1. Patriotism is the last refuge of a scoundrel.

2. The Government must not throw good money after bad. For it to even contemplate such an idea would require a change of strategy and the resignation or removal of the entire Board and Senior management.

To put that another way, the people and their strategies that got Qantas into this mess, by definition cannot get it out of the mire, and must not be allowed to even try.

3. Virgin must be afforded the same treatment as Qantas else they have what is virtually a lay down miserere high court case or more likely an appeal to the world trade organisation.

4. Every state government bar NSW and perhaps QLD is going to scream blue murder if QANTAS is bailed out while their own industries (eg: motor industry) is allowed to go to the wall. Given the treatment by Qantas of Victoria, I would hope they are first in line to complain. QANTAS is totally Sydney - centric which is why Albo is involved.

5. There may be another attempt to privatise Qantas. I wouldn't be surprised if Dixon and Co. hasn't sounded out Emirates owners (Dubai royal family?) about a joint venture - bowing to necessity. Singletons teeth gnashing session when the Emirates tie up was announced gave the game away as to what was intended for Qantas. The logical thing for Dixon and Co todo would have been to make peace with Emirates.

The question then for Emirates would be if Dixon, Singleton and Carnegie could add enough value to make it attractive and also develop a working relationship. There may be other questions I don't understand.

6. Whatever the outcome, Joyce is dead meat, swinging in the breeze, and Clifford too. As I have repeatedly said, the essay into Asia was always going to be a disaster as is the entire idea of a "group" structure. God knows, the fights at Ansett between the state airlines and mainline were bad enough, god knows how bad the ones within the Qantas "group" must be, but they have to be worse.

To put that another way, if you are a profitable part of the "group" (by real management accounting standards) how galling is it going to be to see the millions of capital you thirst for being pissed up against the wall on some Asian pipe dream?

How the F*&% is it a level playing field if the government owns 10% of one airline? haha, good one.

I'm surprised Anonymous haven't visited AJ yet?
Then again, I hope they don't, he will probably blame the Pilots and Engineers as being the faces behind the masks!

https://m.facebook.com/OffiziellAnon...lAnonymousPage

Whatever the outcome I have to agree with Sunfish, surely Joyce and Clifford are the dead meat, they are the ones that have pushed the company into that hole... They are paid the big bucks and they failed, now surely the shareholders will fob the off...

Joyce and the rest of the board should be publicly flogged for what they have done to QANTAS.

Cosgrove for GG
 

Wonder how the Government might be feeling about their intention to nominate Qantas Board member Peter Cosgrove (the ADF equivalent of speed skater Steven Bradbury) as the next Governor-General? Clearly his complete lack of value on the QF Board will make him a suitably hands-off GG...

Quite enjoyed JB's speech today.

I think 'Al' has opened a can of worms for himself. Maybe he knows something we don't. Maybe this is about to go seriously pear shaped. Come on Al, bring on the line in the sand. Keep it up. How I wish I could find that interview where he said that Virgin wasn't even considered a competitor.

Instead of signing a petition in support of Al you should have signed one to oust him. Short memories indeed.

So many mixed messages
 

Qantas heads for more turbulence under watch of credit agencies
The Australian 30-11-2013




Cookies must be enabled. | The Australian


Then in the same paper this headline

Joe Hockey to resist stake in Qantas

For me too, the message is confusing, just what does AJ want? I agree with the writer Steve Creedy, Qantas is not close to failing yet, but some people may believe it is about to with all the mad mixed messages that have flooded the media the last 10 days, and frightening the hell out of the already battle weary Q staff in the process. It's outrageous!

The whole thing has been badly mishandled by the Qantas management, and this time quite frankly, once too many times, everyone is probably just sick and tired of it, another crisis at Qantas.

People are waking up this morning and thinking, "oh here we go again, that Joyce bloke at Qantas is jumping up and down again because things aren't going his way."

Both major Australian Airlines are suffering tough market conditions and is probably the same for many other airlines around the world at present, the difference is, (unlike Qantas management who throw their arms up in the air shouting how unfair it all is,) the other airlines knuckle down and get on with it!

I feel for all the front line staff at Q group including J* who this weekend have to front the punters with questions from them like "what's going on, are things really so bad?" or "are you going broke?" or even worse, stuff like "I'm not bailing you out with my tax money" etc etc... and all so unnecessary..

Actually the suffering began with the line in the sand sorry to say.

And remember that it is very easy for perception to overtake reality to become perceived reality. And then it all becomes self fulfilling. AJ may have just opened a bigger can of worms than he realises.

