Has Qantas got its "mojo" back?

[simongr]

Interesting last night flying back from MEL. I upgraded using points and was given "catering not assured". Generally I have always received catering despite it not being assured. I was almost accosted by the CSM on board and told "You know you wont get any food at all on this flight?" The FA then during service reinforced this and said that they had only loaded 12 J meals for 30 pax... There quite a few upgraders I think and a lot of fascinators...

 

[jetlagger]

Owing to my observations on recent flights, I also don't believe Qantas has it's Mojo back. It is the complete inconsistency in service values & execution that is my biggest gripe.

& don't get me started again on the recurring over worked Qantas blame game announcements - Competition, high operating costs, high Australian Dollar, low Australian dollar, tax ratios etc etc.
Doesn't every business &/or Company face the same/similar 'upheavals"
The biggest whingers are the Qantas management, when perhaps they could possibly be more insular & probe their own management structure & decision making processes - past, present & future.
Just a thought..

 

[simongr]

Isn't that what they are doing? They are making changes and giving the rationale for those changes.

 

[eastwest101]

& don't get me started again on the recurring over worked Qantas blame game announcements - Competition, high operating costs, high Australian Dollar, low Australian dollar, tax ratios etc etc.
Doesn't every business &/or Company face the same/similar 'upheavals"
The biggest whingers are the Qantas management, when perhaps they could possibly be more insular & probe their own management structure & decision making processes - past, present & future.
Just a thought..

Yes - some of the excuses are getting a bit tired i.e. jet fuel, competition, high wages, high AUD etc

I understand that QF management can't re-write the tax system or eliminate competition but I bet you that once/if the AUD depreciates then the increased cost of fuel, decreased amount of australiand going overseas, increased cost of overseas maintenence and cost of aircraft excuses will be rolled out.

No-one wants an overly high AUD - it hurts everyone from australian tourism, service industries, manufacturers to farmers and mining.

I think it will get its mojo back when management stop pissing and moaning about the world that they are in and actually acheive some of the changes that they are doing which should benefit the shareholders and customers.

 

[ajw373]

& don't get me started again on the recurring over worked Qantas blame game announcements - Competition, high operating costs, high Australian Dollar, low Australian dollar, tax ratios etc etc.
Doesn't every business &/or Company face the same/similar 'upheavals"

Yes all business are effected. However some, airlines, and international airlines in particular are effected quite a lot more. Take maintenance for example. For an airline it is quite easy to send an aircraft to somewhere cheap to maintain, and of course your competitors are doing the same anyway, but for an Australian mining company it is a tad hard to send your whopping catapillar dump trucks somewhere cheap. (Maybe hence why Gina wants to import offshore workings on $2 a day!)

 

[jetlagger]

No-one wants an overly high AUD - it hurts everyone from australian tourism, service industries, manufacturers to farmers and mining.

Yes for sure.. & the $ high/low is always a workable challenge.
95% of one of my businesses used to be inbound tourism.. Nowadays I've adapted to a workable sector of 40%. for the inbound tourism market.
It's tough & fiercely competitive, but I also have a good niche market with loyal customers whom I highly value.
It is always about adaptability on all fronts - & always look after your good customers.

 

[medhead]

eh?

QFi was losing $$. QFd was making enough to cover QFi losses

The grounding was in response to industrial action - chick 'n egg situation as to what was costing what.

The QFi changes were to reduce losses.

The post I quoted said the group was losing hundreds of millions. I also said group. Operative word being group not QFi. As I said the qantas group was not losing hundreds of millions a year.

As for the grounding it's happened, but my position remains that management could have made different choices a long time before the grounding and thereby avoided it. Instead they chose a confrontational approach and they got a costly confrontation.


Sent from the Throne

 

[codash1099]

Probably because once you've been in a job for a few years, somewhere along the line you have to stop blaming those that came before. He's predecessors were perhaps lucky that they were able to milk the SYD-LAX route to keep things afloat. That nasty thing called competition has now come along, and it is AJ that has to deal with the fact they can no longer use the route as a cash cow. Six years ago it was not such a problem.

Pretty tough to blame his predecessors for the lack of competition on a route!

I once worked for a company that had a 100% monopoly in a particular area of it's business. We were told that it had to operate as if the competition was breathing down our necks. That was the only way to discourage competition and to be ready for it if and when it came.

Sadly, few companies follow that principle today.

 

[nlagalle]

Probably because once you've been in a job for a few years, somewhere along the line you have to stop blaming those that came before. He's predecessors were perhaps lucky that they were able to milk the SYD-LAX route to keep things afloat. That nasty thing called competition has now come along, and it is AJ that has to deal with the fact they can no longer use the route as a cash cow. Six years ago it was not such a problem.

Pretty tough to blame his predecessors for the lack of competition on a route!

