How would you run Qantas?

[Isochronous]

First class is a loss leader. It's yield is poor - most people who travel in first do not pay for the privilege - well certainly not the rack rates. It is mostly kept on Qantas as a carrot for CEOs etc of big corporate accounts - Dont forget that most airlines have done away with first class - something they would not have done if it was a money spinner.

But F also increases the value of QFF - so arguably the reduction in F services has devalued QFF.

 

[preparefortakeoff]

I worked for QF for over 10 years and worked closely with senior and executive management so my view may differ a bit from some others here, but let's see

1. Do a MAJOR shake up of the executive level employees. I am not talking about the board - the board have the vision but it's the executive level employees that are not competent enough to deliver (not all of them, but a lot of them). This should be slashed by at least 1/3 (realistically probably about 1/2 need to go). It should also be mandatory to have an exec level MBA as a pre-requisite for senior roles as most have no clue (seriously!).
2. Renegotiate awards and EBAs hard when they are next due for renewal, there are many outdated clauses in there that are extremely costly and work rules that are inefficient. Put all new senior professional level employees on individual contracts.
3. Provide incentives and rewards for staff that provide good service and actively manage those who do not (the first part currently happens, the second part does not)
4. Offer a mass voluntary redundancy program to technical crew (pilots) and engineers - get the negative and unproductive ones out (there are a lot of them!)
5. Change the incentive programs from short term focussed to long term focussed, which will shift the mindset of all employees and create longevity for the company rather than yearly slash and grabs.
6. As a more drastic measure cut loose the international airline. This is the part of the business that bleeds the most and is by far the most inefficient. This will not happen though as the mindset of executive management is that the international airline is the "jewel in the crown" ... newsflash people.. it's NOT.
7. Leverage the power of the frequent flyer program - in my view this is actually the Qantas jewel in the crown but they do not see it (refer point 6) - offer stronger incentives for FFs to travel in premium cabins (paid fares) in order to increase yield - get them addicted to premium cabins (we all know that once you fly F you don't ever want to fly in Y again!).


What won't do anything:
1. Cutting benefits for staff - these have a nil cost to QF and seriously for the majority of staff this is their only benefit so getting rid of it will have a serious negative impact and won't be balanced by any substantial cost savings
2. Employing workers offshore on cheaper contracts - whilst this will generate cost savings the negative brand impact will far offset these savings and will disengage the Australian public, who, let's face it, want to keep QF Australian. They should work on making their current and future workers more effective and efficient.

In my view the biggest strategic mistake QF made was letting go of John Borghetti. This was a critical tactical error. Now JB is the head of the competition and has taken with him 25 years of QF expertise. He knows QF better than QF does, and he's making this work for him. More power to him I say.

P4TO

 

[lae]

IMHO the issue with Qantas is very fundamental.

Qantas operates from a cost base substantially higher than its major competitors on the international level so obviously in an effort to remain competitive margins must suffer. As an Australian based business it would be difficult to lower this cost base given the high wages and conditions workers across all levels of industry enjoy and that of course is part of the cost we must bear to live in this great country of ours.

(You can't have your cake and it it, If you want to enjoy the benefits of the lower costs enjoyed in many other parts of the world just try living in some of those countries for time!)

The other issue is on a domestic level, despite Mr Borghetti's insistence that Qantas should not enjoy any preferential Government treatment, his company Virgin is majority owned by foreign airlines who are either overseas Government owned or have substantial Government ownership such as Air New Zealand.
To my mind this places him in the preferential position and allows him to peruse his personal vendetta against Qantas which is always a dangerous game in the commercial world.


Forget about wanting to be CEO of Qantas, I want the top job and as Prime Minister and I would inject a substantial amount of money into our national flag carrier to enable them to implement what is necessary to place them in a competitive position in both the domestic and international marketplace.

Given the support to the automotive industry over the years by Governments on both sides of politics surely Qantas with over 33,000 employees with a truly Global profile and identity as a national icon and is stategicly for too important to let fall into overseas control.

Finally i will hope off my soap bad and wish all my fellow AFF members a great christmas and safe flying for 2014.

 

[cmon0005]

6. As a more drastic measure cut loose the international airline. This is the part of the business that bleeds the most and is by far the most inefficient. This will not happen though as the mindset of executive management is that the international airline is the "jewel in the crown" ... newsflash people.. it's NOT.

I'm not speaking for everyone on here, but for me and many the main reason we fly QF domestically and aspire to high FF status year after year is because QF International exists, take that away and all you're left with is a ok to pretty good domestic airline, access to basic dom lounges (ie. nothing special). So it wouldn't be worth attaining Platinum or Platinum one if it were only a dom airline.

