now posted all 3 articles.
===========================================
Sat "The Australian Financial Review"
3. Dixon's daring but dangerous strategy
Jul 05
Ben Sandilands
As federal parliament rose for the mid-year recess, a bill that threatens to reduce the cabin safety standards of Australian air travel slipped under the radar. The Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand) Bill 2003 caught the Opposition fully occupied with the "rest of Telstra'' sale bill. But the Mutual Recognition package is seen by the unions as a potentially desperate bid by Qantas to cut its costs by halving the salaries of some pilots and slashing cabin crew numbers.
It means that from December 31, each country would recognise the other's Air Operator Certificates (AOCs), allowing their airlines to operate in both countries under the Single Aviation Market agreement.
The legislation, mirrored this week in the New Zealand parliament, is as vital to Geoff Dixon's vision for Qantas as the proposed Air New Zealand alliance that has been frustrated so far by each country's competition regulators. Among the main consequences of the bill, if it is passed, are two sets of standards for cabin safety.
Qantas and Virgin Blue would be bound by Australian rules, requiring one flight attendant for every 36 passengers.
Jet Connect (formerly Qantas New Zealand, and 100 per cent owned by Qantas) would, like Air NZ and FreedomAir, be able to fly with one attendant per 50 passengers.
Because New Zealand AOCs do not permit the use of sky marshals, Jet Connect would not only be more dangerous in the event of a survivable crash landing or fire, but a potential magnet for terrorists or hijackers.
Australia could permit airline operations that do not meet the standards of the United States, Canada and the European Union.
The Flight Attendants Association of Australia and the Australian and International Pilots Association are preparing to strike if necessary. They say Qantas is moving with Jet Connect to apply the lower labour and safety standards of New Zealand to its domestic and (later) international operations. The strategy is being described by both unions as the aviation equivalent of a maritime flag of convenience to slash shipping costs.
The FAAA is angry that the bill slipped past a holiday-bound House of Representatives only weeks after the FAAA celebrated its now hollow triumph over Qantas in having the Australian safety regulator, the Civil Aviation Safety Authority, reject its application to dilute the cabin crew ratio in Australia to the NZ level.
Inside Qantas, critics of chief executive Dixon say this is his last chance to push through meaningful cost cuts to counter disquiet over a massive capital expenditure program and the robust performance of Virgin Blue. They claim Qantas has not seriously addressed the consequences of Virgin Blue's bringing the runaway success of low-cost carriers like Ryanair, JetBlue and Southwest to the Australian market.
But for Dixon's team, Jet Connect, with or without an AirNZ alliance, is the master stroke that will force the drastic productivity and work practice changes onto Qantas that they have so far failed to achieve.
Qantas insists that it has no plans to fly Jet Connect on Australian domestic routes, but will use it from September to undercut the cost base of its Australian-based jets on trans- Tasman routes.
This was made clear to the pilots by Qantas executive general manager, operations, David Forsyth, at a recent meeting about the initial plans to use Jet Connect between both countries.
Nothing would stand in the way of major structural cost reforms, Forsyth told the pilots. He said Jet Connect's fleet of seven 737s would be deployed as two aircraft across the Tasman, four within New Zealand and one as a maintenance spare.
But only until December 31 - now revealed as the date Jet Connect or any other New Zealand carrier will be free to fly domestic routes in Australia against Virgin Blue, and to attack the conditions of higher-paid Qantas staff.
The once docile AIPA, which was largely formed by those who did not support the domestic pilot strike of 1989 by the Australian Federation of Air Pilots, has been galvanised by the bill. Its executive is likely to meet this week after key members return from duty abroad.
Jet Connect captains are paid about $95,000 a year; there are no "on-costs'' for benefits like superannuation or sick leave, which must be self-funded. Virgin Blue captains earn about $140,000 and receive on-cost benefits worth an extra 20 per cent. Qantas 737 captains make about $190,000 plus 25 per cent on-costs.
Transport Minister John Anderson and his NZ counterpart Harry Duynhoven issued similar media statements. Anderson said: ``It will not affect the safety of aircraft operations. Australia and New Zealand both have extremely high safety standards which are consistent with international best practice for airline operations using large capacity aircraft.''
In fact, the NZ standard is not permitted in most of the world, including the US, the EU and, until or if the bill is passed, Australia.
The FAAA's safety and regulatory officer, Guy Maclean, says: "The New Zealand requirement is one attendant for every 50 passengers, while the American and European rules are one for every 50 seats. This is a crucial difference. It makes the NZ standard lower not only than Australia's but the European Union and the US. The present Australian standard shares the honours as being the world's highest with Canada.'' Maclean says the Australian industry has never contemplated having less than one flight attendant for every main door on a jet.
Jet Connect would break this vital ratio by operating with only three flight attendants for the four main doors in its 737s.
Under US law, airlines are prohibited from flying with fewer flight attendants than they used to obtain their certification by physically demonstrating the evacuation of a fully loaded jet in 90 seconds through half the available exits.
The captains who spoke out on this issue were even more forceful. One, speaking on condition of anonymity, said: ``You will have Jet Connect with only one flight attendant at the rear of the cabin between two main doors.
"In an emergency, with smoke, flames and panic, that one person has to manhandle two doors and sets of slides and try to direct dozens of people with only minutes to avoid being burned to death."
"If even one door or slide fails the way two did on the Qantas emergency at Sydney this week that one flight attendant is in an impossible situation."
"This is bloody-minded, silly accountants' nonsense.''
It would also mean CASA tolerating a situation where those sitting in the really cheap seats on Jet Connect would be deemed unworthy of the standard of safety for those paying more for a Virgin Blue or main-line Qantas service.
According to a CASA spokesman, the new regimen is "all about equivalent safety outcomes, not the number of flight attendants''.
But this is contrary to CASA's own rulings on the Australian standard not to mention common sense.
===========================================
you will need to get a copy at your favorite newsagency, the 2
not pasted headers are:
1. Why Qantas really needs to cut it
Qantas faces the challenge of slashing costs by $1 billion as it strives to respond to the daily exigencies of global aviation. By Jane Boyle (Jul 05) »
2. Geoff Dixon: oxygen is required
Growing competition, ageing aircraft, union and bureaucratic hangovers, punctuality and satisfaction issues ... are the Qantas chief's Wagga-nomics up to the job? By Adam Shand (Jul 05) »
Update: Have now posted all 3 articles.
===========================================
Sat "The Australian Financial Review"
3. Dixon's daring but dangerous strategy
Jul 05
Ben Sandilands
As federal parliament rose for the mid-year recess, a bill that threatens to reduce the cabin safety standards of Australian air travel slipped under the radar. The Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand) Bill 2003 caught the Opposition fully occupied with the "rest of Telstra'' sale bill. But the Mutual Recognition package is seen by the unions as a potentially desperate bid by Qantas to cut its costs by halving the salaries of some pilots and slashing cabin crew numbers.
It means that from December 31, each country would recognise the other's Air Operator Certificates (AOCs), allowing their airlines to operate in both countries under the Single Aviation Market agreement.
The legislation, mirrored this week in the New Zealand parliament, is as vital to Geoff Dixon's vision for Qantas as the proposed Air New Zealand alliance that has been frustrated so far by each country's competition regulators. Among the main consequences of the bill, if it is passed, are two sets of standards for cabin safety.
Qantas and Virgin Blue would be bound by Australian rules, requiring one flight attendant for every 36 passengers.
Jet Connect (formerly Qantas New Zealand, and 100 per cent owned by Qantas) would, like Air NZ and FreedomAir, be able to fly with one attendant per 50 passengers.
