QF Joyce: expect higher fares, A380 delivery delays, QF32 damage bill at AUD100m

[thewinchester]

Just spotted from Reuters this morning, all coming out of the IATA AGM currently underway in SIN.

UPDATE 1-Qantas says sees higher fares, delay on A380 orders
Mon Jun 6, 2011 5:32am BST, By Harry Suhartono and Saeed Azhar

• Expects fare increases to cover fuel costs
• A380 delays expected to be 2-3 months
• Damaged A380 repair bill to top AUD 100m
• Considering A320neo for budget carrier Jetstar (Adds quotes, background)

SINGAPORE, June 6 (Reuters) - Qantas Airways Ltd said it expects to increase airfares to cover soaring fuel costs while the delivery of two Airbus A380 aircraft is likely to be delayed by two to three months.

Higher jet fuel prices have hurt global airlines and the International Air Transport Association (IATA) on Monday cut its 2011 profit forecast by more than half on the back of high oil prices and turmoil in Japan, North Africa and the Middle East.

"We have gone through now a number of fare increases and fuel surcharge increases," Alan Joyce, the chief executive of Qantas, told Reuters on the sidelines of the IATA annual general conference underway in Singapore.

He said the increases have still not recovered the additional fuel costs and the airline was "looking at more increases going forward to cover it. Hedging just gives you time."

A380 DELAYS
Earlier, Joyce told reporters that Qantas is expecting a minor delay on the delivery of a "couple" of Airbus A380 superjumbos as engine maker Rolls-Royce continues to resolve a disruption caused by an engine blowout last year.

Joyce said the stricken A380 plane was still being repaired in Singapore and would be there until early next year. The repair bill is expected to top A$100 million ($107.2 million), which will be covered by insurance.

 

[TheInsider]

What's causing the 380 delays?

 

[oz_mark]

What's causing the 380 delays?

Their engines got nicked and put onto in service aircraft.

 

[TheInsider]

Their engines got nicked and put onto in service aircraft.

Oh yer, maybe i should read the article first!

 

[yohy?!]

Not being an expert on Executive Management but it seems these constant negative releases seem to be signalling to the market 'QF = Expensive' and in turn 'talking down' the share price.

Would be fascinated to know what the end game is for all this from Joyce and Co.

 

[Kendall Roy]

Would be fascinated to know what the end game is for all this from Joyce and Co.

Joyce to go and a board shake-up would be ideal!

Some interesting theories going around ATM......... One extreme one is the deliberate killing off of QF (i.e. Unionised workforce) purely in the name of profit and expansion of the orange cancer J*

One thing the muppets running the joint don't appear to appreciate is the enormous value of the QF brand; a brand that is gradually being flushed down the toilet by no fault of QF frontline/ops staff, but the muppets on Coward St!

 

[LiamR]

Some interesting theories going around ATM......... One extreme one is the deliberate killing off of QF (i.e. Unionised workforce) purely in the name of profit and expansion of the orange cancer J*

One thing the muppets running the joint don't appear to appreciate is the enormous value of the QF brand; a brand that is gradually being flushed down the toilet by no fault of QF frontline/ops staff, but the muppets on Coward St!

I've been thinking this a lot lately. Particularly the second, Alan seems to not realize how valuable the brand is.

 

[clifford]

I've been thinking this a lot lately. Particularly the second, Alan seems to not realize how valuable the brand is.

Ah, you come across "slash and burn" managers all the time. It's a good strategy if you manage to get out (with a nice fat pay check) before the thing goes belly up.

Anyone remember Al (Chainsaw) Dunlap? Well, he was in fact quite real. Or, Frank Lorenzo? It all ended in tears.

Good reading for our younger viewers.

 

[Vinny]

It's like he's making excuses for the appalling share prices and I bet his annual income from QF is still quite desirable. I wouldn't mind it anyway.

It's like the excuses that are being made ahead of a shareholders' meeting and during enterprise bargaining for staff.

 

[harvyk]

I've been thinking this a lot lately. Particularly the second, Alan seems to not realize how valuable the brand is.

I agree 100%, but I think that has a lot to do with his history at LCC's, where the price is about the only deciding factor...

Companies like JQ and TT can afford bad press because when your customers are only paying $50 for their flight and where happy to give up all the mod-cons which come with a full service airline, chances are the number of $ was about the only consideration, thus provided the LCC's planes don't fall out of the sky no one really cares.

QF on the other hand, given they are more expensive, price is not the only concern (in some cases, I'd say price was never a factor) thus handling the brand should be job number 1 for Alan... (and brand is more than slapping paint onto a few airplane tails)

So to summarise, Joyce was completely the wrong choice for QF CEO, but if there is an opening at a LCC he'd probably do ok...

 

[ChrisCunard]

Qantas CEO Comments make the news... thoughts?

I'm sure we've all seen these:
Aviation Business: Virgin Australia powers ahead while Qantas international founders

Qantas CEO trashes the brand in comments at IATA conference | Plane Talking

Qantas belittles itself, as SingAir and VirginOz swoop | Plane Talking

Qantas warns of more fare rises in turbulent times - ABC News (Australian Broadcasting Corporation)

Guess that sheds some light on previous questions discussed here as to the future of QF / JQ... thoughts?

 

[djfuzz]

Re: Qantas CEO Comments make the news... thoughts?

Interesting reading - I had also heard some chatter about the fact that QF's cross-subsidisation of JQ made JQ seem artificially more profitable. Strange times ahead...

 

[FSM-2024]

Re: Qantas CEO Comments make the news... thoughts?

