PPRuNe Forums

PPRuNe Forums (https://www.pprune.org/)
-   Australia, New Zealand & the Pacific (https://www.pprune.org/australia-new-zealand-pacific-90/)
-   -   MERGED: Alan's still not happy...... (https://www.pprune.org/australia-new-zealand-pacific/528014-merged-alans-still-not-happy.html)

neville_nobody 17th Nov 2013 21:04

MERGED: Alan's still not happy......
Whilst he probably has some valid arguments here it does sound like a bit of a tantrum, not unlike his shutting down the airline rant a few years ago.

Joyce blasts Virgin deal

Qantas has demanded the federal *government halt a $350 million foreign capital injection into Virgin Australia Holdings, claiming it is the “final act” by “predatory” state-owned airlines to undercut the national carrier, cripple it domestically and internationally, and take over its routes.

In a searing letter to Prime Minister Tony Abbott, Transport Minister Warren Truss and all state governments, Qantas chief executive Alan Joyce said the situation also compounded the disadvantage Qantas experienced from the restrictions imposed by the Qantas Sale Act. He demanded this “outdated policy framework” be urgently revisited as part of any examination of the capital raising proposal.

Qantas’s immediate priority is the $350 million capital raising announced last week which Mr Joyce said would “substantially increase” what he said has been a gradual foreign takeover of Virgin Australia and was designed to circumvent foreign investment restrictions. He demanded it be “forensically examined” by the Foreign Investment Review Board as an acquisition.

The letter, a copy of which has been obtained by The Australian Financial Review, says the $350 million raising from three state-owned airlines – Air New Zealand, Singapore Airlines and Etihad Airways – would increase the total ownership of Virgin by the trio from 63 per cent to 72 per cent.

Mr Joyce’s ultimate fear is that the capital raising, “supported and largely underwritten by three foreign governments’’,  is the latest in a strategy of subsidising Virgin so it can continue to undercut Qantas on profitable domestic routes until Qantas could no longer support its international network.

His other key concern was that *Virgin Australia would soon be effectively owned by three foreign governments but Virgin International would still be designated an Australian *carrier. This would give the three airlines, all of which compete with Qantas internationally, access to lucrative routes, or traffic rights.

This fear was exacerbated last week when Virgin chief executive John Borghetti said the three airlines would be offered board seats.
Ongoing battle

Mr Joyce argued the capital injection, required to bolster Virgin’s *balance sheet amid an ongoing battle with Qantas, “can directly be attributed to its profligate and irresponsible *strategic campaign, underwritten by its sovereign shareholders in the Australian domestic market over the last 12 months’’.

“This has seen damaging levels of capacity introduced into the market with the single objective of damaging Qantas to the ultimate benefit of *Virgin’s foreign backers.’’

Mr Joyce described the capital injection as the “final act’’ in a scenario that has been playing out for months and has “all the characteristics of predator behaviour [to] substantially weaken a major competitor, Qantas Group, and recoup the costs at a later date’’.

“It represents a material threat to the Qantas Group across its domestic and international networks and is consequently contrary to the national interest,’’ Mr Joyce said.

“Their investment,” he said of the three government-owned airlines, “ultimately will be quickly recouped in the international market.’’

Mr Joyce, who will be in Canberra this week to lobby the government directly, said the “proposal goes well beyond what should be considered a legitimate investment to one of foreign control of a strategically important Australian business with objectives to damage Australia’s national carrier’’.

“It would place in the hands of foreign governments which control these airlines extraordinary power well beyond the intention which underpins Australia’s policy of allowing foreign ownership of Australian domestic carriers. The government and FIRB must urgently consider this proposal as an acquisition with worrying strategic intent, and not as an investment in a start-up airline.’’

A Qantas spokesperson confirmed the veracity of the letter and submission but the airline declined to comment.

Last week, Mr Borghetti did not dispute the reasoning for the move, which came after Virgin Australia posted a full-year loss in August.

“This capital raising is designed to enhance liquidity and the gearing position of Virgin Australia to ensure we are in a stronger position moving forward,” Mr Borghetti said in a statement.

The capital raising would replace a $90 million undrawn debt facility extended to Virgin by the three airlines.
Bid to lure more business travellers

He told the AFR the raising would help with Virgin’s “game change” strategy of trying to lure more business travellers and to compete with Qantas on regional and low-cost routes.

It was unclear whether Virgin would return a profit this year as well. “Given the ongoing uncertain economic environment, competitive challenges and market volatility, we are unable to provide profit guidance for the 2014 financial year at this time,’’ Mr Borghetti said.

Qantas has been voicing concerns publicly about Virgin’s foreign partners since at least June last year when Etihad started increasing its share in the airline above 5 per cent.

“Virgin/Etihad will be able to flood the market with capacity until its competition is forced to significantly reduce its own operations or worse,” Qantas said in a submission to the then Labor government.