SOPS, you nailed it! :D

I do find it confusing and a little bit funny that Joe is telling the states sell off your assets because we don't/want to give you money or fund your projects, but hey look AJ is crying (the poor little baby spilled his milk) we better buy or at least say we will buy 10% of a poorly run company so that they can maintain their credit rating! Sorry but WTF?

The way QF operate with 1star as a wholly owned company the money thrown at it and the creative accounting is fantastic to say the least.
When I try and do that with my personal tax return I get a fine and have to pay the ATO more money, but when a major company does it they get tax credits and then when the proverbial hits the fan oh we should sell it back to the government.

Many airlines have had issues over the last 10+ years, many other airlines have had delays due to aircraft deliveries. QF took the money and spent the penalties on J* they bet big they lost big, forst they blamed intl now domestic never have I seen any blame on J*???? WHy is that?

ANZ delayed with 787 they got money from Boeing they spent it on the aircraft they spent it on the people and the service.
767's got winglets, better IFE and 320's got IFE you don't hear them crying oh it's not my fault!

They have had competition in NZ for years they stayed mobile, QF has had an easy ride for a decade. Now VA has a REAL leader someone that happens to know the inside working of his competitor and isn't afraid of taking a few risks.
He has engaged his staff, what has AJ done since taking the helm??
Grounded his fleet of QF aircraft but not J*,
pissed off all his workers,
pissed off his stock holders,
stopped paying dividends,
no real plans for fleet renewal,
gave away most intl flights to the very people he was complaining about,
started a few low cost bases in asia from all rumours they are a massive failure,
said he would start a premium narrow body airline in asia, (Fail)
shut down all his maintenance in Victoria,
sacked many engineers,

Have I missed anything?

Yes mr Abbott and Mr Hockey please give this fumbling baffoon my tax money.
We don't need to improve our roads, teach or kids, or help the dissabled, or treat the ill in hospitals.
We need to protect your access to the chairmans lounge your free first ckass tickets and free gifts from QF.

That is much more important.

WTF has happened to this world where if you fail because you are greedy or inept at what you are meant to do you are rewarded with a bail out or a promotion.

Well said Tech-Line. What an excellent post.

If the Government put one dime up to help this slimy, greedy poor excuse for a group of humans(AJ & the whole QF board), I'm done with both of the major political parties. They do not govern for a fair and democratic Australia. I feel for the Qantas employees who do a great job, but I know damn well if the shoe was on the VA foot, the Govt would not even entertain the thought of a bail out.

The sad thing is that even if the entire, or part of the board are relieved of their duties, they will go off and live happily ever after. The money and bonuses they are paid are never relative to what they achieve during their mantra. And Alan Joyce and his cronies have achieved only what Tech-Line outlined in his post.

Again, well said.

If Australians want to have a national carrier then they'll have to foot the bill and buy back in. Its that simple. Many other countries have government backed national carriers. Call it unfair but the reality is that its not a good look for a national carrier to go broke. I am not saying that's a good idea though. Personally I don't think it should ever have been privatised.

Or, the government I could let it go broke then rescue it from the ashes with a new premium but lower cost model. Then go kick some serious rear end. Australians are generally proud of Qantas but it was doomed from the day it was privatised, way too many irrelevant departments and programs that reek of a government department hangover from the 90's.

If they don't want to pay the bill then set it free & see what happens. But accept that next time services are suspended it might not be temporary.
SN

AJ has shut Down the airline and brought gov to its knees,he might be trying again ??????????

well, afaik thats because bga hasn't actually come out and said. not publicly anyway. the staff petition doesn't even say what they want. he was quick to back away from removal or amendment to the qsa, now claiming there's not enough time. not enough time for what? part of the bluster i'd say.

this clown hasn't got a clue. when he thinks he's close to being found out, he manufactures another calamity.

agree wholeheartedly with tech-line.

Replace AJ and the board and get a fresh start. Put a descent CEO at the helm and then see what's needed. There is too much bad history with him.
SN

Surely little Al can't continue after all this????????? Enough is enough! The employees and our families have had enough of this little mans antics, please tell me he is a goner with or without QF getting government support. :ugh::ugh:

It's been 5 years of one continuous roller coaster, I for one have had enough. :yuk:

Oh for what might have been! Something tells me Dixen put him there to bring it down.
SN

Edit: Any government support should carry with it a seat on the board for every 5% stake.

Huh? They said the debt bond issue was oversubscribed multiple times, they could have priced it cheaper regardless it would appear. And the capital raising? Getting money for nothing (just issue more shares), it's only the retail shareholders who have been shafted, and they would have been shafted letter or no letter.