Because New Zealand AOCs do not permit the use of sky marshals, Jet Connect would not only be more dangerous in the event of a survivable crash landing or fire, but a potential magnet for terrorists or hijackers.
Australia could permit airline operations that do not meet the standards of the United States, Canada and the European Union.
The Flight Attendants Association of Australia and the Australian and International Pilots Association are preparing to strike if necessary. They say Qantas is moving with Jet Connect to apply the lower labour and safety standards of New Zealand to its domestic and (later) international operations. The strategy is being described by both unions as the aviation equivalent of a maritime flag of convenience to slash shipping costs.
The FAAA is angry that the bill slipped past a holiday-bound House of Representatives only weeks after the FAAA celebrated its now hollow triumph over Qantas in having the Australian safety regulator, the Civil Aviation Safety Authority, reject its application to dilute the cabin crew ratio in Australia to the NZ level.
Inside Qantas, critics of chief executive Dixon say this is his last chance to push through meaningful cost cuts to counter disquiet over a massive capital expenditure program and the robust performance of Virgin Blue. They claim Qantas has not seriously addressed the consequences of Virgin Blue's bringing the runaway success of low-cost carriers like Ryanair, JetBlue and Southwest to the Australian market.
But for Dixon's team, Jet Connect, with or without an AirNZ alliance, is the master stroke that will force the drastic productivity and work practice changes onto Qantas that they have so far failed to achieve.
Qantas insists that it has no plans to fly Jet Connect on Australian domestic routes, but will use it from September to undercut the cost base of its Australian-based jets on trans- Tasman routes.
This was made clear to the pilots by Qantas executive general manager, operations, David Forsyth, at a recent meeting about the initial plans to use Jet Connect between both countries.
Nothing would stand in the way of major structural cost reforms, Forsyth told the pilots. He said Jet Connect's fleet of seven 737s would be deployed as two aircraft across the Tasman, four within New Zealand and one as a maintenance spare.
But only until December 31 - now revealed as the date Jet Connect or any other New Zealand carrier will be free to fly domestic routes in Australia against Virgin Blue, and to attack the conditions of higher-paid Qantas staff.
The once docile AIPA, which was largely formed by those who did not support the domestic pilot strike of 1989 by the Australian Federation of Air Pilots, has been galvanised by the bill. Its executive is likely to meet this week after key members return from duty abroad.
Jet Connect captains are paid about $95,000 a year; there are no "on-costs'' for benefits like superannuation or sick leave, which must be self-funded. Virgin Blue captains earn about $140,000 and receive on-cost benefits worth an extra 20 per cent. Qantas 737 captains make about $190,000 plus 25 per cent on-costs.
Transport Minister John Anderson and his NZ counterpart Harry Duynhoven issued similar media statements. Anderson said: ``It will not affect the safety of aircraft operations. Australia and New Zealand both have extremely high safety standards which are consistent with international best practice for airline operations using large capacity aircraft.''
In fact, the NZ standard is not permitted in most of the world, including the US, the EU and, until or if the bill is passed, Australia.
The FAAA's safety and regulatory officer, Guy Maclean, says: "The New Zealand requirement is one attendant for every 50 passengers, while the American and European rules are one for every 50 seats. This is a crucial difference. It makes the NZ standard lower not only than Australia's but the European Union and the US. The present Australian standard shares the honours as being the world's highest with Canada.'' Maclean says the Australian industry has never contemplated having less than one flight attendant for every main door on a jet.
Jet Connect would break this vital ratio by operating with only three flight attendants for the four main doors in its 737s.
Under US law, airlines are prohibited from flying with fewer flight attendants than they used to obtain their certification by physically demonstrating the evacuation of a fully loaded jet in 90 seconds through half the available exits.
The captains who spoke out on this issue were even more forceful. One, speaking on condition of anonymity, said: ``You will have Jet Connect with only one flight attendant at the rear of the cabin between two main doors.
"In an emergency, with smoke, flames and panic, that one person has to manhandle two doors and sets of slides and try to direct dozens of people with only minutes to avoid being burned to death."
"If even one door or slide fails the way two did on the Qantas emergency at Sydney this week that one flight attendant is in an impossible situation."
"This is bloody-minded, silly accountants' nonsense.''
It would also mean CASA tolerating a situation where those sitting in the really cheap seats on Jet Connect would be deemed unworthy of the standard of safety for those paying more for a Virgin Blue or main-line Qantas service.
According to a CASA spokesman, the new regimen is "all about equivalent safety outcomes, not the number of flight attendants''.
But this is contrary to CASA's own rulings on the Australian standard not to mention common sense.
===========================================
Last edited by Wirraway; 5th Jul 2003 at 06:39.
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Update
Managed to retrieve story number 2
Wirraway
Sat "Weekend Australian Financial Review"
2. Geoff Dixon: oxygen is required
Jul 05
Adam Shand
PART A
When things get really tough at Qantas headquarters, chief executive Geoff Dixon is apt to scratch his head and say with a smile: ``Well, I'm just a simple country boy from Wagga.'' It sounds folksy and self- deprecating, but for Qantas managers beloved of complexity, the simplicity of "Wagga-nomics'' is threatening indeed. It demands executives justify their positions in plain terms, that they cut the spin and get to the point. Dixon knows the time for spin is well past, that Qantas must now be absolutely fearlessly honest with our problems''.
He constantly tells his managers "to get out there and tell what the truth is. You are going to fix the problem a lot more quickly than trying to dissemble.'' Wagga-nomics is the knife Dixon must wield to deal with an organisation deeply ambivalent about change, a labour force still steeped in bureaucracy and union bastardry. It's Dixon's greatest challenge, and critics say perhaps he is bringing a knife to a gun fight. Observers question whether Dixon is tough enough to triumph in a battle with his own organisation; whether, indeed, the task is beyond a single manager.
"I have always known what the problems are; the problem is to fix them in a very large organisation. Over 83 years, all traditional airlines have built in processes that are not needed, and unions have been party to that. There's a hell of a lot of practices that aren't in EBAs [enterprise bargain agreements], what we call custom and practice,'' he says.
Dixon told Weekend AFR to expect in the next month some significant management initiatives aimed at driving "greater P&L [profit and loss] responsibility'' across all of Qantas's "silos'' business-school jargon for management fiefdoms.
Dixon has assembled a "Sustainable Futures'' team, an elite group of managers reporting directly to him. As he prepares to take his plan for restructuring Qantas to the board next month, he has instructed this team to assess every aspect of the business, reaching deep into the silos.
"Geoff Dixon is one of Australia's leading CEOs. He's very decisive and he has a clear vision where he has to get to, but he's striking resistance from within his organisation and he'll have to deal with that, too,'' says ACTU secretary Greg Combet.
Qantas is learning to live with "constant shock syndrome'' as terrorism has become airborne and Asian markets have been devastated by the SARS outbreak. Since September 11, 2001, Dixon has used all his guile to buy time for Qantas, to allow this corporate adolescent the room to restructure on its own terms.
Now time is running out. Dixon has set himself the goal of cutting $1billion from Qantas's costs in just two years, while meeting potent challenges on domestic and international routes. He faces revitalised competition from lean and mean Asian carriers such as Cathay Pacific and Singapore Airlines and new entrants like Emirates Airline. And one-time Dixon allies like Prime Minister John Howard's former public service chief Max Moore-Wilton have changed sides. Moore- Wilton, now running Sydney Airport, is championing the entry of new players like Emirates. Now free of political constraints, Moore-Wilton is promoting the heresy that the national interest and Qantas's interest are no longer indivisible, Dixon must make Qantas more efficient rather than rely on lobbying government to block foreign interlopers. Last month, Transport Minister John Anderson rejected Emirates's bid to operate twice daily flights from Sydney to Europe via Dubai, but he has promised to revisit the issue in November.
