Fallacy or Fact - Qantas International losses
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Fallacy or Fact - Qantas International losses
Most would be aware that the current Qantas CEO has been peddling the line about the poor performance of the International arm of the Qantas Group. At no stage however has he done anything other than tell the story and I strongly suspect he is doing it for the wrong purpose. Qantas fares are at the top end of the market as are their load factors, this is without question. Yield is what makes an airline business profitable and with the above variables extremely healthy, the only component that could drag the equation down is the operations expenses.
Most would be aware that there are many components that make up the Operating expenses. Fuel, maintenance, wages, aircraft purchase costs, landing fees and f**ken big payouts to former Executives. You can't do much about some of them such as the price of fuel but if the overall expenses are excessive, yield diminishes and the airline loses money.
Now with Alan selling a notion that International is unprofitable, I can only assume he is saying that costs are too high for that portion of the business. I have no doubt that some costs are higher than those of Jetstar and Qlink but are they so high that he can justify the recent statements? ALAEA members have given anecodatal evidence to suggest that some parts of the wider group are loading up International with additional bills to make it look unprofitable. Qantas have closed their books to investors so we can't really examine it through that channel but there is another avenue.
With the unions currently in negotiation, I would suspect they have all been fed this line about the struggling business. Under the FWA, both parties are obliged to justify any claim and I want them to demonstrate to ALAEA members at least how the expenses are billed to each portion of the group. I don't want Strambi to come in with some pie charts and a powerpoint and just ask us to trust him, I want the full picture. When a Qlink passenger has an OJ from the Qantas Club, how is that billed back to Qlink? Tomorrow we will be in FWA again and our union intends to ask the relevant questions. If anyone has any ideas on where we should start digging, please post them here. Some of my ideas already -
How is Ian Oldmeadow's consultancy billed and how does his fee get paid by each portion of the business?
With the aircraft Qantas lease and then sub lease to another entity, what are the lease costs, how much is passed on and who pays for the maintenance?
Why have LAMEs been told not to fill out form 2350's (customer billing sheets) when additional work or assistance is required on Jetstar aircraft?
What portion of the business is paying the legal bills for the Jit Connict court case?
Who is paying for the $21 million refurb of Hangar 245 that will predominantly house 787's?
Which part of the business pays for advertising? It seems that there aren't too many Qantas ads right now....
etc..... Please if you could help me with ideas at all it would be much appreciated. Just simple questions, no great debates, we can leave that to the other threads.
cheers
Steve P
Most would be aware that there are many components that make up the Operating expenses. Fuel, maintenance, wages, aircraft purchase costs, landing fees and f**ken big payouts to former Executives. You can't do much about some of them such as the price of fuel but if the overall expenses are excessive, yield diminishes and the airline loses money.
Now with Alan selling a notion that International is unprofitable, I can only assume he is saying that costs are too high for that portion of the business. I have no doubt that some costs are higher than those of Jetstar and Qlink but are they so high that he can justify the recent statements? ALAEA members have given anecodatal evidence to suggest that some parts of the wider group are loading up International with additional bills to make it look unprofitable. Qantas have closed their books to investors so we can't really examine it through that channel but there is another avenue.
With the unions currently in negotiation, I would suspect they have all been fed this line about the struggling business. Under the FWA, both parties are obliged to justify any claim and I want them to demonstrate to ALAEA members at least how the expenses are billed to each portion of the group. I don't want Strambi to come in with some pie charts and a powerpoint and just ask us to trust him, I want the full picture. When a Qlink passenger has an OJ from the Qantas Club, how is that billed back to Qlink? Tomorrow we will be in FWA again and our union intends to ask the relevant questions. If anyone has any ideas on where we should start digging, please post them here. Some of my ideas already -
How is Ian Oldmeadow's consultancy billed and how does his fee get paid by each portion of the business?
With the aircraft Qantas lease and then sub lease to another entity, what are the lease costs, how much is passed on and who pays for the maintenance?
