Building a stronger Qantas

[orac]

I dunno... I kinda got the feeling Red Roo was a chick....

I thought that after her first post on this forum and Flyertalk.

Still of the same opinion.

 

[medhead]

Business doesn't work like that and they can have it both ways, as can be seen by what they are doing. Quite clearly they think QFi cannot give sufficient return on investment, at this point in time anyway and they feel that putting effort and cash into other area's is a better way to spend the group profit/investors money. The few changes they have made to QFi (cutting 2 routes) are clearly aimed at bringing the costs and hence looses down. Putting heaps of capital into a business unit that has very little growth potential is silly.

Oh speaking of cross subsidisation isn't propping up QFi with profits from QF domestic an perfect example, or do you a) not actually believe that QFi is making loses or b) believe because Qantas is Qantas that one shouldn't differentiate between Qantas domestic and international so any loses should be hidden away on the balance sheet?

A perfect example of what I'm talking about. Your question disproves your first point. You can't claim it's a whole group when talking about subsidisation of jetstar but when it comes to QFi suddenly decide each business is a silo. You want to talk about hiding things away of balance sheets, isn't that what is happening when we say that qantasia is part of the group contributing to profit. If QF is subsidising JQ capital or fuel, isn't that hiding things away on balance sheets and not giving a true impression.

The lack of growth potential in QFi is created by management deciding to divert the badly needed renewal over to jetstar. It only makes sense to not invest in it because management have decided not to invest in it. That's a self fulfilling prophecy. Management have created the lack of growth potential.

As for you little question. I'm struggling to see your point. Perhaps you can't see the hypocrisy in saying that Qantas group must prop up new unprofitable airlines but there will be no support for QFi while it is renewed. Qantas domestic has to prop up new airlines and according to you that is acceptable, despite those new airlines not contributing to profit. But when someone suggests that the badly needed renewal is undertaken for QFi suddenly propping up by the group is bad. We get ridiculing little attack questions that don't include the obvious 3rd option that qantas needs to concentrate on all parts of its business and make the investments need to return underperforming parts of the group to profit. Doing that to get QFi on the path to profit is exactly the same as creating a new unprofitable airline on the path to profit.

Simple fact is that QFi needs resources to renew itself. Previous boards and management planned for this by ordering new aircraft, A380 and 787. That planning is now being diverted and that means QFi is being left to wither and die. The fact that management has washed its hands of QFi tells me a lot about their lack of capability at managing an airline. I see this every time I get on a QF aircraft and experience things like boarding scrums and $70 muffins.

What's the hope in setting up a new "premium" airline when they clearly can't run the one they have already?

 

[markis10]

I thought that after her first post on this forum and Flyertalk.

Still of the same opinion.

Red Roo is a company rep and could be a number of people?

 

[orac]

Red Roo is a company rep and could be a number of people?

Could well be.

However, the sentence structure and composition of her writing is consistent across the majority of postings I have read. Perhaps there are a number of different posters? In which case I would suggest they all attended the same Qantas "How to write course 101".

To return to the purpose of this thread, I would prefer more interaction from Red Roo in relation to the ongoing issues that come up on forums like this rather than just being a PR/spin person on the latest Qantas enhancements that are "going to improve our flying experience with Qantas". We all know this is not happening, and is unlikely to happen in the future.

Regards

 

[Archphoto]

"red roo says he'll pass on the suggestion of adl-bkk flights and some people are all awash with praise thatbthey are being listened to. "

Acknowledging a positive response to my question seemed to be the polite thing to do. (Maybe that's just me.)

Sure, it's a small thing and yes, they really do need to look at *all* aspects of their current status. I agree they really do need to take on board everything being said both here and from their (dis)satisfied passengers - but not at the expense of rudely ignoring any feedback on their part of a request or question made here.

Red Roo is between a rock and a hard place right now - Damned if he/she answers a question (even the smallest ones), and damned if he/she doesn't. (Not to mention, probably getting flack from their side as well, and maybe more in the dark than we give credit for?)