Moore-Wilton is not waiting for November; he says he'll be back in Canberra soon and believes it's inevitable that Emirates will get what it wants.
It's easy to characterise the issues between Dixon and Moore-Wilton as a battle, but they remain good friends and there are many points of agreement. Yet Dixon has been discomfited by Moore-Wilton's change of heart on Qantas. "He's had quite a metamorphosis from Canberra to Sydney,'' he says. "Max is running a costs-plus business, a monopoly in fact. Give me Max's position any day.''
Which is not to say Dixon hates competition a frequent criticism of the Qantas chief.
"There is no company in Australia that faces more competition every day. We have 38 competitors there's no major Australian company that can say that. You've got to remember that over 70 per cent of our assets on any given day are in our international operations,'' he says.
Emirates's success in bringing many federal and state politicians into its corner clearly irks Dixon. He fires back with familiar arguments about the level of government subsidy that Emirates enjoys, which effectively means "it can't go broke''.
"If anybody believes that Emirates is not an arm of the government hell-bent on creating another Singapore [in Dubai], they're kidding themselves ... Emirates has got a chairman [Sheikh Ahmed bin Saeed Al-Maktoum] who is chairman of the civil aviation authority, he's chairman of the airports so he's really Max Moore-Wilton, John Anderson and Geoff Dixon all rolled into one. I would really have Qantas buzzing if I could run civil aviation policy and Sydney Airport,'' Dixon says.
Anderson, perhaps mindful of the tag "Minister for Qantas'', is determined to promote the national interest over the sectional interests of airlines and airports. "We've got to keep them [Qantas] under enough pressure so that we make sure we have an efficient aviation sector, but we do recognise it's still in the national interest to have a Qantas at the end of the day,'' Anderson says. He's not persuaded by Dixon's argument that Qantas may be forced to close down unprofitable feeder regional routes if it loses international market share to carriers like Emirates.
A Hong Kong-based aviation analyst with JP Morgan, Peter Negline, says the focus on Emirates misses the point that Qantas is facing much more potent threats closer to home from Asian carriers like Singapore and Cathay. "Cathay's David Turnbull has 26 years in aviation and is a terrific operator. Singapore's new chief executive, C.S. Chew [Chew Choon Seng], has 30 years in aviation and is very smart a clear thinker who sees things in very black-and- white terms,'' Negline says. "Both are running airlines that are now lean and mean after years of restructuring in the midst of crisis. Their principle growth was into China but that was before SARS; now, instead, they are looking to an affluent market like Australia for growth. Geoff Dixon has a reputation for being tough and shrewd. Well, he had bloody well better be, because the competition is just as good, if not better.''
Dixon's immediate problem is how to compete when his fleet is ageing. Negline says Qantas will have to buy up to 90 new jets over the next decade simply to replace existing aircraft. The decision to put off new purchases in the 1990s meant Qantas could post record profits, but now it has one of the oldest fleets in the region.
Dixon accepts responsibility for this policy, invoking what he calls "the streaker's defence it seemed like a good idea at the time''.
END PART A
===========================================
PART B
An issue like Qantas's punctuality performance highlights the difficulty Dixon faces. In July 2001 Qantas initiated its inter-urban Cityflyer service to counter the threat to its business market from low-cost carriers like Virgin Blue on the Sydney- Melbourne run. Now it appears Qantas is falling below its targets for punctuality. According to an internal Qantas report for the week ended July 1 , only 42 per cent of flights between Sydney and Melbourne took off within three minutes of schedule. Only 35 per cent of Sydney-Brisbane flights got away on time, while the overall average for domestic routes was 37 per cent.
A Virgin Blue spokesman says Virgin's percentage of on- time departures in June was "in the high 60 per cent range, and that was not one of our best months''.
Qantas international flights were even less reliable, with an average of only 29 per cent taking off within three minutes of schedule. However, this rose to 64 per cent when using a 15 minutes from schedule measure, the standard for international operations.
More worryingly for Qantas International, a confidential customer satisfaction survey seen by Weekend AFR concludes that satisfaction has ``plateaued below the desired premium level''.
On Qantas's domestic performance, Dixon says this was a particularly bad week marked by foggy conditions in Sydney and Melbourne. However, he says punctuality is a key performance indicator for management and he is unhappy with progress so far. The collapse of Ansett (in September 2001) left Qantas with the entire domestic market; it has taken some time for Qantas to adjust to the demands, he says, but punctuality should now improve.
Qantas insiders say the reasons for the delays lie in the complexity of the airline's operations. When ground staff report a problem to line management, it can take months for remedial action, such is the bureaucratic nature of the airline. This acts as a disincentive for reporting problems, the insiders say.
The second, more pressing, issue is the eight different aircraft configurations that Qantas operates on domestic routes. If an aircraft is grounded, it can be difficult to provide a replacement with a similar configuration, say insiders. JP Morgan's Negline estimates that Qantas has at least 23 different combinations of airframe, engine type and seating configuration across the group. This compares with just nine combinations at Cathay and eight at Singapore.
Negline expects that with at least 9 new aircraft to be purchased each year over the next decade, Qantas will quickly try to streamline its fleet. Streamlining the fleet will also help Qantas to address its industrial relations problems, as new-generation aircraft such as B737NG and A380 have been designed with enhanced work practices in mind.
Dixon expects up to half his cost savings to come from labour and has announced that 2000 of Qantas's workers will be made redundant, 800 will go from attrition and another 400 to 600 full-time jobs will become part-time.
The ACTU is one of Qantas's most implacable foes yet Combet is a great admirer of Dixon, as are many of the airline's union officials. Combet says Dixon's problems lie not with the unions but in bureaucratic inertia in middle management.
Combet says Qantas has used a "divide and rule strategy'' by staggering the negotiations for enterprise bargains with its 14 unions, rather than trying to negotiate company-wide agreements simultaneously. In any given year, Qantas might have seven EBAs to negotiate, which has led to an unwieldy industrial relations apparatus. Negotiation is almost constant and disputation is frequent. A stoppage was looming this week over plans to introduce drug and alcohol testing of employees, including a mandatory provision that workers reveal any prescription medication they are taking. In an atmosphere of mistrust, union officials believe the tests will be used to target troublesome workers for dismissal. Anderson is scornful of Qantas's industrial record with its unions.
"It's a dinosaur. In some ways it's a reflection of some of the things that were so bad about industrial relations in the 1960s and '70s,'' he says.
Dixon applies Wagga-nomics to his direct dealings with labour officials, much to the frustration of his tough-talking industrial relations managers. Until last year, Dixon would meet officials and shop stewards of Qantas unions twice yearly to discuss their problems. However, this practice has been wound back as Dixon would countermand the edicts of his managers.
"When you get him one to one over a glass of merlot, he makes commitments with you and he stands by them it sends the Qantas IR guys berserk,'' says one. Dixon makes no apologies for countermanding his staff: "The board countermands me, so I can countermand my staff.''
He believes he brings a fresh perspective to IR from his career negotiators and he says he intends to resume direct talks with officials the get- togethers were suspended only because of a lack of time. Dixon agrees that he is frustrated with the continual focus on industrial relations but says negotiating all agreements with 14 unions at once "would be a nightmare''.
"The jury is out on that one, Greg [Combet] and I have discussed dealing with the ACTU as sole representative and there have been very animated discussions within Qantas on that ... There's a view from our negotiators that if they want to take you on, they can bowl you over much more quickly,'' he says.
Dixon is clearly the man in the hot seat at Qantas; there's little evidence of succession planning. Observers says none of the present members of the executive committee has the all-round skills, including international experience, to take over if Dixon decides to leave before his contract expires in December 2005.
