Qantas - what will Coronavirus mean in the medium term?

[ja1]

If they take leave and travel to or transit through a long list of countries that their employer has said "do not travel to", and they contract the virus, they have been advised that they will not be paid sick leave. So will either have to use holiday leave or LWOP.

That sounds very dubious. I can't even imagine how that would fly (boom tish) if they specifically had this as a condition in your terms of employment / contract let alone an EBA. It also isn't upto the employer to make decisions on paying sick leave based on a medical opinion. If your doctor says you're sick he simply notes you're sick, he isn't required to tell your employer the condition that has caused your sickness!

The employer doesn't seem to be making rational decisions in this context.

 

[pauly7]

I don’t know why everyone keeps on harping on about this being a golden opportunity for Sunrise. Maybe yes, right now if they had the planes but give it a few weeks all the places that Sunrise planned to land will be just as infected too and if they ‘aren’t’ then they ‘are’ anyway

 

[RSD]

I don’t know why everyone keeps on harping on about this being a golden opportunity for Sunrise. Maybe yes, right now if they had the planes but give it a few weeks all the places that Sunrise planned to land will be just as infected too and if they ‘aren’t’ then they ‘are’ anyway

And delivery of the planes is at least 18-24 months away - and with this downturn in travel and thus downturn in QF profits they might not be able to afford the planes anyway!

 

[pauly7]

And delivery of the planes is at least 18-24 months away - and with this downturn in travel and thus downturn in QF profits they might not be able to afford the planes anyway!

I guess it also might make the manufacturers cave in on price if they aren’t getting orders from poor airlines everywhere so maybe an opportunity lurks for a hard bargain. We know AJ is a very hard man.

 

[ja1]

I guess it also might make the manufacturers cave in on price if they aren’t getting orders from poor airlines everywhere so maybe an opportunity lurks for a hard bargain. We know AJ is a very hard man.

There was a fair bit of press about Boeing have a grand total of 0 orders in Jan 2020 for the first time in a long time (if ever) while Airbus ad 296..

So yeah, perhaps AJ is sitting on a contract and driving a hard bargain if someone wants him to sign in 9 months time..

 

[RSD]

There was a fair bit of press about Boeing have a grand total of 0 orders in Jan 2020 for the first time in a long time (if ever) while Airbus ad 296..

So yeah, perhaps AJ is sitting on a contract and driving a hard bargain if someone wants him to sign in 9 months time..

They've picked the A350 and Airbus have a pretty full order book thanks in part to Boeing's problems so their power to negotiate a great price on a very limited production run on a special variant of the A350 for Qantas will be limited I would think - but I think that they would have already agreed to a price so as the QF board had all of the facts to see if the numbers stack up for Sunrise before they press the go button.

 

[oz_mark]

Well they are hardly alone. And a major airline, not an Aussie one, has requested a bailout just now.

Not sure if anyone mentioned yet - this appears to have been Lufthansa

 

[MEL_Traveller]

Not sure if anyone mentioned yet - this appears to have been Lufthansa

Some sort of government assistance. Apparently there's a scheme in Germany which pays workers the shortfall if a company has to lay them off or reduce hours due to extraordinary circumstances. Plus grounding their A380 fleet.

 

[Must...Fly!]

Some sort of government assistance. Apparently there's a scheme in Germany which pays workers the shortfall if a company has to lay them off or reduce hours due to extraordinary circumstances. Plus grounding their A380 fleet.

there's a rumour that Qantas will ground 6

 

[amaroo]

1. It is not the fact that the virus 'only kills old people' that has harmed institutions such as universities. It is the fact that it has resulted in large-scale travel bans that have been implemented precisely to protect the elderly and immunocompromised. Would you rather that government not restrict travel and increase the risk to the elderly and immunocompromised? What a joke.

2. The fact that an institution has been harmed by a hugely disruptive event does not suggest that the 'business model' has 'failed'. No business can create a model that allows it to operate without adjustment no matter the level of disruption. Indeed, that would be a failed business model. Institutions such as universities are adjusting to this hugely disruptive event by, for example, laying off staff and banning international travel. All the other posters have been saying is simply that this response is having a terrible effect on some people (ie the people who are laid off and the people who are no longer able to do their international work). Your post misses the point. The point was simply that COVID-19 is already taking a toll.

The media is littered with stories of how this sector has been gaming the system. It was only a matter of time before it hit them where it hurts.

 

[Economy_Gold]

Some sort of government assistance. Apparently there's a scheme in Germany which pays workers the shortfall if a company has to lay them off or reduce hours due to extraordinary circumstances. Plus grounding their A380 fleet.

