Current Union Activity - Tide of support turned against them?

[thewinchester]

Sorry the"gun" I'm not lambasting Joyce per se. I'm lambasting a system that rewards performance in the top 50% percentile. That is an absolute joke. In the context of the thread that joke is worth remembering when defending Joyce's salary because a big chunk of it is performance related. But that's not an attack on Joyce, that is a failure of the system.

Well the username is derived by something else, ask me about it if we ever meet at an AFF Do.

That's a narrow reading of the remuneration report and payment condition. That in essence means AJ must demonstrate to have made significant performance towards the goal, to the point where they are halfway there and the business is seeing significant benefits in the balance sheet and bottom line.

And let's not forget, the things that have to be achieved are no easy task. Any CEO who hit 50% of these marks is worth their weight in currency.

In order to get the best and have them deliver the best, you have to incentivise them. This is about incentivising AJ to do what they pay him to do then something else again.

Anyway, this has been gone over ad nauseum now. If you don't like the system; you either need to buy shares to change it, or get off the pot.

 

[johntoo]

As a ff with heaps of points accrued assiduously over theyears, my interest in current events is intense. I think the unions fight is alost cause.
Of more pertinence are answers to the following:-
. re. the profitability of QFi, can the ‘incentivised’ AJturn it around and if so, how?
. what are the ways our ff points can be reduced to 0, inthe short term (say, the next 12 months)?
.considering the ‘sale of Qantas Act’ and current economicclimate, what are the possibilities of a merger and how might this affect ourpoints?
. if QFi is a dead airline flying, would he, and how could AJorganise it’s burial (and with it our frequent flyer points?).
Sorry about all the doom and gloom, this is one old buggerwhose chips are all down, and whose dream of a retirement ‘Round the World’ flightis fading into the distance (or at least flickering!)

Any opinions?

 

[dfcatch]

As a ff with heaps of points accrued assiduously over theyears, my interest in current events is intense. I think the unions fight is alost cause.
Of more pertinence are answers to the following:-
. re. the profitability of QFi, can the ‘incentivised’ AJturn it around and if so, how?
. what are the ways our ff points can be reduced to 0, inthe short term (say, the next 12 months)?
.considering the ‘sale of Qantas Act’ and current economicclimate, what are the possibilities of a merger and how might this affect ourpoints?
. if QFi is a dead airline flying, would he, and how could AJorganise it’s burial (and with it our frequent flyer points?).
Sorry about all the doom and gloom, this is one old buggerwhose chips are all down, and whose dream of a retirement ‘Round the World’ flightis fading into the distance (or at least flickering!)

Any opinions?

In reality -

We would just see the rapid Jetstarisation of routes;

Partners would take over other routes;

QFi would fly to LAX and LHR only.

 

[777]

QFi would fly to LAX and LHR only.

Actually i think in the long run they will fly only half way to LHR. If that.

Once you let go of the idea that "Qantas" the brand is the asset as current management have obviously done - then it really becomes about a network of subsidiaries going by a range of names that actually do the (international) flying.

What i am surprised about is how little thought is being given to how risky this strategy actually is. How many people will actually want to fly to London on the Singapore based RedQ or to Germany on Jetstar? Will the current and future governments of Singapore (or Malaysia) actually tolerate what is essentially a front company using it's country's traffic rights if it hits much more powerful local companies? FFS Is there really a market for a premium airline flying 100 odd A320s around Asia? How will competitors with deep pockets respond?

I keep going back to this but this is fundamentally about a clash of visions. One says that that Qantas (the brand, the culture, the safety reputation, etc) is actually the asset. The other - which is essentially the official strategy - is that all of that is essentially a burden and the asset is something else: the ability to raise capital, experience in running airlines, the Frequent Flyer base, etc which is all transferable to any range of new ventures in growth markets.

In practice the current Qantas management needs to downgrade the relative importance of the Qantas brand to shunt people on to their new ventures. They must underinvest in the Qantas product (QF domestic is still one of the most profitable parts of the business but the fleet investments it is due to get are a small number of NBs and JQ hand-me-downs when JQ gets the 787s) in order to have the capital available for their growth plans. And their growth plans have to work. You can't easily go back.