Why have LAMEs been told not to fill out form 2350's (customer billing sheets) when additional work or assistance is required on Jetstar aircraft?
What portion of the business is paying the legal bills for the Jit Connict court case?
Who is paying for the $21 million refurb of Hangar 245 that will predominantly house 787's?
Which part of the business pays for advertising? It seems that there aren't too many Qantas ads right now....
etc..... Please if you could help me with ideas at all it would be much appreciated. Just simple questions, no great debates, we can leave that to the other threads.
cheers
Steve P
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When a delay on a QF aircraft is incurred whilst waiting for J* passengers , who were now to be carried home to SYD by QF ( as their a/c went u/s), we were told that the delay was costing $330 per minute to hold on the aerobridge, charged by the airport . Who pays this cost?
Many good questions to ask fed sec.
I understand a number of unions have started to dig to try and find the answers. Any truth to the rumour that QF has had a quiet word to some of the big four accounting firms, who have been asked by some unions to assist in running the numbers that they, the unions, have uncovered?
Also as an addition, would be keen to learn how much jetstar, jetstar int and efa pay for the use of sim time and ep facilities and also the amount they contribute to pay for the upkeep of such facilities.
Keep digging. You may need a big shovel.
I understand a number of unions have started to dig to try and find the answers. Any truth to the rumour that QF has had a quiet word to some of the big four accounting firms, who have been asked by some unions to assist in running the numbers that they, the unions, have uncovered?
Also as an addition, would be keen to learn how much jetstar, jetstar int and efa pay for the use of sim time and ep facilities and also the amount they contribute to pay for the upkeep of such facilities.
Keep digging. You may need a big shovel.
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A few years ago QF pilots were being sent to HKG and LHR to do A330 courses while JQ were using mainline's A330 simulators for their crew.
How much were JQ paying QF to use their simulators and how did this cost compare to what QF were paying for the outsourced A330 courses + accommodation + allowances ?
How much were JQ paying QF to use their simulators and how did this cost compare to what QF were paying for the outsourced A330 courses + accommodation + allowances ?
If someone asks the following question of AJ at the AGM, is he in breach of the Corporations Act if he is found to have answered falsely?
"Can you advise whether Jetstar pays commercial arms-length lease rates for the A330 aircraft it leases from Qantas?"
Surely a Ben Sandilands or Stephen Mayne can be encouraged to do just this!!!
"Can you advise whether Jetstar pays commercial arms-length lease rates for the A330 aircraft it leases from Qantas?"
Surely a Ben Sandilands or Stephen Mayne can be encouraged to do just this!!!
Nunc est bibendum
I'm a fan of the 'don't ask a question you don't already know the answer to' when it comes to these sorts of proceedings however the following is worth digging into.
Bruch Buchanan and a bunch of other J* people are on the Qantas Intranet directory. Under Bruce's profile is says 'company- Qantas', 'Department- Jetstar'. I wonder then who pays his salary? Is he employed by Qantas or Jetstar? Others on thet list include CEO J* Asia, the J* 'Head of International', Bruce's PA, the J* CFO, the exec manager commercial, etc. All are listed as Company- Qantas, Department J*.
It may be just an administrative thing.
Other questions:
1. Given that a lot of J* equipment is held in Qantas storage areas (formerly QCD), do J* pay a fee for the storage of these items or is this a cost that is borne by mainline?
2. J* cabin crew now do medical training with Qantas cabin crew- a recent occurrence since they copped a shellacking in the senate when their claim to 'uphold all the safety standards of Qantas' was shown to be a sham. Are they charged for this service or is it free? This training is done at the same time as security training. Not sure if they paid for the security training in the first place (or how long they've been doing it with QF crew) but did the cost increase when medical training was added on?
3. Who pays for 'Group Security'? Does J* contribute to this cost and pay for their services or is that another mainline cost?
4. When an A330 is transferred to J*- after having been delivered to QF shortly before- who does the acceptance of the aircraft in Toulouse? Are they QF people or J* people?