You catch more flies with honey - and a show of respect from both sides helps us move closer to achieving what *we* really do want, yes?

 

[Oneworldplus2]

Red Roo is a company rep and could be a number of people?

Exactly what l was thinking. Maybe Red Roo has to ask/permission before each post (imagine a stuff up?? I'm sure that some AFF members would burn Red Roo at the steak...).

Don't forget, there is also a QF Rep on Facebook and Twitter with regular updates.

There could be several Reps (for each media outlet), but each still has to report to a common manager? If anyone here does follow Red Roo on AFF and QF Rep on Twitter + FB, is the language consistent across the board, or varied (indicating multiple people) ?

 

[Simsy85]

Red Roo post's on Flyertalk as well?

I feel dirty and used...



The only way i'll feel better is if they build a F lounge in DRW

 

[drewbles]

I thought that after her first post on this forum and Flyertalk.

Still of the same opinion.

Red Roo 1.0 was a guy I can confirm that.

This is Red Roo 2.0. No idea if this revision is Male or Female

(mind you i've probably said too much there already )

 

[Simsy85]

Red Roo 1.0 was a guy I can confirm that.

This is Red Roo 2.0. No idea if this revision is Male or Female

Now I def feel dirty....

Its going to have to be an F lounge, a Domestic J lounge and A380's from DRW - SIN

I won't take a penny less!

 

[wandering_fred]

Exactly what l was thinking. Maybe Red Roo has to ask/permission before each post (imagine a stuff up?? I'm sure that some AFF members would burn Red Roo at the steak...).

Are we turning into carnivorous forum? :shock: Or has there been changes to the meat content of the Y meals?

And I thought this was to be a witch hunt. :mrgreen::mrgreen: Certainly the information content is variable.

Happy wandering with apologies to those who dislike the grammar police

Fred

 

[drewbles]

Are we turning into carnivorous forum? :shock: Or has there been changes to the meat content of the Y meals?

No, but some of us may still be hungry after the removal of a cracker...

http://www.australianfrequentflyer.com.au/community/playground/qf-gone-cracker-13213.html

 

[drewbles]

Now I def feel dirty....

Its going to have to be an F lounge, a Domestic J lounge and A380's from DRW - SIN

I won't take a penny less!

We'll get them to open a J lounge, co-branded with a JQ lounge just for you

 

[Simsy85]

We'll get them to open a J lounge, co-branded with a JQ lounge just for you

*kicks the dirt*

Ok, i guess that'll have to do....

 

[straitman]

I thought that after her first post on this forum and Flyertalk.

Still of the same opinion.

I dunno... I kinda got the feeling Red Roo was a chick....

How do you know that Red Roo is even a single person :?:

Red Roo is a company rep and could be a number of people?

 

[Simsy85]

How do you know that Red Roo is even a single person :?:

I don't.... a man can dream can't he? I was having a Ralph Fiennes moment...

 

[ajw373]

A perfect example of what I'm talking about. Your question disproves your first point. You can't claim it's a whole group when talking about subsidisation of jetstar but when it comes to QFi suddenly decide each business is a silo. You want to talk about hiding things away of balance sheets, isn't that what is happening when we say that qantasia is part of the group contributing to profit. If QF is subsidising JQ capital or fuel, isn't that hiding things away on balance sheets and not giving a true impression.

Doesn't disprove a thing actually. There is Qantas Limited the overarching (holding?) company. It has several business units, vis Qantas domestic, Qantas international, Jetstar (aus), Jetconnect, Engineering, Catering, Frequent Flyer etc. Each is ran independently taking money from the company and hopefully returning money back into the company. So of course they can make decisions for the COMPANY as a whole and individual out any under-performing business unit within the group. Heaven forbid they could even sell parts of the company if they wanted to. Your comment about QF paying for Jetstar fuel sounds like tarmac gossip, do you have any proof that this is going on, or are you letting your profuse dislike for Jetstar (which I share BTW) turning rumor into fact?

