This QF staff member must never travel on QF9

[Melburnian1]

This editorial about Qantas in 'Sydney Morning Herald' is rather generous in its praise of AJ, the CEO of QF. For instance the editorial does not mention that part of the Asian JQ contraction was due to QF arrogantly believing that Hong Kong aviation regulators would approve a JQ operation based in Hong Kong as a 'locally owned' entity:

A great deal of luck helped Qantas reversal

Despite that, QF took issue with this well written editorial.

The Sydney based highly paid QF staff member who made the comments at the bottom must never travel on QF9 (MEL - DXB - LHR) with its history of late, or badly late, operation. Nor must she have been a passenger on badly delayed QF B744s.

The comments:

Literally scores of people have to get hundreds of things right for an aircraft to depart and arrive safely and on time. In our view, no one does that better than the people at Qantas.

must be part of a comedy skit as in some recent months, VA domestically (albeit with a smaller fleet) has beaten QF for the title of most punctual domestic airline in arrivals less than 15 minutes late.

Internationally to major business destinations such as LAX and LHR, QF's punctuality is notable by how poor it is in comparison to competitors such as SQ, DL, JL and KE to name a few.

Qantas’ response to SMH editorial - Qantas News Room

Many observers would believe that the 'SMH' editorial was largely correct.

QF's latest profit is largely connected with 'luck', whatever the QF spin doctors might try to suggest.

There is no mention as to how less than two years ago, QF wanted government assistance in one form or another. If Mr Abbott had given in, it would have been a huge waste of scarce government funds. Thank goodness he had the common sense to knock such proposals back:

Hopes fading on government assistance for Qantas

Some must have very short memories. Those who were sacked by QF may not.

There is also no mention by QF in its response about its atrocious aircraft purchasing and disposal decisions. Some AFF observers with expertise in the area suggest that not only was the decision a few years ago not to obtain B777s a mistake, but so was the far more recent disposal of two (admittedly elderly) B744s that as we have seen in recent months has at times left QF with what one AFF member referred to (accurately) as 'rolling 24 hour delays.'

The level of corporate arrogance in some Australian businesses may not surprise many of us much any longer, but sadly responses like the QF one do nothing in terms of showing a little bit of St Francis of Assisi-like humility.

 

[marki]

AJ's Luck maybe about to run-out!!!

right at the bottom of the page it says clearly--

".....................t Mr Joyce deserves praise. But a falling Australian dollar will reduce domestic demand for international flights and push up the $A price of aviation fuel. The journey remains a bumpy one."

In Aussie dollar terms the price of aviation fuel is going to hurt if the Aussie gets a 50c(USD) Handle on it.

It not over yet

 

[Melburnian1]

marki, what percentage of QF and VA's operating costs is aviation fuel presently (bearing in mind that this must vary depending on moves in the oil price and A$ v US$)?

25 per cent?

 

[marki]

25-30 %, Operating Cost is Aviation Fuel

Man power and Staff (25%) are about the same making up 50 % of total Costs. So If purchasing power of Aussie dollar goes down (1 USD to 0.50c USD)

Fuel in Aussie terms goes up even if fuel price is stable.

 

[nlagalle]

This editorial about Qantas in 'Sydney Morning Herald' is rather generous in its praise of AJ, the CEO of QF. For instance the editorial does not mention that part of the Asian JQ contraction was due to QF arrogantly believing that Hong Kong aviation regulators would approve a JQ operation based in Hong Kong as a 'locally owned' entity:

Why were they arrogant about setting it up? They only owned 30% of the subsidiary.

The Sydney based highly paid QF staff member who made the comments at the bottom must never travel on QF9 (MEL - DXB - LHR) with its history of late, or badly late, operation. Nor must she have been a passenger on badly delayed QF B744s.

The comments:

Literally scores of people have to get hundreds of things right for an aircraft to depart and arrive safely and on time. In our view, no one does that better than the people at Qantas.

must be part of a comedy skit as in some recent months, VA domestically (albeit with a smaller fleet) has beaten QF for the title of most punctual domestic airline in arrivals less than 15 minutes late.

They've had higher performance what once in the last 15 odd months.

Many observers would believe that the 'SMH' editorial was largely correct.

QF's latest profit is largely connected with 'luck', whatever the QF spin doctors might try to suggest.

Why is it luck?

There is no mention as to how less than two years ago, QF wanted government assistance in one form or another. If Mr Abbott had given in, it would have been a huge waste of scarce government funds. Thank goodness he had the common sense to knock such proposals back:

They wanted either assistance or changes to the sale act given how virgin was getting cash from those with deep pockets. They got the changes to the sale act.

Some must have very short memories. Those who were sacked by QF may not.

There is also no mention by QF in its response about its atrocious aircraft purchasing and disposal decisions. Some AFF observers with expertise in the area suggest that not only was the decision a few years ago not to obtain B777s a mistake, but so was the far more recent disposal of two (admittedly elderly) B744s that as we have seen in recent months has at times left QF with what one AFF member referred to (accurately) as 'rolling 24 hour delays.