5. On another thread, someone mentioned an airport manager being told not to book costs onto J*. They may be referring to Honolulu where it's alleged that QF provided something like 30+ rescue flights in the one year and the additional costs for the Honolulu QF ground staff to turn around these flights was not charged to J*. QF had to wear these costs. Perhaps they were covered in the cost charged to J* for the rescue flight..... but I doubt it.
Again, I must stress I don't know the answer to these questions and I'd hate to ask them in an open court without knowing the answers.
Bruch Buchanan and a bunch of other J* people are on the Qantas Intranet directory. Under Bruce's profile is says 'company- Qantas', 'Department- Jetstar'. I wonder then who pays his salary? Is he employed by Qantas or Jetstar? Others on thet list include CEO J* Asia, the J* 'Head of International', Bruce's PA, the J* CFO, the exec manager commercial, etc. All are listed as Company- Qantas, Department J*.
It may be just an administrative thing.
Other questions:
1. Given that a lot of J* equipment is held in Qantas storage areas (formerly QCD), do J* pay a fee for the storage of these items or is this a cost that is borne by mainline?
2. J* cabin crew now do medical training with Qantas cabin crew- a recent occurrence since they copped a shellacking in the senate when their claim to 'uphold all the safety standards of Qantas' was shown to be a sham. Are they charged for this service or is it free? This training is done at the same time as security training. Not sure if they paid for the security training in the first place (or how long they've been doing it with QF crew) but did the cost increase when medical training was added on?
3. Who pays for 'Group Security'? Does J* contribute to this cost and pay for their services or is that another mainline cost?
4. When an A330 is transferred to J*- after having been delivered to QF shortly before- who does the acceptance of the aircraft in Toulouse? Are they QF people or J* people?
5. On another thread, someone mentioned an airport manager being told not to book costs onto J*. They may be referring to Honolulu where it's alleged that QF provided something like 30+ rescue flights in the one year and the additional costs for the Honolulu QF ground staff to turn around these flights was not charged to J*. QF had to wear these costs. Perhaps they were covered in the cost charged to J* for the rescue flight..... but I doubt it.
Again, I must stress I don't know the answer to these questions and I'd hate to ask them in an open court without knowing the answers.
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One of the pointers may be the number of employees per aircraft for the various arms of the group. Prima facie.... Jetstar has many EPA less than mainline.
Why?
Why?
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Top questions all, keep em coming.
I wonder who pays for the Intranet upkeep if BB has his name in there.
From what we have here and the pms I am receiving, my document has 20 questions with supplemental parts. Hopefully I can walk in tomorrow with 50.
I wonder who pays for the Intranet upkeep if BB has his name in there.
From what we have here and the pms I am receiving, my document has 20 questions with supplemental parts. Hopefully I can walk in tomorrow with 50.
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Re the Corps law I suggest that if any QF Executive or director was to make such a specific comment re the unprofitable nature of International and if it could be established that they knew that to be a false statement because of the way the accounting entries were being made which were not in accordance with the applicable accounting standards, then I do believe they may have some difficulties.
Proof is difficult because you have to firmly establish the knowledge. That is usually established by scrutiny of the email systems both to and from. (ps it is too late to start deleting because destruction of business records is also problematic ).
From recollection that was how ASIC got one of the former FAI Execs because of statements made to the press.
Don't count on any of the Big 4 helping because they would inevitably be conflicted out because of either audit or consulting work. Let alone the prospect of any future consulting work which they would never jeopardise especially when this could be such a great company if saved.
Seems that the best person to seek help from may be the former UBS guy who refused to go along with the dud deal proposed some time ago. These guys have inside sources and a high degree of knowledge at the most minute detail if they will cooperate.
If it can be established that the accounting is not as it should be (and I say if) then every middle manager with professional accounting or actuarial qualifications may need to consider their own futures because they may place those qualifications in jeopardy if it is established that they took part in any transactions or accounting entries that were not as it should be. Historical Royal Commission on corporate failures have shown a great willingness to go to all levels of management for accountability.
