Qantas slashing jobs and possibly selling FF program?

[eastwest101]

Re: Qantas to cut 1,000 Jobs.

SMH is now reporting potential sale of Jetstar..I think that'd be a good thing..maybe..hmmm.

As long as the investment put into JQ from the QF group is repaid (or long suffering QF shareholders get discounted shares in the rumoured float of JQ) then thats fine with me! They could even have Alan Joyce and other management back to manage the new separate JQ business, once QF get more of their A330s and B787s back!

 

[BobbyFlyer]

Re: Qantas to cut 1,000 Jobs.

Obviously this smells of trying to leverage a position with the gov't over ownership restrictions or improving debt rating, but reports of QF being cash flow negative at moment are more worrying. Obviously not sustainable and whether cuts identified do the trick soon enough or have enough impact will be an issue.
Time to switch to another program i think....meantime worried about my 800k of points with QF....dont want to lose those like i did with Ansett...

 

[Oxy]

Re: Qantas to cut 1,000 Jobs.

As long as the investment put into JQ from the QF group is repaid (or long suffering QF shareholders get discounted shares in the rumoured float of JQ) then thats fine with me! They could even have Alan Joyce and other management back to manage the new separate JQ business, once QF get more of their A330s and B787s back!

That all makes a lot of sense,when AJ goes back to Jetstar do they lure John B back from Virgin? "Sorry John, we made a mistake"

 

[dk4]

Qantas - back to basics

IMO before QAN should expect one iota of government support, it needs to get back to basics, i.e. running Qantas.


Just like any other commercial business, it needs to sell off its bloated bits before it can even contemplate asking for assistance in "the national interest".

It is not in the national interest for our government to support a Loyalty/Frequent Flyer Program, so QF should sell it and turn some coin.

It is not in the national interest for our government to support new airline joint ventures overseas, bringing competition and lower fares to foreign markets/customers, so sell the Jetstar franchises.

It is not in the national interest for our government to support two domestic airlines (Qantas and Jetstar) - so sell Jetstar.

It is not in the national interest for our government to support foreign workers doing jobs that Australians are willing and capable of doing.


Qantas needs to get back to basics, cut the fat, and focus on one thing, running an airline called Qantas - if it has any hope of federal government assistance (of any sort).

 

[JohnK]

Re: Qantas - back to basics

Not the type of news one needs to hear. And who said Ansett was not going to be repeated.

Looks like I wont get a chance to use my points. Sad.

 

[moa999]

Re: Qantas to cut 1,000 Jobs.

- Sell off at least half of QF's A380's
- Cancel at least half of all new aircraft orders
- Scrap majority of QFi

Gutting any more of QFi will severely hurt QFF - without the perceived ability (whether you can is another matter) QFF just becomes another points scheme, and value and loyalty shrinks a lot.

- Keep QFF

I agree. It is a valuable part of the business - albeit I believe as per above its profit is heavily linked to QFi

- Lobby for removal of the 51% rule and not for govt funding, allow chinese government to buy stake.

More foreign equity is not the problem imho (well maybe it is now) Qantas spent almost $100m buying back shares in the last six months.
Plenty of other things the govt could do - depreciation, airport charges, Xenophons stupid bills

- Get rid of the ridiculous employee benifits

Much easier said than done - QF is heavily unionised
In any event the flying benefits are not much use if anything other than a young employee - standby with kids is not an option many choose to chance

- Axe Chairmans Lounge

Silly imho. In the scheme of things doesn't cost a huge amount and seemingly creates lots of loyalty amongst the big corporates.
Otherwise why would have JB launched The Club at VA

 

[moa999]

Re: Qantas - back to basics

IMO before QAN should expect one iota of government support, it needs to get back to basics, i.e. running Qantas.
Just like any other commercial business, it needs to sell off its bloated bits before it can even contemplate asking for assistance in "the national interest".
It is not in the national interest for our government to support a Loyalty/Frequent Flyer Program, so QF should sell it and turn some coin.
It is not in the national interest for our government to support new airline joint ventures overseas, bringing competition and lower fares to foreign markets/customers, so sell the Jetstar franchises.
It is not in the national interest for our government to support two domestic airlines (Qantas and Jetstar) - so sell Jetstar.
It is not in the national interest for our government to support foreign workers doing jobs that Australians are willing and capable of doing.
Qantas needs to get back to basics, cut the fat, and focus on one thing, running an airline called Qantas - if it has any hope of federal government assistance (of any sort).

dk4,
Alternatively the answer could be to jettison Qantas altogether - after all this is the main loss making part, and just keep Jetstar with its substantially lower cost base.
Be careful what you wish for.

Jetstar Domestic and International are just as equally Australian airlines, employing Australian staff, just on a much better cost base.

 

[dk4]

Re: Qantas - back to basics

dk4,
Alternatively the answer could be to jettison Qantas altogether - after all this is the main loss making part, and just keep Jetstar with its substantially lower cost base.
Be careful what you wish for.

Jetstar Domestic and International are just as equally Australian airlines, employing Australian staff, just on a much better cost base.

I don't necessarily disagree with you (QFi that is, QFd prior to the ill-conceived 65% strategy was doing good business).

But IMO if "Qantas" wants government assistance, then it needs a divorce from "Jetstar". And great news, if "Jetstar" is profitable and cost effective, it would make a great cash cow to sell, thus injecting some money into QAN so tax payers won't have to.

 

[ReLoad]

Re: Qantas - back to basics

Looks like I wont get a chance to use my points. Sad.

The sky is falling! The sky is falling!!

Of course you have a chance to use your points, have you seen the QF financial statements? You are of course aware of QFs cash flow position?