It's been documented again and again the original 777 was not suitable for the ops QF were doing at the time. The A380 decision dates back to James Strong. To retire old aircraft, well while may seem unusual to some I am sure the fleet planners had their reasons..

The level of corporate arrogance in some Australian businesses may not surprise many of us much any longer, but sadly responses like the QF one do nothing in terms of showing a little bit of St Francis of Assisi-like humility.

Some of the responses by people who don't know much about aviation doesn't surprise anymore either..

 

[timster]

Somewhere in corporate PR texbooks it surely must be written that "snide" is never an approriate tone to be adopted by a company's frontline PR person in a response to the press.

 

[mannej]

Qantas Bashing has been fairly popular in the media over a number of years, whether it be about topics such as the financial performance of the company, the grounding or overseas maintenance. A number of members on here have made mention of the fact that QF don't seem to defend themselves against these articles. I guess one day the straw would break the camels back, hence the response from Ms. Wirth.

Yes Melburnian1 your bias is noted, but the notion of referencing St Francis of Assisi may seem a tad naive or superfluous to me.

With reference to the fuel price and the Australian dollar, what affect does the falling dollar have on the hedged price of fuel?

 

[marki]

It's not my job to point things out or teach you, However not all fuel is hedged, a Percentage of Future Fuel consumption is. That is usually hedged in USD dollar terms. So the fact the purchasing power of our dollar goes up or down will invariably affect the purchase price of aviation Fuel in Australian Dollar terms. ($1 AUD = 0.7078 USD)

Also if it were "that benign" an issue we would never see fuel surcharges,

 

[eastwest101]

With reference to the fuel price and the Australian dollar, what affect does the falling dollar have on the hedged price of fuel?

Trick question - there is no relationship between the price of fuel and fares or indeed fuel surcharges.

The price of fuel and exchange rates are external input costs that Qantas cannot control. Except when they hedge, either the exchange rates/price of fuel or both. Hedging itself costs money and lost opportunity.

Then if the hedge (or bet) works out well then management can take credit, or if the hedge doesn't work out then management can complain to the government about competitors/costs/unions and then respond by cutting costs or raise fuel surcharges/fares or other methods outlined in the SMH article.

The response from Olivia Wirth is an internally contradictory piece of spin and a little bit of an over-reaction considering the overall tone of the SMH Editorial (in my opinion). So yes - AJ and the guys have stabilized the business in the last year or two but still raises the question of what they were doing before these welcome but necessary changes to the business.

 

[Melburnian1]

mannej, it does not have any 'affect', but it may (or may not) have an 'effect.'

And mannej, your bias towards QF is noted - nothing wrong with that, just as there's nothing wrong with preferring VA domestically or a raft of international airlines for travel into and out of Australia. In respect of the latter, while many passengers may have little choice if their corporate travel agent has a particular travel policy, given that QF's standalone market share is relatively low (though higher when JQ and close stablemate EK are included), the QF group plus EK command a less than 40 per cent share of air travellers into and out of Oz.

Woolworths has been the subject of arguably far more negative press articles (in both Fairfax and News Ltd newspapers) than Qantas recently, but notably Woolworths does not copy the over reaction that this Qantas executive displayed. And yet Woolworths has a track record of paying dividends (which in recent years QF does not, apart from the soon to occur return of capital) and despite some recent problems (Masters is one), Woolworths has been far more consistently profitable than QF. (Yes, they are in different sectors though.)

nlagalle, referring to www.bitre.gov.au, VA has had the greatest percentage of on time (i.e. less than 15 minutes late) arrivals among 'major domestic airlines' in January, February, March, June and July 2015; QF has won that title in April and May. So thus far in 2015, VA is 'winning' on an overall basis although naturally the route by route (and also route by direction) 'winner' varies. Statistics for August 2015 have yet to be released. Flight cancellation percentages also vary widely on a route by route basis.

I am happy to be corrected, but VA has not ever sought taxpayer assistance in the way QF did. It is legitimate for nlagalle and others to suggest that QF may have faced an 'unfair' situation with respect to the Qantas Sale Act, but let's remember that the capital that flowed into VA was from business not government (which is not to dispute that some of the airlines involved have a level of government involvement, but that may be at some distance from taxpayers and subject to commercial considerations.)

The risk for QF in submitting such seemingly aggressive public responses is that it is perceived as a large, powerful and at present profitable corporate entity with a very thin skin. There is also the question about whether a lecture about 'accounting' comes across as aloof or arrogant, or as eastwest101 commented, that the response overall comes across as 'snide.' Not good public relations practice.

 

[opusman]

So maybe as well as a fuel surcharge we can look forward to a Pacific Peso surcharge as well?