Considering people still harp on about QF not buying 777's (how many years ago was that?), you can't put in place within a year or two what has taken 10+ years to get to either. I don't see AJ blaming his predecessors either, he seems more focused on the job at hand moving forward. now whether people agree with that or not, but at the same time I don't see too many executives that may actively try and destroy a company, but more that people don't agree with the way that they are doing it.

 

[Pilbaracommuter]

Doing nothing is never an option, and when you start off on some routes with a near monopoly, the most probable direction for market share is down. Unless you are supplying a product where it's just not sensible or economic to have multiple suppliers (e.g. water supply), the competition will come along sooner or later.

When the competition does come along with a lower operating cost base, there are not a lot of options.
- you can lock in some of your big corporate customers with long term contracts (but this will only last so long, and you will need to erode your margins to get the business)
- you can start slashing costs (usually comes with a drop in quality and potential industrial relations strife)
- you can withdraw from portions of the market (looks like this is the plan for international)
- you can re-brand your product (with risks on whether the customers will accept it or not)

But unfortunately you usually can't sustain the unsustainable. If you compare with USA where volume and price are the key drivers, Australia has a pretty good domestic travel product (but still surpassed by quite a few Asian airlines with much lower cost bases). Many of AJ's critics just want to preserve Qantas in a time warp. Times change, the market changes and you have to adjust. This isn't either defending or attacking the changes in the company, just noting reality.

 

[The Rok]

I think Jetstar is probably the best thing QF have ever done!

 

[jetlagger]

I think Jetstar is probably the best thing QF have ever done!

From which perspective - Qantas or the consumer?

 

[The Rok]

Both. From QF's perspective, it was a win win! Say a route is under performing, loads too low, insufficient profits etc, then QF had limited choices.

1. Continue the route at a loss.
2. Cease the route and thereby hand your pax directly to your competitor,
3. Set up a low cost carrier that CAN make the route profitable and therefore still keep the profits & customers in house!

Inside AFF people think that Qantas "Jetstarising" routes is the end of the world and they refuse to fly them, but outside AFF I suspect that is not the norm! If it were then Jetstar wouldn't be as profitable as it is.

From the customers prospective the establishment of Jetstar provided an alternative carrier with cheaper prices, that suits the leisure traveller.

Being a Frequent Flyer, and a member of AFF for most people takes us firmly out of the Leisure Flyer category and into the Business Flyer category, hence Jetstar is not aimed at AFF typical flyers.

Mom, dad and kiddies want to do a holiday to Bali. Pre Jetstar, choices would of been Garuda $800, Virgin $800, Qantas $1000 per person. Now, Jetstar is in the scene and a figure of $300 per person is the norm!

So for the general flying public, Jetstar is doing its job, it's working.

(If I were at my pc I would type a more detailed response than this but I'm not and I couldn't be coughd typing long spiels on an iPhone)

 

[medhead]

Setting up Jetstar isn't an issue for me. My issue is that Jetstar has been set up and is treated as a competitor to the other airlines in the group.


Sent from the Throne

 

[The Rok]

But my point is that really Jetstar is selling to a different market, one that QFd & QFi could not compete on. So really Jetstar for most people is not a competitor.

Also, if Jetstar didn't exist, and produce the profits and market share that it does then QFi probably wouldn't of survived this long.

 

[medhead]

I agree with your point. Just saying that qantas management in some ways do treat JQ and QFi (in particular) as competitors. It seems that they are focusing on the parts not the whole.


Sent from the Throne

 

[The Rok]

Agreed. However I suspect there may be a long term plan in Jetstar's international expansion ex Australia.

It's quite possible that when QFi has stabilised, and Jetstar has grown to sufficient routes and customer base that Jetstar will start to morph into a full cost carrier with similar/same benefits as QFi but without the legacy costs or strangle hold that the unions have on QFi right now!

 

[simongr]

One recurrent issue about Jetstar being profitable is the transparency of moving costs between the businesses.

I agree that JQ serves a niche (well more than a niche really) but I don't think investing in the mainline brand and investing in JQ are mutually exclusive. What we have seen over the AJ period is a prioritisation of JQ over QF mainline. Admittedly that is over the worst financial crisis the world has seen in many years. If we start to recover globally and premium travel comes back then I hope/expect to see QF mainline getting prioritised.

 

[The Rok]

Without Jetstar QFi is dead and gone! There is no way you can fiddle the books to the amount of QFi's losses v JQ's profits.

In the current climate JQ is the breadwinner. I agree though that should the premium market return to its glory days then QFi can and probably will get further investment.

 

[Paddy55]

I've flown about 100 sectors in the past 2 years... Mainly Dom Y, Dom J SYD-PER, and some Intl J. 90% QF.

Yes, I think QF is getting some mojo back - improved food SYD-PER, happier crew... Rarely a problem.

When I have to call QF I invariably find staff helpful and cheerful, in stark contrast to many other companies.