Building a stronger Qantas

[Canny man]

I think you'll find Virgin Australia's employees are generally being paid significantly less than their Australian based Qantas counterparts.

This was also the case in the UK where BA have been battling similar structural cost issues vs Virgin Atlantic and LCC's

 

[Oneworldplus2]

What is even scarier is when looking to book SIN-SYD return and the Qantas booking engine recommends a list of flights and the option with a JQ flight is actually $1 more than the QF option. Why anyone in their right minds would choose the JQ option is beyond my comprehension.

That's crazy, l bet it has happened to someone.

And yes I think it is time Qantas gave us a way to remove JQ flights from the search instead of using the lame line that people want to see all the options. If I want to see all the options I will go to Expedia or Zuji, not Qantas website....

Spot on Johnk.

Red Roo, thank you for the previous reply, however, can l propose another idea.

If someone does browse the QF website for flights, by all means, show all options.
If l 'log-in' to 'my' account and 'I' browse for flights, give 'me' a option 'tick-this-box' to exclude JQ or l can set-it-up in my preferences or it resets with each search I do?
Can this be done, l'm pretty sure it can. Will QF do this to please members, I don't think so. QF save 'money' buy trying to feed us onto JQ flights as it has lower overhead costs (for pretty much the same points cost) and is also a inferior product.

 

[oz_mark]

My opinion on this- DISGUSTING.

1000 jobs gone, just like that.

Focusing on an Asian operation then saving yourself here in Australia... oh wait forgot it's spirit of asia now isnt it? You were not loosing money at all, you just wanted half the rates for the workers, and not paying them for work as viewed on the ABC.

Can I submit to you, that a high Australian Dollar is having more effect on jobs that this Qantas thing.

 

[Canny man]

There has been little comment on why it makes strategic sense to launch a 'new premium airline' in Asia other than that there are lots of new millionaires and a burgeoning middle class.

This is well and good, but building a new mass affluent brand is easier on a consultants ppt presentation than in reality. The same trick was tried trans-Atlantic with the business class only airlines pre-GFC.

Asian markets are highly brand conscious (witness the success of Gucci, Prada etc) so launching a new brand will be very costly - I wonder if QF will announce the investment required/anticipated? The investment required to build the Middle Eastern premium brands has been staggering and required long term subsidy.

The choices would seem to be:

• start from scratch - maybe leveraging some core parent brand attributes
• brand extension - Qantasia concept, but still expensive in building specific brand values
• brand association - work with a brand that has appeal to the target market, Air Luis Vuitton anyone?

Each of the above has its pitfalls, but will live and die on the basis of the service matching the brand promise. Given the general view that Qantas has lost the edge on this aspect of delivery in its home turf (where it has heritage, cultural affinity, enormous capacity to data-mine) this will be another big challenge.

 

[nlagalle]

Alan Joyce you have thrown the brand into the dirt, all my family members and myself will never fly with you again because of your aircraft are old, the crew are sour faces most of the time, the food is awful and after so many incidents they fear of flying qantas.

How many times recently have you flown QF Jack? You also do realise the "incidents" are often media beatups?

Virgin Australia will show how an Australian company is to operate it is employing as many people onshore as possible, and loves there staff which makes there company a great one.

So if the love their staff so much, why are they paid less?

Of all the people jumping up and down saying its terrible etc, not one has said an alternate plan of action, except industrial action which will achieve nothing.

 

[ajw373]

There has been little comment on why it makes strategic sense to launch a 'new premium airline' in Asia other than that there are lots of new millionaires and a burgeoning middle class.

This is well and good, but building a new mass affluent brand is easier on a consultants ppt presentation than in reality. The same trick was tried trans-Atlantic with the business class only airlines pre-GFC.

Asian markets are highly brand conscious (witness the success of Gucci, Prada etc) so launching a new brand will be very costly - I wonder if QF will announce the investment required/anticipated? The investment required to build the Middle Eastern premium brands has been staggering and required long term subsidy.

The choices would seem to be:

• start from scratch - maybe leveraging some core parent brand attributes
• brand extension - Qantasia concept, but still expensive in building specific brand values
• brand association - work with a brand that has appeal to the target market, Air Luis Vuitton anyone?

Each of the above has its pitfalls, but will live and die on the basis of the service matching the brand promise. Given the general view that Qantas has lost the edge on this aspect of delivery in its home turf (where it has heritage, cultural affinity, enormous capacity to data-mine) this will be another big challenge.

