Qantas will be dead in 6 months
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Qantas will be dead in 6 months
Qantas faces being gutted and restructured around Jetstar model: aviation expert | Business | News.com.au
QANTAS will no longer exist in its current form if the downturn that is crippling the industry lasts another six months, one of Australia's leading aviation experts has claimed.
Centre for Asia-Pacific Aviation director Peter Harbison said that a currently unprofitable Qantas faces being gutted and reconstructed around a more profitable Jetstar model.
He also told The Daily Telegraph yesterday that the 3300 jobs already axed at the airline would be easily superceded in the coming months if conditions did not improve.
The airline confirmed on Tuesday it was currently losing money and was likely to chalk up a loss of up to $180 million in the first six months of 2009.
To help stem further losses, it also announced a 5 per cent reduction in capacity, the axing of a further 1750 frontline staff and senior managers, grounding of 10 aircraft and multiple delays of new aircraft on order.
Qantas blamed a dramatic fall in international travel for its unglamorous slide into the red. Its bottom line is also being decimated by a cut-throat airfares war that has had ticket prices fall to unprecedented levels.
Those levels simply can't be sustained, Mr Harbison said.
"If this environment continues, we basically have an unprofitable Qantas airline that doesn't have a future.
"Even if we stay at the same level for six months, they really have to look at ripping the airline apart and doing something dramatically different.
"There will definitely be a lot more jobs cuts but, more than that, the whole structure of the company will have to change."
Contrarily, Qantas' budget carrier Jetstar continues to trade positively, largely due to its slim cost base and appeal to budget-conscious travellers.
Mr Harbison said Qantas would not have made it through the current recession if it had not launched Jetstar in 2005 to counter Virgin Blue.
While Qantas management expressed confidence in the airline's future, its boss Alan Joyce seemed to echo those sentiments yesterday
He told Business Spectator it was Qantas' broad portfolio - namely Jetstar and the performing Qantas Frequent Flyer program - that was aiding its survival.
Centre for Asia-Pacific Aviation director Peter Harbison said that a currently unprofitable Qantas faces being gutted and reconstructed around a more profitable Jetstar model.
He also told The Daily Telegraph yesterday that the 3300 jobs already axed at the airline would be easily superceded in the coming months if conditions did not improve.
The airline confirmed on Tuesday it was currently losing money and was likely to chalk up a loss of up to $180 million in the first six months of 2009.
To help stem further losses, it also announced a 5 per cent reduction in capacity, the axing of a further 1750 frontline staff and senior managers, grounding of 10 aircraft and multiple delays of new aircraft on order.
Qantas blamed a dramatic fall in international travel for its unglamorous slide into the red. Its bottom line is also being decimated by a cut-throat airfares war that has had ticket prices fall to unprecedented levels.
Those levels simply can't be sustained, Mr Harbison said.
"If this environment continues, we basically have an unprofitable Qantas airline that doesn't have a future.
"Even if we stay at the same level for six months, they really have to look at ripping the airline apart and doing something dramatically different.
"There will definitely be a lot more jobs cuts but, more than that, the whole structure of the company will have to change."
Contrarily, Qantas' budget carrier Jetstar continues to trade positively, largely due to its slim cost base and appeal to budget-conscious travellers.
Mr Harbison said Qantas would not have made it through the current recession if it had not launched Jetstar in 2005 to counter Virgin Blue.
While Qantas management expressed confidence in the airline's future, its boss Alan Joyce seemed to echo those sentiments yesterday
He told Business Spectator it was Qantas' broad portfolio - namely Jetstar and the performing Qantas Frequent Flyer program - that was aiding its survival.
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If there is any truth to the accusations that Jetstar's performamce in the past few years has been as a result of some crafty accounting that has shifted costs to Qantas' books, we'll soon have indications to confirm or deny.
How much for the orange gear?
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Transferred from Qantas pilots chat room:
Financial Review on Wednesday the 15th of April;
- "While Qantas likes to promote the rapid growth of it's low cost offshoot Jetstar, the downgrade highlights the fact it remains highly leveraged to long-haul international and premium travel.
- "There is no arguing Jetstar's success but it contributed less than 10 per cent to group earnings before interest and tax last year."
Last edited by struggling; 16th Apr 2009 at 22:42. Reason: to reflect post below
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Recent announcements that the Roo is bringing back home heavy maintenance that was being carried out in: HKG, KL & MNL seems to indicate that Harberson’s view that Qantas is proceeding with the 'Dixon Plan' is somewhat short-sighted.
How myopic his view is won’t be known until the Qantas Group actually revokes proposed crewing of its Trans Tasman operations with New Zealand based pilots.
Personally believe it is reasonable to presume that the Roo will become increasingly willing to appease the Government and the Unions in order to get up necessary changes to the Qantas Sale Act so it can consolidate globally.
