Red Q - Dead in the water?
 

Any truth to the rumour told to me by a nameless little bird that the great Asian experiment has fallen over at the first hurdle?

Supposedly QF can't find a bank gullible enough to give them the finance it needs to fund 110 A320s.

Also heard a certain ex B767 fleet manager has had his A320 conversion terminated as he is now surplus to requirements as the whole thing has fallen through. ;)

Heard about the conversion being cancelled from two well placed sources over the last 48.

Wouldn't surprise me if it had fallen over. The whole idea was drug smoking of the highest order.

Personally I think it was just a smoke screen for moving the B744 or A380 fleet offshore. Other posters have noted Joyce's attitude in the media over the last seven days to be remarkably upbeat.

Perhaps Clifford and the board have green lighted the offshoring once FWA arbitrates the current disputes with AIPA, FWU and ALAEA.

I agree. RedQ was the front for a jet connect style operation based in SE Asia with them operating 787s in Qantas colors. They would have also been a raging success ontheir own branded flights because QF would have code shared with them on multitudes of flights to Europe. The catch is that QF would have paid a premium for 90% of the seats whether they were used or not and RedQ would have been declared an outstanding success while QF international continued to struggle- thus requiring more work to go offshore.

It's no shock if Qantas were having trouble finding someone to partner with them though. It's always been a dodgy call.

As to the Returnee, it was mentioned by a few at the revue last night but no reasons were proffered. Hopefully the 'tude' won't be present when he returns.

Possible reasons for this little project allegedly falling apart at the seams:

1) No bank wants to hold the amount of risk that the little man is wanting to borrow. They have worked out he is a fruitloop prone to rash decision making such as grounding an entire airline, and he also makes overnight decisions which include the fantasy of taking over Asia and building a global empire larger than Dr Evil's.
2) The banks have no money left to lend the little fella. They too have trashed their own organizations in the pursuit of pure greed and are now also reaping what they have sewn.

Maybe just maybe the piper has started playing for Team Joyce? Slowly slowly catch the monkey.

Nothing would surprise me in this outfit.

A senior manager wrote that JG's little Asian sojourn was a great example of the opportunities that would open up for Qantas pilots.

So....leave QF as a fleet manager, piss off to Asia for six weeks, start a type endorsement, get screwed over by management incompetence and come home again, chastened and poorer for the experience. Yep, sounds like a typical QF 'opportunity'.:cool:

So if the plan is falling apart, why are board members buying shares?

Because when it is announced that it has "fallen apart", it will be the perfect opportunity to blame it on workers once again, with no option left but to transfer all remaining international operations to the orange star.

Was "RedQ" ever really a genuine proposition? Announced with no name, no location and pretty much no other information!

Perhaps this is all part of the script?

Just a hypothetical theory.

Finance for equipment is definitely getting very hard to get. I have relatives who have large amounts of equipment involved in mining, and they are going gangbusters... but the banks and finance houses are all a bit jittery, scared of what is going to happen when the Euro and the PIIGS start to unravel, and scared of a double-dip recession in the U.S. The relatives say that getting the machines now is the relatively easy part - getting the finance is the hard part.

The financing of equipment was relatively easy in recent times, if you could show a satisfactory cash flow from the equipment. Now, the cost of borrowing worldwide is increasing, and additionally, funding (or willing funders, perhaps a better description) is actually in short supply. Many financiers look like losing a lot of money if the Euro scene gets a lot worse, very quickly.

However, in most cases, the manufacturers usually have an arrangement with a bank or financier, who provide finance for the products of the manufacturer.
There is always the deep concern that perhaps the aviation industry is going to suffer a slowdown, and that only the best propositions will get finance, if that is what is currently driving the financiers outlook.
In essence, equipment financing has been very easy, the last 5 years or more. The terms of financing are returning to the standards of 20 or 25 years ago, when it was a lot tougher to get finance.

Because the current share price is undervalued by strict investment criteria. Provided Q survives at all, which it will, the share price is almost certain to go up.

If I was ever going to invest in an international airline, this would be a good time to buy.

Pinnacle seats have been asked to quote for a 2 class seating arrangement....... For Jetstar.

