Qantas flags record profit.

[justinbrett]

As of the first, that’s nonsense of course. Doug Parker is Doug Parker with his legacy and he’ll bring the same to any airlines he gets his mitts on.

Of course Doug Parker is Doug Parker. But whether he is a demon or a competent professional with 35 years in the airline industry - that's the question. As someone who flew AA a lot both before and after he was appointed, there's no doubt in my mind it's a better airline now. AA (and most US carriers) were dire in the early 2000s.

VA (or any airline) would be lucky to have someone of that calibre on their board. If nothing else, he might at least negotiate a merger with Rex and/or Bonza!

One positive from this is that he for sure won’t be on the board of VA after it floats.

No, but I hear AJ is available

I completely and utterly disagree.

Parker made cuts so fast and so deep that they ended up apologizing to their regular flyers for their poor service "standards" such as meals in First Class.

A man strait out of AJ's mould - I fear for Qantas if Parker has any real say in matters.

Just go over to FlyerTalk and check the AA forum out for posts during the period USair took over AA from inside like a parasite.

Was not my experience. You couldn't even get a bottle of water on AA for free in Y in the early 2000s. ACs didn't have complimentary alcohol (except the oneworld vouchers). Aircraft were 30 years old, no personal IFE, lounges not much newer. It was terrible.

 

[serfty]

Was not my experience. You couldn't even get a bottle of water on AA for free in Y in the early 2000s. ACs didn't have complimentary alcohol (except the oneworld vouchers). Aircraft were 30 years old, no personal IFE, lounges not much newer. It was terrible.

Your timing is a little out, before AA was absorbed internally both complimentary drink and drink vouchers were available at A/C for Qantas type PAX.

Parker squeezed in two additional rows of seats in their 737's installing lavatories where some could not turn around.

I could go on, but I'll leave it there ...

 

[justinbrett]

Your timing is a little out, before AA was absorbed internally both complimentary drink and drink vouchers were available at A/C for Qantas type PAX.

Parker squeezed in two additional rows of seats in their 737's installing lavatories where some could not turn around.

I could go on, but I'll leave it there ...

Sure, I'm not attributing anything to him specifically, I'm just saying as a passenger, my personal experience is that AA is a much better airline now than it was back in the early 2000s.

Maybe it was the CEO before him that did the heavy lifting, but it's at least not back to the dire position it was 20 years ago.

I still prefer flying AA to QF.

 

[dajop]

Agree that AA is significantly improved vs what it was around 10-15 years ago.

Agree that those improvements were executed under Doug Parker’s leadership.

However, AA was just following the pacesetter in the market, Delta. They had no choice but to make the improvements.

What it all means for Qantas? Probably not a lot in terms of major changes. But it does bring someone to their board that has experience in profitably running a large airline. And not just any airline, but one of their key partners.

 

[RooFlyer]

No, but I hear AJ is available

Now, I'm worried.

 

[Quickstatus]

having him on the board should foster closer relations between AA and QF.

That said, he’s neither the chairman nor the CEO. Just a board member. Not exactly veto powers.

Not sure how he will be able to foster as he exited AA. (Other than the networks he brings)
....

 

[justinbrett]

Not sure how he will be able to foster as he exited AA. (Other than the networks he brings)
....

That's how.

That's business 101. He knows people. He knows AA inside and out, and all the people who run it.

 

[Quickstatus]

He knows AA inside and out,

Sure but without board/executive power, influence can only do so much - assuming the 2 boards actually want a closer relationship.

Interesting to see that the new Chairman of AA used to be the chief bean counter of Boeing

 

[justinbrett]

Sure but without board/executive power, influence can only do so much - assuming the 2 boards actually want a closer relationship.

They already have a pretty close relationship. I understand AJ and DP are pretty good mates already from their time as respective CEOs - I don't see any reason why the next set won't be either; especially as Vanessa Hudson is the former QF VP for the Americas, she would have a lot of contacts and be well known in AA management.

There's no international market more important to QF than the USA. (Same applies to NZ)

 

[Quickstatus]

AJ and DP are pretty good mates already from their time as respective CEOs

Yes DP got an invite to the 100th beanfest.
However, I don't see a reason why they would or would not. Often a board/executive renewal results in a new heading change notwithstanding the influence that DP may bring to the benefit of QF.
....

With this record profit, Will QF follow 2 other major airlines who operate into/out of AU by paying staff hefty bonuses?
EK 6 months
SQ 8 months

I hear crickets....

 

[Himeno]

Agree that AA is significantly improved vs what it was around 10-15 years ago.

Agree that those improvements were executed under Doug Parker’s leadership.

However, AA was just following the pacesetter in the market, Delta. They had no choice but to make the improvements.