 

[marki]

I like trick Questions eastwest101 Though the issue is not that benign that there is no relationship. (4 sure)

 

[marki]

mannej, ...................

nlagalle, referring to www.bitre.gov.au, VA has had the greatest percentage of on time (i.e. less than 15 minutes late) arrivals among 'major domestic airlines' in January, February, March, June and July 2015; QF has won that title in April and May. So thus far in 2015, VA is 'winning' on an overall basis although naturally the route by route (and also route by direction) 'winner' varies. Statistics for August 2015 have yet to be released. Flight cancellation percentages also vary widely on a route by route basis.

..........................arrogant.

I never quite understood this taking off 30 min late but arriving 30 min earlier.

 

[Mattg]

I am happy to be corrected, but VA has not ever sought taxpayer assistance in the way QF did.

As far as I am aware Virgin has been propped up in the past, just not by Australian taxpayers. If you look at who owns VA, I think it is obvious why.

 

[mannej]

Melburnian1, you retort by stating my bias to QF. Whilst that may be your perception, I am not the one accusing members of working for QF should they question the lopsided threads against a certain airline, but not others.

It's not my job to point things out or teach you, However not all fuel is hedged, a Percentage of Future Fuel consumption is. That is usually hedged in USD dollar terms. So the fact the purchasing power of our dollar goes up or down will invariably affect the purchase price of aviation Fuel in Australian Dollar terms. ($1 AUD = 0.7078 USD)

Also if it were "that benign" an issue we would never see fuel surcharges,

Not your job? Pfft, isn't that the point of this forum, to learn off each other? Whilst I am aware of the logic behind fuel hedges, it is always good to learn off others with more knowledge in the area.

 

[russ]

Many observers would believe that the 'SMH' editorial was largely correct.

Who are these observers?
Why "would" they believe, not actually believe?

 

[amaroo]

Fairfax ... now that's a business with plenty of problems LOL

 

[pauly7]

Woolworths has been the subject of arguably far more negative press articles (in both Fairfax and News Ltd newspapers) than Qantas recently, but notably Woolworths does not copy the over reaction that this Qantas executive displayed.

Probably because half of the WOW marketing/comms team have been booted out the door the last few months - there is no one left to respond!

 

[marki]

Melburnian1, you retort by stating my bias to QF. Whilst that may be your perception, I am not the one accusing members of working for QF should they question the lopsided threads against a certain airline, but not others.



Not your job? Pfft, isn't that the point of this forum, to learn off each other? Whilst I am aware of the logic behind fuel hedges, it is always good to learn off others with more knowledge in the area.

So sorry mannej did i offend you.<redacted>.what was the point your making? My point was this hedging is not straight forward as your previous post had implied.

 

[sydstar]

I think it's clear from other threads that the OP isn't a fan of QF, and that's fine. There are a range of options out there, and variety is what makes life interesting . But I do question the motivation of some of these threads. On the one hand, we have a lengthy thread about QF delays (some minor in the scheme of things), yet then the claim that QF only has a small market share out of Australia :?: If that's the case, why the massive QF delay thread?

...Internationally to major business destinations such as LAX and LHR, QF's punctuality is notable by how poor it is in comparison to competitors such as SQ, DL, JL and KE to name a few.

Just curious why you selected DL, JL and KE as examples? DL has one flight to LAX per day, as opposed to QFs up to 5. JL and KE are very long detours for LAX and pick up minimal LHR traffic

Many observers would believe that the 'SMH' editorial was largely correct.

But what qualifications does the editor of a newspaper have over the average person to assess the competence of an airline board and senior executive? Fairfax really has gone downhill over the past 3-5 years, but considering there are so few staff left is it any wonder?

There is no mention as to how less than two years ago, QF wanted government assistance in one form or another. If Mr Abbott had given in, it would have been a huge waste of scarce government funds. Thank goodness he had the common sense to knock such proposals back

Do you actually think that the current Qantas Sale Act is equitable? One airline is bound by a legislative instrument that places limitation on foreign ownership, whilst the other (VA) has no limitations (exl. Air Navigation Act), and the majority of share holdings are by three state-owned carriers? Are both airlines are expected to compete freely in the market under this arrangement?

There is also no mention by QF in its response about its atrocious aircraft purchasing and disposal decisions. Some AFF observers with expertise in the area suggest that not only was the decision a few years ago not to obtain B777s a mistake, but so was the far more recent disposal of two (admittedly elderly) B744s that as we have seen in recent months has at times left QF with what one AFF member referred to (accurately) as 'rolling 24 hour delays.'

Agree the constant delay to the 787 has led to headaches in the current schedule. The 2 747s that have been retired this year were over 20 years of age and it would be safe to assume were up for D checks. Would the cost of a D check have been worth it, considering the boost to the 330 fleet from future JQ returns? The 777 issue has been discussed to death in the past, but remembering the 380 was selected in 2000(?), where would the 777 fit in the QF fleet, considering ETOPS issues on the Southern routes and the greater efficiency of 330s for Asian ops?

I can see why airlines love the 777 for its operational capability, but I actually can't stand it as a pax! Much prefer a 380/330, or a 747 (for nostalgia).