Make of that what you will. Perhaps jQ is looking for a way to increase the "Jetstar" group yield in Asia to protect itself should the Qantas group be broken up and sold as AJ claims. Why start up a new company when the flight can be crewed by current pilots?

Secondly, Airbus now does Finance in wake of the GFC.

Rumors of unavailable financing are consistent with a Global financial meltdown that I have been watching develop for the past Four years.

Julia Gillards mini budget in December is going to surprise many with its toughness.

My main concern now is what happens if there is a run on Australian Banks.


This is where the Qantas outsourcing wet dream comes unstuck. In a major recession, which is just around the corner, it is the cash costs in an organisation that suddenly start to matter, not the full costs.

In that scenario, having your own staff to do your maintenance is not as expensive in terms of cash cost as outsourcing, because your outsourcing charge is based on the contractors full cost.

In addition with your own in house maintenance, you may decide to make stuff rather than buy, or repair rather than buy new - if it saves cash.

If I am right, which is not often I suppose, fuel suppliers will be looking at the credit terms they give airlines by the end of this coming week.

I sincerely hope so. The name itself is indicative of how out of touch (or utterly foreign) Qantas senior management are, for Blind Freddie (another Australian reference those same people would not probably recognise) could tell you that it would have become universally known as "FarQ" to every Australian within weeks of starting operations.

Keep talkin
 

Keep speculating gents, I'm willing to take bets on the outcome !

This is simply not possible.

Alan Joyce was recently voted a big payrise because that's what was necessary to retain the highest quality executives. Ergo, he is brilliant and knows exactly what he is doing. :ok:

Drifting a little...
 

A week ago a 767 pulled up at a Melbourne gate. When the pax were off a flock of suits with cameras, laser levels and tape measures embarked and commenced frantically scoping the interior of the jet. When asked they replied it was confidential.

Head of QDS has been quoted as saying he has signed a contract to remodel the interiors of 20 767s for Qantas.

The 787 may not be able to save QF but the model Ts may.:ok:

Well this seems about right for the way the place is run at the moment.

Make a major announcement with no detail, contracts in place, or even the barest of information such as place AND no finance in place whilst only focussing on "spin".

Then go and spend money on clapped out 767's while gifting real machines to the star performer of the group whilst the main money spinner languishes propped up by the goodwill of the staff as they are beaten mercilessly at every turn and told they are overpaid/out of date.

If the "stunt" at Melbourne was true, amateurish at best which seems about right.

There was/is a definite risk factor in the share price over the RedQ thing. It might pay off, but it is risky and may sink hundreds of millions for nothing.

Perhaps removing RedQ removes the risk.

Still no doubt international will continue to shrink, but there might be a substantial refocus on the domestic brand. it is after all the most profitable segment by a huge margin. It will continue to bring the most stable earnings.

Shareholders (including directors) like stability, and maybe even a dividend in the future.

I would say one thing for sure - if RedQ is dead, so is Joyce. His position would be totally untenable if his Qantas saving plan gets canned before it begins.

One thing I had learnt about Qantas up till now was that when they said they were going to do something, they usually had all the ducks lined up, and they did it.

Financial, operational, regulatory and government.... it was all done. That is what made the RedQ announcement so different. There were some of those parameters still seemingly not settled.

So why the rush to announce it if it is still not settled? It only ends up making Joyce and the board look very amateur. Something has not been right here and it is very unusual.

I can also confirm the 767's till 2020 rumor. Not that it will happen but very strong rumors. New interiors blah blah blah. It was something to do with the requirements for all the fleet to be ADSB equipped in a short time frame that spurred this on. Maybe other will know more.

Gate capacity would take a hit if the 787 replaced the 767 domestically in toto.

The 767s until 2020 has reportedly come from Strambi at one of his lunches. There has also recently been an acceleration in the painting of a number of 767s- about time considering that the 'new' livery was unveiled by Geoff Dixon in 2007! :eek: :ugh: An interior re-furb with the new product would go a long way to keeping the 'premium' passengers happy. Certainly in seat video screens for trans national flying is being viewed by the passengers as more and more a necessity so they either need to move on that in a hurry or the onboard wifi bizzo that will ensure people can use their own mobile devices to stream onboard entertainment.