27th February Big Qantas announcement

[smit0847]

Look out for the up coming ads on the Nine Network calling for contestant applications for the BLOCK 2015 ..... Production notes include couples/partners/ friends can apply to be one of four parings tasked with taking a vacant / abandoned property in the Perth area, extremely close to a major transport hub and converting it into high end, New York Style loft apartments.

That would actually be an extremely clever marketing strategy - have a season of the Block do an airport lounge (say SYD intl J). The public would be desperate to gain entry so they could have a look and it would be endless free publicity during the show...

 

[amaroo]

Clive Palmers been on Lateline tonight - there will be no amendments to the Qantas Sale Act supported by his party - because they epitomise who we are - our social well-being - further he doesn't wish to support a debt guarantee and he wonders how the current Management could run the value of the company down from $10b to $2b.... and that their views of what to do need to be tested by independent experts

He only needs to look at the balance sheet of Palmer Resort and the odd fish & chip wrapper Clive Palmer loses 40 per cent of wealth in resources downturn | News.com.au

 

[OATEK]

I don't get the wage thing...

qantas A380s... if we take $92k as the average wage for an FA that would mean crewing cost per day is $5293, based on 21 crew. (92,000/365x21)

emirates at $47k per crew, x31 crew = $3991 per day.

so it only costs qantas $1300 more to fly it's a380 than it does emirates.

less, of course, the savings QF makes on hotels over EK (21 rooms vs 31 rooms)

I thought that the A380 FAs were contracted differently to longer term staff on 747s and A330s, and this had led to some lowering of costs.

 

[amaroo]

There are a large number of issues that have affected QF. Industrial awards that hung over from the past as well as bad decisions by management. The question the CEO needs to answer is why it has been allowed to get to this stage.

TBF he did attempt to change the IR/EBA dynamics in 2011. Grounding the airline was a bold call with the sole aim of getting the unions to negotiate within a "real world" state of mind.

 

[cove]

There is some doubt as to whether Palmer could run a pay toilet successfully. He appears to have buggered up quite a bit lately if you believe news reports on nickel refineries and golf resorts.

 

[amaroo]

Now it's VA turn Qantas fight leaves Virgin Australia with $83.7 million black eye

 

[smit0847]

There are a large number of issues that have affected QF. Industrial awards that hung over from the past as well as bad decisions by management. The question the CEO needs to answer is why it has been allowed to get to this stage. If the questions being raised about Jetstar and cost shifting across to QF are true the CEO has a lot to answer.

My concern is that there just does not appear to be good planning - either at the international level with their failed expansion into Asia or at the local level. Take Cairns for example - just coming out of long recession in the area but rapidly growing with the Chinese and domestic market. They are sacking 100 crew in Cairns - they have already replaced many QF flights with JQ on the Cairns route - and as regular traveller - flights are inevitably full. The CEO must come clean on his failed dalliance with the Hong King and failed Asian expansion - and stop using domestic profits to subsidise this failure - and actually take care of their loyal domestic travellers on routes other than just Syd - Melb.

What's that business saying? 'You can't save your way to profit'?

 

[Atleastonce]

I have not read all the comments in this thread so excuse me if this has been said before. Surely as senior managers the daily data they should have been on top of would have showed troubles long ago and management should have implemented strategies to fix the issues. I know if I was not proactive in data analysis and not knowing my business units performance on a daily basis I would not get a second chance. I am astounded that any CEO can get away with saying he will now implement strategies to fix it. I have not heard any interview where it has been asked when were the indicators there were problems and what were the actions taken at that point.

 

[Mwenenzi]

I thought that the A380 FAs were contracted differently to longer term staff on 747s and A330s, and this had led to some lowering of costs.

Employee cost is only 1 of the big operational cost on an airlines.

With FA's IIRC the new hire FA's and longer term FA's have different union awards. New hires are paid ~30% less & different working conditions. Have a link & pdf on my other computer. This was some years ago. The FA union realised the good times could not go on forever. Other QF unions have not yet realised the good times cannot go on forever. Some of them may remember what happened to the good times at Ansett (as another post on AFF today comparing VA to AN employee numbers verses passengers carried)

 

[ajw373]

What's that business saying? 'You can't save your way to profit'?

But you can cut things that are making a loss.

 

[RooFlyer]

Huh, EK crew get a base wage just like QF?

No doubt, but what I'd the tenor of the base wage, and what extras do they get?

I am not saying QF staff are overpaid necessarily, merely that staff of other airlines receive a lot less in their total remuneration.

 

[markis10]

No doubt, but what I'd the tenor of the base wage, and what extras do they get?

I am not saying QF staff are overpaid necessarily, merely that staff of other airlines receive a lot less in their total remuneration.

Unlike QF, EK provide Health Care and accomodation FOC, and of course there is no tax. So their pay is pretty much spending money:

Your pay is made up of three components: a fixed basic salary, an hourly pay for operated flights and an overseas allowance.
Pay Scale for Grade II (entry level):
Basic monthly salary, tax free in the UAE - AED4,020 (1 US$=approx AED 3.673).
Flying pay on an hourly basis - AED55 paid between chocks off and chocks on. Flying pay is paid in the month following accrual.
Meal allowances are paid in the currency of the country in which a night stop is made. The company provides free transport to and from the airport and hotel accommodation.

