Australia's a backwater in aviation>>
 

AJ is right; It's happening in Asia..:oh:


From Paris Air Show this week:

AirAsia's chief executive Tony Fernandes was on hand to announce the deal alongside the jubilant Airbus team - striking a deal to buy a record 200 A320neo jets for a price of 12.7 billion euros.

"It is the largest single order for Airbus in terms of numbers of aircraft," Enders said, while observers noted it was in fact the biggest order in unit terms ever placed for commercial airliners.

The order makes the Malaysian low-cost pioneer Airbus' biggest customer, with a total of 375 planes on order and 89 A320s already in service.

Yeah yeah but what's the delivery time frame? 15 years or more?

go to Asian airports and see the movements.

Go to SYD/MEL/BNE and have a sleep between movements. The "busy" period here sees half a dozen waiting once or twice a day.....

TBM..... I work, and have worked for 20 years in one of the biggest hubs in Asia, yep you got it Hong Kong........So I've seen a thing or 3 before thanks :ok:

All very well to say we've ordered a zillion aircraft but the real question is in what time frame? and how many airframes does it replace?

Ok

OK, if you read the statement it says they have a total of 375 on order. Currently 89 in service. If they go still leaves a fleet over over 300 aircraft...
Paris 2011: AirAsia eyes fleet of over 300 aircraft by 2020 with new A320neo | Centre for Asia Pacific Aviation - CAPA

Ok, but over what time frame are they getting these Aircraft? If its 10 years then it's not as big as you think.
Also some of the earlier delivered Aircraft may be replaced by the later delivered ones.
You need to see what their fleet numbers are being planned for the future to know how big they plan to be.

Only on pprune could a 200 aircraft order get talked down.

How many aircraft do all the oz airlines combined have on order? At least some of these airlines are moving the industry forward and getting on with the job rather than getting into a 10yr battle with its staff....

Backwater or not, it happens to be our own 'backwater'. What happens here matters for Australian pilots. For those who choose working overseas as their career path, good luck while you are away. Surrendering our own airlines to provide that overseas work should not be the plan. Keeping our 'backwater' functional for those who live here and for our own travellers is of paramount importance. The Australian Government can help by levelling the playing field for local operators. Some overseas airlines operate in artificial tax free environments where the normal business rules don't apply (despite their protestations to the contrary). Large populations elswhere will always make our slice of the industry look small. However capitulating to predatory overseas practices or cheaper operating costs will be the ruin of Australia. Standing by and watching even smaller nations buy their aviation industry at our expense with oil or other revenues is hardly a clever Government activity. It is the Goverment which has the power to provide both relief and support to internationally exposed industries, rather than expecting fixed costs to be lowered adnauseum. The levels of taxation, Government charges and overseas access to Australian routes is all the province of Government. Management don't have the ability to change international pressures. If our Government believes that all services should go to the lowest cost global player, then we are doomed to share their lower condition and surrender all our local industry to offshore producers. No work means no income. If Australia is to avoid becoming a quarry occupied by masses of unemployed citizens, the government has to actively support our industries with revenue from our natural resources and advantages. We have masses of energy which we sell for peanuts and an educated trained workforce. If dictatorial nations can use their resources to buy industry, why can't democratic Australia at least retain those ones it has? You won't see our politicians or management types lowering their costs under pressure from cheaper overseas competition. Globalisation is for the powerless only. We don't need to run on that treadmil, whether we are a small player or not. Meanwhile in Europe, aviation industries including airlines are wondering why their governments support building enormously big airliners, subsidised by European taxpayers, which are used mainly by foreign 'supported' carriers to monopolise the worlds long haul routes to the detriment of European companies. Governments are not often 'naturally clever'. They need guidance!

Completely agree with all that.

Meanwhile, how many hopes and dreams of Australian working class airline employees get dashed whilst executives have their snouts in the trough?

Where is the balance? Well, there is none.

Oil funded countries, or tax friendly havens may create tough competition but that doesn't explain QFs attitude to it's staff and customers.

Who wouldn't like a well run and safe aviation industry in Australia? No-one would put their hand up for that but no-one is willing or able to facilitate either.

What's the answer? Who knows right now, but I need to make sure I provide a roof over my families head and that bills get paid. Australian aviation is pretty much unable to offer that in the longer term at the moment.

“Some overseas airlines operate in artificial tax free environments”

Artificial? In what way.

“where the normal business rules don't apply”

What exactly are “normal” business rules and do you think you will be able to change these?

“However capitulating to predatory overseas practices….”

As though you have a choice.

“….. or cheaper operating costs will be the ruin of Australia”

Yes, it will. And the ruin of most western countries. Take a look at Western Europe and the UK. The western world has lived on debt for decades but that is coming to a close.