Virgin rejected the accusation at the time, saying the investment “has absolutely no impact or influence on the company’s management or strategy”.

Also at the time, then shadow treasurer Joe Hockey did not rule out changing or abolishing the Qantas Sale Act to enable the airline to compete on a level playing field, including being able to enter into similar foreign equity arrangements. “We have to make a decision about whether Qantas does become a major international airline with a majority ownership overseas, or whether we want to retain it and pay a price for retaining it as an Australian icon,” he said.

In October this year, Mr Hockey approved Air New Zealand’s FIRB bid to lift its stake in Virgin to 25.9 per cent. Etihad and Singapore are awaiting rulings to move above 19.9 per cent each.

At present, foreign airlines could buy 100 per cent of Virgin Australia’s domestic operations while, under the 1992 Qantas Sale Act, foreign investment is capped at 49 per cent, total ownership by foreign airlines is capped at 35 per cent and a single foreign investor can buy no more than 25 per cent.
National interest at threat

Mr Joyce’s submission said the policy of allowing 100 per cent ownership of Australian domestic airlines such as Virgin Australia “while at the same time maintaining the restrictions in the Qantas Sale Act in Qantas, including Qantas’s domestic operations, has resulted in serious distortions in the domestic market . . . of a kind not applicable to any other industry in Australia’’. It says the capital raising by Virgin Australia highlights the inequity.

“A shift in the market architecture as radical as this must be judged against the contemporary circumstance of the Australian market,’’ the letter says. “Much of the current policy was framed over a decade ago in very different circumstances than those present today.

“The government cannot realistically judge this proposal against an outdated policy framework. The proposal from Virgin compounds the challenges already present in the Qantas Sale Act.

“The government must urgently revisit the policy framework as a part of the examination of the proposal.”

Mr Joyce argues the national interest would also be at threat because Virgin International would be able to maintain its designation as an Australian carrier under international air services agreements.

“Because designation can be challenged by foreign governments, we are now faced with the absurd situation that the governments of Abu Dhabi, New Zealand and Singapore, which are beneficiaries of an acquisition, will be the determinants of Australia government policy in this sensitive area.’

V-Jet 17th Nov 2013 22:20

Mr Joyce argues the national interest would also be at threat because Virgin International would be able to maintain its designation as an Australian carrier under international air services agreements.
I would argue BGA (and the board/senior 'management') is a far greater threat to the national interest than anything the Borgsta does.

SB - Very good point re actively destroying International yet over reacting re anything that might upset Domestic. Very interesting.....

Toruk Macto 17th Nov 2013 23:05

He knows this game well , he is doing the same to his Asian rivals . Pumping money into Jetstar Asia so they can undercut competitors , with the aim of hurting their bottom line so they can't compete as aggressively on the Australian runs .

Logohu 17th Nov 2013 23:20

It's a bit rich for QF to now cry "predatory behaviour" when they themselves formed and continue to subsidize Jetstar with the sole intention of undermining Virgin. In the process they have probably done far more damage to Qantas branded domestic and international flights than Virgin will ever do. Pot calling kettle black I think :=

Still if AJ's outburst finally persuades the Govt to lift the restrictions on foreign ownership in QF, he will finally have achieved his goal and Emirates will be able to take over what is left of QF....

denabol 17th Nov 2013 23:22

This point is made in Ben's piece today and the Fin Review has some other commentary suggesting to me that AJ's bleating will bite him on the backside.

It is also difficult to make a case for curbing the growth of international competitors in Australia when the Emirates-Qantas business partnership consisted of giving away the Qantas presence on the routes to Europe to the Dubai based giant for free in every city except Sydney and Melbourne.
Qantas has attempted to direct its loyal customers on the kangaroo routes to Emirates, which it reviled in strident terms all the way up to the give-away which was finally agreed with Emirates in June 2012, which makes its credentials and position look hollow, even if the underlying logic of its actions were accepted.

If the Qantas Sale Act is repealed, Qantas could be what Virgin Australia is becoming. A strong Australia based airline brand, managed and operating in Australia, with no artificial restrictions on where it gets its capital from.

Its somewhat shrill objections to what Virgin Australia is doing would vanish. It would do the same. And Australia would still have a Qantas, and a Virgin Australia. Provided they were well managed.
The full story can be found here.

Qantas in 'stop the Virgins' plea | Plane Talking

ALAEA Fed Sec 17th Nov 2013 23:26

Hong Kong will be taking note of every word and every tear that Alan Joyce sheds.

hotnhigh 17th Nov 2013 23:38

Perhaps a sign of the times that Alan's 54 pillar strategy is about to collapse around his ears.
After years of neglecting the international side of the business, segmenting everything possible domestically and having the cash fire hydrant firmly in jetstars gob, the penny may finally drop that Qantas' many problems are predominately self inflicted.
Alan and the neo conservative were quite happy to blow $200 mill in grounding the airline.
Many pundits are still waiting to see where this magical jetstar fix is going to save the group. Instead we see more cash thrown down the tubes into the jetstar abyss.
The enemy in the long term battle are the other airlines Qantas competes against, not the front line staff, whom Alan and the neo are incapable of talking to, let alone delivering a strategy that all staff can believe in.
Good luck Alan, at least today, it's one day closer to your departure than it was yesterday.

