Memo to Lesley Grant
 

The latest figures from BITRE merit some comment.

http://www.bitre.gov.au/publications...les/1210_M.pdf

While Qantas Intl suffered another reduction in market share, some of it attributable to the A380 problems, all is not gloom and doom.
Some key points:

*QF Intl had an average load factor on all services of 86.7%.

*Jetstar Intl had an average Load factor on all actual international
services of 77.85%. (I.E. Doesn't include the Australian domestic pax and NZ Domestic pax added as padding.)

* Both SIA and CX had load factors less than QF Intl but their number of services to Singapore and HKG respectively DWARFED QF Intl.

* QF Intl and VA Load factors to the US were almost identical. Both of them beat United and Delta by substantial margins.

*QF Intl's Avg load factor to and from Japan was 86.9%. Jetstar Intl was 77.8%

With Lesley Grant supposedly heading up a task force to improve the market share/performance of QF Intl, I would suggest the answers are fairly self evident.

Dear Lesley,

-More people want to fly QF Intl than J* Intl.

-More red and White A330's or 777's are required to compete with SIA and HKG and VA on these key routes.

-J* Intl is not working. Now that it has been more than 12 months since J* took over the NZ Domestic routes and those passengers were surreptitiously included into the J* Intl figures to pad them out, the spectacular yearly increases have stopped. In fact the November 10 figures showed a percentage decrease on the November 09 figures.

Please invest in the things that makes airlines great, the product and the people.

You already have the people; let them know they are valued instead of constantly trying to find ways to undercut them.

Invest in the product that was consistently profitable before this disease known as Jetstar Intl was introduced and we will show you the money.

The chaps in the City can't believe it.

JP Morgan is now saying:Just smashing!

Kremlin,

Quoting load factors is all when and good but the statistic that matters for re-investment is whether Qantas international is profitable, and it isn't.

I would have thought that a shareholder would read the Company reports. Actually it IS profitable.

Spin all you like QAN. It is management who arent profitable with these figures. They aren't managing such great figures to turn a profit.

We don't need to replace the pilots, or the cabin crew, or the engineers, or the ground staff. WE NEED TO REPLACE THE FRICKIN MANAGERS.

Not wanting to get into or start one more QF vs JQ fight I'll stick to the facts.

Jetstar was born with more than one purpose but only one publicised intention.
That was to maintain market share on domestic flights with the entry of Virgin Blue.
We can argue all day and night but that part of the parents intention has been achieved.It's methodology is another argument but it has done the job in that regard.

The problem is that not withstanding the success of the Jetstar formula it's viability domestically does not necessarily translate to international long haul flights.

The geographical location of Australia does not lend itself to the same probability of success that low cost carriers in other parts of the world enjoy.

If QF was given the right aircraft for the job,advertising etc and the correct management approach to staff then it has and always will have the potential to be very profitable.

To do that though the staff need the tools for the job and that includes good management practice.

The Agenda
 

Establish JetStar to drive down wages and conditions of mainline
Starve mainline of capital
Transfer all Jetstar costs to mainline
Shrink mainline network to the point of irrelevance
Mainline collapses and put into administration
Employees offered jobs but at reduced wages.
All Qantas Group aircraft painted red and white
Jetstar ceases to exist except on thin leisure routes
Management paid inflated bonuses for rescuing Qantas

Kremin,

have you passed these figures on to Lesley or AIPA? Id expect the review of Int will include such things as 'how can our bonuses be maximised' and 'how can we cut costs' rather than 'how can we increase revenue'.....

Information such as this could be helpful

cheers

Kremin,

As far as company reports are concerned Qantas report mainline as one business unit so no separate disclosure on international. However, Joyce commented that the US and UK routes would have been breakeven but for the A380 issues and that Qantas domestic is the most profitable brand in the domestic market. The implication of this is that international is loss making.

I haven't checked the accuracy of the load factor statistics you quote but these seem to be December figures which were artificially high due to A380s being out of service. Hence the conclusion 'more people want to fly QF' is a bit shaky.

Shareholder, also your reliance on what Joyce says is also shaky as the EBA's for the Long Haul pilots and LAME's have expired. Everything he says to the press is aimed at reducing the bargaining power of his employees. Dixon was an exponent of this and Joyce has followed suit.