If anyone thinks they are going under in the next 12 months they are in fantasy land.

 

[Aussie_flyer]

Re: Qantas - back to basics

Not the type of news one needs to hear. And who said Ansett was not going to be repeated.

Looks like I wont get a chance to use my points. Sad.

So with this announcement your points are now lost?

 

[Limewood]

Re: Qantas - back to basics

Looks like I wont get a chance to use my points. Sad.

As we could be remotely related I'll have em

 

[Edge]

Re: Qantas - back to basics

Time for a new CEO.

The macroeconomic environment hasn't been that bad in the first half of F2014. If QF is making a loss during this period then there are significant structural issues.

 

[beardoc]

Re: Qantas - back to basics

There seem to be a lot of questions in this thread (like "how can this be happening when QANTAS was on track to profitability?", etc.) The answer is related to Virgin and other competitors have been increasing capacity dramatically which is putting pressure on yields and on costs - QF is wanting to increase capacity to retain the market share above 65%, but this comes at a cost, as they're now flying more planes, more often. It's an airline capacity war, and when there's an airline capacity war, it's a race to see who has the deepest pockets. Previously, QF thought it did, and so was comfortable with the airfare war, but when Virgin raised $350 million of capital from its shareholders in the recent rights issue, that changed the balance of who has the deepest pockets. It's now a situation where QANTAS can't win this now - it's QF rather than Virgin that will run out of money in the capacity war. That's how the game has changed.

That's why you've seen Joyce angling towards the QANTAS Sale Act and looking at government guarantees of debt, so that they can get out there and raise funds more cheaply.

What this is going to mean is that QF will need to pull back on capacity ultimately. They can't increase capital because of the QANTAS Sale Act, and they can't borrow it except at exhorbitant rates. So they're stuck.

This is why you're seeing the sudden change in outlook. The Virgin capital raising changed everything.

A good analysis is at Business Spectactor: Bleeding Qantas dives into dire straits | Business Spectator

 

[777]

Re: Qantas - back to basics

The sky is falling! The sky is falling!!

Of course you have a chance to use your points, have you seen the QF financial statements? You are of course aware of QFs cash flow position?

If anyone thinks they are going under in the next 12 months they are in fantasy land.

A radical devaluation of points would potentially sure up the balance sheet though. QF may not disappear but at a stroke of the pen they could significantly change QFFs liabilities. I'd certainly book sooner rather than later if you're hoarding points.

 

[777]

Re: Qantas - back to basics

There seem to be a lot of questions in this thread (like "how can this be happening when QANTAS was on track to profitability?", etc.) The answer is related to Virgin and other competitors have been increasing capacity dramatically which is putting pressure on yields and on costs - QF is wanting to increase capacity to retain the market share above 65%, but this comes at a cost, as they're now flying more planes, more often. It's an airline capacity war, and when there's an airline capacity war, it's a race to see who has the deepest pockets. Previously, QF thought it did, and so was comfortable with the airfare war, but when Virgin raised $350 million of capital from its shareholders in the recent rights issue, that changed the balance of who has the deepest pockets. It's now a situation where QANTAS can't win this now - it's QF rather than Virgin that will run out of money in the capacity war. That's how the game has changed.

This is EXACTLY it. They bet the house on driving virgin broke in a capacity war and lost. I'm not sure they had a plan B hence the mad scramble.

 

[eastwest101]

Re: Qantas - back to basics

Jetstar Domestic and International are just as equally Australian airlines, employing Australian staff, just on a much better cost base.

And the startup capital, management time & attention, fleet, IT systems, equipment, training, economy of scale, terminal space/rent, regional customers, lounge access, backup (in case things go wrong)? All provided by? Impulse?

But I get what some people are saying - a lot of posturing for the governments benefit there and maybe some attempt to lay the groundwork for a split/spin off/ partial government finance/investment, review of depreciation laws, review of QF Sales Act or numerous other options for the future.

And the points about QF starting a capacity war and then finding out that VA had partners with deeper pockets than QF rings true. Hence the mad scramble and a change of strategy coming up....

 

[UP4014]

Re: Qantas to cut 1,000 Jobs.

Qantas would not be in its current state of financial stress if it were better managed
and offered the public a decent consistent service.
In my view, Qantas is a very average airline with a superiority complex.

I actually think the service is fine, but what happens is the lead time on getting results on decisions can be long; so ordering a new fuel efficient aircraft now make take a couple of years to bear the fruit.

Make the wrong decisions and by the time you work out you need to change and make that change and bear the fruit could be 3 years.

Isn't hind sight good!

Matt

 

[Danger]

Re: Qantas to cut 1,000 Jobs.

I seem to remember around 12 months ago we were all lead to believe Emirates and Dubai were the answers to Qantas's woes.

Surely we weren't all lead up the garden path/runway.

 

[beardoc]

Re: Qantas to cut 1,000 Jobs.

More analysis: Qantas saga to get more bloody and brutal

Or in other words, Virgin is outwitting, outplaying, and possibly will outlast QANTAS, by playing them in the capacity war. You've got to admire John Borghetti - he knows how to play QANTAS at their game. You have to be amazed that QANTAS thought it could win the capacity game and that because Virgin is now able to outspend them, then the house of cards at QANTAS is falling.

 

[Danger]

Re: Qantas to cut 1,000 Jobs.

And some more media:

Qantas to axe 1000 jobs as H1 loss looms | Travel Weekly

Qantas to cut jobs, reduce costs |ETB News Australia

Sky News Business is also doing a special at 3.30pm, I think on channel 602 or 603.