Maybe all of this talk by Joyce is getting everyone (Shareholders, Staff) ready for some big changes? Sadly I think this would be in the form of 'enhancements'. Hopefully QF doesn't become like AA by trying to compete against the new VA.

 

[samh004]

Re: Qantas CEO Comments make the news... thoughts?

Sounds like the chairman and board should sack him, as it's clearly pointed out in the article that he's rubbishing what he's had 2 years to work with... if he's really that disillusioned then he's not been doing his job!

Unless of course the idea of the speech is to poke fun at yourself like I've seen happen occasionally? Is that what this is?

 

[Paddy55]

Re: Qantas CEO Comments make the news... thoughts?

Sounds like the chairman and board should sack him, as it's clearly pointed out in the article that he's rubbishing what he's had 2 years to work with... if he's really that disillusioned then he's not been doing his job!

Unless of course the idea of the speech is to poke fun at yourself like I've seen happen occasionally? Is that what this is?

+1

CX seems to be following a different road, and enjoying success with the strategy.

 

[samh004]

Not being an expert on Executive Management but it seems these constant negative releases seem to be signalling to the market 'QF = Expensive' and in turn 'talking down' the share price.

Would be fascinated to know what the end game is for all this from Joyce and Co.

Do QF have enough money to buy back outstanding shares and become private? Would help if the share price was a bit lower...

Some interesting theories going around ATM......... One extreme one is the deliberate killing off of QF (i.e. Unionised workforce) purely in the name of profit and expansion of the orange cancer J*

Does Jetstar buy their own aircraft, or are they mostly/fully subsidised by QF?

I also see CX was considering the A320neo, wonder what routes they'd go on?

 

[ChrisCunard]

Re: Qantas CEO Comments make the news... thoughts?

Sounds like the chairman and board should sack him, as it's clearly pointed out in the article that he's rubbishing what he's had 2 years to work with... if he's really that disillusioned then he's not been doing his job!

Unless of course the idea of the speech is to poke fun at yourself like I've seen happen occasionally? Is that what this is?

How much longer can this possibly go on? Aren't the Qantas shareholders livid at the decline of their brand, their share price and the direction of their company?! :evil:

 

[Moopere]

We see a fair bit of Joyce bashing on these forums. Its understandable because for many here QF is a beloved brand and airline of choice for many years. But we should be a least a bit careful of assuming that coming from a LCC means that he is automatically trying to convert QF into such an entity.

Look at how much manufacturing and maintenance goes on in Australia as a whole, across all industries not only the air game - almost none, and its been in steep decline for more then 20 years. Without looking at QF's books and removing whatever 'creativity' they may have inserted in favour of JQ we can't comment from any worthwhile perspective on what their base costs are ... but at a complete guess based on other Australian based engineering (like mining) , they are likely to be extraordinarily high.

Note that I make no comment on the worthiness of Australian workers to earn a fair and reasonable wage, I live and work here and want to be paid well for what I do.

However, unless QF becomes nationalised, we simply can't view them as anything other than what they are ... a business who wants to make a competitive return on their investments.

As each new announcement occurs, including the recent proposed strike action I am more and more convinced that QF management are not a bunch of silly old buggers who don't know what they are doing .. far from it, they are running a strategy and the Unions, irrespective of the merits of their argument, have fallen right in to play their preordained role.

Maybe I'm prone to conspiracy theory? Perhaps. But look even now at QF's international routes. The ones they _actually_ fly under the QF banner on QF metal with QF crew. Apart from perhaps a dozen obvious major destinations, they fly almost no-where. JQ and codeshare (and crewshare has taken over almost all international routes both near and far.

- QF complains that local costs are too high and that competing airlines are mainly nationalised (and foreign government subsidised)
- JQ, I believe, using predominantly SIN maintenance take over all o/s routes they possibly can.
- MH looks like joining OW
- Hints and rumour of QF wanting to build a Malaysian based full service airline, ala JQ model but not a LCC

International routes in the very near future, in my opinion, will not be serviced by QF, I predict they will almost completely withdraw the brand to domestic duties sharing the profitable O/S routes with a combination of JQ (and subsidiaries) and a new entity ala the Malaysian rumour (... or even, bizarrely perhaps a weird MH joint venture)?

At a strategically opportune time QF will announce that despite their best efforts they just can't get a ROI domestically and will hand local operations to JQ, or, more probably, a new entity we've not seen yet but that is based and serviced elsewhere.

At this point QF will essentially become a management company.

 

[connieguy]

Re: Qantas CEO Comments make the news... thoughts?

How much longer can this possibly go on? Aren't the Qantas shareholders livid at the decline of their brand, their share price and the direction of their company?! :evil:

Now we have AJ flouting a food and wine business while QF can't provide a priority boarding lane for it's domestic bread and butter Gold and Platinum FFers and "Enhances" what most WPs value most, their position at the top of the FF feeding chain to some as of yet undefined WP1 super wankers, then comes up with yet another reason to hike their prices, which are already at the top of the price point.

Madness, pure madness unless AJ intends to rise like a Phoenix and become a rebranded JQ. More pure madness such as ANZ buying Ansett and sinking it into insolvency with their fuel bill. To hell that Ansett had a loyal FF group, that burned a lot of Golden Wing miles, lifetime Golden Wing membership and loyalty. Screw airline accountants.

I smell a really big rat. Time for someone to throw back the curtains and show the world what the Wizard Of Oz is really doing.

 

[trippin_the_rift]

Everyone is quick to bash AJ...

What has Joyce done that's been good....?