I just typed "Alan Joyce" into google because I wanted to see how much he earns.

Interestingly, the drop down menu of other search suggestions provided "former qantas CEO" as an alternative. It seems google can even predict the future.

Oh, and google said he earns around 5.1 million annually plus got $1.7m in share gifts.

If it's any consolation, by the time he is finished the shares will be worthless. :D

Precisely :ok:

A good summary as to why a free-marketeer like Hockey is all for shutting down an investment deal like GrainCorp and pumping government money into Qantas:

Graincorp Qantas Telstra foreign investment decisions | Crikey

Still believe that Qantas will fade, Jetstar rebranded as Qantas. It will be done by a knew CEO blaming the last one together with government inaction etc, etc.
The rebranding will be seen as the only option to save the brand. Government will allow it "in the national interest".

I dont want to see Qantas fail - I have many friends working in the Qantas Group and wouldn't wish that on them (along with the remainder 30000 strong workforce). It is clear however that in order for Qantas to succeed they are going to have to concede market share. Period. This company doesn't own the Australian sky and the travelling public doesn't need to be paying astronomical prices on routes where there isn't any competition (as has been the case in the past).

I am also getting fed up of hearing that Qantas is iconic and must be around for the national interests and security of Australia. Before 1946 the government didn't own Qantas. This didn't stop the government utilising the airline during world war two to move pax/troops around and fly supplies. So hypothetically if Qantas was no longer around, why couldn't the government utilise any other airline in exactly the same way? Virgin Australia would be more than capable and willing to help out. So would any other airline that would no doubt start up to fill the void left by Qantas in this hypothetical scenario. Additionally, whats to stop the government buying/investing in a stake with another airline, other than Qantas, and making them the national carrier?

For now, I along with everyone else on the this forum, am sick and tired of the Alan Joyce show. He is a weasel without any integrity who has single handedly inflicted severe damage to what once was a great airline to work for. Reminds me of the kid on the play ground who carries on until someone stronger stands up to little Alan and then he goes running to the teacher saying he is getting bullied.:ugh:

tech-line
I find it strange you use Air New Zealand as an example. You may have forgotten but NZ was bailed out by the NZ government in 2002 to the tune of $885M. It consisted of a $300M loan by way of convertible preference shares at $0.24 - $0.27 each and a $585M investment. Once complete the government had a 82% stake in the national carrier. They have only just sold 20% of their shares for $1.65 each netting $365M for the NZ tax payer on top of the $840M in dividends in the last 11 years but at the same time retaining a 53% controlling interest in the national carrier.

Air NZ, while govt owned, operates on the same cost-profit base as any other public company. You can buy shares in it on Monday morning, if you want to. If you buy enough, you'll get a seat on the board. The NZ govt does not intervene in Air NZ policies and activities.*

It seems from recent press releases that many people think "government owned" is the same thing as "supported by government handouts and policies". In the case of Air NZ, that isn't true. The government is simply a shareholder in a public company.

* Exception 1: the NZ government re-floated the airline after the Ansett debacle. That fiasco was conducted under the leadership of a private equity owner, much like the consortium under Geoff Dixon that tried and failed to take over Qantas in recent times.
Exception 2: Air NZ carried Australian troops to the middle east in 2007, at a time when NZ government's policy was not to support that war. The Labour PM, Helen Clark, publicly stated that the airline should not be bidding for these war contracts. This intervention hindered, rather than helped, the airline.

Oktas8

Anyone who thinks that QF will be renationalised by the Federal Government are delusional. If the federal government helps Qantas it will be in the form of an equity stake in the airline similar to Air New Zealand bailout in 2002 and the US governments bailout of their car industry in 2008. Abbot and Hockey are already on the record as saying the Federal Government are not in the business of owning and running an airline and have no intention of going down this path.

Without the Labor Party’s and Greens support changing the Qantas Sales Act of 1992 is dead in the water.
There are really only five options available to the Federal government. They are:

1. Renationalisation. Abbot and Hockey have essentially ruled this out. It also goes against everything the LNP stand for.

2. Changing the Qantas Sales Act. There is no support within the Labor Party or the Greens so won’t get through the Senate before the 1st July 2014. The public would also most likely not support it either. There is also a chance that Australia’s international air services agreements could be put at risk if it was to be changed. AJ has also come out not in support of it.

3. Straight up bail out. A huge cost to the tax payer with no return. Rewards QF for bad behaviour. Abbot and Hockey have indicated they aren’t in favour of this route either.

4. Bail out involving an equity stake. Potentially could result in a good return for the government and the tax payer and would most likely garner support from within the LNP and Labor. Hockey has indicated support for this route.