In Germany when there is a lack of work companies can apply to get "Kurzarbeitergeld" (literally short work money) for their employees. Then the unemployment insurance is paying for a large share of the original income while the workers temporary do not work, but they are still technically employed by the company. Usually, companies top-up the government payment to the full usual salary of the staff affected.
This is what Lufthansa is planning and is a proven concept to avoid a spike in unemployment during a short to medium-term crisis.
Obviously this is not an avenue available for Australian companies such as Qantas.

 

[Melburnian1]

AFFer 'The Insider' said elsewhere (on AFF) that QFi's move to take all but two A388s out of running was due to (a collapse in) 'forward bookings.'

However, turning to domestic bookings, these are often made closer to the date of travel than international bookings.

This must make it harder for airlines to predict how domestic bookings will 'perform', as access to historical data may not be of as much use as normal.

Are the smaller percentage terms QFd flying reductions announced today sufficient? Larger businesses can be guided by their corporate risk consultants, and that's probably not a huge subsector, so they may well all sing from similar hymn books.

Leisure travellers? Given loo paper situation, one could see many similarly panicking and shutting the door even on domestic holiday travel. But for how long?

 

[moa999]

They also announced that domestic cutbacks would grow from 3 to 5%, but I tend to think this may go up in coming weeks

 

[Melburnian1]

They also announced that domestic cutbacks would grow from 3 to 5%, but I tend to think this may go up in coming weeks

Are you asserting, moa999, that it will be done on an 'ad hoc' basis, such as flights being cancelled within seven days of the operating date, or even cancelled the night before with affected passengers transferred to flights that are still 'go?'

 

[jakeseven7]

AFFer 'The Insider' said elsewhere (on AFF) that QFi's move to take all but two A388s out of running was due to (a collapse in) 'forward bookings.'

However, turning to domestic bookings, these are often made closer to the date of travel than international bookings.

This must make it harder for airlines to predict how domestic bookings will 'perform', as access to historical data may not be of as much use as normal.

Are the smaller percentage terms QFd flying reductions announced today sufficient? Larger businesses can be guided by their corporate risk consultants, and that's probably not a huge subsector, so they may well all sing from similar hymn books.

Leisure travellers? Given loo paper situation, one could see many similarly panicking and shutting the door even on domestic holiday travel. But for how long?

So, speaking to some people at the airlines, there is some evidence that people travelling for leisure are actually cancelling international flights left right and centre BUT then rebooking local holidays in Australia.

I guess this makes sense, you are covered in AU from a travel health perspective and a lot of people also would like to support local tourism workers hit by the decrease in international arrivals.

If I had leave and an international holiday booked - this is exactly what I would do!

 

[AIRwin]

So, speaking to some people at the airlines, there is some evidence that people travelling for leisure are actually cancelling international flights left right and centre BUT then rebooking local holidays in Australia.

Time for some A380 Points Plane domestically...

 

[moa999]

on an 'ad hoc' basis, such as flights being cancelled within seven days of the operating date, or even cancelled the night before with affected passengers transferred to flights that are still 'go?'

Some argue that they already do that.

Was more saying that I expect more corporates to introduce policies severely restricting travel, which will necessitate further donestic flight cuts

From the AFR many of the international banks are essentially banning travel, as well as splitting teams in offices, and sending people to work full time at backup sites or from home. I expect these kind of policies to spread in coming weeks.

 

[jpp42]

My company, which is a major international "Fortune 100" company that you've certainly heard of, has banned all travel, including domestically, without senior VP approval. We are fighting to get approval to travel to NZ for a critical project. They aren't worried about NZ specifically since it has very few cases, but more the fact that we'll be in a plane at all, which could have others who recently traveled internationally from affected areas, on the same plane. They are suggesting car travel for domestic Australia where possible, as a safer option.

 

[AIRwin]

We are fighting to get approval to travel to NZ for a critical project. They aren't worried about NZ specifically since it has very few cases, but more the fact that we'll be in a plane at all, which could have others who recently traveled internationally from affected areas, on the same plane.

Case for booking First class on EK between SYD and CHC?

 

[Melburnian1]

...
From the AFR many of the international banks are essentially banning travel, as well as splitting teams in offices, and sending people to work full time at backup sites or from home. I expect these kind of policies to spread in coming weeks.

Our Oz banks have had their share prices crunched. Where possible, it'd be expected that they too would be banning most international travel and restricting domestic. But saving money would be part of the equation, not just health concerns.