On his worst day, does he ever think of chucking in the Qantas job and heading back to his pub in Wagga? ``Wagga always looks pretty good to me. My mum and dad are buried there. I've got some mates there but no, I would be kidding myself,'' he says. "I love this.''
==========================================
Managed to retrieve story number 2
Wirraway
Sat "Weekend Australian Financial Review"
2. Geoff Dixon: oxygen is required
Jul 05
Adam Shand
PART A
When things get really tough at Qantas headquarters, chief executive Geoff Dixon is apt to scratch his head and say with a smile: ``Well, I'm just a simple country boy from Wagga.'' It sounds folksy and self- deprecating, but for Qantas managers beloved of complexity, the simplicity of "Wagga-nomics'' is threatening indeed. It demands executives justify their positions in plain terms, that they cut the spin and get to the point. Dixon knows the time for spin is well past, that Qantas must now be absolutely fearlessly honest with our problems''.
He constantly tells his managers "to get out there and tell what the truth is. You are going to fix the problem a lot more quickly than trying to dissemble.'' Wagga-nomics is the knife Dixon must wield to deal with an organisation deeply ambivalent about change, a labour force still steeped in bureaucracy and union bastardry. It's Dixon's greatest challenge, and critics say perhaps he is bringing a knife to a gun fight. Observers question whether Dixon is tough enough to triumph in a battle with his own organisation; whether, indeed, the task is beyond a single manager.
"I have always known what the problems are; the problem is to fix them in a very large organisation. Over 83 years, all traditional airlines have built in processes that are not needed, and unions have been party to that. There's a hell of a lot of practices that aren't in EBAs [enterprise bargain agreements], what we call custom and practice,'' he says.
Dixon told Weekend AFR to expect in the next month some significant management initiatives aimed at driving "greater P&L [profit and loss] responsibility'' across all of Qantas's "silos'' business-school jargon for management fiefdoms.
Dixon has assembled a "Sustainable Futures'' team, an elite group of managers reporting directly to him. As he prepares to take his plan for restructuring Qantas to the board next month, he has instructed this team to assess every aspect of the business, reaching deep into the silos.
"Geoff Dixon is one of Australia's leading CEOs. He's very decisive and he has a clear vision where he has to get to, but he's striking resistance from within his organisation and he'll have to deal with that, too,'' says ACTU secretary Greg Combet.
Qantas is learning to live with "constant shock syndrome'' as terrorism has become airborne and Asian markets have been devastated by the SARS outbreak. Since September 11, 2001, Dixon has used all his guile to buy time for Qantas, to allow this corporate adolescent the room to restructure on its own terms.
Now time is running out. Dixon has set himself the goal of cutting $1billion from Qantas's costs in just two years, while meeting potent challenges on domestic and international routes. He faces revitalised competition from lean and mean Asian carriers such as Cathay Pacific and Singapore Airlines and new entrants like Emirates Airline. And one-time Dixon allies like Prime Minister John Howard's former public service chief Max Moore-Wilton have changed sides. Moore- Wilton, now running Sydney Airport, is championing the entry of new players like Emirates. Now free of political constraints, Moore-Wilton is promoting the heresy that the national interest and Qantas's interest are no longer indivisible, Dixon must make Qantas more efficient rather than rely on lobbying government to block foreign interlopers. Last month, Transport Minister John Anderson rejected Emirates's bid to operate twice daily flights from Sydney to Europe via Dubai, but he has promised to revisit the issue in November.
Moore-Wilton is not waiting for November; he says he'll be back in Canberra soon and believes it's inevitable that Emirates will get what it wants.
It's easy to characterise the issues between Dixon and Moore-Wilton as a battle, but they remain good friends and there are many points of agreement. Yet Dixon has been discomfited by Moore-Wilton's change of heart on Qantas. "He's had quite a metamorphosis from Canberra to Sydney,'' he says. "Max is running a costs-plus business, a monopoly in fact. Give me Max's position any day.''
Which is not to say Dixon hates competition a frequent criticism of the Qantas chief.
"There is no company in Australia that faces more competition every day. We have 38 competitors there's no major Australian company that can say that. You've got to remember that over 70 per cent of our assets on any given day are in our international operations,'' he says.
Emirates's success in bringing many federal and state politicians into its corner clearly irks Dixon. He fires back with familiar arguments about the level of government subsidy that Emirates enjoys, which effectively means "it can't go broke''.
"If anybody believes that Emirates is not an arm of the government hell-bent on creating another Singapore [in Dubai], they're kidding themselves ... Emirates has got a chairman [Sheikh Ahmed bin Saeed Al-Maktoum] who is chairman of the civil aviation authority, he's chairman of the airports so he's really Max Moore-Wilton, John Anderson and Geoff Dixon all rolled into one. I would really have Qantas buzzing if I could run civil aviation policy and Sydney Airport,'' Dixon says.
Anderson, perhaps mindful of the tag "Minister for Qantas'', is determined to promote the national interest over the sectional interests of airlines and airports. "We've got to keep them [Qantas] under enough pressure so that we make sure we have an efficient aviation sector, but we do recognise it's still in the national interest to have a Qantas at the end of the day,'' Anderson says. He's not persuaded by Dixon's argument that Qantas may be forced to close down unprofitable feeder regional routes if it loses international market share to carriers like Emirates.
A Hong Kong-based aviation analyst with JP Morgan, Peter Negline, says the focus on Emirates misses the point that Qantas is facing much more potent threats closer to home from Asian carriers like Singapore and Cathay. "Cathay's David Turnbull has 26 years in aviation and is a terrific operator. Singapore's new chief executive, C.S. Chew [Chew Choon Seng], has 30 years in aviation and is very smart a clear thinker who sees things in very black-and- white terms,'' Negline says. "Both are running airlines that are now lean and mean after years of restructuring in the midst of crisis. Their principle growth was into China but that was before SARS; now, instead, they are looking to an affluent market like Australia for growth. Geoff Dixon has a reputation for being tough and shrewd. Well, he had bloody well better be, because the competition is just as good, if not better.''
Dixon's immediate problem is how to compete when his fleet is ageing. Negline says Qantas will have to buy up to 90 new jets over the next decade simply to replace existing aircraft. The decision to put off new purchases in the 1990s meant Qantas could post record profits, but now it has one of the oldest fleets in the region.
Dixon accepts responsibility for this policy, invoking what he calls "the streaker's defence it seemed like a good idea at the time''.
END PART A
===========================================
PART B
An issue like Qantas's punctuality performance highlights the difficulty Dixon faces. In July 2001 Qantas initiated its inter-urban Cityflyer service to counter the threat to its business market from low-cost carriers like Virgin Blue on the Sydney- Melbourne run. Now it appears Qantas is falling below its targets for punctuality. According to an internal Qantas report for the week ended July 1 , only 42 per cent of flights between Sydney and Melbourne took off within three minutes of schedule. Only 35 per cent of Sydney-Brisbane flights got away on time, while the overall average for domestic routes was 37 per cent.
A Virgin Blue spokesman says Virgin's percentage of on- time departures in June was "in the high 60 per cent range, and that was not one of our best months''.
Qantas international flights were even less reliable, with an average of only 29 per cent taking off within three minutes of schedule. However, this rose to 64 per cent when using a 15 minutes from schedule measure, the standard for international operations.
More worryingly for Qantas International, a confidential customer satisfaction survey seen by Weekend AFR concludes that satisfaction has ``plateaued below the desired premium level''.