TBM-Legend 18th Nov 2013 00:22

Emirates orders 50 A380's and 150 B777-X's @ Dubai Air Show..

I'd like them in my corner...

ASY68 18th Nov 2013 02:58

Not when AJ still says that EK made the wrong choice.

Stalins ugly Brother 18th Nov 2013 03:09

If management had spent more time over the last five years investing in Qantas instead of throwing cash hand over fist into the pathetic business unit that is jetstar we wouldn't be in this pickle.

Over the same period Virgin has grown, employed more Australians and is standing up as a real viable Australian business, employing Australians where we are becoming less Australian as each day passes as more staff are made redundant and more work is exported overseas such as our maintenance. Our whole business principle has become about slashing and burning Australian jobs while propping up the offshoring of Jetstar and staff on T&c's that are generally so poor that staff have to rent together in groups to make ends meet.
So I doubt the government are going to do anything to stop or hinder a growing business who will continue to employ more and more staff on home soil instead of flogging them off overseas.

Qf management have gambled and lost on the Jetstar adventure, and have taken their eyes well and truly off the mainline ball. It's now time to have the focus put back on where the real cash stream comes from instead of where the cash stream is going to.

It's time to go you lot, and allow new management to restore direction! :ugh::ugh:

TIMA9X 18th Nov 2013 03:09

Perhaps a sign of the times that Alan's 54 pillar strategy is about to collapse around his ears.
After years of neglecting the international side of the business, segmenting everything possible domestically and having the cash fire hydrant firmly in jetstars gob, the penny may finally drop that Qantas' many problems are predominately self inflicted. my bold
Alan and the neo conservative were quite happy to blow $200 mill in grounding the airline.
Pretty much sums up the strategy that has failed already, don't need to wait 5 years for the transformation process. Even if OW's ex employer Joe Hockey supports the changing of the Q sales act the momentum is lost for Q International as the management have spent too much of their time on J* International with little return..


Virgin to Qantas: It’s no longer a monopoly

Virgin to Qantas: It's no longer a monopoly | Plane Talking

Like Telstra under Sol Trujillo, or Harvey Norman decrying online retailing, Qantas’s loudmouthed approach will only serve to alert both consumers and the government as to how how much potential for competition there is. If you still own some monopoly elements then you’d best shut up about them.
If things keep going as they are, LC & AJ are running out of time & money, for me its been a long and painful 12 months watching it all unfold. :eek:

Qantas buy back announcement includes poor outlook for FY13 | Plane Talking

V-Jet 18th Nov 2013 05:41

I can't help myself. BGA's brilliant strategic mind at work....

Cost Index 18th Nov 2013 05:49

Could this have been the Qantas boards ultimate end game from the moment the acquisition of Impulse was conceived? Trash the brand to such an extent that it is no longer seen as a "Flag Carrier" hence eliminating the Qantas Sale Act? :ok:

OneDotLow 18th Nov 2013 06:45

For those wondering if a mistake has been made in investing in JQ and not in QF mainline, I refer you to the Boston Matrix. Do yourself a favour and have a read. QF Group management are just blindly following what Boston told them to do many years ago. It will give you a sense of acceptance as to where this ridiculous farce has come from and is going, until we have a board and exec flush out. Unfortunately this is not on the horizon.

Boston Matrix

Here's the tip :
Network / Jetconnect are the Question Marks (allocate minimum practical resources)
Catering / Startrack were the Dogs (dispose of if you can)
JQ is the Star (invest heavily at all cost)
QF is the cash cow (milk and starve.... She'll be right!)

So don't pat yourself on the back and think that it is your answering the phone and flexibility that makes Jetstar receive more investment, it is merely their current strategy. They knew exactly what they were doing when they purchased Impulse. The above helps explain why no JQ business in Asia has returned their cost of investment, and a yet they still receive shiny new jets. It also explains why, with such doubts over the profitability of JQ Intl, they are receiving the brand new B788's. Money will continue to be thrown into the Orange Abyss no matter what.

Likewise, if you are at Q, don't despair that your extra ton of fuel is running the company into the ground, and therefore not allowing the board to allocate funds the way of mainline. It won't make a brass razoo of difference. The cash cow is there to be milked and starved of investment and that is exactly what has been occurring for many many years. Even the most cockeyed optimist would agree that Qantas has suffered a lack of investment.

So to answer the question as to why the institutional investors have not jumped up and down when those at the 'cash cow' despair at the direction of the company...

They are just simple numbers people as well. When AJ rocks up and says he is "just doing what Boston Consulting told him to do", the all "ooh" and "ah" and that is the end of it.

