27th February Big Qantas announcement

[DrA]

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.

Right...So I can backtrack almost 4 hours to SYD, deal with dom-int transfer hijinks and then fly all the way back to SIN on QF? Or I could fly PER-SIN on a pathetically substandard LCC that isn't especially "low cost" anyway? Or I could just get a direct PER-SIN flight on SQ?

Yeah, let me think on that for a second

Anyway, I'm for bed. Our travel manager gets to deal with these headaches for me tomorrow. She's going to have fun rebooking thousands of forward flights for everyone!

 

[Comoman]

I will most likely have to switch to SQ and go for the QF/VA platinum double rather than just P1 on QF. The positive is I will not have to fly on the substandard EK J flights out of PER to Europe.

That's exactly what I've done - it's now even harder to earn the required 4 x ~ flights required by QF every year though. I don't do much domestic travel - mostly all is international.

 

[cove]

So who gets the Qantas lounge at Perth international and who gets the take off and landing slots that are being vacated?
I think a lot of Perth flyers will totally jump ship so QF domestic may take a hit from this very stupid decision as well.

 

[ajw373]

The argument is nonsensical.

Just like the argument that because Qantas doesn't fly international from Perth they are somehow not the Spirit of Australia.

 

[ajw373]

Does QF serve PER domestically only because east coast people may want to come and visit? Would they cut all WA services services otherwise ?

When I fly PER->BNE/SYD/MEL, I am always asked if I am going home like no one actually lives over here......

They fly domestically because there is money to be made. Just like how they have quite a large intra-WA network as well.

 

[ajw373]

Tiger is now Virgin isn't it? Not SQ (directly anyway).

Tiger Australia is owned by Virgin, not the whole of Tiger. But your right SQ doesn't actually own Tiger either, it has an interest but not ownership or control.

 

[CMA222]

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

We should be more worried about the future of the country than of Qantas when someone with the political power of Clive Palmer thinks Australia's emotional attachment to Qantas is sufficient to overcome having a private company restricted to who they can have as shareholders, seriously limiting their access to capital and the ability to raise finance. He would scream from the rooftops if the Oz Government tried to tell him who he can have as shareholders of his companies. Not to mention (1) an uneven playing field (2) the tiny but competitive Australian aviation market and (3) other international flag carrier airlines, owned or heavily subsidised by their Governments, pouring capacity into the Australian market and onto routes served by Qantas. The future for Qantas is going to be a turbulent ride !!.

 

[Lonely Flyer]

He would scream from the rooftops if the Oz Government tried to tell him who he can have as shareholders of his companies.

He is the only shareholder. He cannot relate to the problem.

 

[mannej]

Just like the argument that because Qantas doesn't fly international from Perth they are somehow not the Spirit of Australia.

Disagreed. Sometimes it does feel as if some members just post for the sake of an argument.

 

[Mr_Orange]

This might be an unpopular opinion.

You think???

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.

Why the hell should I have to backtrack to Sydney? It's one of the worst airports I have come across to transit Dom to Int. QF is Syd-centric enough as it is, it doesn't need to consolidate that tactic.

 

[cove]

Careful Mr_Orange cove is a shareholder of Sydney airport and sure the maintenance of the toilets seems to be run out of petty cash they make pretty good profits. I do wish they could get a few more of the toilets to work!

 

[ajw373]

Disagreed. Sometimes it does feel as if some members just post for the sake of an argument.

Thought I had made a very valid point rather than just being argumentative. Judging by the likes I received on that post, and similar replies it would seem others share my sentiment.

 

[cove]

Macquarie has put an outperform recommendation on Qantas shares this morning. Is it time to pull out your wallets for QAN shares for a 50/50 chance??

 

[drron]

Some of the press views that don't just focus on AJ-

Joyce has watched as foreign carriers who care less for their bottom line pour excess capacity into the Australian international market — nine per cent in the last year alone.
He has inherited mismanagement from the past — the purchase of double-decker A380s that have proved to be duds on Qantas’ point-to-point operation and excessive pay and entitlements rates won by unfettered unions.
He has been hamstrung by the Qantas Sale Act preventing foreign ownership jumping above 49 per cent and forcing the airline to do the bulk of their heavy maintenance in Australia, while Virgin Australia does it overseas. The field is not level. Not even close.
Which is why Joyce ­deserves the chance to transform his legacy carrier into a lean, fighting machine that can compete on just terms with its peers — but the clock is ticking. What Joyce now needs to detail is only not the extent of shrinkage but his grand plan to return to profitability.

No Cookies | thetelegraph.com.au

The final words are for former Virgin CEO Brett Godfrey who said in 2004: “This year we will carry as many passengers as Ansett, with one third the staff.”
And that staff was being paid approximately half the average of Ansett employees. Perhaps today Qantas is Ansett Mark 2 but the difference is there is still time for Qantas to reinvent itself.

Airline Ratings

GEOFFREY THOMAS: The issue for Qantas is simply that its cost structure is too high and has been high for too long.

JASON OM: Complicating this, he says, are 14 unions and a complex enterprise bargaining process.

GEOFFREY THOMAS: Their average wage cost was $92,000. In the international space, Emirates' wage cost average is $47,000, Singapore Airlines: $42,000. So Qantas is way out of step with their international competitors, and in the domestic space, their wage cost is about 16, 17 per cent higher than Virgin Australia.

Lateline - 27/02/2014: Qantas to slash costs and cut jobs

 

[MEL_Traveller]

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)

 

[Clivem]

So who gets the Qantas lounge at Perth international .............

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.

 

[Mwenenzi]

Airline Ratings

GEOFFREY THOMAS: Their average wage cost was $92,000. In the international space, Emirates' wage cost average is $47,000, Singapore Airlines: $42,000. So Qantas is way out of step with their international competitors, and in the domestic space, their wage cost is about 16, 17 per cent higher than Virgin Australia.

But in Australia on top of the $ on the employees pay slip are pay roll tax, superannuation, workers compensation insurance(name varies by state), annual leave, leave loading, public holidays, sick days, training levies, rostered days off, long service leave, maternity leave, and others. While some of these vary by union award, many other countries do not all these imposts. Adds 35% ~ 50% to headline wage rate. Compared to Australia even USA is low cost, even allowing for $125 per week for USA employee health insurance

 

[RooFlyer]

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)

(my bolding)

Ah, but fortunately the Qantas crews at least get paid even when they aren't flying, and get all sorts of added goodies I bet the EK crews don't.

And then there's the cost of fuel.

And then there's the cost of maintenance.

And then there's the cost of funding.

And then there's the cost of union featherbedding.

And then there's the cost of super and leave and leave loading.

And then ....


Well, I think we get it. There's a lot more in calculating the "cost to fly an A380" than just the crew salary.

 

[markis10]

(my bolding)

Ah, but fortunately the Qantas crews at least get paid even when they aren't flying, and get all sorts of added goodies I bet the EK crews don't.

.

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

 

[Steelo]

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.