“Standing by and watching even smaller nations buy their aviation industry at our expense with oil or other revenues is hardly a clever Government activity.”

Hang on there mate. Wasn’t it you that referred to a place “where the normal business rules don't apply”?

“If our Government believes that all services should go to the lowest cost global player, then we are doomed to share their lower condition and surrender all our local industry to offshore producers.”

Isn’t a free market wonderful? It giveth and it taketh.

“If Australia is to avoid becoming a quarry occupied by masses of unemployed citizens….”.

Do you mean like the US and UK are also becoming? France maybe. Italy. Ireland. Spain.

“….but I need to make sure I provide a roof over my families head and that bills get paid.”

There are 3 billion people in India, China and the Middle East that want the same thing, but they will do the job for a lot less than you.

“Australian aviation is pretty much unable to offer that in the longer term at the moment.”

Get a grip. ALL aviation jobs in Australia pay enough to achieve this outcome.

Like manufacturing protectionism won't work. The consumer is driving this bus and will vote with their wallets. Politicians are powerless in this Global paradigm shift of all sorts of capital including labour.

Let's get smart in aviation and pull together and do what it takes to move forward. The workers have the most to lose here so urgently engage with management in a constructive way to see how together we can grow the far. It must be on a collective manner. The threats of strikes etc in aviation only alienates the travelling public. You will get NO support from the masses particularly when you are seen by them to be gouging from a perceived position of being well paid and conditioned now. Remember the lessons from 1989.

Pick up the phone and start talking to the management about an engaging compact.

{if you want to see what Government thinks of industries and local jobs, look at what they've just done to the cattle industry. They can't even export to Australian owned and controlled meat works that are based over seas and fully meet Australian standards. Anyway Indonesia etc will be on the phone o Brazil/Argentina and buy their cows never to return.}

TBM, you and the rest of the Asian fantasist just don't get it.

Yes, the Asian market is huge, however you forget one thing - it's an Asian market.

What that means is that the airlines that serve it are going to be Asian. They are going to be staffed by Asians trained by other Asians. The aircraft will be built in Asia (as far as possible). The GSE and infrastructure will be built in Asia by Asians. The ATC will be Asian, and of course the passengers will be Asian. But more importantly the revenues and profits will be Asian.


So Qantas thinks it can walk in and say "I'll have a chunk of that!" That is about as realistic as El Al deciding that the burgeoning mining fly in fly out markets in Wester Australia justify setting up an El Al base in Perth and mixing it with Australian competitors, or Aeroflot deciding that it wants to compete on the Sydney - Melbourne market. - in your dreams fellah!


The "huge Asian market" game has been played by the Chinese since at least as early as 1935, and it sucks in Western money every time it does because there is always some gormless Western twit like Alan Joyce who thinks that there really is a pot of gold at the end of the Asian rainbow - there isn't, unless you are Asian.


To put it another way; what can Qantas do in Asia that the Asians cannot do better and cheaper themselves? A Neil Perry menu perhaps?

To put it yet another way, if you decide to risk your money and technology in China, you are going to have to have such a commanding technological position that the Chinese cannot steal it from you no matter what.

By the way, its probable that those 200 Airbuses will be built in China, and Airbus itself may get stung if it is not very very careful. Qantas has already had warnings; how is Jetstar Vietnam going? Jetstar Asia?

I don't have to speculate on this because I know it to be the case. My Father started trading in Asia around 1935 and the Family company successfully operated in that environment from 1960 to 2000. You will not believe the games that are played, and it not only cost people all their money, at least one joint venture ended in the suicide of the western principle.

Defend your patch in Australia and trade at arms length on strict and honorable terms. You will win respect and make a little money. Leave this Asian joint venture crap alone, it always ends in tears.

Sunfish: You missed my point and that is that Australian consumers will vote with their feet when something is on offer cheaper elsewhere - look at the store here crying about internet purchasing and then wanting the government to effectively tax imports which would be impracticable.

My point is that Oz companies need to build a strong COMPETITIVE base here if they are to survive. I've also lived in Asia for many years and done business there as well. Doesn't make me an expert however..

My issue is that we do not need to fight amongst ourselves. - Sun Tsu will tell you that the enemy laughs then because you weaken your cause.

Who is going to be the first to put their hand up to accept Asian wages and living conditions.

You don't need to "accept Asian wages and working conditions" to be competitive.

The Chinese will typically over - man operations.

Then there are the supposedly "qualified" staff.

Then there is the lack of initiative and the several layers of management including the bosses son, his nephews, daughters, etc.