On Qantas's domestic performance, Dixon says this was a particularly bad week marked by foggy conditions in Sydney and Melbourne. However, he says punctuality is a key performance indicator for management and he is unhappy with progress so far. The collapse of Ansett (in September 2001) left Qantas with the entire domestic market; it has taken some time for Qantas to adjust to the demands, he says, but punctuality should now improve.
Qantas insiders say the reasons for the delays lie in the complexity of the airline's operations. When ground staff report a problem to line management, it can take months for remedial action, such is the bureaucratic nature of the airline. This acts as a disincentive for reporting problems, the insiders say.
The second, more pressing, issue is the eight different aircraft configurations that Qantas operates on domestic routes. If an aircraft is grounded, it can be difficult to provide a replacement with a similar configuration, say insiders. JP Morgan's Negline estimates that Qantas has at least 23 different combinations of airframe, engine type and seating configuration across the group. This compares with just nine combinations at Cathay and eight at Singapore.
Negline expects that with at least 9 new aircraft to be purchased each year over the next decade, Qantas will quickly try to streamline its fleet. Streamlining the fleet will also help Qantas to address its industrial relations problems, as new-generation aircraft such as B737NG and A380 have been designed with enhanced work practices in mind.
Dixon expects up to half his cost savings to come from labour and has announced that 2000 of Qantas's workers will be made redundant, 800 will go from attrition and another 400 to 600 full-time jobs will become part-time.
The ACTU is one of Qantas's most implacable foes yet Combet is a great admirer of Dixon, as are many of the airline's union officials. Combet says Dixon's problems lie not with the unions but in bureaucratic inertia in middle management.
Combet says Qantas has used a "divide and rule strategy'' by staggering the negotiations for enterprise bargains with its 14 unions, rather than trying to negotiate company-wide agreements simultaneously. In any given year, Qantas might have seven EBAs to negotiate, which has led to an unwieldy industrial relations apparatus. Negotiation is almost constant and disputation is frequent. A stoppage was looming this week over plans to introduce drug and alcohol testing of employees, including a mandatory provision that workers reveal any prescription medication they are taking. In an atmosphere of mistrust, union officials believe the tests will be used to target troublesome workers for dismissal. Anderson is scornful of Qantas's industrial record with its unions.
"It's a dinosaur. In some ways it's a reflection of some of the things that were so bad about industrial relations in the 1960s and '70s,'' he says.
Dixon applies Wagga-nomics to his direct dealings with labour officials, much to the frustration of his tough-talking industrial relations managers. Until last year, Dixon would meet officials and shop stewards of Qantas unions twice yearly to discuss their problems. However, this practice has been wound back as Dixon would countermand the edicts of his managers.
"When you get him one to one over a glass of merlot, he makes commitments with you and he stands by them it sends the Qantas IR guys berserk,'' says one. Dixon makes no apologies for countermanding his staff: "The board countermands me, so I can countermand my staff.''
He believes he brings a fresh perspective to IR from his career negotiators and he says he intends to resume direct talks with officials the get- togethers were suspended only because of a lack of time. Dixon agrees that he is frustrated with the continual focus on industrial relations but says negotiating all agreements with 14 unions at once "would be a nightmare''.
"The jury is out on that one, Greg [Combet] and I have discussed dealing with the ACTU as sole representative and there have been very animated discussions within Qantas on that ... There's a view from our negotiators that if they want to take you on, they can bowl you over much more quickly,'' he says.
Dixon is clearly the man in the hot seat at Qantas; there's little evidence of succession planning. Observers says none of the present members of the executive committee has the all-round skills, including international experience, to take over if Dixon decides to leave before his contract expires in December 2005.
On his worst day, does he ever think of chucking in the Qantas job and heading back to his pub in Wagga? ``Wagga always looks pretty good to me. My mum and dad are buried there. I've got some mates there but no, I would be kidding myself,'' he says. "I love this.''
==========================================
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Sat weekend "Australian Financial Review"
1. Why Qantas really needs to cut it
Jul 05
Jane Boyle
A confluence of events has placed massive stress on Qantas as it embarks on a potential $25 billion fleet overhaul and radical restructuring to meet aggressive competition.
Its ageing fleet was last renewed in the 1980s, allowing the company a holiday from aircraft replacement and a boost to shareholder returns following the company's 1995 sharemarket listing. Qantas chief financial officer Peter Gregg acknowledges: "It has fallen to Geoff [Dixon] and I to re-equip the business. But the ground's shifting underneath us."
The executive team is continually having to revise strategies in the light of what Merrill Lynch recently coined the "constant shock syndrome" afflicting global aviation.
Denis Adams, who led the start-up of Qantas' low-cost international subsidiary Australian Airlines last year, was recently seconded to accelerate the group's restructuring project, dubbed Sustainable Future.
Adams has been assigned to find ways to to strip $1 billion of costs out of the business in 18 to 24 months - ahead of a three-year target envisaged at the start of the year before severe acute respiratory syndrome and the Iraq war.
In the firing line is labour outlays, one of the few controllable variable costs, which totalled $2.7 billion, or a quarter of expenses from last year.
The latest retrenchment of 2000 staff - in addition to attritition, increased use of part-timers and forced leave - appears to be more about migrating staff into different areas and entities (with different labour structures) rather than downsizing the group.
To put it in context, Qantas has made significant provisions for redundancies and restructuring in the majority of years since it listed. Yet its full-time equivalent workforce grew a whopping 50 per cent to 34,770 since its listing and December last year.
"There is always restructuring going on in part of the company," says Gregg. "That doesn't stop us growing in other parts of the business."
Like its competitors around the world, Qantas is segmenting its operations into a suite of airlines with separate enterprise bargaining agreements and brands. If executed well, observers say this strategy should provide management with different vehicles it can move around to respond to changes in market demand and competition, and to overcome the constraints imposed by Qantas' traditional EBAs and regulatory hurdles.
Among the subsidiaries being expanded is Australian Airlines, a lower-cost, one-class Boeing 767 leisure carrier, which flies mid-range Asian routes but is also carrying feeder traffic on an increasing number of domestic routes. It is also growing Jet Connect, based in New Zealand, which will start flying the Tasman route in September. Industry insiders believe Jet Connect could be brought into the Australian domestic market as a low-cost vehicle taking advantage of NZ's lower labour costs.
And, if mutual recognition of safety regimens on either side of the Tasman is introduced, it offers a way around regulations that competitively disadvantage Australian carriers. While cost-cutting is the mantra in the global airline industry, it's not the only consideration.
The gap between Qantas' costs and those of Virgin Blue is estimated to be anywhere between 15 and 30 per cent. That gap, says Gregg, is narrowing quickly. The flipside is that Qantas commands a revenue or yield premium to Virgin Blue because it dominates the high-paying corporate market.
It's the difference between the revenue and cost premium that is key to Qantas' profitability.
Combined, Qantas and Virgin Blue made record profits out of the domestic market in the first half of the latest financial year. But Centre for Asia Pacific Aviation managing director Peter Harbison says that was not surprising given inefficiencies under the old Qantas-Ansett duopoly.
This year profits have been under greater pressure as international travel has slumped. And Harbison says average yields have certainly declined over the past 12 months. This intensifies the pressure to cut costs. Qantas is switching to an all-economy configuration on domestic leisure routes and speculation persists that it will introduce a lower cost vehicle like Jet Connect or a no-frills operation in the domestic market.
"The public is being reasonably well looked after," says Harbison. "But there is certainly room for cheaper prices."
Some analysts say competition will intensify if Virgin Blue uses the four new Boeing 737-800s earmarked for domestic use - out of 10 due next month - to lift capacity on Sydney routes.