I say all this with the experience of someone who took my flying to the competitor when the route i flew most was shunted to Jetstar. It's not a coincidence that a lot of the most loyal DJ flyers on this board are people forced to sample their product by Qantas and decided it was a better deal. In future there will be a lot more of those people.

I think there are legitimate reasons to think the unions are overplaying their hand and to think their claims are a bit much. But the core issue - and the reason it cant be resolved - is not about pay it's that they believe that Qantas should be primarily Qantas and not "The Qantas Group" and management doesn't agree. Some of that is for selfish reasons but a lot of it is because a lot of them have pride and history with the company and actually believe that Qantas's formidable safety record and reputations really is because Qantas has the best pilots, the best maintenance teams and is one of the best airlines in the world. Once you undo that - whether you need to or not - it's gone and you can't go back.

 

[medhead]

Well the username is derived by something else, ask me about it if we ever meet at an AFF Do.

That's a narrow reading of the remuneration report and payment condition. That in essence means AJ must demonstrate to have made significant performance towards the goal, to the point where they are halfway there and the business is seeing significant benefits in the balance sheet and bottom line.

And let's not forget, the things that have to be achieved are no easy task. Any CEO who hit 50% of these marks is worth their weight in currency.

In order to get the best and have them deliver the best, you have to incentivise them. This is about incentivising AJ to do what they pay him to do then something else again.

Anyway, this has been gone over ad nauseum now. If you don't like the system; you either need to buy shares to change it, or get off the pot.

Oops, sorry and sorry I didn't explain that right. The "hard" mark I've seen has been to perform (by whatever metric eg shareprice) better than the median company in a selected grouping (be that industry sector or top 50/100/200). Better than the middle (top 50 percentile) is not a major hurdle IMO. That just says turn up for work and do nothing and you'll make a big chunk of the at risk bonus.

 

[QF WP]

Firstly, I'll declare my interests - I am beneficially entitled to QF shares.

Let me start by saying that I think Alan Joyce's pay rise was outrageous and insensitive and for that he should go. Secondly I think Qantas Staff are fantastic. Having said those 2 things I don't agree with the strike or the demands.

Totally agree although I think AJ has earnt his pay over the past 2 weeks
but perhaps should not have been given (or accepted) his recent package increase. History will tell, as I'm sure his tenure in the job is less sure than the unions members.

The reality is that Qantas's future is at stake. Internationally Qantas cannot survive and thrive if it meets the demands of the Unions. In my opinion, Qantas Management should bring the Unions to a meeting and spell out the financially reallities of their situation. If the Unions are not prepared to modify their demands to fit Qantas's ability to pay, then...

One must be careful about sharing too much. As a SME, we shared from the beginning (Apr 07) the monthly headline P&L figures with our staff. That just tracked revenue and didn't show them just how much we had invested in the business and what "skin in the game" we had, so recently we began showing them headline BS figures. They quickly worked out how tenuous everybody's position was and how we hadn't earned much profit in the preceding years, although we were drawing salaries.

We also had to make sure they understood what they were seeing, misunderstood information is sometimes blown out of all proportion to the truth.

I can't see QF Management wanting to go that far with the unions.

As expressed by others, I am now trying the DJ side and will be looking to fly the majority of sectors with them, until my VA renewal date (30 August). I'll put one flight (BNE/DFW/JFK/SEA/LAX/AKL/BNE) with QF next year and continue to use JASA's to retain Gold.

QF have dis-engaged me in the whole process and dis-incentivised me trying to achieve any SC's above Gold retention, or my previously held belief that QF LTG was worth achieving first before switching my flying elsewhere.

 

[browski]

The unions do not want to see the QFi books; they'd like to see the JetStar books. Overjoyed they would be to see how Jetstar's costs have been allocated. There is NO benefit to management in this approach; it would leave them exposed to too much scrutiny. God knows what would be discovered.

But in principal, I don't think it is a good idea for a company to ask its staff if they'd take a financial haircut because the profits are no good. I mean can you ever imagine a country asking its people if they'd like a financial haircut. It just wouldn't happen..............oops....damn you Greece.