Real shame AIPA let its GM go. Can't use industrial tactics to solve Trans National issues.
How myopic his view is won’t be known until the Qantas Group actually revokes proposed crewing of its Trans Tasman operations with New Zealand based pilots.
Personally believe it is reasonable to presume that the Roo will become increasingly willing to appease the Government and the Unions in order to get up necessary changes to the Qantas Sale Act so it can consolidate globally.
Real shame AIPA let its GM go. Can't use industrial tactics to solve Trans National issues.
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Dragun,
Read the same article myself, the quote is from the Fin Review.
Was also gobsmacked to read that overseas maintenance will be returned to Australia in an effort to reduce maintenance costs. I thought that was the reason maintenance was transferred OS in the first place.
They're just making it up as they go along.
Read the same article myself, the quote is from the Fin Review.
Was also gobsmacked to read that overseas maintenance will be returned to Australia in an effort to reduce maintenance costs. I thought that was the reason maintenance was transferred OS in the first place.
They're just making it up as they go along.
Holic
I meant the quote "I do not envisage any "intention" to change any "initial" plans that we have been told to date..." was not from the article in the financial review as per my post. Which is why struggling has edited his post. Minor point.
I meant the quote "I do not envisage any "intention" to change any "initial" plans that we have been told to date..." was not from the article in the financial review as per my post. Which is why struggling has edited his post. Minor point.
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Gingerbread,
This is all part of the NEW Dixon plan.
Funny how the man responsible for slashing engineering jobs in Australia is now on a Queensland board designed to retain, and develop, new jobs in Queensland.
Watch the overseas jobs come back to Australia and Dixon make a pretty penny in the process.
This is all part of the NEW Dixon plan.
Funny how the man responsible for slashing engineering jobs in Australia is now on a Queensland board designed to retain, and develop, new jobs in Queensland.
Watch the overseas jobs come back to Australia and Dixon make a pretty penny in the process.
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I think it was predicited by many people from day 1 of Jetstar, after enough years the Jetstar brand or at least some of it will be rebranded back into Qantas coulours.
There is no way you are going to let one of the most recognisable marketing icons such as Qantas go under. What management ideally want is Qantas coulours and pay Jetstar salaries. It is going to happen. You know why, because the Jetstar excercise has already proven to management that pilots, flight attendants, check-in people etc will fly/work for those lower salaries. It is just a process of slowly introducing that into mainline.
If it doesn't happen, then maybe Mr Harbison is right. This is no normal recession, not just a downturn and then come out the other side. This recession is significantly going to change the way lots of businesses/industries run.
Qantas will have to be a very different beast to grow and continue as a great airline.
This is not meant to be a negative post, just that i think reality will be very different now.
There is no way you are going to let one of the most recognisable marketing icons such as Qantas go under. What management ideally want is Qantas coulours and pay Jetstar salaries. It is going to happen. You know why, because the Jetstar excercise has already proven to management that pilots, flight attendants, check-in people etc will fly/work for those lower salaries. It is just a process of slowly introducing that into mainline.
If it doesn't happen, then maybe Mr Harbison is right. This is no normal recession, not just a downturn and then come out the other side. This recession is significantly going to change the way lots of businesses/industries run.
Qantas will have to be a very different beast to grow and continue as a great airline.
This is not meant to be a negative post, just that i think reality will be very different now.
There is no way you are going to let one of the most recognisable marketing icons such as Qantas go under.
What management ideally want is Qantas coulours and pay Jetstar salaries. It is going to happen.
Jetstar is an integral part of the QANTAS Group - but it is not going to, like some will suggest, cause the demise of QANTAS Mainline.
I think this site should be renamed the Professional Pilots Nonsense Network.
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the Jetstar excercise has already proven to management that pilots, flight attendants, check-in people etc will fly/work for those lower salaries.
Remember the 457 visas for foreign crew.
The economic cycle has turned, they'll get the crew now. But once we emerge from the downturn. Those who have gained experience will look to greener pastures.
Evertonian
How many LAME's were let go when all the MX went offshore? Could it now be cheaper here because QF will re employ them at lower or casual rates?
I'll just go & put my cynic back in the box shall I?
I'll just go & put my cynic back in the box shall I?
Is this the same Harbison that predicted Rex would last 1 month???
I think your crystal ball is a little foggy Mr Harbison...
I think your crystal ball is a little foggy Mr Harbison...
PETER HARBISON: "Right or wrong, I think it's going to occur probably in the next six months, and we'll probably see Singapore Airlines operating that route some time in 2006."
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As ironic as the following quote by Comfy would be:
Such an outcome can only be good for both Australia and Qantas.
Here's hoping.
Watch the overseas jobs come back to Australia and Dixon make a pretty penny in the process.
Here's hoping.