What it all means for Qantas? Probably not a lot in terms of major changes. But it does bring someone to their board that has experience in profitably running a large airline. And not just any airline, but one of their key partners.

I'm not sure Parker can get all the "credit" for improvements to AA. A lot of the improvements people have been crediting to Parker were started by his predecessor Tom Horton during his period as AA CEO in 2011-2014.

 

[justinbrett]

I'm not sure Parker can get all the "credit" for improvements to AA. A lot of the improvements people have been crediting to Parker were started by his predecessor Tom Horton during his period as AA CEO in 2011-2014.

2011-2013 actually, and his entire time as CEO was when AA was in Chapter 11 bankruptcy which ended with AA becoming the financially minor partner in the merger with the smaller airline US Airways - and why it was DP who continued on as CEO of the new company, not Tom.

Not to say it was Tom's fault, he was appointed the day they filed Chapter 11 - but it was hardly a rosy time for the airline and it was really (IMO) the merger that saved them. They were done for otherwise.

With this record profit, Will QF follow 2 other major airlines who operate into/out of AU by paying staff hefty bonuses?
EK 6 months
SQ 8 months

I hear crickets....

Well, QF did give some bonuses last year, they may do so again. The two examples you give are both state owned airlines - SQ got 19 billion relief during Covid, EK runs on oil money. I'd rather see QF pay off its Covid debt before splashing money around.

 

[Himeno]

2011-2013 actually, and his entire time as CEO was when AA was in Chapter 11 bankruptcy which ended with AA becoming the financially minor partner in the merger with the smaller airline US Airways - and why it was DP who continued on as CEO of the new company, not Tom.

Not to say it was Tom's fault, he was appointed the day they filed Chapter 11 - but it was hardly a rosy time for the airline and it was really (IMO) the merger that saved them. They were done for otherwise.

AA didn't have any financial problems which caused the chapter 11. They did it because everyone else already had and they were operating at a disadvantage. The US Air take over wasn't needed to "save" AA, it was opportunistic, and AMR still got the large part of the combined company. US only got 28% of the combined AAG.
Tom is also the one who ordered the then largest aircraft order in history, with 460 737 and A320s to replace the AA narrow body fleet.

Horton was CEO until Dec 2013 when the merger closed, then stayed as chairman until mid 2014.
Again, Parker isn't the one who deserves all the credit. When he started as AA CEO, everyone was worried that he would do to AA what he did to US after the America West take over. Parker just finished what Horton started.

 

[justinbrett]

AA didn't have any financial problems which caused the chapter 11. They did it because everyone else already had and they were operating at a disadvantage. The US Air take over wasn't needed to "save" AA, it was opportunistic, and AMR still got the large part of the combined company. US only got 28% of the combined AAG.
Tom is also the one who ordered the then largest aircraft order in history, with 460 737 and A320s to replace the AA narrow body fleet.

Horton was CEO until Dec 2013 when the merger closed, then stayed as chairman until mid 2014.
Again, Parker isn't the one who deserves all the credit. When he started as AA CEO, everyone was worried that he would do to AA what he did to US after the America West take over. Parker just finished what Horton started.

To clarify what I meant by AA being the minor partner - not quoting stock distributions, but it was AA that was absorbed into US, then changed their name to AA; it wasn't AA absorbing US as you might expect by the difference in scales. I believe the term is a reverse merger.

AA had plenty of financial problems, as did most American airlines, as a result of 9/11 and then the 2008 GFC.

I'm not saying Parker is the only one who deserves credit, just highlighting that the time that TH was CEO was not a particularly rosy time - he was literally appointed to save AA, and in the end he did so via the merger. It was a pretty short tenure, even if you include the subsequent chairman time.

 

[jpp42]

To clarify what I meant by AA being the minor partner - not quoting stock distributions, but it was AA that was absorbed into US, then changed their name to AA; it wasn't AA absorbing US as you might expect by the difference in scales. I believe the term is a reverse merger.

This is not correct. In terms of stock ownership - which is what *matters*, it definitely wasn't a reverse merger as already explained - AMR Corp (the old AA holding company, which was in Chapter 11) ended up with 72% of the merged company and US Airways got 28%, reflecting the relative size of the respective companies. From an operational perspective, this was clearly an AA takeover - the US Airways Air Operating Certificate (AOC) was retired, as was the call sign, and all US Airways crews merged into the American Airlines seniority system. As noted, Doug Parker and other senior US Airways officials did retain their jobs which is a little unusual given they were the smaller partner, but reflective of the fact that US was not in bankruptcy and AA was. Overall it was thought of as a relatively "equal" merger in that even though AA was clearly the larger partner, US's management was mostly running the show.