Virgin Blue chief Brett Godfrey expects the domestic market to grow overall by 9 per cent in the 12 months to March next year. He says Virgin will aim to capture half of that growth, which is aggressive considering its market share was 28 per cent at March this year.
But Harbison observes that Virgin Blue needs to make good profits in the lead-up to a float. It is more likely to pursue that by sacrificing some load factor to chase higher yields rather than filling its planes with cheaper seats (which would worry potential investors), he says. As a result, Qantas is offering some fares cheaper than its "discount" rival.
At the same time international competition is intensifying. Gregg says Qantas' costs on long haul international routes are competitive. But that position is under threat as the Australian dollar strengthens and rivals slash costs.
Qantas is one of the strongest airlines, but that comparison is made against an industry that has destroyed value over its history, sending many operators broke.
Merrill Lynch analysis shows that even Qantas and two of its most profitable international rivals, Singapore Airlines and Cathay Pacific, have not been making returns on invested capital that cover their weighted-average cost of capital over the past seven years. And worse, those returns have been declining.
Qantas cannot afford to compromise on its fleet upgrade. While it has been forced to slash capital expenditure by $1 billion this financial year to $1.8 billion (compared with $3.4 billion in fiscal 2003), it is mainly non-flying investment like airport infrastructure that has been deferred.
The appreciating Australian dollar helps. As a rule of thumb, every US1¢ gain in the $A cuts its capex bill by $80 million and adds $14 million to profits.
The aircraft purchases provide for 5 per cent growth of the fleet. It has committed to spend up to $13 billion and has flagged potential further expenditure of as much as $11 billion to $12 billion, which would include replacement of its narrow-bodied fleet and part of its B767 fleet and more A380s. But those costs are falling in $A terms.
The fleet upgrade cannot be put off. It involves a rationalisation of aircraft types and the operating costs of the new jets are 15 to 25 per cent lower than its ageing planes.
At the same time, the investment in upgrading the cabins of its long-haul planes, including the installation of business class sleeper beds and improved inflight entertainment, is crucial to remain competitive with regional peers and maintain its yield premium.
=========================================
1. Why Qantas really needs to cut it
Jul 05
Jane Boyle
A confluence of events has placed massive stress on Qantas as it embarks on a potential $25 billion fleet overhaul and radical restructuring to meet aggressive competition.
Its ageing fleet was last renewed in the 1980s, allowing the company a holiday from aircraft replacement and a boost to shareholder returns following the company's 1995 sharemarket listing. Qantas chief financial officer Peter Gregg acknowledges: "It has fallen to Geoff [Dixon] and I to re-equip the business. But the ground's shifting underneath us."
The executive team is continually having to revise strategies in the light of what Merrill Lynch recently coined the "constant shock syndrome" afflicting global aviation.
Denis Adams, who led the start-up of Qantas' low-cost international subsidiary Australian Airlines last year, was recently seconded to accelerate the group's restructuring project, dubbed Sustainable Future.
Adams has been assigned to find ways to to strip $1 billion of costs out of the business in 18 to 24 months - ahead of a three-year target envisaged at the start of the year before severe acute respiratory syndrome and the Iraq war.
In the firing line is labour outlays, one of the few controllable variable costs, which totalled $2.7 billion, or a quarter of expenses from last year.
The latest retrenchment of 2000 staff - in addition to attritition, increased use of part-timers and forced leave - appears to be more about migrating staff into different areas and entities (with different labour structures) rather than downsizing the group.
To put it in context, Qantas has made significant provisions for redundancies and restructuring in the majority of years since it listed. Yet its full-time equivalent workforce grew a whopping 50 per cent to 34,770 since its listing and December last year.
"There is always restructuring going on in part of the company," says Gregg. "That doesn't stop us growing in other parts of the business."
Like its competitors around the world, Qantas is segmenting its operations into a suite of airlines with separate enterprise bargaining agreements and brands. If executed well, observers say this strategy should provide management with different vehicles it can move around to respond to changes in market demand and competition, and to overcome the constraints imposed by Qantas' traditional EBAs and regulatory hurdles.
Among the subsidiaries being expanded is Australian Airlines, a lower-cost, one-class Boeing 767 leisure carrier, which flies mid-range Asian routes but is also carrying feeder traffic on an increasing number of domestic routes. It is also growing Jet Connect, based in New Zealand, which will start flying the Tasman route in September. Industry insiders believe Jet Connect could be brought into the Australian domestic market as a low-cost vehicle taking advantage of NZ's lower labour costs.
And, if mutual recognition of safety regimens on either side of the Tasman is introduced, it offers a way around regulations that competitively disadvantage Australian carriers. While cost-cutting is the mantra in the global airline industry, it's not the only consideration.
The gap between Qantas' costs and those of Virgin Blue is estimated to be anywhere between 15 and 30 per cent. That gap, says Gregg, is narrowing quickly. The flipside is that Qantas commands a revenue or yield premium to Virgin Blue because it dominates the high-paying corporate market.
It's the difference between the revenue and cost premium that is key to Qantas' profitability.
Combined, Qantas and Virgin Blue made record profits out of the domestic market in the first half of the latest financial year. But Centre for Asia Pacific Aviation managing director Peter Harbison says that was not surprising given inefficiencies under the old Qantas-Ansett duopoly.
This year profits have been under greater pressure as international travel has slumped. And Harbison says average yields have certainly declined over the past 12 months. This intensifies the pressure to cut costs. Qantas is switching to an all-economy configuration on domestic leisure routes and speculation persists that it will introduce a lower cost vehicle like Jet Connect or a no-frills operation in the domestic market.
"The public is being reasonably well looked after," says Harbison. "But there is certainly room for cheaper prices."
Some analysts say competition will intensify if Virgin Blue uses the four new Boeing 737-800s earmarked for domestic use - out of 10 due next month - to lift capacity on Sydney routes.
Virgin Blue chief Brett Godfrey expects the domestic market to grow overall by 9 per cent in the 12 months to March next year. He says Virgin will aim to capture half of that growth, which is aggressive considering its market share was 28 per cent at March this year.
But Harbison observes that Virgin Blue needs to make good profits in the lead-up to a float. It is more likely to pursue that by sacrificing some load factor to chase higher yields rather than filling its planes with cheaper seats (which would worry potential investors), he says. As a result, Qantas is offering some fares cheaper than its "discount" rival.
At the same time international competition is intensifying. Gregg says Qantas' costs on long haul international routes are competitive. But that position is under threat as the Australian dollar strengthens and rivals slash costs.
Qantas is one of the strongest airlines, but that comparison is made against an industry that has destroyed value over its history, sending many operators broke.
Merrill Lynch analysis shows that even Qantas and two of its most profitable international rivals, Singapore Airlines and Cathay Pacific, have not been making returns on invested capital that cover their weighted-average cost of capital over the past seven years. And worse, those returns have been declining.
Qantas cannot afford to compromise on its fleet upgrade. While it has been forced to slash capital expenditure by $1 billion this financial year to $1.8 billion (compared with $3.4 billion in fiscal 2003), it is mainly non-flying investment like airport infrastructure that has been deferred.
The appreciating Australian dollar helps. As a rule of thumb, every US1¢ gain in the $A cuts its capex bill by $80 million and adds $14 million to profits.
The aircraft purchases provide for 5 per cent growth of the fleet. It has committed to spend up to $13 billion and has flagged potential further expenditure of as much as $11 billion to $12 billion, which would include replacement of its narrow-bodied fleet and part of its B767 fleet and more A380s. But those costs are falling in $A terms.
The fleet upgrade cannot be put off. It involves a rationalisation of aircraft types and the operating costs of the new jets are 15 to 25 per cent lower than its ageing planes.
