Qantas Fleet Grounded 29/10

[ComeFlyWithMe]

Sorry ComeFlyWith me, don't mean to quote you personally on this one (I'm quoting that figure that has been used so much over the last few days).

The 8/10 is not entirely correct. Qantas carried just over 2.5M pax in CY2010 which is about 20% of the total passengers carried, however JQi carried 1M so all up the Qantas Group carried about 30% of the passengers (or to correct the figure Dick Smith etc are using, 7/10 passengers aren't flying Qantas). This figure doesn't include Jetstar Asia.

That doesn't look good, however we do have to consider the reason why the figures are so low. For CY2010, there were just under 73,000 scheduled international flights out of Australian ports. Qantas operated just under 14,000 of these (or, what do you know, about 20% of them). Jetstar another 6,300. Again, this doesn't include any of the Jetstar Asia flights.

I may be simplifying, however if Qantas are only operating 20% of the flights out of the country, common sense leads us to conclude that they'll only carry 20% of the passengers! Qantas have continued to cut International services over the years and pushed more services to Jetstar (with its lower cost base) so it's to be expected that market share will continue to fall. I don't believe this is as a result of people intentionally selecting other airlines, more a product of Qantas' decision to reduce capacity. I don't recall the last time I was on a QF International flight that wasn't very full (especially in J/F) and QF is 9/10 times the most expensive option.

That's a very very simplistic assessment that I've made (and please pull it apart), however it frustrates me that the media is constantly pulling this incorrect "8/10 passengers" line without telling the full story.

All good points, however we are referring to Qantas mainline international. The frequency and destinations are being wound back because of demand and competition. Demand has reduced because of the high cost base which has made the fare prices higher than their competitors. With a lower cost base they would be more competitive. This is why Jetstar has been successful as it has a lid on its cost base.

I think it's very simplistic to lump it all together and say 'Qantas Group', but you are actually talking about a number of separate businesses - QF Domestic (highly profitable, 2 competitors - only 1 serious), QF International (loss making, high cost, 20+ competitors), Jetstar (actually loss making in parts, but profitable overall due to low cost base), Freight, Ancillary (QFF etc).

If you could separate these businesses, most competent managers would have closed QFi a long time ago - but there is a reputational risk which would cost the carrier's domestic market share. Without a significant international operation, the domestic business would lose some of its appeal.

Your assumption that Qantas have 'chosen' to supply the market with 20% of capacity is actually incorrect. If they had more competitive fares, they would have more of this market, and therefore supply more capacity. You can't run empty planes - it is an expensive exercise.

You will find Jetstar has taken over routes that are primarily leisure routes, utilised by pax who are price sensitive and are chosing competitors over QFi. While many may have used the routes for business, note the word 'primarily'.

 

[ComeFlyWithMe]

Sorry ComeFlyWith me, don't mean to quote you personally on this one (I'm quoting that figure that has been used so much over the last few days).

The 8/10 is not entirely correct. Qantas carried just over 2.5M pax in CY2010 which is about 20% of the total passengers carried, however JQi carried 1M so all up the Qantas Group carried about 30% of the passengers (or to correct the figure Dick Smith etc are using, 7/10 passengers aren't flying Qantas). This figure doesn't include Jetstar Asia.

That doesn't look good, however we do have to consider the reason why the figures are so low. For CY2010, there were just under 73,000 scheduled international flights out of Australian ports. Qantas operated just under 14,000 of these (or, what do you know, about 20% of them). Jetstar another 6,300. Again, this doesn't include any of the Jetstar Asia flights.

I may be simplifying, however if Qantas are only operating 20% of the flights out of the country, common sense leads us to conclude that they'll only carry 20% of the passengers! Qantas have continued to cut International services over the years and pushed more services to Jetstar (with its lower cost base) so it's to be expected that market share will continue to fall. I don't believe this is as a result of people intentionally selecting other airlines, more a product of Qantas' decision to reduce capacity. I don't recall the last time I was on a QF International flight that wasn't very full (especially in J/F) and QF is 9/10 times the most expensive option.

That's a very very simplistic assessment that I've made (and please pull it apart), however it frustrates me that the media is constantly pulling this incorrect "8/10 passengers" line without telling the full story.

We are talking the Qantas International mainline business, not the Qantas group. The rest of the Qantas group is (mostly) profitable.

This is a supply and demand scenario. If the cost base was lower and QF fares were more competitive, there would be more demand and therefore more flights would be operated by QFi. Lowering the cost base would also free up more cash to invest in product and service improvements, further attracting demand.

You cannot run an international airline with aircraft full of empty seats.

