Qantas slashing jobs and possibly selling FF program?

[777]

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.

What's particularly dumb is the way Qantas telegraphed it's strategy. "We will add 2 planes for every 1 they add" is basically saying we are willing to lose a bottomless pit of money in an effort to send you broke. Qantas was always (and still is as apparently the 65% is the only thing not under review today!) going to lose more money than virgin if they did this -- they are going to fly twice as many planes and their operating costs are higher -- but they worked from the assumption that they had a bigger war chest than Virgin and always would.

It's hard to tell whether Borghetti always knew he had access to deeper pockets (in which case the strategy is flat out brilliant to wait until Qantas was bleeding to pull the trump card) or has simply improvised the best of a bad scenario (points for that in any case) but the one obvious thing is that Qantas never saw it coming. You can see how off tilt they have been since the capital raising was announced.

Looks like a Mohammed Ali-esque rope a dope to me. Cop the punches til the other guy is spent and then bring out the big artillery.

 

[The Flying Brick]

Re: Qantas to cut 1,000 Jobs.

If AJ was leading from the front , he would resign. Its been a rapid downhill decline since he came on board.

The sooner the better - for long suffering QF cusomers, shareholders and even the Abbott govt!

 

[Deleted member]

Re: Qantas - back to basics

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.

Not sure by how much the "shore up " would be seen as positive by Frerquent fliers so a balance between shareholders returns and frequent flier value will need to meet in the middle I suspect

 

[Supersonic Swinger]

Re: Qantas - back to basics

Alan Joyce was quoted as saying "Our competitors in the international market, almost all owned or generously supported by their governments, have increased capacity to pursue Australian dollar profits, changing the shape of the market permanently."

Wouldn't this include the very airline you handed over almost all your European flying to?

 

[seritonin]

Re: Qantas - back to basics

I just love this cheeky Virgin ad on The Age overshadowing Qantas grim news...

 

[lovestotravel]

Re: Qantas - back to basics

So Virgin is making money at the moment yeah ?

 

[Sojourner]

Re: Qantas - back to basics

So much for being 'relaxed' about the Virgin revamp:

http://www.australianfrequentflyer....qantas-relaxed-about-virgin-revamp-32670.html
"Qantas relaxed about Virgin revamp" - Blogs - The Australian Frequent Flyer Online Community

Only two years ago I was laughed at by munitalP for suggesting that VA was going to pose a real threat with its strategy to transition from a LCC to a full service airline who said, "The whole concept of VA taking the top end customers from QF is a vision which crazy. VA don't have the aircraft - sure a couple of old high rotation 330's have just joined the fleet, but real world is QF have many old high rotation AC, which fly many routes across AU." I'm sure Alan Joyce thought it was crazy too. He seemed pretty 'relaxed' about the whole affair.

Last time I checked though, VA had exceeded its targets for corporate customers. Meanwhile Qantas' obsession with the "65% line in the sand" - adding two airplanes for every one added by VA has clearly come at a cost (yield).

"Joyce believes a key reason for the problems at Qantas are Virgin and its dumping of capacity on the market and the resultant airline wars. What he doesn't say is his own line in the sand of 65 per cent market share has driven much of the capacity war. Interestingly it is Qantas that the ACCC is investigating whether it is abusing its market power by insisting on main*taining a 65 per cent share of the dom*estic market."
Read more: Qantas saga to get more bloody and brutal

Be prepared for some more cost saving 'enhancements' from QF in the near future. I'm looking to use more of my points in the near future, in case they flog the QFF program off and start inflating prices for redemption.

 

[Pushka]

Re: Qantas to cut 1,000 Jobs.

Not the greatest press release...shares have dived 16c.

http://www.asx.com.au/asxpdf/20131205/pdf/42lf195c6j7ss1.pdf

16%! Worse still.

 

[Sojourner]

Re: Qantas - back to basics

So Virgin is making money at the moment yeah ?

This is from the VA's presentation at the AGM on the EOFY results:
• Statutory loss after tax of $98.1m – in line with guidance of a loss of $95 to $110 million
• Pre-tax loss (excluding one-off transformation costs and Skywest loss) of $35.2 million – in line with guidance of a loss of $30 to $50 million
• Total revenue and income over $4.0 billion for the first time, up from $3.9 billion in FY12
• Outperformed main competitor on Group yield growth
• Strong underlying cost performance – underlying CASK2 (excluding fuel) approximately equal to FY12, inclusive of major product and service enhancements
• Positive operating cash flows of $184.2m
• Total cash position of $580.5m, with unrestricted cash of $326.5m

They key point was a POSITIVE OPERATING CASH FLOW for VA. Comparatively, QF is facing its first operating loss coming into December.

 

[amaroo]

Re: Qantas - back to basics

I'll worry when a trucking company buys into QF and then hands out the QF scrip as a dividend to it's trucking shareholders.

 

[Ansett]

Re: Qantas - back to basics

So much for being 'relaxed' about the Virgin revamp:

http://www.australianfrequentflyer....qantas-relaxed-about-virgin-revamp-32670.html
"Qantas relaxed about Virgin revamp" - Blogs - The Australian Frequent Flyer Online Community

Only two years ago I was laughed at by munitalP for suggesting that VA was going to pose a real threat with its strategy to transition from a LCC to a full service airline who said, "The whole concept of VA taking the top end customers from QF is a vision which crazy. VA don't have the aircraft - sure a couple of old high rotation 330's have just joined the fleet, but real world is QF have many old high rotation AC, which fly many routes across AU." I'm sure Alan Joyce thought it was crazy too. He seemed pretty 'relaxed' about the whole affair.