The term " I relied upon senior and experienced managers to advise me" will be trotted out loud and often if there are any runs in the "alleged" practices.
Similarly if it can be established that the allegations have any "legs" then that possibly also opens up the directors to class actions and that they will not like and will fight to the death.
Finally when the game is almost over you might get interest from ASIC, but don't count on it until the last event and certainly don't hold out any hope of a meaningful result that may assist employees save this company.
Proof is difficult because you have to firmly establish the knowledge. That is usually established by scrutiny of the email systems both to and from. (ps it is too late to start deleting because destruction of business records is also problematic ).
From recollection that was how ASIC got one of the former FAI Execs because of statements made to the press.
Don't count on any of the Big 4 helping because they would inevitably be conflicted out because of either audit or consulting work. Let alone the prospect of any future consulting work which they would never jeopardise especially when this could be such a great company if saved.
Seems that the best person to seek help from may be the former UBS guy who refused to go along with the dud deal proposed some time ago. These guys have inside sources and a high degree of knowledge at the most minute detail if they will cooperate.
If it can be established that the accounting is not as it should be (and I say if) then every middle manager with professional accounting or actuarial qualifications may need to consider their own futures because they may place those qualifications in jeopardy if it is established that they took part in any transactions or accounting entries that were not as it should be. Historical Royal Commission on corporate failures have shown a great willingness to go to all levels of management for accountability.
The term " I relied upon senior and experienced managers to advise me" will be trotted out loud and often if there are any runs in the "alleged" practices.
Similarly if it can be established that the allegations have any "legs" then that possibly also opens up the directors to class actions and that they will not like and will fight to the death.
Finally when the game is almost over you might get interest from ASIC, but don't count on it until the last event and certainly don't hold out any hope of a meaningful result that may assist employees save this company.
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1. How much of QF International's losses are due to one off events eg. A380 grounding, earthquakes, cartel fines etc? Have these losses been offset by the compensation payment from RR?
2. How much does Qantas Frequent Flyer pay Qantas to use its brand name? How much does JQ pay to be part of FF?
3. QF has depreciation costs of about $1B. JQ has depreciation costs of $17m. How is this broken down?
2. How much does Qantas Frequent Flyer pay Qantas to use its brand name? How much does JQ pay to be part of FF?
3. QF has depreciation costs of about $1B. JQ has depreciation costs of $17m. How is this broken down?
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1. Depreciation.
Qantas depreciation (2H10) $547m from memory J* $17m. Why does all the depreciation accrue against mainline profit? Just what lease cost is paid by the"segment"
2. Intersegment revenue.
Just what cost basis is used to determine th apportionment of costs between operating segments? If a seat is 'bought' by J* on mainline, it is provided at a 'cost plus margin basis'. What margin is chaged? Given the propensity for a higher than cost charge to the customer, why does J* keep the additional revenue.? (notes to accounts 31 December 2010.
3. If Jetconnect is a standalone entity, why does the CEO not know the boardmembers? When does the board meet? If it is independent, why is board rumerneration paidfor by the ultimate parent?
Food for thought.
What is a french national, Galaxy fund manager who works from tax shelters doing on the board?
Why is Clifford connected to KKR, Bain and Co? Just what remuneration does GD and others receive through the investec leasing and GAAM structures?
The Centro properrty decision has huge ramificationsfor the Qantas board, if it is found their statements aren't consistent with the facts, or indeed omissions and errors in the acounts are present.
Qantas depreciation (2H10) $547m from memory J* $17m. Why does all the depreciation accrue against mainline profit? Just what lease cost is paid by the"segment"
2. Intersegment revenue.
Just what cost basis is used to determine th apportionment of costs between operating segments? If a seat is 'bought' by J* on mainline, it is provided at a 'cost plus margin basis'. What margin is chaged? Given the propensity for a higher than cost charge to the customer, why does J* keep the additional revenue.? (notes to accounts 31 December 2010.