JMHO, but it all adds up unfortunately. Qantas will continue to fight with one hand tied behind its back no matter what we do about it.

neville_nobody 18th Nov 2013 07:41

Borghetti returns serve..............

Virgin Australia chief executive John Borghetti has hit out at Qantas' claims that it is receiving an unfair advantage by emphasising that his airline has ended a monopoly in this country's air-travel market.

In a escalation of the battle between the pair, Qantas chief executive Alan Joyce has formally complained to Prime Minister Tony Abbott, Transport Minister Warren Truss and state governments about the regulatory restrictions on its business in contrast to Virgin.

Qantas has called for a review of the motives behind what it describes as ''the virtual takeover of Virgin Australia by foreign airlines, and to prevent destabilising of the domestic aviation industry, local tourism and jobs''.

Its attack on its competitor has been fuelled by Virgin’s $350 million capital raising last week, which will boost the stakes of its cornerstone shareholders Air New Zealand, Etihad and Singapore.

But Mr Borghetti said Virgin was focused on bringing stronger competition to the aviation market, pointing out that it had created more than 3000 jobs over the last three years.

''Fundamentally the landscape has changed forever, and it is no longer a monopoly,'' he told BusinessDay.

''This is all about competition and the creation of more jobs, and helping the tourism sector, which in the current global climate certainly can use all the help it can get.''

Government yet to respond

Federal Treasurer Joe Hockey has not responded publicly to Qantas' latest claims but he indicated last year that a Coalition government would consider lifting foreign-investment and business restrictions placed on Qantas.

Under the Qantas Sale Act, foreign investment in the airline is capped at 49 per cent, total ownership by foreign airlines is limited to 35 per cent and a single foreign investor can buy no more than 25 per cent.

Labor is unwilling to enter the renewed debate about the regulations governing Qantas. Shadow transport spokesman Anthony Albanese declined to comment today about Qantas' latest claims.

Pilots side with Joyce

But Qantas’ call for a review has won support from the pilots’ union, which argues that the ‘‘playing field has become too skewed due to the rising influence of foreign government-controlled investment in the market’’.

Australian and International Pilots’ Association president Nathan Safe said Virgin’s capital raising was not consistent with the intent of the country’s laws or the national interest.

“Our laws and regulations were not designed so that the interests of foreign-government backed airlines would be placed at a significant advantage to the national flag carrier,” he said.

In the wake of Virgin's capital raising, Qantas said it had decided to state its concerns ''as the national carrier about potentially damaging shifts in Australia's aviation industry''.

The capital raising could result in Virgin's major airline shareholders – Air New Zealand, Etihad and Singapore Airlines – boosting their combined stake from almost 63 per cent to as much as 70 per cent.

Richard Branson's Virgin Group will also retain a 10 per cent stake.

''The recent announcement by Virgin Australia that it would receive more than $300 million in further capital from three government-backed airlines highlights the uneven playing field created by existing policy settings,'' Qantas said in a statement today.

''The decision of these shareholders to invest in Virgin Australia's loss-making strategy highlights that these airlines aren't subject to the same commercial realities as Qantas.''

Qantas said its arch rival's foreign-ownership levels could rise to more than 80 per cent without the need for further regulatory approval, but yet it would still retain the rights as an Australian designated airline.

''If wholly privatised, Virgin Australia's ability to receive potentially unlimited capital from its government-backed owners would seriously distort the domestic aviation market for the benefit of foreign interests,'' it said.

Mr Joyce will visit Canberra this week where he is expected to press his points in meetings with politicians.

The latest outcry come just months after Qantas stepped up efforts to pressure federal politicians to take a closer look at whether Virgin was abiding by aviation laws, after its major airline shareholders boosted their stakes.

Qantas has been critical that Virgin has circumvented the Air Navigation Act by splitting its business. The act stipulates Australian airlines have to keep foreign ownership at 49 per cent to benefit from this country's traffic rights on international routes.

The split allowed Virgin to open its share register to Air New Zealand, Etihad and Singapore Airlines while retaining an Australian designation for its international operations.

Read more: 'No longer a monopoly': Virgin Australia chief hits back at Qantas claims

BPA 18th Nov 2013 09:01


Etihad have also just placed big orders,

From Plane Talking;

Etihad buys another 50 A350XWBs, 36 A320, 1 A330F

Etihad first at DXB13 with $25 bn of Boeings.

Etihad is the first to announce an order at the Dubai Air Show, with 25 Boeing 777-Xs, 30 Dreamliner 787-10s, and one more 777 freighter

Press release (last paragraph is very interesting for Virgin).

• Orders 117 Airbus and 82 Boeing aircraft. • Confirms 127 GE Aviation, 115 Rolls-Royce and 52 CFM engines. • Total list price of combined orders tops US$ 67 billion.*

Etihad Airways, the national airline of the United Arab Emirates, today announced its largest ever fleet order, for 199 aircraft and 294 engines, in a US$67 billion dollar deal which will enable the airline to accelerate its industry-leading growth over the next decade.

It announced firm orders at the Dubai Air Show for 87 Airbus and 56 Boeing aircraft, with a further 56 options and purchase rights.* The new aircraft will be powered by 127 GE Aviation, 115 Rolls-Royce and 52 CFM engines.

The new aircraft will be used to support the ambitious growth strategy of Etihad Airways, launching into new markets and increasing frequencies on existing routes, as well as progressively replacing its older, less efficient aircraft.*

In a unique new approach, Etihad Airways will have a capability to redirect orders to members of its equity alliance, the airlines in key markets around the world in which it holds minority shareholdings.* This will allow capacity to be allocated where most required, while improving fleet commonality and sharing significant cost synergies among equity alliance carriers.

The order, for 25 next-generation Boeing 777X aircraft, 30 Boeing 787-10 Dreamliners, one Boeing 777 freighter, 50 Airbus A350 XWB, 36 Airbus A320neo family aircraft and one Airbus A330-200F, will see passenger aircraft deliveries start in 2018.*

The airline currently has a fleet of 86 aircraft, with more than 80 on firm order.* Its last major aircraft deal was made at the Farnborough Air Show in 2008, where Etihad Airways announced firm orders for 100 aircraft, in a long-term order which was at the time one of the largest in commercial aviation history.The value of the 2008 and 2013 orders, including engines, tops US$ 110 billion at list prices.

Etihad Airways will now become the single largest airline customer for the Boeing 787 Dreamliner, with the 30 aircraft in this order being added to 41 announced in previous orders.It will also become a launch customer for the Boeing 777-8X aircraft.

James Hogan, President and Chief Executive Officer of Etihad Airways, said:“Last week, Etihad Airways celebrated its tenth anniversary.* In just one decade, we have grown into an airline with 86 aircraft, carrying more than 11 million passengers on 97 routes, served by more than 16,500 employees.*

“We now have seven equity alliance partners reaching across the world and a business strategy that has seen us create the world’s leading airline.* We have achieved all of this while reaching sustainable profitability.

“These aircraft orders provide the next step in our long-term growth strategy. They are about meeting the needs of the next 10 years, and beyond, as we grow further and faster than ever before.

“We are helping to establish Abu Dhabi as one of the world’s great aviation hubs, offering connections to cities on every continent.* This order will provide us with the capacity to continue with those ambitious aspirations.”

The mix of wide- and narrow-body aircraft will help support the development of the airline’s maturing network, focused on its hub at Abu Dhabi International Airport, which will see the new Midfield Terminal opening in 2017, significantly increasing capacity.

Mr Hogan said the ability to share the orders with members of the equity alliance offered a unique opportunity.* Etihad Airways currently holds stakes in airberlin, Air Seychelles, Aer Lingus, Virgin Australia, and Air Serbia. Etihad Airways last week received regulatory approval for a proposed 24 per cent investment in India’s Jet Airways.

Today, it also announced the acquisition of a 33.3 per cent stake in Swiss carrier, Darwin Airline, which will offer Etihad Airways’ first branded regional operations under the new Etihad Regional badge and livery.

Mr Hogan said: “The revenue benefits of our equity alliance, to all the members, have always been clear.* But the real strength of this strategy lies in the opportunity for business synergies which can improve the operating costs of all the partners. This means all our strategic partners will have the chance to benefit from it.

“When we made our last major order, at Farnborough in 2008, we structured deals that gave us great flexibility in the timing of aircraft deliveries, allowing us to match them to actual passenger demand, according to market dynamics.

“These deals take that concept a step further, allowing us to offer capacity where and when it is most needed within the equity alliance.* The opportunity to standardise fleets and align product among members – whilst always keeping the distinct brand identities of each airline – will offer both cost synergies and marketing benefits.”

Stalins ugly Brother 18th Nov 2013 09:28

Qantas Group CEO Alan Joyce has compared an alliance with Etihad ahead of Emirates as "being offered a bike before a BMW".
So if Ek is a BMW,
and Etihad is a Bike,
What now best describes whats left of us (QF)???????? :(

wrongwayaround 18th Nov 2013 12:02

I'm with you Wally!
I'm afraid we will not see all the "back patting" when it all 'sadly' slides down the drain!

RATpin 18th Nov 2013 12:06

This would be the same AJ that backed Ms G's carbon Tax seeing a political advantage.
Good Luck Pal!

Berealgetreal 18th Nov 2013 12:21

I'm confused, Alan and the QF group faithful on one hand are full to the brim with confidence one minute yet hysterically screaming foul the next.

I recall Alan saying that Virgin weren't even a competitor not long ago. Really he shouldn't be worried should he..?