The lack of growth potential in QFi is created by management deciding to divert the badly needed renewal over to jetstar. It only makes sense to not invest in it because management have decided not to invest in it. That's a self fulfilling prophecy. Management have created the lack of growth potential.

I personally reckon the lack of growth potential in QFi is based on the fact that there are bugger all profitable route options left that can be served direct from Australia by a full service expensive to operate airline like QFi rather than a lack of investment. However at the other end of the spectrum there is still growth left in the cheap end, which cannot be run by Qantas, hence why we, like it or not there is investment in Jetstar.

As for you little question. I'm struggling to see your point. Perhaps you can't see the hypocrisy in saying that Qantas group must prop up new unprofitable airlines but there will be no support for QFi while it is renewed. Qantas domestic has to prop up new airlines and according to you that is acceptable, despite those new airlines not contributing to profit. But when someone suggests that the badly needed renewal is undertaken for QFi suddenly propping up by the group is bad. We get ridiculing little attack questions that don't include the obvious 3rd option that qantas needs to concentrate on all parts of its business and make the investments need to return underperforming parts of the group to profit. Doing that to get QFi on the path to profit is exactly the same as creating a new unprofitable airline on the path to profit.

Don't think there is any hypocrisy at all. The company needs to invest LONGTERM in area's where there is growth and profit potential. Clearly investing in airlines like Jetstar and the new airline has/will cost money, money that has been earned through profits from other parts of the group and investors money, however they are gambling that long term those business units will pay back that investment. Investing money in a business unit that has structural problems and little growth potential is not a good long term proposition. Those parts of the company need to be consolidated, restructured and once complete new investment put in. You don't need massive new investment to do this either!

Simple fact is that QFi needs resources to renew itself. Previous boards and management planned for this by ordering new aircraft, A380 and 787. That planning is now being diverted and that means QFi is being left to wither and die. The fact that management has washed its hands of QFi tells me a lot about their lack of capability at managing an airline. I see this every time I get on a QF aircraft and experience things like boarding scrums and $70 muffins.

QFi needs to be restructured to match the reality of the market before any extra funds are put in to expand, if there are markets to expand into. For the time being clearly the board thinks a strategy of a minor, and I do mean minor shrinkage is a good start to restructure. The fact QFi is still flying and is having $400m invested in the existing product says to me they are serious about keeping it long term, but for the time being are consolidating to fix the issues.

What's the hope in setting up a new "premium" airline when they clearly can't run the one they have already?

Most of the issues with the current one relate from the fact that the board cannot do what they need to do to restructure Qantas, clearly they won't have these same issues with the new airline!

 

[Moopere]

Most of the issues with the current one relate from the fact that the board cannot do what they need to do to restructure Qantas, clearly they won't have these same issues with the new airline!

Yes I broadly agree with this comment. Also, before anyone jumps onto the various failings of service provision outlined in many threads here, this type of thing should be handled (with due direction) way below board level. Seems like QF is suffering systemic management quality failure to me - something often seen in large and mature businesses. Tons of management levels who are all frozen with inaction and underproductivity. Need to get into middle and upper management with a broom now and then to keep that level of the business functional.

 

[medhead]

Doesn't disprove a thing actually. There is Qantas Limited the overarching (holding?) company. It has several business units, vis Qantas domestic, Qantas international, Jetstar (aus), Jetconnect, Engineering, Catering, Frequent Flyer etc. Each is ran independently taking money from the company and hopefully returning money back into the company. So of course they can make decisions for the COMPANY as a whole and individual out any under-performing business unit within the group.

My point is about the comments on AFF not what the company is doing. There is a clear distinction. Sorry that I clearly haven't explained that well enough to understand. Profit flows may very well flow into the group, but the treatment of QFi clearly shows that when it comes down to it they are not a group. The new airlines are not "all good" as they will profit QF group because the QFi treatment clearly says that those profits are not going to be used to help the whole group.