 

[amaroo]

The unions do not want to see the QFi books; they'd like to see the JetStar books. Overjoyed they would be to see how Jetstar's costs have been allocated. There is NO benefit to management in this approach; it would leave them exposed to too much scrutiny. God knows what would be discovered.

But in principal, I don't think it is a good idea for a company to ask its staff if they'd take a financial haircut because the profits are no good. I mean can you ever imagine a country asking its people if they'd like a financial haircut. It just wouldn't happen..............oops....damn you Greece.

QF employees are no different to any other worker in Australia.......turn up, do the work, go home, get paid weekly or fortnightly or monthly. Work hard enough, you'll keep your job - unless of course the business goes belly up for whatever reason.

The first financial haircut in most cases, is the door.....every organisation & Government uses this tool in the kit.

 

[Baysider]

As a ff with heaps of points accrued assiduously over theyears, my interest in current events is intense. I think the unions fight is alost cause.
Of more pertinence are answers to the following:-
. re. the profitability of QFi, can the ‘incentivised’ AJturn it around and if so, how?
. what are the ways our ff points can be reduced to 0, inthe short term (say, the next 12 months)?

My fears exactly. I lost half a million points when the unions finished off Ansett. They then blamed everyone else, and clearly said it often enough that they convinced themselves and will only learn the truth when they repeat the exercise by finishing off QANTAS. I'll be spending my FF points really soon. All J class rewards from today.

 

[Moopere]

The unions do not want to see the QFi books; they'd like to see the JetStar books. Overjoyed they would be to see how Jetstar's costs have been allocated.

Massive assumptions about questionable intra-company deals aside, I'd have to say ... look at the JQ books?? To what end? Assume what you are implying is correct and the Union funded auditors find it ... so what? Ownership/management can't allocate costs internally to suit their strategy?

In this hypothetical, after the audit, AJ turns up, hands in the air and says "you got me, we're trying to close QFi and launch RedQ in its place, we just needed to find an excuse for you guys so you'd accept it". Ok. So, now what? The unions, knowing the "truth" refuse to allow the strategy to be implemented? They, frankly, have no say, though of course they would be loud and obnoxious about it.

Further assume that JQ is being internally funded (subsidised) by redirected profits from QFi. When QFi is closed, presumably JQ will also have to close as they will no longer have access to a back-door cost offset.

 

[eastwest101]

Some interesting comments there Moopere - and you admit that there are some hypotheticals in there, but if it all did eventuate that way I would imagine that at the very least that the government or indeed the public would certainly have something to say about that and the exact wording and intent of the Qantas Sale Act Not to mention the ASX and ASIC.

As some have said - there is a perception out there about this, but will be interesting to see how things progress

 

[Moopere]

Some interesting comments there Moopere - and you admit that there are some hypotheticals in there, but if it all did eventuate that way I would imagine that at the very least that the government or indeed the public would certainly have something to say about that and the exact wording and intent of the Qantas Sale Act Not to mention the ASX and ASIC.

This would be the bit of the QSA we're referring to I suspect:

"Prohibit Qantas from conducting scheduled international air transport passenger services under a name other than: (i) its company name; or

(ii) a registered business name that includes the expression “Qantas”;"


Indeed it would be up to the lawyers from all stakeholders to interpret how much of a joint venture would contravene the above, or if _any_ stake in foreign international operations is essentially off limits to QF.

Interesting though that Jetstar seems fine in conducting international operations without triggering the above. Presumably because they are "Jetstar, a QANTAS company". One wonders then if "Red-Q a QANTAS company" would be sufficient??? I'd say it would have to be argued, from an 'intent' perspective, if the original QFi must be maintained as an operational entity or if Jetstar and/or RedQ sufficiently owned by QF and branded in a legally sensitive way (to comply with the QSA) would be sufficient?

As some have said - there is a perception out there about this, but will be interesting to see how things progress

I guess this was the intent of my post. Its interesting for us all to talk about this, but I really wonder if our views (the public) or the workforces views, in relation to any potential cross subsidisation, is relevant at all????