 

[11sjw]

5% over three years - not even keeping pace with inflation. How dare workers make the "outrageous" demand for a modest payrise so their wage doesn't effectively go backwards?

Did you not listen to AJ's comments? Wages were not the issue. They had reached an in principle agreement on pay rates.

The issues were:

1. Demands for job security clauses over and above what any of us; and
2. Demands that any new overseas employees be paid on an Australian payscale.

Totally absurd and ridiculous demands that would not be agreed to by anyone.

 

[browski]

I cannot believe it was impossible to come to a settlement....

That's because you do not understand the main disputed issue. It is not about a payrise or a paycut. It is about Qantas Mgt trying to remove jobs from Australia and re-employing staff overseas at lower wages.

There still won't be any settlement in 21 (or 42) days. How can there be? If Qantas mgt agree to job security, they essentially must throw out their plans to re-base int'l operations in Singapore. They believe that this is not an option, so off to arbitration they will go.

Qantas mgt understand the endgame is the final ruling by that arbitration committee. If the Unions get job security, then Alan Joyce will be sacked by the board (most likely he'll resign). If the workers lose their job security (and Qantas planes are allowed to be flown by JetStar Asia contracted pilots etc) then he has more time (maybe 24 months) to implement his plan; and demonstrate some results to the board.

Arbitration will not look kindly at a company trying to actually sack their workers and be replaced by cheaper foreign workers based overseas. But irrespective of the obvious distasteful nature of this Qantas mgt action, it is hard to see any law that Arbitration could invoke to stop Qantas. The QF legal team must already have given legal advice that an arbitration ruling will fall their way.

So Arbitration will award the workers both the pay rise claim and the "lack of change to safety work practices claim".
However the Job security issue will not be ruled on and this will be dealt with at the time the first Qantas worker is given a forced redundancy; obviously a different tribunal will rule at that time. Now a forced redundancy is illegal if you replace someone in the same role for cheaper money; but if you allow an employee from a subsidiary company (maybe Jetstar Asia contracted) to work on those QF aircraft based in a foreign country, then you might just overcome that law.

In the meantime, workers are banned from striking and as such it's a "win" to Qantas mgt.
Well played, AJ, I guess. But the above scenario is not taking into account any unforeseen events.........like legislation changes etc.

 

[amaroo]

Well here it is from your link, and as I said there is no overt statement to go out and buy with other airlines. It is hypothetical advice only.

No, it's not me.......just had my eyes tested & they came in at 20/20

 

[amaroo]

5% over three years - not even keeping pace with inflation. How dare workers make the "outrageous" demand for a modest payrise so their wage doesn't effectively go backwards?

As two out of the three unions have said - it's not about money. It's about controlling the company to our agenda......If they are so right why haven't we heard words of support from the other 12 unions that operate in Q?

 

[FlyboyAl]

Thank god calm heads prevailed and it's over. Now we can return to normal programming. Wonder what positive spin the unions try to make put of the decision when it's clear they have lost.

I'll bet AJ had a good nights sleep

Their spin is that it has now stopped the "lock out" and all staff can go back to work.
They are not saying anything about the eact they can no longer go on strike!

It always amazes me what you can do with words, and how you say and phrase them for different meanings!

Personally, I see this as a big win for QANTAS (and AJ), but at least everyone can now get on with their lives without being held to ransom as to if the unions will strike or not on a particular day/time.

 

[simongr]

5% over three years - not even keeping pace with inflation. How dare workers make the "outrageous" demand for a modest payrise so their wage doesn't effectively go backwards?

5% over three years?

Try 15%:

- Around 15 per cent increase in wages and allowances over three years.

- A guarantee that no changes be made to current work practices including changes which improve productivity or that are in line with developments in modern aircraft technology.

- Introduction of a time serving classification structure where workers receive additional pay increases based on years of service rather than merit or qualifications.

 

[ajw373]

I am disappointed by the QF grounding decision. It was a cynical decision, with only one real outcome. (Which is, presumably, why the QF board chose that route.) It demonstrates nothing but contempt for customers. :-|

I beleive the opposite is true. The decision whilst sure it inconvenianced many (I was lucky my flight to Sydney on Saturday was at 10am so missed the chaos) for the best part of 3 days, the end result is certainty. Without certainty the travel plans of many many more could have well been effected at any time, so the decision has secured that and travellers can travel with confidence that industrial action will not effect their plans.

Also lets not forget that this disupute, read negotiations have been going on for the best part of 18 months and some of the demands of the unions, which they have not backed down on are things that cannot be given by Qantas. For example the claim by the international pilots that all Jetstar and Jetconnect pilots be paid the same. Now come on. Also guarantees of job security, no one, even including public servants these days have a guarantee of a job so why does anyone in a private company expect the company to guarantee this?

 

[dk4]

Once bitten twice shy

For those saying this is over, I think that this is only the beginning.

Setting aside queries about any future tactics that the “unions in question” will implement from this point on, forcing Qantas management and workers together isn’t going to produce a unified and harmonious workplace, it is merely going to fan the flames of discontent.

What is going to happen when the next union steps up to negotiations? (Remember that given the large number of work groups that Qantas has, it is in almost constant negotiations with its staff.) Unionists won’t even have to take any protected action in the future, the mere hint that they are considering it, will have an immediate effect Qantas cash flow, as customers start booking elsewhere fearing another possible lockout by management.

And also let’s consider the ALP government. Before the lockout the government had made it clear that they wanted Qantas to find a solution internally. After the lockout some ministers have publicly expressed their distain at Qantas management’s actions, so there is likely to be legislative repercussions.

While the Qantas business continues to need to deliver a better return on capital to investors, the war with their workers is not over. And those customers who stick with Qantas will continue to be caught in the middle, one way or another.

One thing is certain, this stunt has not generated any long term certainty at Qantas.

 

[Andyzx]

1.26pm Sydney flight path arrivals

Just seen my first QF flight inbound to Sydney, although may have been a reposition from Melb.

 

[Stephen65]

Qantas could have applied to FWA on its own but getting the government to do it in the context of a lockout was a stronger move and much more likely to bring about what was necessary to finally end this dispute - termination of all industrial action followed by compulsory arbitration. Having the government onside always assists greatly in any court application and the lockout created the economic risks necessary to get a termination order.

If Qantas had applied itself without the government and without a lockout then the unions would have been in a very much better position to resist a termination order and all Qantas would have ended up with, at best, would have been a suspension to be followed by a continued union sabotage campaign dragging indefinitely into the future.

While its been at the cost of considerable temporary inconvenience to many people Qantas has had a big win here in getting a termination order and in the long run should put the airline in a much healthier position.

 

[el_rooto]

How long do you think that would have taken, and how many millions of dollars would be lost in the meantime? FWA would only act if there was a significant national economic risk. Qantas made a decision to bring this matter to a head, as it would have dragged on for years and cost millions of dollars to the company, not to mention the tarnishing of the brand. The company would have eventually either had to enact large redundancies to remain competitive and decimate the business in the meantime, or take extreme action to force an outcome.

The 'national carrier' line being toyed with is actually false. The taxpayer and government have zero ownership. It is a public company owned by shareholders. The only thing national about Qantas is the kangaroo on the tail.

Shareholders have voted - the share price is now up over 5%.

This is the outcome that the QF Group board were after. Arbitration is a no brainer in their favour.

 

[Andyzx]

1.26pm Sydney flight path arrivals

Just seen my first 747 QF flight inbound to Sydney, although may have been a reposition from Melb.

EDIT sorry this got posted twice system is running slow

 

[amaroo]

The sun has risen - as has the share price

Time to move on and get on with work, play & life.

 

[winfred]

Am I stuck in "Groundhog Day" or has this same post been posted twice previous? That's spam I believe.

Apologies for posting multiple times. After pressing the submit button I got an error message. I then press back and submit again.

 

[amaroo]

Re: Once bitten twice shy

And also let’s consider the ALP government. Before the lockout the government had made it clear that they wanted Qantas to find a solution internally. After the lockout some ministers have publicly expressed their distain at Qantas management’s actions, so there is likely to be legislative repercussions.

ALP government - words that shouldn't be used together......won't be long before it's just the ALP

 

[cirqueboy]

Watching, reading all of this from afar in Brasil.

A little bit of me just died in the last few days.

I have no side to take because I am far removed from Australia these days.

BUT

What has happened makes me very sad to be an Australian.

What I see is an icon that is internationally recognised as representative of our country, our culture, out spirit being trashed.

This just needs to stop. Now.

It saddens me to think that what started out 90 odd years ago as the Queensland And Northern Territory Air Service has come to this.

 

[Stephen65]

This is the outcome that the QF Group board were after. Arbitration is a no brainer in their favour.

I think so too. Union demands that no work practices ever be changed to take account of new aircraft maintenance technologies, Qantas build a new A380 hangar it doesn't need and foreign subsidiaries of Qantas be forced to employ overseas employees on Australian terms and conditions are not going to get anywhere before any arbitrator.

 

[monoccular]

The ineptitude of this government knows no bounds. And the PM was actually on TV Saturday night saying just how proud she was of her new IR system -- geez, if you can be proud of a system that cannot act until the country has been brought to it's knees, you have a strange set of values, or maybe a strange hidden agenda.