Sue Ridgepipe 18th Nov 2013 14:03

So BGA is bleating because he thinks foreign airlines are taking over in Australia, but it's okay for him to set up his Crapstar operation in other countries? :confused:

TIMA9X 18th Nov 2013 14:11

mixed messages for the punters?

I'm confused, Alan and the QF group faithful on one hand are full to the brim with confidence one minute yet hysterically screaming foul the next.

I recall Alan saying that Virgin weren't even a competitor not long ago. Really he shouldn't be worried should he..?

So BGA is bleating because he thinks foreign airlines are taking over in Australia, but it's okay for him to set up his Crapstar operation in other countries? http://images.ibsrv.net/ibsrv/res/sr...s/confused.gif
I'm confused as well, its been war for three years, line in the sand stuff.... now a collective on guard is called... WOW, funny business this industry.

...... and it's a big media splash today, it's in everything aviation media & mainstream.

QANTAS boss Alan Joyce has issued an unprecedented call to action from 35,000 staff to mount a nationwide political campaign against what he claimed was the foreign takeover of Australian skies.
In a first for an Australian corporate, the Qantas boss has urged the united workforce of the airline to lobby Federal MPs against further foreign investment in its competitor Virgin which he claimed was trying to kill off the flying kangaroo.

The Daily Telegraph
has obtained a memo from Mr Joyce, sent to all staff last night, calling for urgent action by Qantas employees to pressure Government to intervene or risk an eventual foreign monopoly on domestic routes.

"After all the hard work we have put in over the past five years - and all the work by the thousands of Qantas people over 93 years of history - I am not sitting by while the future of Australia's Qantas is snatched away," Mr Joyce wrote.

"No other country on earth would passively allow such a foreign takeover to happen.

"If you feel as strongly as I do, I encourage you to make your voice heard as well. Write a letter to your local Federal representative. Make a phone call. Speak up on social media.

"Each one of you has stood up for Qantas and fair, vigorous competition. It's essential - and now urgent - that Australia's political leaders do so as well."

Qantas CEO Alan Joyce / Picture: Rob Griffith Source: Supplied

Mr Joyce has already written to Prime Minister Tony Abbott to intervene and block Virgin's $300 million foreign capital plans.Mr Joyce has received the backing of key unions in calling for a review of aviation policy following the plan by Virgin's majority owners - Air New Zealand, middle east-based Etihad and Singapore Airlines - to inject a further $300 million into the Australian airline.

They argued that the equity raising lifted Virgin's ownership by foreign Governments to 72 per cent, allowing the airline to continue running at a loss and under-cut Qantas on prices, a strategy which would ultimately cripple Qantas.

"The Australian and International Pilots Association is calling for a review of Australia's aviation policy settings, arguing the playing field has become skewed due to the rising influence of foreign government-controlled investment in the market," the AIPA said in a statement.

"AIPA is deeply concerned that Virgin Australia, by splitting its business, has been able to access a significant advantage by circumventing the intent of the Air Navigation Act, which requires that Australian airlines, other than Qantas, are limited to 49 per cent foreign ownership by international airlines."

ACTU secretary Dave Oliver also backed Mr Joyce and called on the Abbott government to ensure the viability of the national carrier.

"As I said, this airline has been a key part of society today, and employs tens of thousands of Australians, and that this Government cannot sit on the sideline and just simply leave it to the market."
Virgin, however, has hit back claiming its presence in the market had broken the monopoly situation of the past and that its new capital raising would further enhance competition in the market.

In a statement issued yesterday in response to Qantas's move, Virgin said its presence in Australia had been good the economy and that its board operated with majority independent control.
"The landscape of Australian aviation has changed forever. It's no longer a monopoly," it said.

Qantas still dominates the market carrying 48.3 million passengers a year compared to Virgin's 19.3 million.

But Mr Joyce insisted Qantas now faced an "unprecedented situation".
"For months Virgin has been losing money, driven by a strategy of setting uncompetitively low prices to win customers off Qantas across all our flying businesses," he said.

"With the benefit of unlimited sovereign funds - including the recent injection of a further $300 million - Virgin can set prices below a competitive level simply because, unlike us, they don't need to make a profit.

"The agenda of these foreign airlines is to terminally weaken Qantas and Jetstar in our domestic markets, force us to shrink our international business, and sacrifice jobs. If nothing is done, they will be perfectly placed to take a domestic monopoly position in the Australian market over the longer term.

"No nation on earth depends more on aviation than the island-continent of Australia. It is a strategic issue for this country. As the national carrier our red tail is a symbol of Australia around the world, and a beacon for Australians in need."
Well, I guess if the Q pilots support it, I hope some good comes out of this for all Aussie pilots & operational staff long term futures... my bolding

On the other hand, Qantas has brought much of this on its own head with its Emirates alliance. It's hardly surprising that the trio of Etihad, Singapore and AirNZ would seek to build relationships with a domestic Australian player. For AirNZ it's life or death. If Qantas got its way, we would be heading potentially for a domestic monopoly and a totally dominant Qantas-Emirates global combine internationally.

The cleanest and most sustainable outcome would be to allow two full mergers. Say Qantas-Emirates and Singapore-Virgin-AirNZ - perhaps with a continuing link to Etihad.
But that is not going to happen. Not so long as governments continue to insist countries have "national carriers". No Cookies | Herald Sun

My guess is that Joyce is preparing the ground for an unsavoury result in the first half and probably the full year as well. He is pulling every cost-cutting move available. But it is probably not enough.
The flying kangaroo is being financially king-hit by its smaller competitor, Virgin, that now has the backing of three large, ostensibly sovereign-owned airlines with unlimited financial muscle.
It's the equivalent of the schoolyard weakling finding three big brothers and trouncing the bully.
The trouble for investors is that both the bully and the weakling are getting very bloody noses in this fight and it's far from over

Qantas in dogfight with Virgin
It's going to be a interesting week me thinks.

SOPS 18th Nov 2013 14:36

He wants the united workforce of the airline........WTF??? As far as I can tell, he has dedicated himself to destroying the united workforce, including shutting the airline down at one stage.

He has reduced International to a shadow of it former self, ploughed untold money into Jetstar and it's off shoots, and proposed crazy ideas like Red Q.

And now he wants help.......spare me.

EK will soon operate a fleet of 100 A380s and untold 777s of all types, versus QF Internationals fleet of what....30 aircraft? (Please feel free to correct this number).

The plot was lost long ago...and as I have said before many times, I can't understand why those in charge have seemed so hell bent on destroying Qantas, but I think they might have just done it.

OEB 18th Nov 2013 15:26

Qantas Really?
Qantas should have been gone 25 years ago. 6 Federal government bale outs and still complaining. The world has moved on. They are an old rotting shell of an airline with an antiquated seniority system and governance. Exposed to the world with pants down. I'm sure Capt Crispy has all the answers in his next book. Ciao QF.

Boeing buster 18th Nov 2013 16:52

My fellow employee.
We qantas, you and I are in threat of being screwed over by foreign Goverment owned airlines. I urge you to stand up and fight for your right to be screwed over by myself, Leigh, Olivia,Paul, Nasty and Strams.
Considering how much work we have put into stripping Qantas for the benefit of Jetstar it would be unfair for us not to have the chance to finish the job.
Come on people it's not easy to close a national carrier and blame someone else.
You know you love me so show it
Tell your local member you want my member in you.
Leigh said not to say anything else so I'm done

Stalins ugly Brother 18th Nov 2013 17:09

Don't drink and post, just makes you look like a knob. :=

Very funny and more accurate than what most of us realise.


Ollie Onion 18th Nov 2013 20:43

I am no fan of Alan, but I think in this instance what he says does have a bit of merit. Australia works with very very strict foreign ownership rules. Virgin seems to be getting an endless line of credit from its foreign owners with the sole purpose of gaining DOMESTIC market share.

Who can really deny that Ethiad and Air NZ (FOREIGN CARRIERS) are basically now funding and providing commercial direction for Virgin Australia, is this allowable under Australian laws???

Somehow this thread has drifted into yet another Qantas vs. Jetstar bashing session. This has little to do however with the point that Al is making. Would we be so happy as a pilot group in Australia if a foreign carrier came and set up shop here and with an overseas workforce with all profits going offshore, infact sod it, why not just do away all together with the cap on foreign ownership, then we will see what happens to pilot's terms and conditions in Australia.

Berealgetreal 18th Nov 2013 20:49

Suddenly he's referred to as "Al".

This has got a few guys spooked. Its kind of funny.

Berealgetreal 18th Nov 2013 20:51

Suddenly he's referred to as "Al".

This has got a few guys spooked. Its kind of funny.

Now he's asking to unite with staff. Amusing to say the least.

hotnhigh 18th Nov 2013 21:12

Ollie, fair point. However I think the majority who work for Qantas, realise this call for solidarity is for one reason only, saving his own bacon from the closer inspection of his and the boards failed policies.
If Joyce was a true leader and good CEO, this issue would be a storm in a teacup.
Memo to Alan. Qantas is the main game and you have well truly positioned it in a dire spot. Well done.

Potsie Weber 18th Nov 2013 21:44

Happy to write to my local MP etc. But I'll just add in the failings of the current management. Help save QF, but in return, management has to go.

oldhasbeen 18th Nov 2013 21:53

QF ceased being the "national carrier" the moment they were given 400 million and used it to destroy AN..and became a listed company

Gingerbread 18th Nov 2013 21:55

Comedy Act by Ben Sandilands

Qantas Group CEO Alan Joyce is only a few words short of calling on his pilots to wear red ties and lead passengers in a rousing chorus of “I still call Australia Home” before push back given his mobilisation call to employees yesterday to make Virgin Australia give back its grubby unfair foreign money from predatory government owned airlines.

But is this the same Alan Joyce that replaced Qantas jets to London with billions of dollars worth of Emirates A380s and Boeing 777s when he gave away Qantas services from Perth, Brisbane, and Adelaide on the kangaroo route to the sovereign owned Dubai carrier earlier this year?

Which is worse if we want to be judgemental about this, Mr Joyce. Using a state owned Middle East carrier to reduce the need for Qantas services (and those pesky unionised Qantas workers) to London and Frankfurt, or using foreign carriers like those which have invested money in Virgin Australia to make it grow even faster?

If using foreign money to grow Australian jobs in an Australian controlled airline is bad, how much worse is using similarly foreign money to avoid Qantas employing Australians to continue its presence on the kangaroo routes? And please, stop talking about Qantas continually operating for 93 years. You grounded it for several days in 2011 for a nasty ambush pulled on tens of thousands of your customers, scattered all over the world, to browbeat a confused government into supporting a court order to end court approved industrial action which was yours for the asking anyhow?

Qantas has no claim to being the world’s oldest continuously operating carrier, because you discontinued it. You attacked in the basest of terms the people you are now imploring to mobilise, to cover your own sorry record of mismanagement which has seen the airline share price trashed and dividends vanish.

Remember. You woke up one morning late in October 2011, and said “I’ll ground the airline”. And lo, miraculously, there was a courier army, loitering with intent for the word to be made flesh, and cycled forth, delivering letters and notices that appeared out thin air, while passengers suddenly prevented from attending weddings, funerals, christenings, graduations, and the odd multi-million dollar business contract signings abroad, were all directed by shafts of divine light to hundreds of hotel rooms that had been fortuitously booked for no apparent reason days in advance.

Forgetting this tragic comedy for a moment, this is a borderless world when it comes to capital. Qantas should in fairness be allowed to access that capital under the same rules that apply to Virgin Australia.

Repealing the Qantas Sale Act is something long overdue. But on current indications giving Qantas equality of access to foreign capital alongside Virgin Australia won’t save it from the Virgin menace. That requires comprehensive changes in the management culture at Qantas, and in its board room, and we all know where that begins Mr Joyce. It begins with you.

Source:Qantas dilemma. Which Alan Joyce is talking? | Plane Talking

WorthWhat 18th Nov 2013 22:33

Whilst I would be amongst the first to agree that ‘What’s going down at Qantas is no joking matter,’ must admit I am more taken by Elizabeth Knight’s article in today’s SMH – Qantas in a dogfight no one will win.

As Elizabeth points out in her article:

Qantas is not in trouble because its source of international investors is limited by the Qantas Sale Act. This has been a legitimate beef for a number of years but partner airlines such as Emirates could have taken a shareholding but chose not to.

The aspiring Virgin model has better enticed partners wanting to tap into the Australian market.

The Qantas Sale Act is there for very good reason and necessary changes to it need to include appropriate protections for all served by it. Achieving this will not come easily. It probably can and should be done but isn’t likely whilst the current protagonists control the agenda.

waren9 18th Nov 2013 22:34

al has been pretty happy to set up shop in everyone elses back yard, but when it comes to others wanting a slice of the australian domestic scene, nooooo, we cant have that.

no sympathy from me.

that guy need to prove he can actually run something rather than just cut slash burn since he's been been in the hot seat. the times coming where we might eventually get to see i guess

Mr.Buzzy 18th Nov 2013 22:44

Go on Al. I dare you to ask for help in Melbourne or Avalon!


73to91 18th Nov 2013 23:02

He can just rename it Air Pacific, after all that name is no longer used.

virginexcess 18th Nov 2013 23:09

I would hope that AIPA have qualified their support with a letter to the board demanding Joyce's head on a plate.

Check_Thrust 18th Nov 2013 23:53

I know that this would not happen but how is this for an idea?

Alan could try to raise capital by convincing the big four Australian banks to invest $500 million each, this additional $2 billion of Australian ownership would then allow for further foreign investment of up to about $1.9 billion. If all that was to happen it would more than double the market capitalisation of Qantas. This injection of funds would allow Qantas to compete with any predatory behaviour, or to expand their operations, or to provide upgrade/superior services across their fleet (eg. Inflight entertainment for Qlink, Wifi internet on all flights, more new aircraft, etc) or perhaps do all three.

Obviously the banks and any other investors would want to see a return on their investment so they would not want to see their money simply thrown down the drain on a strategy of undercutting any competition on ticket price alone.

If this funding was to happen it would help show if the alliance of Virgin Australia backers are simply injecting funds into Virgin for predatory purposes because to continue the strategy they would then have to invest a lot more to keep up or alternatively they would walk away. If their strategy is not of predatory nature then they would maintain their current level of investment or slightly increase it and Virgin Australia would compete with offering a superior service to Qantas (I am not saying Virgin isn't trying this already).

As I said before, I know it won't happen.

All times are GMT. The time now is 12:36.

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.