 

[dfcatch]

The unions do not want to see the QFi books; they'd like to see the JetStar books. Overjoyed they would be to see how Jetstar's costs have been allocated. There is NO benefit to management in this approach; it would leave them exposed to too much scrutiny. God knows what would be discovered.

But in principal, I don't think it is a good idea for a company to ask its staff if they'd take a financial haircut because the profits are no good. I mean can you ever imagine a country asking its people if they'd like a financial haircut. It just wouldn't happen..............oops....damn you Greece.

No you're right.

But "in-principle", employees in any organization can bury their heads in the sand and the result is the same:

1/ Lack of pay increase

2/ Lack of new hires

3/ Redundancies.

Money doesn't grow on trees.... "in-principle".

 

[johntoo]

Massive assumptions about questionable intra-company deals aside, I'd have to say ... look at the JQ books?? To what end? Assume what you are implying is correct and the Union funded auditors find it ... so what? Ownership/management can't allocate costs internally to suit their strategy?

In this hypothetical, after the audit, AJ turns up, hands in the air and says "you got me, we're trying to close QFi and launch RedQ in its place, we just needed to find an excuse for you guys so you'd accept it". Ok. So, now what? The unions, knowing the "truth" refuse to allow the strategy to be implemented? They, frankly, have no say, though of course they would be loud and obnoxious about it.

Further assume that JQ is being internally funded (subsidised) by redirected profits from QFi. When QFi is closed, presumably JQ will also have to close as they will no longer have access to a back-door cost offset.

\

Hang about, you guys, I have gotten the impression (from this and other forums) that Jetstar is the desired economic model for running a profitable airline.

Can someone please explain who is subsidising who and which branch of QF is the fittest to survive??

 

[serfty]

...
Can someone please explain ... which branch of QF is the fittest to survive??

Unless things change, Jetconnect (QNZ), or, goodness gracious, Jetstar Asia (JSA) and/or Valuair (VLU).

None of these are based in Oz!

 

[Mwenenzi]

Interesting article with Bill Kelty (ATCU secretary 1983-2000) in today’s (05-11-11) Fin Review (page 4). Somehow I think the TWU, LAME's & the highly paid international pilots are in denial of reality. Passengers who vote with credit cards are not.

I used to love bargain. He said. “You could kick [companies] to death sometimes. It does teach you accountability, real accountability because if you kick to death your own employer, there are no jobs, for your members. If you are silly you pay the price
Unions should not think they can enrich employees by asking to run the company, he said

<snip>

“We {ALP Unions} don’t have the quality of leadership we had in the 1980s”

OT: these QF IR threads have a significant number of newbie posters

 

[medhead]

\

Hang about, you guys, I have gotten the impression (from this and other forums) that Jetstar is the desired economic model for running a profitable airline.

Can someone please explain who is subsidising who and which branch of QF is the fittest to survive??

In a GFC jetstar goes well. But then QF profit significantly out grew jetstar in the latest results and jetstar contribution to revenue was small compared to QF. IMO, there is significantly more upside in QF than jetstar.

As for LCC being the preferred model, remember qantas Asia is going to be a premium airline.

 

[VHOEJ]

Borghetti is rubbing his hands together - but remember, DJ's international arm was also losing a lot of money. He made decisions to turn it around and now it is making money. Joyce is trying to do the same at QF - the unions at Virgin didn't oppose JB's plans, but seem hell bent on preventing Joyce's plan.

 

[amaroo]

Interesting article with Bill Kelty (ATCU secretary 1983-2000) in today’s (05-11-11) Fin Review (page 4). Somehow I think the TWU, LAME's & the highly paid international pilots are in denial of reality. Passengers who vote with credit cards are not.


OT: these QF IR threads have a significant number of newbie posters

I read that article & thought he was spot on.

 

[VHOEJ]

Qantas resume negotiations with engineers

Interesting - this whole notion that stopping doing things is 'unsafe' is a furfy. The reliablility of aircraft these days are so good that they don't need to be met at every flight. They can be checked at nights easily.

No other airline in the world needs all these engineers to do that same job - they have all moved with the times. Does that mean they are all unsafe?

Me thinks they are getting nowhere in the negotiations if that is thier attitude.