You might be mixing things up with the America West / US Airways reverse merger, was was definitely "reverse" in the sense that America West bought out US Airways, but kept the US Air(ways) brand as it was more suitable to a nation-wide company as the airline was no longer "West" focused. America West's AOC and operational practices took over the US Airways planes (including the call sign "Cactus"), but they had major problems merging the crews' seniority, so they were operating as two separate systems for quite a while. When done, it was totally an America West show, headquartered in Phoenix etc, but with the US Airways brand.

 

[marchredmr]

Has it even touched the sides of the covid debt?

Perhaps QANTAS could start to payback the $2bn+ handout (above and beyond JobKeeper payments) from the Aus government during COVID

 

[justinbrett]

This is not correct. In terms of stock ownership - which is what *matters*, it definitely wasn't a reverse merger as already explained - AMR Corp (the old AA holding company, which was in Chapter 11) ended up with 72% of the merged company and US Airways got 28%, reflecting the relative size of the respective companies. From an operational perspective, this was clearly an AA takeover - the US Airways Air Operating Certificate (AOC) was retired, as was the call sign, and all US Airways crews merged into the American Airlines seniority system. As noted, Doug Parker and other senior US Airways officials did retain their jobs which is a little unusual given they were the smaller partner, but reflective of the fact that US was not in bankruptcy and AA was. Overall it was thought of as a relatively "equal" merger in that even though AA was clearly the larger partner, US's management was mostly running the show.

You might be mixing things up with the America West / US Airways reverse merger, was was definitely "reverse" in the sense that America West bought out US Airways, but kept the US Air(ways) brand as it was more suitable to a nation-wide company as the airline was no longer "West" focused. America West's AOC and operational practices took over the US Airways planes (including the call sign "Cactus"), but they had major problems merging the crews' seniority, so they were operating as two separate systems for quite a while. When done, it was totally an America West show, headquartered in Phoenix etc, but with the US Airways brand.

I quite clearly said AA was the larger airline, and obviously they went with their branding, AOC, callsign etc. That has nothing to do with stocks!

I'm an aviation person, not a business person, so I'll leave the business speak to the professionals, I'm just going from what I recall at the time - and other media stories describing it as a reverse merger (eg https://www.bizjournals.com/bizjour...s-american-airlines-merger-pss-computers.html), maybe that term was not technically correct, and just referencing the fact that it was US wearing the pants in the merger talks.

In any case, it doesn't change my point that AA was in chapter 11 whilst TH was CEO, and was only lifted out of it on merging with US. US was not in Chapter 11 - and I think you've basically agreed with me there in your reply.

Perhaps QANTAS could start to payback the $2bn+ handout (above and beyond JobKeeper payments) from the Aus government during COVID

Most of that was not for JobKeeper - it was paid services for freight and some was industry wide relief of government fees for aviation services.

I don't see why QF should have to pay back the government which (along with state governments) caused a loss well beyond the compensation QF received.

 

[marchredmr]

Most of that was not for JobKeeper - it was paid services for freight and some was industry wide relief of government fees for aviation services.

I don't see why QF should have to pay back the government which (along with state governments) caused a loss well beyond the compensation QF received.

Yes - as I said "above and beyond JobKeeper payments". And industry wide or not, QANTAS got the lion's share in Australia.

So you are of the ilk that blames the govt for their need to take drastic health measures during COVID rather than acknowledging that companies like QANTAS would have gone under, in such challenging times for all, without govt assistance. OK for AJ to beg the govt to keep QANTAS afloat during the bad times, but no 'good corporate citizen' obligation to assist with the $800+bn national debt in their record good times.

Fair enough, you are entitlted to adopt a purely corporate perspective and see it as a one-way street.

 

[Zanzara]

Yes - as I said "above and beyond JobKeeper payments". And industry wide or not, QANTAS got the lion's share in Australia.

So you are of the ilk that blames the govt for their need to take drastic health measures during COVID rather than acknowledging that companies like QANTAS would have gone under, in such challenging times for all, without govt assistance. OK for AJ to beg the govt to keep QANTAS afloat during the bad times, but no 'good corporate citizen' obligation to assist with the $800+bn national debt in their record good times.

Fair enough, you are entitlted to adopt a purely corporate perspective and see it as a one-way street.

Let's not forget how Australians were stranded overseas during the pandemic as QF shut down.

 

[justinbrett]

Yes - as I said "above and beyond JobKeeper payments". And industry wide or not, QANTAS got the lion's share in Australia.

So you are of the ilk that blames the govt for their need to take drastic health measures during COVID rather than acknowledging that companies like QANTAS would have gone under, in such challenging times for all, without govt assistance. OK for AJ to beg the govt to keep QANTAS afloat during the bad times, but no 'good corporate citizen' obligation to assist with the $800+bn national debt in their record good times.

Fair enough, you are entitlted to adopt a purely corporate perspective and see it as a one-way street.

Yes I am, but won't comment any further because:

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