At the same time, the investment in upgrading the cabins of its long-haul planes, including the installation of business class sleeper beds and improved inflight entertainment, is crucial to remain competitive with regional peers and maintain its yield premium.
=========================================
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Ben Sandilands had better get his facts straight:
"The once docile AIPA, which was largely formed by those who did not support the domestic pilot strike of 1989 by the Australian Federation of Air Pilots..."
Bullsh@t.
"The once docile AIPA, which was largely formed by those who did not support the domestic pilot strike of 1989 by the Australian Federation of Air Pilots..."
Bullsh@t.
I have to agree that Geoff Dixon is not addressing the VB presence and expansion fast enough. Sure there is a lot of talk of action but it is not visible at the 'coalface',yet. He is going to have to do something soon or it will be too late
for QF.
With his performance perhaps his time as CEO is coming to an end,any bets on how long until he is replaced?
More importantly,who do you think will replace him?
Rod Eddington
.
Safe flying, hoss
for QF.With his performance perhaps his time as CEO is coming to an end,any bets on how long until he is replaced?
More importantly,who do you think will replace him?
Rod Eddington
.Safe flying, hoss
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"But for Dixon's team, Jet Connect, with or without an AirNZ alliance, is the master stroke that will force the drastic productivity and work practice changes onto Qantas that they have so far failed to achieve."
What Geoff Dixon has pulled off here must give Brett Godfrey
2nd thoughts about starting trans-tasman and domestic NZ,
the only answer is to start a NZ base for VB and pay the same
as Jet Connect and Freedom Air for cheap Kiwi labour.
As for the threat of strike action by QF employees, could be
playing right into Geoff's hands for the trigger he is looking
for.
What Geoff Dixon has pulled off here must give Brett Godfrey
2nd thoughts about starting trans-tasman and domestic NZ,
the only answer is to start a NZ base for VB and pay the same
as Jet Connect and Freedom Air for cheap Kiwi labour.
As for the threat of strike action by QF employees, could be
playing right into Geoff's hands for the trigger he is looking
for.
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Dixon has to prepare for a much leaner SQ investing in Virgin.The writing is on the wall for an assualt on the Australian market by Emirates and also SQ now that things are on the improve. No way in the world have we seen the end to new investment in the Australian market, especialy investment in Virgin.
I feel for all those loyal QF employees that will end up getting the shaft out of all this.
Buster Hyman, you still have AN ties, have you heard the latest one to come out of Singapore? It involves open skies here and ex SQ management along with certain AN and Airbus reps forming a deal to hit the Australian domestic market. 5 ports initially after a majority stake is purchased of an incumbent Australian airline. The Airbuses are part of an existing order from SQ and Silkair.
I feel for all those loyal QF employees that will end up getting the shaft out of all this.
Buster Hyman, you still have AN ties, have you heard the latest one to come out of Singapore? It involves open skies here and ex SQ management along with certain AN and Airbus reps forming a deal to hit the Australian domestic market. 5 ports initially after a majority stake is purchased of an incumbent Australian airline. The Airbuses are part of an existing order from SQ and Silkair.
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It looks to me like Qantas have the cheapest B737 pilots going around, if Jet Connect Capts only get 95K! (Is that true, or BS journalism?)
That must piss off the QF ponies, who have been endlessly bagging DJ for lowering pilots pay and conditions - when their own company is way below DJ's remuneration.
How on earth did the almighty QF pilots let this happen? I didnt think QF pilot's would accept such poor conditions?
That must piss off the QF ponies, who have been endlessly bagging DJ for lowering pilots pay and conditions - when their own company is way below DJ's remuneration.
How on earth did the almighty QF pilots let this happen? I didnt think QF pilot's would accept such poor conditions?
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Who said they have Hostie Humper? Last I heard there were some pretty pissed off pilots in the group.
I believe that AIPA are being inundated with complaints from the troops. It will be interesting to see AIPA's response.
I believe that AIPA are being inundated with complaints from the troops. It will be interesting to see AIPA's response.
Three Bars
Sad thing is management realise that your uniform doesn't count for much. These pilots do your job just as well for half the price.
Countless numbers of "contractors" were let go from QF over the last 12 months. They wore your uniform, sat in your flight decks and passed your sim. Have they now bitten your ass with TJ and ended up in Jet Connect?
The QF expansion was at the expense of the AN carcass. Cadets and new hires replaced the jobs of the experienced and in this case 737 pilots. There was a glut of experienced 737 pilots and they have taken the only positions on offer.
The market speaks and comparitively speaking, your conditions have been more than halved. Qantas pilots are now grossly overpaid!
Good luck in your battle. I am not so stupid to realise the imperative for all pilots in the market; to see you keep your conditions.
Didn't the AirNZ pilots stand up to management by threatening strike action and win a dispute recently? A leaf from their book?
Or does the QF Psyche Profiling carefully choose those who would never dream of such fortitude?
Sad thing is management realise that your uniform doesn't count for much. These pilots do your job just as well for half the price.
Countless numbers of "contractors" were let go from QF over the last 12 months. They wore your uniform, sat in your flight decks and passed your sim. Have they now bitten your ass with TJ and ended up in Jet Connect?
The QF expansion was at the expense of the AN carcass. Cadets and new hires replaced the jobs of the experienced and in this case 737 pilots. There was a glut of experienced 737 pilots and they have taken the only positions on offer.
The market speaks and comparitively speaking, your conditions have been more than halved. Qantas pilots are now grossly overpaid!
Good luck in your battle. I am not so stupid to realise the imperative for all pilots in the market; to see you keep your conditions.
Didn't the AirNZ pilots stand up to management by threatening strike action and win a dispute recently? A leaf from their book?
Or does the QF Psyche Profiling carefully choose those who would never dream of such fortitude?
Last edited by Gnadenburg; 7th Jul 2003 at 04:11.
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Gnadenburg,
The uniform comment I made is wrt to contract pilots being paid less than us but wearing the same uniform. I think that they should wear different uniforms because they are working for a different company, under different conditions, and do not have the same protections that we have.
Many have worked hard for many years to wear a Qantas captain's uniform, and they object to seeing someone coming in off the street and wearing one straight away. When the public see the QF uniform, they naturally associate that image with QF mainline. I well remember the television coverage of QF New Zealand going broke. One punter was seen shaking his head saying that he couldn't believe that "Qantas" had gone broke. The public did not realise that this was a FRANCHISE with no connection to Qantas mainline other than the paint scheme. I had hoped that QF managament might have learned their lesson.
I disagree with you comment that "Qantas pilots are grossly overpaid". Instead, I think that other pilots in VB, Jetconnect etc are being grossly underpaid at a time when jet flying jobs are hard to come by and various managements know that they have us by the b@lls (industrially). I have expressed my views, in detail, on other related threads concerning Jetconnect.
I appreciate the support that you have expressed for us in keeping our conditions. In time, and with a recovery, things may change and I hope that, if it comes to industrial action, we will pick a time when we have a reasonable chance of winning. VB pilots should also be fighting to improve their conditions to be more in line with ours.
One final point. I think that people feel that there is some ongoing animosity to ex-AN pilots by the QF pilots. At the time that AN collapsed, I think that there was a great deal of sympathy felt towards those pilots who had lost their livelihood. Many joined QF as second officers, and have since gained F/O slots in minimal time. The angst being expressed on another thread is aimed toward those who would seek to gain instant promotion and then do our jobs for less.
The uniform comment I made is wrt to contract pilots being paid less than us but wearing the same uniform. I think that they should wear different uniforms because they are working for a different company, under different conditions, and do not have the same protections that we have.
