How would you run Qantas?

[The Rok]

I think QF actually have a very long term solid growth strategy, and that's the reason for not getting rid if Sir Alan. He is a major part of it.

For 4 or 5 years, slash costs, routes, benefits, staff and anything else that us a burden on the airline. Get rid f it's legacy overheads. Who better to do that then Sir Alan.

Then, when you think you have cut all you can cut, and received govt backing of your debt, and the public can take no more, you do a shake up, as planned when you hired him. Why else would they hire him on such a costly contract if it was not going to be a turbulent ride?

You appoint a new CEO, a new senior management team, your new planes are arriving, your debt cost is lower, legacy staff on ridiculous salaries are all gone, and your product and destinations are a basic as hell, the only way to go is up.

You start real enhancements, costed and funded years earlier, you start new routes on new planes, planned years earlier, and right about then VA will be running out if steam and shareholder will power to keep losing money, QF will once again thrive..

It all sounds so outrageous it is true. I think the board know exactly what they are doing and are pulling it off exactly as per the plan.

Give it 3 years and the sentiment for quants will of done a complete 360....

 

[moa999]

The Rok,
I agree with you that AJ was appointed because the Board decided that the CEO need to be someone who could substantially reduce QF mainline cost base.
I think the economic conditions and competitive response that have occured have proven this right.

I don't believe AJ has cut enough however, and this is why VA, and other international competitors are eating it for breakfast.

As for the Jetstar's
Australia - Great move - first mover advantage, very profitable, lots of growth.
Asia (Singapore) - Great move - first mover advantage, got the politics right with initial Temasak investment, however Tiger and Scoot are catching up. Ultimately is going to struggle against Air Asia operating out of the much lower cost Malaysia
Pacific (Vietnam) - Interesting move in country with controlled fares. At least got into bed with the government. To date has been poor, but have a good position and could get great growth if fares are deregulated
Japan - Great move (initially) - first mover advantage, lots of growth. Lots of fat in ANA and JAL to compete against. Good local partners. Some current issues with 2nd base but expect this will be resolved.
Hong Kong - To date disaster. Seemingly got a good partner with China state owned China Eastern, but has obviously been out-politicked by Cathay - almost two years since initial announcement. That said great opportunity if it gets its approval

 

[medhead]

The major problem I have is the suggestion that dropping below 65% is a betrayal of customer loyalty. Maintaining the line in the sand is hurting them such that they have to cut service levels while still demanding a significant premium in airlines. But charging customers a price premium with no greater level of service doesn't betray customer loyalty? Pull the other one it plays jingle bells.


The business reporting I read at the time suggested that they had to partner with the government in Vietnam. Mandatory.

 

[Isochronous]

I just hope they don't cut JNB services. If they have to, when the new A330s are here maybe they can run the A330 PER-JNB and have everyone hub there, but SYD-JNB is making money and should otherwise stay!

 

[Awesom Andy]

Asia (Singapore) - Great move - first mover advantage, got the politics right with initial Temasak investment, however Tiger and Scoot are catching up. Ultimately is going to struggle against Air Asia operating out of the much lower cost Malaysia

Seems more like a first mover disadvantage to me. Spent the money to establish the market so others can come in and take market share with lower prices/costs.

 

[katiebell]

Yet I haven't seen a single person here quote how much extra they'd be willing to pay for all the extra services/benefits that are being asked (though lots of people complain about how expensive QF is...)

So either QF has to find something else to cut (suggestions welcome), or prices need to rise. How much extra are you prepared to pay?

QF product is not just food, drink, luggage etc but flight schedule incl. dep & arr times, frequency, route, direct/commecting & ease of connection etc. These are not necessarily costs over and above other airlines.

I do pay more to fly when I want to dep/arr route etc

 

[Pushka]

QF product is not just food, drink, luggage etc but flight schedule incl. dep & arr times, frequency, route, direct/commecting & ease of connection etc. These are not necessarily costs over and above other airlines.

I do pay more to fly when I want to dep/arr route etc

Qantas uses food, full food service and Neil Perry as a point of differentiation between them and Virgin. So it is very much about a food promise. The delivery is sadly lacking.

 

[VHOEJ]

I just hope they don't cut JNB services. If they have to, when the new A330s are here maybe they can run the A330 PER-JNB and have everyone hub there, but SYD-JNB is making money and should otherwise stay!

They might not have a choice. If the restrictions on the route and the 'arrangement' with Sth African isn't maintained and the powers that be restrict it, then it wouldn't surprise me. If they can't do it daily or at least 6 days a week, it isn't worth it.