Then there is the Chinese penchant for "cheese paring" - reducing quality to the minimum they can get away with - witness the baby formula scandal.

Then there is good old fashioned Chinese corruption aka "business ethics".

Then there is Government corruption to be paid.

It ain't so cheap when you add all those costs into the equation.

That said, when properly motivated, the Chinese can produce excellent quality and have done for years.

However, do you want your airline to be the one who has to do the education and motivation? It is extremely expensive and time consuming.


P.S. Suppose you finally do make an enormous profit? Just try and get it out of the country once the Government discovers it. Pretty soon you will realize that your shareholders will never see a return on their investment, and since their investment is in China, they cannot even recover it.

I watched an Australian metals company develop new gold recovery technology for the Chinese, installed it and made it work. They then asked for payment. The Chinese response? "You see that hill over there, it must contain at least a $100 million in gold! It's yours, here is your mining lease!

An Australian pilot who thinks this will get him to the pointy end of a shiny jet more quickly. :ugh:

Oh no they are not, all it takes is the will. They are there to represent us & our best interests.

Not going to happen until management prove that they can act in good faith. Up until about 7 or 8 years ago I wasn't really interested in union matters. More often than not I'd throw a union newsletter in the bin rather than read it. But after repeated broken promises, lies and other acts of bastardry by the company you won't find a stronger union supporter. Take a look at the Jetstar pilots. 12 months ago, after years of telling them to watch the company in the same way you would watch a brown snake, they were chanting "Alan akbar". Didn't take long to change that, once again because the company refused to act in good faith.

Also, what makes you think that starting another offshore subsidiary in Asia is a great idea? And no vague assertions about the rate of growth in Asia and all we have to do is turn up with empty bags to load the cash in. Apart from the points that Sunfish has raised :

1. Jetstar Pac is a write off. Jetstar Asia is barely breaking even after years of losses. Shouldn't QF prove that it is capable of running a profitable airline in Asia before investing more money there?

2. QF can only have a minority holding in an Asian subsidiary. So not only do profits leave the company (and Australia), QF loses control. Which is fine while the relationship stays nice and cosy, but leaves QF exposed to things like regime change, diplomatic relations etc.

3. Australians fly QF because the are Australian and they are safe. The two factors are fundamental to Qantas. See SPs letter about the problems with outsourcing maintenance in Asia. What will be the attraction for Australians to fly on an Asian airline with a red tail slapped on it?

4. If, say for example, Singapore allow QF to start a premium carrier based in Singapore, how can the Australian government continue to refuse Singair the right to fly the Pacific?

5. How many Australians have the ability to use the services provided by J* Pacific? The intent of the Qantas Sales Act is that Qantas provide a service to Australia. The expectation of the public is that Qantas provide a service to Australians. They don't care how much money can be made in Asia when Qantas is neglecting its duty to Australia. In general, Qantas has always had the support of the government and the public. Why risk that?

Qantas does not have a "duty to Australia"...

It is a public company not a public institution.

The shareholders dictate the terms ultimately.

The almost open skies international policy that is driven by our own productivity commission [in parts] allows almost unbridled competition vs. QF
and the travellers are voting with their $$$$. Unless they're business travellers or high frequency flyers it is price driven. Pricing can only come from cost.

New age all Australian airline : BoganAir
 

I suggest you read the Qantas Sale Act

Have you?
QANTAS SALE ACT REFORM A GOOD STEP FORWARD CANBERRA, 16 December 2009: Qantas today welcomed the Federal Government’s confirmation that it would remove foreign investment restrictions under the Qantas Sale Act. The changes, outlined in the Government’s National Aviation Policy Statement (White Paper), will remove restrictions on the amount of interest in Qantas held by foreign airline shareholders (currently 35 per cent of share capital) and foreign individual shareholders (currently 25 per cent of share capital). The 49 per cent restriction on total foreign shareholders will remain.

Qantas Chief Executive Officer, Mr Alan Joyce, said the reform was an important step forward. “The change announced today gives Qantas parity with Australian carriers governed by the Air Navigation Act when it comes to attracting capital,” Mr Joyce said. “It will help Qantas continue to deliver benefits to its customers and employees and to Australian trade, tourism and business.

“Airlines need policy certainty and financial freedom of movement in order to implement long-term growth plans. Qantas has ambitious goals for fleet, product and infrastructure renewal – and access to capital will be vital to achieving those objectives. “The global financial crisis and economic downturn was a sharp reminder of the volatility of the aviation operating environment, so Qantas is pleased that the White Paper puts a strong focus on providing certainty and generating opportunities for the industry in Australia.