Your attack question is based on some premise that supporting QFi is bad and that contradicts the position that they are all part of the one group.

In any case the QF airlines are the group. They funded the creation of the other airlines. Where is there return on investment

Your comment about QF paying for Jetstar fuel sounds like tarmac gossip, do you have any proof that this is going on, or are you letting your profuse dislike for Jetstar (which I share BTW) turning rumor into fact?

I guess you missed the IF

I personally reckon the lack of growth potential in QFi is based on the fact that there are bugger all profitable route options left that can be served direct from Australia by a full service expensive to operate airline like QFi rather than a lack of investment. However at the other end of the spectrum there is still growth left in the cheap end, which cannot be run by Qantas, hence why we, like it or not there is investment in Jetstar.

Blind Freddy can see that QFi need new and different aircraft to grow. (Plenty of more knowledgable people on AFF than me, have expressed this better than I can.) No doubt that's why aircraft were ordered for QF. These changes do nothing to help QFi. That is the fundamental problem here, first off the different treatment of QFi and then the supposed solution which does nothing to actually fix the problems with QFi. A solution that marginalises QFi within the group. My problem is not jetstar or the new airline, it is the obvious deception involved in this change in relation to the QF airline and brand along with the implicit agenda.


As for growth at the cheap end that might be relevant if they were expanding jetstar. They aren't, they are creating a premium airline.

Don't think there is any hypocrisy at all. The company needs to invest LONGTERM in area's where there is growth and profit potential. Clearly investing in airlines like Jetstar and the new airline has/will cost money, money that has been earned through profits from other parts of the group and investors money, however they are gambling that long term those business units will pay back that investment. Investing money in a business unit that has structural problems and little growth potential is not a good long term proposition. Those parts of the company need to be consolidated, restructured and once complete new investment put in. You don't need massive new investment to do this either!

QFi needs to be restructured to match the reality of the market before any extra funds are put in to expand, if there are markets to expand into. For the time being clearly the board thinks a strategy of a minor, and I do mean minor shrinkage is a good start to restructure. The fact QFi is still flying and is having $400m invested in the existing product says to me they are serious about keeping it long term, but for the time being are consolidating to fix the issues.

So here is the problem QF airline is the group. They created the other airlines. Where is there return? Where is the benefit of that risk to be fed back into the QF airline to fix there problems. QFi apparently has structural problems to do with the aircraft it operates exactly how do you fix that by not giving them the aircraft that were ordered to address this problem and by making them keep operating those wrong aircraft.

As for little growth potential. Smell the roses as I said that lack of potential has been created by management and their unwillingness/inability to take the problems with QFi. What came first the chicken or the egg?

Most of the issues with the current one relate from the fact that the board cannot do what they need to do to restructure Qantas, clearly they won't have these same issues with the new airline!

And they can't do that because management has taken a confrontational and belligerent approach to dealing with some of the problems. Having hit a brick wall they have now put the problem into the too hard basket and will instead put it to one side to wither and die.

Edit: to pick up on the following comments on this point. I would lump in fixing management as being in the "too hard" basket.

 

[Oneworldplus2]

7:30 Report just had a quick 5 minute segment on QF.

I'll post a link when it becomes available. Some interesting points made

 

[medhead]

7:30 Report just had a quick 5 minute segment on QF.

I'll post a link when it becomes available. Some interesting points made

Yes very interesting. Key allegations i can remember:

• 6 aircraft leased to JQ by QF with a lease fee that matches the depreciation charge. (So how do you get a return on capital in that case?)
• JQ executive salary paid by QF.
• Bali staff paid by QF
• auditors noted the discrepancy between revenue (77% QF, 16% JQ) and profit (~16% QF and ~26% JQ) note my memory is fading on the profit numbers

Just on the profit we know a big chunk is from QFF. How much of that should be attributed to QF? After all it is QF operations that are the basis of that profit.