I think you have hit the nail on the head as to why the new company won't be called Qantas and I don't think there will be much cross brand promotion within Asia. To people outside of Australia the brand is meaningless, so Qantas need to create a separate identity within Asia to attract Asian passengers. Your also right that the money required to build the new airline will be quite high and of course it has a high risk. However the fact remains though that there is really little profitable growth left in the Australian domestic/outbound international market, so it makes sense to invest in emerging markets where profitable growth prospects exist rather than on more Australian expansion that cannot be sustained.

 

[argamond]

What is even scarier is when looking to book SIN-SYD return and the Qantas booking engine recommends a list of flights and the option with a JQ flight is actually $1 more than the QF option. Why anyone in their right minds would choose the JQ option is beyond my comprehension.

My guess is that when the cheaper qantas deals are all booked out, the JQ fares will actually be cheaper than the rest of the options. (Meaning that the JQ fare is only more expensive than the cheapest qantas option - not all qantas economy options)

 

[drron]

Which kind of negates your earlier suggestion that feeding the qantasia hub is a growth option for QFi. I predict that the 787s will go to Qantasia, to deal with the limitations of trying to fly A320s Asia to Oz.

But do we know if Qantasia is getting the A320 neos?With a range of 3800NM they will have no problems making DRW,ADL,PER from SIN.
BNE and MEL are also about the same distance as AA flies the 757 with a similiar range.SYD with a distance of just over 3900 miles should be OK but there will be widebodies going out of SYD so i wouldn't think that would be an option.

If out of BNE,ADL,PER or DRW to SIN i would have no problems with the A320 if a day time flight which they should be.Probably though overnight coming back-just lucky i will be up the front!

 

[samh004]

My opinion on this- DISGUSTING.

1000 jobs gone, just like that.

Focusing on an Asian operation then saving yourself here in Australia... oh wait forgot it's spirit of asia now isnt it? You were not loosing money at all, you just wanted half the rates for the workers, and not paying them for work as viewed on the ABC.

There are many theories on why they’ve taken this move, and if you don’t subscribe to their theory then you’d have this (or another) view, but I put it to you another way. Say they continue along as they are, gradually losing more and more money each year, until the business (or at least the international side of it) is no longer sustainable and collapses. How many jobs do you lose then? More than 1000?

It’s a business at the end of the day, it has shareholders and they are ultimately the ones that Qantas are working for, followed by the passengers and then staff I would guess.

 

[harvyk]

To people outside of Australia the brand is meaningless

Not quite true, whilst the "Spirit of Australia" tagline doesn't invoke the same patriotism OS has it does here, the QF brand still stands for being safe, reliable, with a half decent product.
That's one of the big things, they have a good brand internationally and yet are doing little to protect it.

 

[dajop]

There has been little comment on why it makes strategic sense to launch a 'new premium airline' in Asia other than that there are lots of new millionaires and a burgeoning middle class.

Everything you say make sense but nowhere I have read that QF is going to launch a "premium brand"(ed) airline just a "premium airline". In todays speak that just means they will in all likelihood have a business class cabin, serve food & beverages for free and don't charge for luggage ...

 

[ajw373]

Here's a thought. How about Qantas Airways Limited changes it's name to something that doesn't have Qantas in it's name. It then still keeps Qantas (the airline) as it's Australian domestic and international full service brand, along with all the other companies and brands it owns. Doing this may make people realise that there is actually a major difference between what we know today as Qantas (the company) as opposed to Qantas (the airline). Seems many confuse the two, especially when arguments heat about about cross subsiding etc.

 

[connieguy]

...If however this new airline was set-up offshore with the sole intent of taking over Qantas flights into Australia then I think you could argue that it was designed to get people off the Australian wage system. But this isn't the plan... well yet anyway.

If the service levels are equivalent (which is what Qantas seems to be saying will be the case), the Qantasia aircraft are newer with latest tech / styling and the cost of the Qantasia seat is less than the QFi seat, what do you expect will happen to QFi sales Asia to/from Australia?

 

[mannej]

Sam, thank you for stealing my point!

The aviation industry is a hostile environment that has seen countless casualties. Ansett being the biggest one. How many jobs were lost after Ansett went belly up? 1000 jobs is quite minimal compared to what JAL went through to get out of bankruptcy, that was 15000-16000?
Jack, do you know anyone who works for DJ? If not you are just speculating about how they love their employees.

People have been saying restructure is necessary. I think strategy is what Qantas has been lacking up to now. People may hate Joyce, but my feeling is that he was brought in for a reason.
As we love to make comments as arm chair critics, I think the real judgement should be held until the results of the strategy have been realised. If these changes make QF stronger, and help them return back to solid performance great.

As for the disgusting part, leave it unchanged, and as Sam said, it may be a lot more than the 1000. It is a harsh reality from a business perspective. There is a lot of emotion that people have attached to Qantas, and sometime that does blur people's perceptions about their beloved Qantas.

 

[NM]

Here's my take on the fleet strategy. Of course this is just my opinion and not substantiated with any inside knowledge or facts. Its not just about capital and redeployments, there are other very significant factors at play here too.

For example, bringing A320 to QF mainline domestic, as a new type for that part of teh airline, allows QF to "negotiate" new conditions for the crews (possibly both tech and cabin crews). And they can use the current JQ A320 crew "agreements" as the starting point for developing new contracts for the operating staff.

Moving B737 aircraft from QF domestic to Jet Connect and Qantas Japan allows them to reduce the number of crew on the existing Qantas 737 employee conditions and offer the crews some choices:

• Move to Jet Connect on the Jet Connect contracts
• Move to Qantas Japan on a new contract
• Move to the A320 on a new contract
• Hope for a slot to move into Qantas International on A330
• Leave the Qantas group

I also believe this is part of the reason behind the initial 787s going to JQ. That way they can establish a new JQ crew contract for those aircraft, and then when the QF ones finally arrive they can use that as the basis for the QF 787 crew contracts, using the thread to just have them all operated by JQ crews wearing QF uniforms (like TT flughts "operated" by Jet Connect). This I believe is the basis of the current action by APIA seeking to keep Qantas pilots flying Qantas aircraft.

The progressive retirement of the 747 and 767 fleets also reduces the number of crew on the existing conditions and contracts. Their crews have the choice to move to A330 or A380, obviously pending available slots, or to leave Qantas.

So Qantas can use the introduction of a new aircraft type into the QF domestic fleet (A320) as a catalyst for new crew contracts. They can use the introduciton of a new aircraft type into the JQ fleet (787) as the basis for establishing a grouo-wide 787 crew contract. They can remove some of the existing QF domestic fleet (737s to Japan and Jet Connect) to reduce the number of crew on existing high-cost contracts.

As with most thing in aviation, there are lots of contributing factors at play. All may not be as clear-cut as it first appears.

 

[gumpy]

That is not what the Qantas press releases say.

Firstly in the release about the A320 order

About Qantas - Media Room - Media Releases

and in the release about Jetstar Japan



About Qantas - Media Room - Media Releases

This along with Medhead's response, this is a fair point. Maybe the new J* Japan would be profitable enough to take the new aircraft and the Japanese are the sort that would appreciate and choose brand spanking new airlines over old ones.

 

[nlagalle]

The aviation industry is a hostile environment that has seen countless casualties. Ansett being the biggest one. How many jobs were lost after Ansett went belly up? 1000 jobs is quite minimal compared to what JAL went through to get out of bankruptcy, that was 15000-16000?
Jack, do you know anyone who works for DJ? If not you are just speculating about how they love their employees.

Along with Ansett, in recent times there has been:

Pan Am
Lauda
Swiss Air

How many lost their jobs then?

And don't forget how many have been bailed out to.. JAL, Alitalia etc..

If you want to see the list of bankrupt airlines look here:

Bankrupt Airlines from around the World and the most recent Chapter 11 filings from US Airline Companies

 

[oz_mark]

For example, bringing A320 to QF mainline domestic, as a new type for that part of teh airline, allows QF to "negotiate" new conditions for the crews (possibly both tech and cabin crews). And they can use the current JQ A320 crew "agreements" as the starting point for developing new contracts for the operating staff.

After having been through all of the Qantas announcements, I am struglling to find where they said that A320's would be going to QF domestic. Lots of Jetstar and the new premium airline, but nothing about QF services. Can you point me to where this was said?

 

[TheInsider]

Please remember guys, with the 1000 jobs to go, these are going to be mostly voluntary redundancys, where the staff members say they want to leave. Also there are quite a few of these, especially in cabin-crew.

 

[connieguy]

Along with Ansett, in recent times there has been:

Pan Am
Lauda
Swiss Air

How many lost their jobs then?

And don't forget how many have been bailed out to.. JAL, Alitalia etc..

If you want to see the list of bankrupt airlines look here:

Bankrupt Airlines from around the World and the most recent Chapter 11 filings from US Airline Companies

The Qantas group are not going bankrupt. It is making good money. The issue is the claimed loss making QFi and how to make QFi profitable. Qantas are using the "Look what happened to Ansett" as a scare campaign to get these changes agreed by the government, which I do trust will call their bluff as even blind Freddy can see that eventually Qantasia will replace QFi.

Additionally from my source (my RAAF ex Orion pilot son) CX pays their left seat pilots more than Qantas pays their left seat pilots plus the CX working conditions are better.