Last time I checked though, VA had exceeded its targets for corporate customers. Meanwhile Qantas' obsession with the "65% line in the sand" - adding two airplanes for every one added by VA has clearly come at a cost (yield).

"Joyce believes a key reason for the problems at Qantas are Virgin and its dumping of capacity on the market and the resultant airline wars. What he doesn't say is his own line in the sand of 65 per cent market share has driven much of the capacity war. Interestingly it is Qantas that the ACCC is investigating whether it is abusing its market power by insisting on main*taining a 65 per cent share of the dom*estic market."
Read more: Qantas saga to get more bloody and brutal

Be prepared for some more cost saving 'enhancements' from QF in the near future. I'm looking to use more of my points in the near future, in case they flog the QFF program off and start inflating prices for redemption.

Im not convinced that QF would sell off the FF Programe as it is about the only part of the airline that is making money. I feel that what will be seen is an even more dramatic drop in service across the premium and economy cabins both domestic and international. All of this makes a mockery of the following statements

 

[yohy?!]

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.

you mean the negative cash flow position that's being widely reported? ie only forward bookings keeping them going now

 

[777]

Re: Qantas - back to basics

So much for being 'relaxed' about the Virgin revamp:

http://www.australianfrequentflyer....qantas-relaxed-about-virgin-revamp-32670.html
"Qantas relaxed about Virgin revamp" - Blogs - The Australian Frequent Flyer Online Community

That's a blast from the past. This snapshot says a lot:

http://www.australianfrequentflyer....d-about-virgin-revamp-32670-3.html#post484862

Qantas shares then: $1.59 now: $1.07
Virgin shares then: 30c now: 39c .

 

[Sojourner]

Re: Qantas - back to basics

you mean the negative cash flow position that's being widely reported? ie only forward bookings keeping them going now

yohy, I don't think ReLoad understands how to read a financial statement.

ReLoad, before laughing at others, I suggest you do some homework to understand the implications of NEGATIVE OPERATING CASHFLOW because you are looking very much like a fool. Negative operating cashflow is why QF is in the news, without the prospect of a government bailout or other form of assistance QF's SP would fall through the floor. No business can continue to exist with negative operating cashflow unless there's someone else propping them up (usually a parent company, or the government).

 

[BD1959]

Re: Qantas to cut 1,000 Jobs.

What the heck is happening at QF???

I thought that things were back on the improve from all the news coming from the company and that the EK partnership was producing great results?

The numbers ($300m loss) cover the period July-December.

On 6 September, Qantas published their 2013 Annual Report in which they stated (looking to the then current financial period):

"Having reached an inflection point in 2011/2012, the turnaround of Qantas International is on track."

"the Group is well positioned for future success. The actions we took during 2012/2013 are delivering results. And we have a clear strategy to build long-term shareholder value."

"In the domestic market, we are winning against the competition on every measure, with the best airline in each category."

"With total domestic underlying EBIT* of more than $450 million, we remain the clear profit leader domestically."

"Jetstar Japan [is] off to a strong start"

"The Qantas Transformation program delivered substantial strategic benefits in 2012/2013. We have withdrawn from loss-making routes, retired aircraft, consolidated operations and improved the economics of our fleet. Overall, we reduced Group-wide comparable unit costs* by 5 per cent (including a 5 per cent reduction for Qantas International)"

"We are laying the foundations for the Qantas Group to succeed and grow."

So ... Qantas reported all this to the market at a time when it knew this to be untrue? Certainly within the space of a month they were having to pump $60m into Jetstar Japan ...

Puzzled,

BD

 

[Sojourner]

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.

Totally agree that Joyce has been outwitted by Borghetti. I think QF passing over Borghetti was a big mistake. I still can't believe how Joyce was afforded an interview for the QF CEO job, but the same opportunity was not afforded to other applicants including Borghetti.

 

[Supersonic Swinger]

Re: Qantas - back to basics

you mean the negative cash flow position that's being widely reported? ie only forward bookings keeping them going now

Or the volumes of Gift Cards being bought by AFFers based on the 10 points per $ offer...

 

[737NG]

Re: Qantas to cut 1,000 Jobs.

Check out this news clip from 18 months ago. The QF CEO doesn't seemed worried about Virgin. (1.30 in)


Virgin Australia goes fancy - YouTube

 

[burrco]

Re: Qantas - back to basics

Or the volumes of Gift Cards being bought by AFFers based on the 10 points per $ offer...

Not sure what all the fuss is about. China Southern can just buy themselves 300 million worth of gift cards, earn a whopping 3 billion in points and everything is solved.

 

[zainman]

Re: Qantas to cut 1,000 Jobs.

Check out this news clip from 18 months ago. The QF CEO doesn't seemed worried about Virgin. (1.30 in)


Virgin Australia goes fancy - YouTube

Best frequent flyer program in the world?!!? LMAO...