“Qantas is and will remain an Australian airline. The overall 49 per cent foreign ownership limit and requirements relating to Qantas’ management, operational base and Board composition are still in place. “Qantas’ management will always remain Australian.

“Just as importantly, Qantas is uncompromisingly committed to world-leading standards in safety, fleet and product, customer service and operational efficiency. “We will continue to work to these principles in the interests of Australian workers, travellers and business and those of the broader Australian economy.

"Get a grip. ALL aviation jobs in Australia pay enough to achieve this outcome."

Really, worked them have you? I have worked a lot of them and unfortunately only a few offer to support a family in Australia today.

You are patently wrong on that one.

When you leverage off and trade in the Australian name, you owe a duty to the name.

The suggest YOU read the sale act and attempt to understand the debate that was undertaken at the time of Qantas' privatisation. It was specifically designed to stop what Joyce and Clifford and Peter Cosgrove are now attempting to do. A weak government is helping the cause.

Message for Joyce:

http://ep.yimg.com/ca/I/demotivators_2164_7042456
If you expect to score points by whining,
Join a European Soccer Team

Good point. I would have thought profits would have been fairly high up on the list of shareholder priorities. So perhaps you'd like to address the points I raised about the profitibility and ownership of our existing Asian subsidiaries?

Or shall we conveniently ignore those questions until the accountants have had a chance to massage their numbers a bit more.

I'm no fan of AJ by the way.

Challenge started when GD and co started the current mgt processes but like the Govt once a course is charted it's hard to change direction until the next change of mgt...

In the meantime I see that they are trying to match the cost base of their competitors. Smart thing really..

TBM: "Shareholders dictate terms"... and more so now! This may have slipped through unnoticed ?

601: "Who will be the first to accept Asian T&C's..." -a few self indulgent shonks have already for the Pornstar widebody jobs!

"Australian aviation is pretty much unable to offer that in the longer term at the moment." ...and hence the constant flow of experience going elsewhere, especially out of NZ too, which has worse T&Cs.

Australia is "at the end of the line" and in terms a backwater of sorts. Ever increasing investment in services from majors elsewhere, keep it in touch with the global populations thankfully. It's just interesting to observe the different managerial styles currently in action here, from regionals upwards. :}

“Then there is good old fashioned Chinese corruption aka business ethics.” And “Then there is Government corruption to be paid.”

The US military is currently fighting several wars in the middle east on behalf of western multinational oil companies at the same time that wall street bankers are making off like bandits after lobbying and sometimes paying off government regulators to permit the raping of home owners in a scam that has really only just begun.

And you think the Chinese are alone in corruption?

“Australians fly QF because the are Australian and they are safe.”

Actually, they are doing it fewer numbers than ever before. Australians are choosing foreign carriers, especially Asian carriers, in a trend that will not reverse.

Why is that?

Picked the same random dates in Feb 2012.
MEL-LHR-MEL .

Economy
Air Asia: $1500 .. newish wide body jet with a seat pitch of about 32"
QANTAS: $2400 (on sale) ... newish wide body jet with a seat pitch of about 32"


Both have a pretty good safety record (once upon a time there would have been be a real gap). And, from my experience, Air Asia cabin crew are stricter with the safety and cabin rules.

Air Asia ... buy the food you want(about $10 - $20) + pay for baggage (about $20)
QANTAS ... white lunch box and 1 bag included

My question is ... why am I choosing and paying more for QANTAS?

In fact, I, and many others ... aren't, as there's no added value in using QANTAS anymore.

Obviously, from what Joyce says, International routes aren't packing them in, so, how does QANTAS (or any other Australian Airline) try and fix the problem?

Cost cutting has just about run its course and, as SUNFISH, points out ... it's almost impossible to beat them on their own turf.

My answer is, and always has been, improve the product and charge a premium(which they are charging now - but, sans the improved product). That is, find a premium niche.

As a start, give Economy a 36" seat pitch and see how much extra price the market will bear. QANTAS would keep the diehards ... who'll pay the extra anyway, and they should attract more discerning travelers ... both Aussie and Asian ... as they pass through the Asian hubs.

You'll never beat the Asian LCCs at their own game ... you have to create your own.

Tell that to the cattle farmers up in our north and all the small businesses that are supported by the trade.

Of course the animals should be treated humanely and 99% of them were. Whose interests are the government looking after by stopping the trade?

Mate there's plenty of Asian airlines that pay well and look after their pilots (and still make a profit surprise surprise)!!

Considering that Aus / NZ pilot wages are already among the lowest in the world, and considering that I had to move to one of the most dirt poor third world countries in Asia to earn anything better than a truck driver's wage back home, I'd implement "Asian wages and living conditions" in a heartbeat if I was PM :ouch: