Flights you couldn't get on Qantas

[medhead]

Yeah as I said best return. Flying other flights like Perth may well make that return even less in the current enviroment, so it's all relative.

They get no return now! Even less would make no difference. What's the return on paying for an A320 to sit around unused?

 

[harvyk]

I would try to lease another aircraft and have 2 profitable routes.

Nice idea in theory, but who says that a route will be just as profitable with a leased aircraft?
Plus it's not just the aircraft, it's the people to actually operate it (wet or dry lease, someone somewhere will need to fly the plane, and they probably won't be doing it just for love).

There is a really really nice expression which can be adapted for this situation. It's called Total Cost of Ownership (or TCO for short). Basically it looks at all factors, all costs associated with purchasing a product or providing a service. Whilst on paper and in exclusion with all other factors something might seem like a good idea, the reality is that once all factors have been taken into account the TCO will look very different to the list price.

I'm sure that QF looked at all these options before dropping the route. Making schedule changes is not something which someone would wake up at 3am and say "you know what, I'm going to screw over Perth". There would be careful considerations of the costs, they would be looking for alternatives, and they would be looking at it strategically, from a big picture point of view, and not a disgruntled west aussie point of view. It's not that I can't sympathize with people who don't live in BNE / SYD / MEL (hey, I don't live in any of those cities, and thus any international flight either involves a long drive or a positioning flight), it's just I also strongly suspect the decision was a carefully thought out one. Whether that was the right choice, time will tell.

 

[Awesom Andy]

What's the return on paying for an A320 to sit around unused?

Qantas/Jetstar should really have a read of this article - especially the "Don't say no" part.
Never cross your feet in Japan

 

[JohnK]

I'm sure that QF looked at all these options before dropping the route.

I am not convinced current Qantas management have been doing too much thinking.

Lack of thinking is one of the reasons Qantas is in this much trouble. It's not as rosy as simply saying their current position is due to unforeseen factors beyond their control

 

[harvyk]

I am not convinced current Qantas management have been doing too much thinking.

Lack of thinking is one of the reasons Qantas is in this much trouble. It's not as rosy as simply saying their current position is due to unforeseen factors beyond their control

Whilst one can argue schematics about if they've made the right decision, if they've chosen the right strategy, questioning if there is a flaw in their decision making process, and even wondering if there is a hidden agenda by one or more members of upper management / the board, I'm pretty confident that every strategic move QF has made has had some degree of thought and / or decision making process gone into it.

Keep in mind that they need to be able to justify every strategic decision to the board and in some cases I'd imagine the shareholders as well, plus at any time the gov't can issue a please explain and ask the hard questions of management.

 

[medhead]

Whilst one can argue schematics about if they've made the right decision, if they've chosen the right strategy, questioning if there is a flaw in their decision making process, and even wondering if there is a hidden agenda by one or more members of upper management / the board, I'm pretty confident that every strategic move QF has made has had some degree of thought and / or decision making process gone into it.

Keep in mind that they need to be able to justify every strategic decision to the board and in some cases I'd imagine the shareholders as well, plus at any time the gov't can issue a please explain and ask the hard questions of management.

Tell me about the thought and decision making that goes into introducing a new 5 year recovery plan ever 12 months? Is it normal business practice to give a 5 year recovery plan 12 months before replacing it? Especially considering the new plan must have been developed, say, 3 months before being introduced and that the success of the old plan was being talked up during the 6 month update.

 

[JohnK]

Keep in mind that they need to be able to justify every strategic decision to the board and in some cases I'd imagine the shareholders as well, plus at any time the gov't can issue a please explain and ask the hard questions of management.

Poor old shareholders. When was the last time shareholders received a dividend?

If anyone in senior management has received a performance bonus in that time then there's something seriously wrong somewhere....

 

[harvyk]

Tell me about the thought and decision making that goes into introducing a new 5 year recovery plan ever 12 months? Is it normal business practice to give a 5 year recovery plan 12 months before replacing it? Especially considering the new plan must have been developed, say, 3 months before being introduced and that the success of the old plan was being talked up during the 6 month update.

Some idea's as to why

- Market conditions change
- They failed to consider all the variables
- A key contractor / staff member / executive changes roles and the new person has a better idea
- A plan doesn't come to fruition as originally expected
- A hive of killer bees has taken up residence outside the house of their strategic manager cutting off their access to the outside world
- They're just not that good at their jobs.

Pick your scenario...

 

[harvyk]

Poor old shareholders. When was the last time shareholders received a dividend?

If anyone in senior management has received a performance bonus in that time then there's something seriously wrong somewhere....

The reason why senior management receive performance bonuses in companies which are not doing as well as one would like is because performance bonuses are often tied to individual KPI's, rather than the company performance. Not saying it's right, just saying how it's usually done.

 

[JohnK]

The reason why senior management receive performance bonuses in companies which are not doing as well as one would like is because performance bonuses are often tied to individual KPI's, rather than the company performance. Not saying it's right, just saying how it's usually done.

I know how it is done.

Qantas should not have paid any performance bonuses in the past 5 years based on their performance. The company has been in trouble for a while and not that long ago the CEO had a huge salary increase and the CFOs salary increased ~$156,000/pa.

I really don't understand why the shareholders have accepted this poor performance. Are most shareholders institutions? Who manages the funds in those institutions? Senior management?

 

[harvyk]

I really don't understand why the shareholders have accepted this poor performance.

That's the $64,000 question...

 

[amaroo]

I really don't understand why the shareholders have accepted this poor performance. Are most shareholders institutions? Who manages the funds in those institutions? Senior management?

My guess - They want the unions busted and rebalance the IR/EBA landscape.

 

[medhead]

Re: performance pay. The last time I looked at the huddles for a company they were decidedly not that big. Things like if the company performs at the median level of the peer group of companies 50% of the performance pay will vest. So if the company's performance is average they got 50% of the performance bonus. Wtf!

Some idea's as to why

- Market conditions change
- They failed to consider all the variables
- A key contractor / staff member / executive changes roles and the new person has a better idea
- A plan doesn't come to fruition as originally expected
- A hive of killer bees has taken up residence outside the house of their strategic manager cutting off their access to the outside world
- They're just not that good at their jobs.

Pick your scenario...

I guess the funny bit is getting up after 6 months to tell everyone how great the plan is working. If the non-bee scenarios did happen I would've expected a less positive 6 month update. Anyway.

 

[suparockin]

Lack of Qantas international routes is one of my (now building) resentment of QFi and it won't be long till I give up on them.

Sydney > Mumbai - was a really important connection for business travellers, couldn't believe they nixed that one?

Sydney > San Francisco - it's a major tourist destination, how many people you know can't wait to visit Dallas? Yuk.

Sydney > Buenos Aires - with Santiago the only flight to South America I think Qantas is really limiting itself, not much competition either? They could charge big bucks.

Sydney > anywhere in continental Europe??

 

[dajop]

Lack of Qantas international routes is one of my (now building) resentment of QFi and it won't be long till I give up on them.

Sydney > Mumbai - was a really important connection for business travellers, couldn't believe they nixed that one?

Sydney > San Francisco - it's a major tourist destination, how many people you know can't wait to visit Dallas? Yuk.

Sydney > Buenos Aires - with Santiago the only flight to South America I think Qantas is really limiting itself, not much competition either? They could charge big bucks.

Sydney > anywhere in continental Europe??

Dallas may not be that attractive in its own right, but it works because it offers the ability to travel almost anywhere in the US with only one stop (from SYD). There is more to the US than California, and AA reduced their SFO services a few years back, limiting potential for QF to sell destinations beyond SFO.

As for Mumbai, it's difficult, as it is not a good place to access other cities on India from, nor is SYD the best place for transiting - so someone traveling MEL-DEL will most likely choose SQ, MH or TG (or AI) with a single hassle free transit over QF traveling MEL-SYD-BOM-DEL.

 

[ajw373]

Lack of Qantas international routes is one of my (now building) resentment of QFi and it won't be long till I give up on them.

Sydney > Mumbai - was a really important connection for business travellers, couldn't believe they nixed that one?

There is an interesting article in Australian Business Traveller about how important India thinks business travellers are in terms of the hoops and cost of business visas. Must admit I only fly this route twice, both back and the days the 743's operated the route and the bulk of the pax were down the back.

Sydney > San Francisco - it's a major tourist destination, how many people you know can't wait to visit Dallas? Yuk.

As someone said above Dallas may well not be a destination in itself, but it does open up the east coast of the US, the Caribbean and the northern part of South America through AA. Destinations Qantas couldn't do on their own. The simple fact they have upgraded the route to A380 must show it is working for Qantas.

Sydney > Buenos Aires - with Santiago the only flight to South America I think Qantas is really limiting itself, not much competition either? They could charge big bucks.

What charge big bucks on an half full aircraft, as opposed to flying to a partners hub with dozens of more route options?

Sydney > anywhere in continental Europe??

Yeah right, London is marginal, the rest of Europe you gotta be kidding. Name one mainland European carrier flying to Australia? In fact there is only one European carrier flying to Aus, which is BA and they can only fly the route because they reduced their crew costs significantly through their mix fleet crew arrangements.

So see a theme? Qantas works as a point to hub carrier and on point to point routes that are a single hop and generate sufficient traffic. The world of aviation has changed the past 20 years, not just because of Emirates and the like but it has played a big part and not just for Qantas.

 

[harvyk]

Yeah I wouldn't mind seeing SYD-SFO again. That was a flight I took a few times when it was running. It was also my first experience of long haul J.

The other thing I'd love to see is a 744 doing a TT run from time to time. I loved the QF25/26 combination, and would fly on that for TT almost exclusively.

 

[swilk]

Well I've completed my PER-SIN-SUB and return flights.

I have to say SIA in J is pretty good. Cabin crew on all 4 flights were attentive, polite and cheerful. The food on board was excellent and the wines a choice of Barossa or Bordeaux. The Silverkris lounge at Changi is superb.

As we pushed back on SQ215 I gazed wistfully out the window at the sole Qantas A330 which was docked 2 gates down (probably headed to Mel or SYD) and recalled my previous flights on QF SIN to PER. Alas, no more.

Coming back to the chaos that is PER Intl airport made me wonder just which was in fact the third world country.

It will be extremely difficult for me to maintain WP from now on with no QF flights from PER to SE Asia. I do have LTG but I will really miss the domestic priority boarding.