5. Do nothing and potentially let Qantas go broke. Political suicide.

So looking at these five options available to the Federal government, which do you think they will choose?

I am glad someone brought up ANZ is government owned and had a bail out.

What I was trying to point out is/was that ANZ has learned from their mistakes they have progressed evolved into a very strong company/ entity!
They also now own 20+% of Australia's second airline, who is doing well.
They used the sorry we stuffed up money from Boeing to further ANZ not something else.
What did QF use it for?
How many years of profit from QF is actually from the QF flying?
How come when QF showed a profit because of Boeing no one was jumping up and down saying why are we doing so bad that our flying is not making any money?

AJ and predecessor Dixon what have they learned what have they achieved?

How can someone say I will maintain 65% of all flying in Australia and no one says that is predatory?
I will put 2 a/c on each route that VA puts! Is this not just showing QF and AJ do not care about yields? He does not care about QF mainline making money!

When QF shows the real books of J* and there operating margins and the gift of no competition I will believe.
Oh almost forgot J* now has a real competitor in Tiger with a REAL manager I wonder when AJ will start to complain about them!
Oh those dirty tactics with those dirty foreign owned government airlines.
Woe is me maybe he is just getting us all ready for that!

Happiest memory of QF for me was selling my shares at a price no one will ever see again! Thank you Dixon!

Now we have that foreign airline VA CEO bleating that they should have Oz Govt guarantees... Well they do have effective govt ones from Singapore, ANZ and Etihad owners.

AJ did not write the QF sales act. The Gummit did. Now they need to fix it...

lemel,
Qantas has been bleeding international market shares for years, shrinking routes particularly outside of SYD/MEL. Pax carried is slightly better thanks to upgauging to A380. Any more shrinking and there won't be a Qantas Internationally.

Domestically the Qantas line in the sand is group share - ie Qantas plus Jetstar. When Compass 2 then Ansett went in quick succession, Qantas share was probably at 80%. Since then Virgin and Tiger have grown, but so has Jetstar - far more so than Tiger. When Qantas>> Virgin and Jetstar>> Tiger, the line in the sand sounds reasonable. Market share is not something you give up easily, its very hard to get back.

Moa999,

I'll tell you how not to lose international market share. The first thing you don't do is give away all of your flying to Emirates for free.

As far as domestic is concerned, yes the 65% line in the sand is reasonable, if it can be achieved. Clearly putting on 2 aircraft for every 1 Virgin puts on a route is not the way to do it if AJ then starts complaining that they are losing money. In this instance it is most certainly unreasonable to maintain 65% market share. AJ might not like it, but it is clear that they cant afford to maintain their 65% market share and therefore will lose it , not "give it up" as you put it.

The fact is VA are raising capital to run their business as they see fit within the law. As JB pointed out in his media release, Qantas has also raised capital in the past, to be precise they have raised something in the order of $1.2 billion in 10 years. Did you hear any other airline crying about it to the politicians?

The only reason why Qantas have lifted their game of late is because they have been forced to by Virgin. To compete with Virgin they have upgraded all of their clapped out 767's offering new cabins, their customer service has improved, the staff are finally getting new uniforms (which look very similar to Virgin's) and airfare prices across all segments (both long & short haul business/economy, regional and low cost) have reduced. This is fantastic news for the traveling public.

AJ is asking for a level playing field with Virgin? Is he f*&cking kidding? Qantas has never had a level playing field in the last 20 years (or more), the only difference is that it was tilted in their favour. They are always favoured and looked after by the government. I believe that the government will come to their rescue and inject money into Qantas within the next few weeks.

Under Qantas's current management, I have no doubt that if there was "a level playing field", Virgin would come out on top.

P.s. Like I have said in my previous post, I don't want Qantas or any other airline to collapse, its just the tactics that are used by Qantas's current management when they don't get things their way that I despise. From shutting down the airline and locking out their workers to lobbying Canberra to block Virgin's capital raising.

TBM-Legend, I think that you did not grasp what I said earlier. Air NZ at least (cannot comment on SQ or Emirates) do not have a govt guarantee. Anyone who thinks that the NZ govt will extend a cash lifeline to VA if the VA share price falls, simply does not understand NZ politics.

Cheers, O8

The market share mantra goes all the way back to the Ansett - TAA days & I find it amazing that airline management in Australia are still using it as a measure of success.

The measure of a successful business is profitability, not market share.

IMHO, market share is mainly about ego. (mine's bigger than yours & all that)

Interesting on the bolt report this morning - Peter Costello came out and said Qantas cried foul when the government was approached by Ansett regarding a bailout - Can't have it both ways qantas! Interesting viewing.