Also in my view International is the crown jewel its just that current management have made some bad decisions re the international division (read:asia). There are many of us that want to fly QF Internationally however what ends up stopping us is: not flying to the destinations people want to travel, where they don't fly not having good enough options available as alternatives like having a proper Oneworld codeshare. In Asia all we get at the moment is Jetstar Asia when booking through QF.com.
In the end it all becomes too hard for us the consumer and we end up booking with other airlines. Recently I booked directly with CX and MH for trips to and around asia as I had no other choice.

Secondly if you had crown jewels you would display it in a nice glass cabinet for all to see, in the context of QF the crown jewels are displayed in hessian bag, (ie. QF A330's with terrible cabins, yes I know this is getting fixed but it's years too late, not having 787's now...etc) all of these things are showing of M'ment's bad decision and only thinking short term.

 

[rotor]

Not sure why people are attacking staff benefits. All businesses have them - banks give out cheap loans, Google has free food and other stuff (Master FM just had an interview at their Sydney office and was rather taken with the environment). Many people on this board would travel in J when on company business, so why can't QF staff. I get that people want more upgrades etc but I think that is a different issue and probably a strategic decision on Qantas' part which has nothing to do with staff travelling in F or J.

I work for a very large company and none of that rings true - only if you are *very* senior. Google is the exception. Whether it is the right approach to keep your staff happy is another story, but if you're in financial difficulty it is often the staff that get the raw end of the stick - NOT customers.

 

[Hvr]

I worked for QF for over 10 years and worked closely with senior and executive management so my view may differ a bit from some others here, but let's see


<snip>

4. Offer a mass voluntary redundancy program to technical crew (pilots) and engineers - get the negative and unproductive ones out (there are a lot of them!)
<snip>

The problem with mass redundancies is that the negative and unproductive people won't leave because often they know they're useless and would never be employed elsewhere.

The good people will run for the money and work elsewhere using the skills they have developed whilst working.

That there are apparently so many poor people is an indictment on their managers. They also need to be told to lift their game and supported to do their job and then deal with their poor performers. If they cannot do the job for which they're paid a lot of money, then they need to be dismissed, not rewarded with a redundancy bonus.

 

[Melburnian1]

Hvr, you make an important point about the 'bad' ones staying - this has been true in some organisations that I know of in other fields - but surely creative HR managers must have some solutions for that conundrum.

 

[maninblack]

I'm not speaking for everyone on here, but for me and many the main reason we fly QF domestically and aspire to high FF status year after year is because QF International exists, take that away and all you're left with is a ok to pretty good domestic airline, access to basic dom lounges (ie. nothing special). So it wouldn't be worth attaining Platinum or Platinum one if it were only a dom airline.

Also in my view International is the crown jewel its just that current management have made some bad decisions re the international division

I used to think I wanted to fly Qantas internationally but as a Melbourne based person this is simply impractical, inefficient and expensive. Over time I discovered that I was wasting my time and money and guess what, the QF product is really not all that good anyway. I have never had a decent nights sleep on a Skybed, I don't really care all that much about Australian based lounges, it's when I'm overseas that they matter and Qantas staff are not what they once were.

So I'm no longer QF WP and so what, I've picked up the equivalent elsewhere and I only fly in J (or sometimes F) so the added status benefits are minimal to me anyway. The many hours I save not going through Sydney and the many thousands of dollars I save are worth a great deal more than QF status or the warm and fuzzy feeling one once got by being a loyal Qantas customer.

I don't fly JQ unless there is no other choice so they can throw that one in the bin for my purposes. The whole EK/Dubai thing was pretty much the last straw for me. If I never stepped on a Qantas international aircraft again that would be a shame but I no longer really care all that much. I cannot see any jewel or anything that sparkles at all at QF. I think that an increasing number of people are like me and this is where some of QF's problems lie.

I've "lost that loving feeling"

 

[Happy Trails]

I've "lost that loving feeling"

That's righteous brother!

 

[Jacques Vert]

In the past I spent a lot of time travelling in 36 seat Dash 8's - with only a single FA, and I cannot recall anything other exemplary service on these flights. Nobody to gossip with, no concerns about "showing up" colleagues, so free to serve customers as seen fit. Now some of that may be due to QF Link management, but I can't help but think absence of peers is also a factor.

Agree the service of the 36 seat Dash is consistently excellent.

 

[Flying mermaid]

I work for a very large company and none of that rings true - only if you are *very* senior. Google is the exception. Whether it is the right approach to keep your staff happy is another story, but if you're in financial difficulty it is often the staff that get the raw end of the stick - NOT customers.