Many have worked hard for many years to wear a Qantas captain's uniform, and they object to seeing someone coming in off the street and wearing one straight away. When the public see the QF uniform, they naturally associate that image with QF mainline. I well remember the television coverage of QF New Zealand going broke. One punter was seen shaking his head saying that he couldn't believe that "Qantas" had gone broke. The public did not realise that this was a FRANCHISE with no connection to Qantas mainline other than the paint scheme. I had hoped that QF managament might have learned their lesson.
I disagree with you comment that "Qantas pilots are grossly overpaid". Instead, I think that other pilots in VB, Jetconnect etc are being grossly underpaid at a time when jet flying jobs are hard to come by and various managements know that they have us by the b@lls (industrially). I have expressed my views, in detail, on other related threads concerning Jetconnect.
I appreciate the support that you have expressed for us in keeping our conditions. In time, and with a recovery, things may change and I hope that, if it comes to industrial action, we will pick a time when we have a reasonable chance of winning. VB pilots should also be fighting to improve their conditions to be more in line with ours.
One final point. I think that people feel that there is some ongoing animosity to ex-AN pilots by the QF pilots. At the time that AN collapsed, I think that there was a great deal of sympathy felt towards those pilots who had lost their livelihood. Many joined QF as second officers, and have since gained F/O slots in minimal time. The angst being expressed on another thread is aimed toward those who would seek to gain instant promotion and then do our jobs for less.
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Three Bars,
I can see where you’re coming from, but many will look at what you’ve written (as quoted here) and the more kind will say you’re taking yourself a trifle seriously. The less kind will say ‘typical Qantas ******’.
Sadly, the days when the public gave a rotund rodent’s rectum about ‘associating images’ of anything a professional pilot would feel any pride in are long gone, and if there is anyone in QF who still thinks they are the exception because they are (gasp! awe!)Qantas pilots, I’d have to say they’ve taken the company propaganda they feed new recruits a little too seriously.
On to a complete change of subject, I’d have to say that I concur completely with your comment on another thread about the Jakarta 25R T-Vasis (or should that be the Jakarta “+” Vasis). I think we could get that fixed overnight if we pointed out to the Indons that they’re displaying a permanent, very large Christian symbol to every pilot who lands at Hatta.
Many have worked hard for many years to wear a Qantas captain's uniform, and they object to seeing someone coming in off the street and wearing one straight away. When the public see the QF uniform, they naturally associate that image with QF mainline.
Sadly, the days when the public gave a rotund rodent’s rectum about ‘associating images’ of anything a professional pilot would feel any pride in are long gone, and if there is anyone in QF who still thinks they are the exception because they are (gasp! awe!)Qantas pilots, I’d have to say they’ve taken the company propaganda they feed new recruits a little too seriously.
On to a complete change of subject, I’d have to say that I concur completely with your comment on another thread about the Jakarta 25R T-Vasis (or should that be the Jakarta “+” Vasis). I think we could get that fixed overnight if we pointed out to the Indons that they’re displaying a permanent, very large Christian symbol to every pilot who lands at Hatta.
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"VB pilots should also be fighting to improve their conditions to be more in line with ours."
cos we all wanna be a White Rat dont we.......
We choose to work for who we work for for various reasons, accepting such things as an employers conditions is just one thing but to be told by others that we need to be like them is
!
Enjoy it while it lasts, life is short, play hard. I enjoy getting paid for having a great time doing what I love! Not many can say that...
cos we all wanna be a White Rat dont we.......
We choose to work for who we work for for various reasons, accepting such things as an employers conditions is just one thing but to be told by others that we need to be like them is
!Enjoy it while it lasts, life is short, play hard. I enjoy getting paid for having a great time doing what I love! Not many can say that...
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Sick,
Grow up will you, no one is 'telling you to be a white rat'
All Gnads is saying is that IHHO you guys are poorly paid by world standards.
I agree with him - but if you are happy thats your business and good luck to you
I love the job also, but wait untill you have a family and committments and see howe far the 'love' of the job alone will get you.
QF is already a lean airline by world standards - the proof is that they are not broke / chap 11 / govt protected like so many other carriers.
Remember that your and the capts wages contribute approx 3% to operating costs. The rest is made up in fuel (us dollars), lease costs (us dollars again), maintenance (spares in USD) and the outrageous airservices charges gouged by airservices / SACL ect.
It is easy for airline management to chop a few dollars per hour of your hourly rate and say to the owners / directors and stockmarket "look we are on top of costs here"
It is harder to analyse your business model and determine that you are overstaffed in certain areas (look at QF cabin services management for example) and make changes.
This takes genuine skill, vision and hard work - hence why it is not done. Look at air sheep, most of their staff are paid ****** all by world standards yet they are still losing money hand over fist. If it is not staff wages there must be another reason eh?
Our bosses love threads like this where guys start chopping at one another - it means that instead of clinically examining the facts around the wage / profitability nexus we are falling hook line and sinker for their propaganda and crap
Grow up will you, no one is 'telling you to be a white rat'
All Gnads is saying is that IHHO you guys are poorly paid by world standards.
I agree with him - but if you are happy thats your business and good luck to you
I love the job also, but wait untill you have a family and committments and see howe far the 'love' of the job alone will get you.
QF is already a lean airline by world standards - the proof is that they are not broke / chap 11 / govt protected like so many other carriers.
Remember that your and the capts wages contribute approx 3% to operating costs. The rest is made up in fuel (us dollars), lease costs (us dollars again), maintenance (spares in USD) and the outrageous airservices charges gouged by airservices / SACL ect.
It is easy for airline management to chop a few dollars per hour of your hourly rate and say to the owners / directors and stockmarket "look we are on top of costs here"
It is harder to analyse your business model and determine that you are overstaffed in certain areas (look at QF cabin services management for example) and make changes.
This takes genuine skill, vision and hard work - hence why it is not done. Look at air sheep, most of their staff are paid ****** all by world standards yet they are still losing money hand over fist. If it is not staff wages there must be another reason eh?
Our bosses love threads like this where guys start chopping at one another - it means that instead of clinically examining the facts around the wage / profitability nexus we are falling hook line and sinker for their propaganda and crap
Join Date: Jun 2003
Location: around you know
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Fartsock
At least you have the capacity to see it the way it really is. Good on ya!
Put Me Down Sick
You are obviously just a pup. The day will come when you will discover your first silvery grey pube. I hope by then you are still enjoying your rose coloured view of the world because thats all you are going to have living on a pension. Your kind will be easy to spot as your face will be sporting an arse shaped sun tan from the rays coming out of your employers rear.
Lap it up boy lap it up!
At least you have the capacity to see it the way it really is. Good on ya!
Put Me Down Sick
You are obviously just a pup. The day will come when you will discover your first silvery grey pube. I hope by then you are still enjoying your rose coloured view of the world because thats all you are going to have living on a pension. Your kind will be easy to spot as your face will be sporting an arse shaped sun tan from the rays coming out of your employers rear.
Lap it up boy lap it up!
Join Date: Jan 2001
Location: NSW Australia
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My two points were:
1. Some people in QF take pride in the uniform that they wear and think that the efforts that they have put in to achieve their rank deserve adequate compensation.
2. Pilots from other low-cost airlines should be aspiring to improve their conditions rather than trying to reduce ours.
If you guys can read QF arrogance into those sentiments, I really think that the problem is yours, not mine.
FS - agree with your comments completely.
1. Some people in QF take pride in the uniform that they wear and think that the efforts that they have put in to achieve their rank deserve adequate compensation.
2. Pilots from other low-cost airlines should be aspiring to improve their conditions rather than trying to reduce ours.
If you guys can read QF arrogance into those sentiments, I really think that the problem is yours, not mine.
FS - agree with your comments completely.