3. If Jetconnect is a standalone entity, why does the CEO not know the boardmembers? When does the board meet? If it is independent, why is board rumerneration paidfor by the ultimate parent?
Food for thought.
What is a french national, Galaxy fund manager who works from tax shelters doing on the board?
Why is Clifford connected to KKR, Bain and Co? Just what remuneration does GD and others receive through the investec leasing and GAAM structures?
The Centro properrty decision has huge ramificationsfor the Qantas board, if it is found their statements aren't consistent with the facts, or indeed omissions and errors in the acounts are present.
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how much does J* pay for its employees in Mel/ other bases to pay (how much) for car parking/bus transfer to-from carpark/security companies costs ?
what cost of ticket is J* paying for code shares on QF ,eg. Fra-Sin then transfer to J* to oZ.
How much is FF (the company) paying for seats as $ value (Pc/JC/Wc/YC) for FF points redemption on flights?
How much is J* paying to QF for leasing check-in space/gates at every airport in OZ?
How much is J* paying to QF for its premium punters to use Valet parking?
hope this helps,
what cost of ticket is J* paying for code shares on QF ,eg. Fra-Sin then transfer to J* to oZ.
How much is FF (the company) paying for seats as $ value (Pc/JC/Wc/YC) for FF points redemption on flights?
How much is J* paying to QF for leasing check-in space/gates at every airport in OZ?
How much is J* paying to QF for its premium punters to use Valet parking?
hope this helps,
1) Jetstar cabin crew are often seen paxing in uniform in J class domestically. What do they pay for those tickets and why are they upgraded before staff and frequent fliers?
2) To the best of my knowledge Jetstar have no medical department and use the Qantas medical center when they have passengers with medical queries. What do they pay for this.
3) Fuel hedging. I believe this is handled by mainline yet Jetstar benefits. What do they pay for this service and the cost advantage of using the Qantas buying power for fuel costs?.
Hope you can get some answers. Good luck.
2) To the best of my knowledge Jetstar have no medical department and use the Qantas medical center when they have passengers with medical queries. What do they pay for this.
3) Fuel hedging. I believe this is handled by mainline yet Jetstar benefits. What do they pay for this service and the cost advantage of using the Qantas buying power for fuel costs?.
Hope you can get some answers. Good luck.
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Another issue is the fact that you can book a Jetstar flight from the Qantas website. Is there a booking fee paid by Jetstar.
Also you cannot book a Qantas flight on the Jetstar site yet in many cases a Qantas fare is cheaper than the Jetstar flight around the same time. Pretty much a one sided advantage to Jetstar.
Also you cannot book a Qantas flight on the Jetstar site yet in many cases a Qantas fare is cheaper than the Jetstar flight around the same time. Pretty much a one sided advantage to Jetstar.
Why is there a J* statement in the after landing PA about connections on a Qantas flight, but no mention of Qantas flights on J* ?? And don't forget the destinations in the in-flight magazine articles on Qantas flights that you can only get to using J*!!
Oh yeah, and recently noticed no Qantas sign on the outside of the terminal in Hobart, only J*. The more you think about it its Qantas ..part of the Jetstar Group.
Are the airservices charges for the Qantas Group paid from a single contract or from each company (Qantas/Jetstar)? i.e who pays for overflights when jetstar takes over an international route like Japan or HNL ?
Oh yeah, and recently noticed no Qantas sign on the outside of the terminal in Hobart, only J*. The more you think about it its Qantas ..part of the Jetstar Group.
Are the airservices charges for the Qantas Group paid from a single contract or from each company (Qantas/Jetstar)? i.e who pays for overflights when jetstar takes over an international route like Japan or HNL ?
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profile is says 'company- Qantas', 'Department- Jetstar'
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What does J* pay towards the costs of terminal space (check in), security, parking gates, Qantas Club at airports such as Melbourne?
Does J* use Medlink? Is their cost for this fully apportioned to them?
Good luck
Does J* use Medlink? Is their cost for this fully apportioned to them?
Good luck