No doubt your experience is more current than mine - most of the people I know are retired..... However is it true that staff who work in retail e.g. David Jones etc no longer get staff discounts? There always used to be staff perks of one sort or another....No doubt I am showing my age. Master FM has an offer to work at Google in California - the offer is amazing, but there are a number of IT companies in Australia that really look after their staff as well. E.g. Atlassian. I still think that the lack of upgrade opportunities on Qantas planes has a lot more to do with Qantas' policy than staff gobbling up all the seats....Not that I am all that enchanted with Qantas at the moment - after flying with them for 40years I am tentatively dipping my toes in other waters.

 

[marki]

Ouch this hurts even me not sure if AJ will take notice.:?:

Re:
I've "lost that loving feeling"

 

[cmdwedge]

My Government department avoids flying staff through the UAE if possible. Unfortunately this means flying CX to Europe instead of QF. I love CX but I would much rather fly the national carrier. Maybe it's impossible now, but dropping the UAE as a hub would be helpful.

I'd also like to see Government policy change - rather than using the cheapest possible fare always, instead, all flights should default to the Australian carrier, unless the price differential exceeds 15%. Apply to all Federal and State Governments. The 15% number will force QF to stay competitive, but we're spending taxpayer funds on Australian services instead of overseas carriers and shareholders.

 

[SeatBackForward]

The problem with mass redundancies is that the negative and unproductive people won't leave because often they know they're useless and would never be employed elsewhere.

The good people will run for the money and work elsewhere using the skills they have developed whilst working.

That there are apparently so many poor people is an indictment on their managers. They also need to be told to lift their game and supported to do their job and then deal with their poor performers. If they cannot do the job for which they're paid a lot of money, then they need to be dismissed, not rewarded with a redundancy bonus.

How does that expression go?:

What if we train them and they leave?
What if we don't train them, and they stay!

 

[SeatBackForward]

7. Leverage the power of the frequent flyer program - in my view this is actually the Qantas jewel in the crown but they do not see it (refer point 6) - offer stronger incentives for FFs to travel in premium cabins (paid fares) in order to increase yield - get them addicted to premium cabins (we all know that once you fly F you don't ever want to fly in Y again!).

The jewel in the crown of an airline is its quasi-financial product?

 

[Oxy]

I think the QF Groups implementation of the 787's speaks volumes.

Handing them to JQ, where as pointed out most pax don't know or care what aircraft their traveling on, whilst receiving Jetstar hand me down's, is not a good look.
Compare that with an opportunity for an exceptional product launch of the 787. Imagine the potential excitement had QF gone out on a limb, and announced say PER-NRT, setting up a new codeshare/partnership with JL. You could then have one stop to several N.A., europe and asian destinations, many on the 787 the whole way. How many people here would go out of their way to use this flight!
I don't know the ins and outs of airline management, but QF's trend is on the downward slope, and needs some groundbreaking changes and ideas to arrest this.

 

[MEL_Traveller]

My Government department avoids flying staff through the UAE if possible. Unfortunately this means flying CX to Europe instead of QF. I love CX but I would much rather fly the national carrier. Maybe it's impossible now, but dropping the UAE as a hub would be helpful.

I'd also like to see Government policy change - rather than using the cheapest possible fare always, instead, all flights should default to the Australian carrier, unless the price differential exceeds 15%. Apply to all Federal and State Governments. The 15% number will force QF to stay competitive, but we're spending taxpayer funds on Australian services instead of overseas carriers and shareholders.

I would rather that 15% extra (to fly QFi) goes to hospitals, schools and other public services than the pay packets of Qantas board members and executive.

 

[AnonymousCoward]

I think the QF Groups implementation of the 787's speaks volumes.

Handing them to JQ, where as pointed out most pax don't know or care what aircraft their traveling on, whilst receiving Jetstar hand me down's, is not a good look.

Doesn't Jetstar work on low costs?

How many people here would go out of their way to use this flight!

Not enough to fill 300 seats/day. And even if there were, one route isn't going to save QFi

 

[Awesom Andy]

Not enough to fill 300 seats/day. And even if there were, one route isn't going to save QFi

Despite all the hype about the 787, if a route is not profitable for an A330, I think it would be marginal at best for a 787 (unless you really needed that extra range).

 

[BD1959]

I'd be doing all I could to avoid such headlines and commentary:

Moody's downgrades Qantas to junk status

"Qantas suffered further ignominy on Thursday when Moody's downgraded the airline two notches to Ba2, from Baa3, with a negative outlook. A two-notch downgrade is uncommon."

"Moody's senior vice-president Ian Lewis said the downgrade reflected a worse than expected impact on Qantas' credit profile from a sharp deterioration in its core domestic business."

​

I've worked on more than one IT Project in the past where the ethos for both the project and general business has been to keep the Customer out of the newspapers from a negative press perspective.

Regards,

BD