How long will this go on?
Can't help but think of the parallels with BA, around 2000.
Industrial relations at British Airways - setting a new course?
Ayling survived 4 years with a similar mantra to Joyce.
The penny must be getting close to the inevitable drop. :ugh:

Its all getting very un Australian at Qantas . Taking work of Australian workers and giving it to foriegners . Foreign CEO , giving routes to competition when the going gets tough , fighting dirty only to run to the gvt when same tactics being used against them . Going into other people's places and telling them how its going to happen .
But they still proudly carry the Australian flag ?

Yes, the jobs at Avalon will end up in Singapore or Hong Kong

http://www.afr.com/p/business/sunday/qantas_lobbies_against_sham_virgin_dWERo3DoDzSwrBUjc10yUN[/URL]

Qantas lobbies against ‘sham’ Virgin structure
NABILA AHMED

Qantas Airways chief executive Alan Joyce, who is seeking government assistance to shore up the airline’s credit rating, is pushing Deputy Prime Minister Warren Truss to revoke the international flying rights of rival Virgin Australia Holdings.

In a letter obtained by the Nine Network’s Financial Review Sunday, Mr Joyce describes Virgin as a “newly minted sovereign-owned airline” and says it has “the ability to do great harm to not only Qantas but severely disrupt Australia’s critical national infrastructure and aviation policy”.

Virgin last year split its domestic and international operations which has allowed for four foreign investors to control 73 per cent of the listed company but to keep its international business majority Australian owned with a separate board to comply with the Air Navigation Act.

The board of Virgin’s international operation is chaired by HSBC Australia and Stockland chairman Graham Bradley and Business Council of Australia president Tony Shepherd and former government minister Lindsay Tanner are also directors.

Qantas argues the two Virgin operations are linked through service and loan agreements. Mr Joyce claims Virgin’s domestic arm effectively controls the international business. Qantas has described the Virgin international structure as a “sham”.

Qantas is not allowed to complete a similar structure due to the Qantas Sale Act.

But it is unclear whether revoking Virgin’s international flying rights would have a material effect on boosting Qantas’s ailing domestic and international businesses.

In revenue terms, Virgin’s international business is only 1/5 the size of Qantas International. With the exception of Boeing 777s used on flights to the United States and Abu Dhabi, if Virgin halted its international operations the remainder of its planes could be put into the domestic market, where Qantas is already complaining of overcapacity.

Virgin flies the bulk of its international flights to short-haul destinations like New Zealand, Indonesia, Samoa, Fiji and Papua New Guinea.

Virgin’s international shareholders Air New Zealand, Singapore Airlines and Etihad Airways are more focused on using Virgin’s domestic business as a feeder to their own flights than on Virgin’s international business.

“The primary motive will be to damage Qantas in its domestic market so that it will be unable to support its international network,” Mr Joyce said of the goals of Virgin’s shareholders.

But if Virgin was forced to abandon the international market, the partner airlines might decide to boost their own capacity to Australia in a move that could further damage Qantas.

Mr Joyce is attacking Virgin on several fronts as federal government considers Qantas’ plea following bruising, 18-month battle with Virgin Australia over the domestic market. Options for the federal government include purchasing a stake in the national carrier, participating in a share placement, providing a debt guarantee or the extension of a debt facility.

Qantas is seeking a solution as urgently as possible ahead of the release of its half-year results in February.

John Sevior, the founder of boutique investment group Airlie Funds Management, told Financial Review Sunday that he did not think the government should use taxpayers’ money to prop up the airline, pointing out that as a stand-alone listed entity with a capital structure, Qantas had shareholders who could fund a capital raising.

Prime Minister Tony Abbott on Saturday said a number of proposals were being publicly debated and he wanted to see how it played out in a careful manner.

“The government doesn’t have to make a decision today or tomorrow or next week on this,” he told reporters.

A credit downgrade could have damaging implications for Qantas, which currently has a rating of BBB minus – the lowest investment grade rating. Qantas’s efforts to maintain 65 per cent market share domestically has put its rating at risk.

Qantas spent the past 18 months matching Virgin’s capacity and assuming in doing so it would send its smaller rival into a dire financial position. But now that Air NZ, Singapore and Etihad have put up funding, it is possible Virgin could outlast Qantas in this battle.

Qantas is expected to report a loss when it unveils interim results in February. Morgan Stanley has slashed its estimate to a $504 million underlying loss before tax from its previous forecast of a $73 million loss. Macquarie Equities is expecting a $440 million loss before tax.

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