Joyce - 'We Could Go Under'

[Pleb Status]

I think Joyce is essentially correct on one major matter here, the Qantas sales act has to go or be amended significantly.

The QF sale act allows QF to be 49% foreign owned, with 25% held by a single foreign airline. All other Australian domestic airlines can be 100% foreign owned. This is more liberal than a lot of other countries.

For example, in the US, the maximum foreign ownership of a US based airline is 25% (total). Therefore, the QF sale act is not as restrictive as legislation in the US (for all their airlines, not just their legacy airlines).

QF has to maintain 51% Australian ownership to maintain flag carrier status. So what does AJ think he is really going to achieve anyway? What are the advantages to Australia (not QF) in allowing our national carrier to be sold off to overseas interests? This has worked so well for our other iconic companies which are now foreign owned.

AJ is just scrambling to find excuses for his mismanagement of QF. The only people who still support AJ are the QF board, and that is because it was them who appointed him! With the share price in the toilet, I cannot see shareholders being too happy with him. He had to ground the airline due to staff unrest, so they are not happy with him. QF is losing market share (particularly at QFi), so customers are not happy with him.

How much more damage does AJ have to do before he is shown the door? Who does his performance appraisal? I would like to see the metrics he is measured against.

 

[Moopere]

Well be at least a bit fair. The AGM was held when? About 9 months ago? Joyce and the board seemed to get pretty universal approval from shareholders large and small, much to the chagrin of the foamy mouthed union leaders at the time. I wouldn't use USA airlines as a guide of how things should be done either ... they've all called chapter 11 bankruptcy in the last few years. "Our" national carrier is, in actual fact, the shareholders carrier. If we want it to be 'ours' again then we need to lobby the Government to buy it back ... and with the share pricing the way it is, perhaps now is a good time???

If you would like to see the CEO's KPI's I'm sure theres a good read in the AGM minutes, or elsewhere, in the public domain.

Honestly, QFF is not winning any votes with me, I'm rarely travelling with them any more, so no fan boy here, but lets not get too carried away with the flag waving and national indignation.

 

[JohnK]

....airline could 'go under'....

I find these sort of statements extremely disturbing....

 

[drron]

I just take this statement for what it is-an attempt to put political pressure on our pollies to ditch the QF Sale act.
Just as Winston Churchill said that you cant underestimate the intelligence of the electorate IMHO the same applies to politicians.

 

[Pleb Status]

Well be at least a bit fair. The AGM was held when? About 9 months ago? Joyce and the board seemed to get pretty universal approval from shareholders large and small, much to the chagrin of the foamy mouthed union leaders at the time. I wouldn't use USA airlines as a guide of how things should be done either ... they've all called chapter 11 bankruptcy in the last few years. "Our" national carrier is, in actual fact, the shareholders carrier. If we want it to be 'ours' again then we need to lobby the Government to buy it back ... and with the share pricing the way it is, perhaps now is a good time???

A lot of things have changed since the last AGM. The share price is more than 25% lower (and even that is artificially high due to takeover talk), the CEO grounded the airline with no notice and QF now makes almost no profit at all. Also, the CEO is now saying the company could go bankrupt.

The shareholders bought shares in QF based on the terms of QF Sale Act. They now want the act changed by the Government. The shareholders need to clearly demonstrate how Australia will be better off changing an Act of Parliament. This is different to most other companies as they do not have legislated ownership laws.

 

[codash1099]

Keep in mind that there is a forthcoming split in QF.

While I don't often read "Plane Talking" and nor do I believe much of what I read there, but the suggestion that the newly separated QFi could be put into receivership warrants some thought.

 

[whatmeworry]

The QF sale act allows QF to be 49% foreign owned, with 25% held by a single foreign airline. All other Australian domestic airlines can be 100% foreign owned. This is more liberal than a lot of other countries.

So in theory JQ dom and QFd could be sold off in entirety? I guess it has to do with the wording of what constituents QF, but with the separation of QF into QFi and QFd this could prove interesting. I guess this means JQ could be sold off?

 

[Moopere]

Keep in mind that there is a forthcoming split in QF.

While I don't often read "Plane Talking" and nor do I believe much of what I read there, but the suggestion that the newly separated QFi could be put into receivership warrants some thought.

Yes, I've pondered this too. I wonder if the split is a strategy to force the governments hand re: the QF Sale Act? What would the legal standpoint be if QFi essentially went bankrupt? could the QF Sale Act be interpreted to force remaining QF businesses to come to the rescue? Could QFi simply be closed as unprofitable? Would the Government allow it to be closed? Brinkmanship aside, would QF allow QFi to be closed? They well know the value of an international business to the profitable QFF arm of the business and would financially risk a _lot_ if QFi was no longer part of the mix.

 

[medhead]

FWIW i think those elements of Qantas sale act that restrict it's ownership over above that which applies to any other Australian airline should go. I also think it will make bugger all difference to the performance of current Qantas management.

Funny then that the current government tried to remove some of those restrictions but was blocked by the opposition.


Sent from the Throne

 

[oz_mark]

Last year the unions suggested that I should book my end of year holiday on another airline.