Lester, all the evidence within the Qantas Group is that is what is actually happening (intentionally) which is why the LH pilots have to make a stand now otherwise QF mainline will be replaced by "Jetstar Offshore".

QAN Shareholder, my statistics are from BITRE, which are more accurate than the QF reports that continue to hide the fact that passengers flying domestically in Australia and NZ are being counted as Jetstar International passengers (something that inflates the Jetstar Intl figures by almost 100%) ...... something that Ben Sandilands finally got out of them months ago.

The JP Morgan report that London Sloop alluded to is even more crystal clear.

Memo to Lesley and Alan,
WTF do you need a committee of 20 to be set up to tell you what's wrong?
If you don't already have an idea, well what the hell have you been doing for the last 'x' years?

I don't disagree that Joyce makes statements to the press to influence EBAs but the idea that Qantas international is actually doing fine just doesn't stack up. I know how some desperately want to believe Jetstar is loss making but comparing Tiger, Jetstar and Virgin profits, yields and costs suggests Jetstar is profitable.

Joyce has also said Qantas domestic is more profitable than Jetstar domestic, seems you have to cherry pick statements to make the conspiracy theory fit.

AJ doesn't know his business!
 

These are some of the comments AJ made at the Press Club in February while announcing Lesley Grant's review of the 'sick' QF International business.

Did AJ not know that the load factor for QF international was up 2% in January to 86.5%? Yield for international up 5.7% for the month and 11.1% for the year!

JStar international had a load factor so far this year is 78.5%!

Considering that QF international has the oldest aircraft in the group, and that management is 'attacking' it's employees both internally and externally. You tell me which one is "underperforming"?

QAN Shareholder, you should be using your vote to get a CEO that either, knows his business better, or, is honest about his true agenda.

The thing thats jumps out at me from those figures is how can Jetstar Intl with a load factor of 77.8% be making money. If Qantas mainline at 86.5% load factors and higher yields is bleeding then Jetstar at 77.8% must be close to death.

Going a bit further back...
 

AverageLoad Factor/Pax stats from October/November 2010

Qantas Intl October 82.85%
Jetstar Intl October 78.35% Pax Carried Internationally 192456/ Reported to ASX 353000
Qantas Intl Japan 80.0%
Jetstar Intl Japan 67.9%


Qantas Intl November 83.35%
Jetstar Intl November 77.35% Pax Carried Internationally 171578/ Reported to ASX 332000
Qantas Intl Japan 82.9%
Jetstar Intl Japan 72.85%

Who is cherry picking again?

QAN-Shareholder, if you can work out the Jetstar costs then you are doing a better job than every financial institution in the country because even they cannot!

Do you know how much Jetstar pay Qantas to lease the aircraft off them?
What rates they are charged for maintenance?

Take out the near $1 billion for mainline in depreciation charges and then tell me how long haul is really doing...

The only reason that Jetstar loads are at 77.8% is because the punters are FORCED to fly with them. Frequently, there is NO alternative.

It has been said again and again, the passengers DETEST Jetstar. HATE them. More than we as crew do. But they have no choice.

But unfortunately, with the mismanagement of the company, Jetstar will never be close to death. They will continue to leach off Mainline, and management will continue to spin.

Disgusting world we live in. I sometimes cannot believe the way my fellow human beings behave.

Kremin,

So we have reached some common ground QF international load factors around 83% and Jetstar international around 78%. My objection was using a figure of 86% for December when impacted by A380 issues.

Skyscanner,

Why on earth would you add back $1bn in depreciation for mainline? Capex per annum is running at $1bn and for management accounting purposes you should deduct another $1bn for cost of capital.

MF,

Yields may indeed be up 11.7% ytd but only since they fell 20%+ in the prior year. The previous year was a catastrophe, yes this year is better, it doesn't make it good.

QAN Shareholder

Why did AJ come out in public and attack QF International and not JStar International? QF International has the better matrix.

If last year was so bad for QF International, why has it taken AJ so long to act? Was he asleep at the wheel, or is he better as a CEO of a budget operator than a premium operator?

I still think you need to exercise your shareholder responsibilities to vote for a new CEO!!