 

[amaroo]

Unlike QF, EK provide Health Care and accomodation FOC, and of course there is no tax. So their pay is pretty much spending money:

Your pay is made up of three components: a fixed basic salary, an hourly pay for operated flights and an overseas allowance.
Pay Scale for Grade II (entry level):
Basic monthly salary, tax free in the UAE - AED4,020 (1 US$=approx AED 3.673).
Flying pay on an hourly basis - AED55 paid between chocks off and chocks on. Flying pay is paid in the month following accrual.
Meal allowances are paid in the currency of the country in which a night stop is made. The company provides free transport to and from the airport and hotel accommodation.

Hourly rate of A$16.70 looks pretty sad...

 

[markis10]

Hourly rate of A$16.70 looks pretty sad...

Thats starting out, median gross is AED12000 a month all in.

 

[moa999]

The CEO must come clean on his failed dalliance with the Hong King and failed Asian expansion - and stop using domestic profits to subsidise this failure.

There was a statement in one of the fact sheets that the Total Amount invested in
Jetstar Asia (49%) - 19 A320s
Jetstar Pacific (27%) - 6 A320s
Jetstar Japan (~40%) - 18 A320s
Jetstar Hong Kong (~33%) - 0 aircraft as it doesn't have an AOC (5/6 stored)
is approximately $300 million

Compare this to
- A380 list price of US$403m
- Investment in Brisbane hanger of $30m, Melbourne Airport West of $100m
- Jetstar EBIT of $138m in FY2013 and $203m in FY2012 -- ie Jetstar has self funded the above

The Asian Jetstar's while sure a small current drain, are not the main problem for Qantas

 

[jetlagger]

Unlike QF, EK provide Health Care and accomodation FOC, and of course there is no tax. So their pay is pretty much spending money:

Your pay is made up of three components: a fixed basic salary, an hourly pay for operated flights and an overseas allowance.
Pay Scale for Grade II (entry level):
Basic monthly salary, tax free in the UAE - AED4,020 (1 US$=approx AED 3.673).
Flying pay on an hourly basis - AED55 paid between chocks off and chocks on. Flying pay is paid in the month following accrual.
Meal allowances are paid in the currency of the country in which a night stop is made. The company provides free transport to and from the airport and hotel accommodation.

Tax Free & meal allowances should be generous at some ports + overtime allowance might make up for better monthly earn average.

 

[esquire]

Oh no the sky is falling in! Sack the CEO and the board clearly they cannot manage their costs. They are clearly unsustainable must also be the unions fault. Quick I better use up my FF points today and I'll never fly them again as they have turned their back on the desires and dreams of Australia and are about to collapse!

Oh hang on I thought the story was referring to QF ... Its VA - that's ok then its just a black eye.

 

[Must...Fly!]

There was a statement in one of the fact sheets that the Total Amount invested in
Jetstar Asia (49%) - 19 A320s
Jetstar Pacific (27%) - 6 A320s
Jetstar Japan (~40%) - 18 A320s
Jetstar Hong Kong (~33%) - 0 aircraft as it doesn't have an AOC (5/6 stored)
is approximately $300 million

Compare this to
- A380 list price of US$403m
- Investment in Brisbane hanger of $30m, Melbourne Airport West of $100m
- Jetstar EBIT of $138m in FY2013 and $203m in FY2012 -- ie Jetstar has self funded the above

The Asian Jetstar's while sure a small current drain, are not the main problem for Qantas

Well said.

 

[zainman]

Hourly rate of A$16.70 looks pretty sad...

Isn't that 'additional' to the base pay? Considering free accommodation etc etc, I think it's not too bad. No Unions either

 

[Alanslegal]

This might be an unpopular opinion.

But I think QF is probably losing money on its flights to SEA, especially with all the capacity that had been added recently. I think the load factors on routes to SIN are lower than the average LF network wide.

I think the Australia-Singapore flights have to go.

Just leave Jetstar/Jetstar Asia to do the flying on its existing routes (Darwin, Perth and Melbourne) to Singapore. And use/codeshare on Emirates (which they currently do) to fly from Brisbane and Melbourne to Singapore.

Just keep Sydney-Singapore-Sydney as twice daily. Qantas could route passengers who still want to fly Qantas from MEL/BNE/ADL to Singapore via Sydney. I know SYD is a pain to transit. But this would help stem the losses somewhat.

The Australia-Singapore market is really cornered by the SQ group with SQ, Scoot and Tiger. I believe NZ's future return to Singapore is only made possible because of SQ handing over one daily flight to it.

Don't be put off by airing your own opinions here no matter how much you think they are unpopular. I have raised a few unpopular ideas lately including the thought that QFi will go disband, with JQi hopefully picking some of those QFi customers. Some ex-QF flyers will stick around, some will go on, that's normal and expected when any changes happen. I'd even be wishing for JQi to acquire some A380's that QF no longer need when they exit international long haul

We here are a tiny kettle of fish in the flying world and Qantas, well at least Qantas international side, will soon follow the footsteps of Ford, Holden, SPC and many other brands that have come and then gone. Everyone at heart wants to support Australian brands but at the end of the day, we just don't for a variety of reasons. If we did though, we'd all be driving Ford Falcons and Holden Commodores.