Seems the Qantas CEO is suggesting I look elsewhere this year....

 

[Deleted member]

Well I hope it's still flying in 12 months because we are already booked for the BR lunch at Noma
I really don't fancy losing all those points.

 

[Simo]

Must be some very interesting words being used in the board room.

I just wonder if AJ and other board members are cashing in on extra shares to boost their portfolio's.

 

[Deleted member]

Don't you mean " their " portfolio?

 

[amaroo]

Squeaky wheel gets the oil

---------------------------------------------------------------------
The Nationals senator Barnaby Joyce is backing Qantas. He does not support changing the act but believes investment by state-owned enterprises needs to be checked.
''It's not a case of being xenophobic; it's a case of recognising reality,'' he told the Herald.
----------------------------------------------------------------------

These blokes will be in power soon.

Seems the strategy is winning more friends!

Hockey suggests lifting Qantas restrictions

 

[drron]

Funny then that the current government tried to remove some of those restrictions but was blocked by the opposition.


Sent from the Throne

When did this occur.Certainly the government did propose changes last year but by no means were they an easing of conditions.here is Geoff Dixon's take on it-
I

believe the Qantas Sale Act must be interpreted in the interests of Qantas's long-term survival in what is a very brutal industry. Making the act more inflexible would be a major backwards step.
For instance, Qantas cannot walk away from potential mergers in the future if a suitable opportunity arose for the management and board to consider.
Such an opportunity would require a more mature response than we saw in Australia in 2008 when there was an opportunity for Qantas to merge as a major partner with British Airways.
That this did not happen was a lost opportunity for Qantas and for Australia.


Read more: Blistering winds of competition beneath Qantas's strained wings

Also it is his view that if Qantas and Australian Airlines had not beem merged in the 90s QF may have gone under then-
■The

merger of Qantas and Australian Airlines in the early '90s and the subsequent privatisation of Qantas provided the scale and domestic franchise for Qantas's aggressive expansion and profitability. (Without the merger, Qantas could not have been privatised and could easily have gone the way of Pan Am.)


Read more: Blistering winds of competition beneath Qantas's strained wings

 

[maninblack]

The QF sale act allows QF to be 49% foreign owned, with 25% held by a single foreign airline. All other Australian domestic airlines can be 100% foreign owned. This is more liberal than a lot of other countries.

For example, in the US, the maximum foreign ownership of a US based airline is 25% (total). Therefore, the QF sale act is not as restrictive as legislation in the US (for all their airlines, not just their legacy airlines).

QF has to maintain 51% Australian ownership to maintain flag carrier status. So what does AJ think he is really going to achieve anyway? What are the advantages to Australia (not QF) in allowing our national carrier to be sold off to overseas interests? This has worked so well for our other iconic companies which are now foreign owned.

The breadth of Part 3 of the Qantas Sales Act extends far beyond the limited number of points you mention above. Take a look at it if interested. Qantas Sale Act 1992

 

[Pleb Status]

The breadth of Part 3 of the Qantas Sales Act extends far beyond the limited number of points you mention above. Take a look at it if interested. Qantas Sale Act 1992

I acknowledge that but I was summarising the headline points. Thanks for the link though, I have never read the actual legislation before.

I note that there does not appear to be anything limiting a Virgin style split, as the Act appears to require only international services to be operated under the QANTAS name (clause 7.1(f)).

 

[Globetrotter]

Has anyone heard any more news about the possible collapse of QFi? I'm not sure how valid this is but a colleague of mine caught up with their friends recently who all work for QFi. Apparently they're quite worried about the future of QFi and of course their jobs. Internally, most seem to disapprove of the Emirates alliance saying that it won't work but the real concern is that Emirate will undercut QF fares to ME/Europe which will in turn have a major impact on QFi's revenue. This combined with not operating to UK/Europe via Asia on QF metal doesn't leave any room to move (DXB = all eggs in one basket situation). QFi staff predict QFi will collapse within 6 months from when the EK alliance commences. I'm sure there is more to this but I thought I'd share what I had heard and see if anyone has any further insight.

Also Re QF FF Points. I'm curious to know for those who are concerned about the possible collapse of QFi if you are...

1. Redeeming your points now
2. If so and it's for travel later this year, are you choosing partner airlines or QFi metal

Cheers, Globetrotter

 

[serfty]

... Apparently they're quite worried about the future of QFi and of course their jobs. ...

This ^

It is difficult to be objective in such a situation. As a result there is often some level of diminished credibility to be observed from the POV of a bystander.

Part of that is the 6 Months?? I can imagine a concerned group of QFi employees getting together feeding off tid bits of partial information/rumors, all concurring, not letting any fact or thoughts that indicates that it may as not be as bad as they think getting in the way of group analysis

As for the QFF scheme, that would survive no matter what, and would probably increase profits without the burden of an airline.

 

[haydensydney]

I doubt most QFi employees would be privvy to such controversial information and if they were, I doubt it would be dinner table conversation fodder. It sounds like simple gossip between colleagues and therefore should be taken as a grain of salt.