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Qantas in Chaos!

December 5, 2013

708040-qantas-tails

 

  • Massive pre-tax loss of $300 million…!!
  • Thousands of jobs to go…!
  • Share price in free fall!

Qantas plans to cut at least 1,000 jobs over the next year after reporting an expected pre-tax loss of up to $300 million in the first half of this financial year.

The airline’s chief executive Alan Joyce says sales have deteriorated during the past few months, as the same time as Qantas has been in a war of words over foreign ownership with its rival Virgin Australia.

“Our November figures have shown us that there continues to be deterioration in the revenue performance of the business and our competitor has just received $350 million, meaning they can continue their uncommercial behaviour,” he told a media teleconference after the announcement.

“We are putting all options on the table in a review of our structure.”

Mr Joyce says the cuts will include 300 jobs already being axed at its heavy maintenance facility near Geelong in Victoria

Qantas has flagged a pre-tax loss of between $245 million and $300 million in the six months to December 31.

It also expects to cut the salaries of Mr Joyce and the company’s board.

It will impose a pay freeze and ban bonuses for all other executives.

Mr Joyce says the airline will do “what ever we need to do to secure the Qantas Group’s future”.

“The challenges we now face are immense – but we will overcome them and we will continue to build a stronger and better Qantas for Australia,” he said.

“Since the Global Financial Crisis, Qantas has confronted a fiercely difficult operating environment – including the strong Australian dollar and record jet fuel costs, which have exacerbated Qantas’ high cost base.”

The company’s share price has plunged by 14.1 per cent after the announcement.

At 10:45am (AEDT) they were trading at $1.03.

Mr Joyce says Qantas is facing strong competition on domestic and international routes.

“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,” he said.

 

 

 

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138 Comments leave one →
  1. TB Queensland permalink
    December 5, 2013 11:31 am

    Here we go! Here we go! Here we go!

    Those fkn unions again … 🙄

    Didn’t this little prick get a massive pay-rise so that they could make a profit? 🙄

    Why doesn’t the board recognise his fkn incompetence? 🙄

    He never had the ability to run an airline as big as QANTAS … who employed him? 🙄

  2. Walrus permalink
    December 5, 2013 11:31 am

    Never buy shares in an airline

  3. Walrus permalink
    December 5, 2013 11:33 am

    “… who employed him?”

    Geoff Dixon (his predecessor) and the Board I guess

  4. Tom of Melbourne permalink
    December 5, 2013 11:38 am

    Airlines are difficult businesses, particularly ones that have to deal with outdated structures, unions all over them and a government that gives a head start to competitors

  5. Splatterbottom permalink
    December 5, 2013 11:50 am

    “It also expects to cut the salaries of Mr Joyce and the company’s board.”

    A good start, but the little fucker will probably leave with a massive payout!

    Still Qantas, as a national icon, should be saved. The most sensible way of achieving that is to let the company fail and sell the brand to Virgin.

  6. TB Queensland permalink
    December 5, 2013 12:07 pm

    … let the company fail and sell the brand to Virgin.

    LOL!

    Maybe we could apply the same reasoning to the Federal Government and Clive Palmer … 😉

    Go Clivey!

  7. December 5, 2013 12:46 pm

    Xenophon: “Why should 1,000 Qantas employees & their families be sacrificed for the failed strategy (Jetstar) of Joyce, Clifford & Board?”

  8. Splatterbottom permalink
    December 5, 2013 1:05 pm

    Xenophon: “Why should 1,000 Qantas employees & their families be sacrificed for the failed strategy (Jetstar) of Joyce, Clifford & Board?”

    What a fucking idiot! What does that even mean?

    And what about the poor shareholders who have just been sacrificed?

    Should the government should run all businesses to protect the employees from bad management decisions? Or maybe the government should pass a special law protecting the jobs of all workers? Or maybe just those who work for an iconic Australian company?

    Or maybe Xenophon should just admit that he is a populist pollie on the make, mouthing meaningless platitudes.

  9. Splatterbottom permalink
    December 5, 2013 1:08 pm

    The market is an evil thing – sacrificing people all over the place. Time for the government to step in and run things properly. A planned economy would be so much better than the chaos of the market. Why oh why hasn’t this been tried yet?

  10. Tom of Melbourne permalink
    December 5, 2013 1:41 pm

    Politicians and union officials are always experts on running airlines. Paul Howes routinely tells Qantas what it should be doing.

    Shorten was also an expert in the aviation industry, apparently.

    If unions allowed Qantas the same structure and work practices they allow Virgin, it would be stable and profitable.

  11. December 5, 2013 1:42 pm

    “This is a very difficult period for Australia’s aviation industry ”

    #BillShortenstatingthefknobvious

  12. December 5, 2013 1:45 pm

    The airline industry is a tough game but Joyce hasn’t made it easy for himself. Qantas is far bigger than Virgin but he has allowed the airline to outwit him every step of the way. If this latest demonstration of the pain Qantas is suffering doesn’t work, his next card might be to threaten to close international and the many thousands of staff.

    There will be a lot of twists and turns in the Qantas saga. Where it will end is anybody’s guess but it will be bloody and brutal.

    http://www.smh.com.au/business/comment-and-analysis/qantas-saga-to-get-more-bloody-and-brutal-20131205-2ysis.html#ixzz2mZ3COUX4

  13. Walrus permalink
    December 5, 2013 1:49 pm

    “If unions allowed Qantas the same structure and work practices they allow Virgin, it would be stable and profitable.”

    Qantas due to its maturity is burdened by entrenched work practices and Union deals.

    Virgin is newer an nimbler and never allowed ridiculous deals from its existence.

  14. Tom of Melbourne permalink
    December 5, 2013 1:58 pm

    Virgin is newer an nimbler and never allowed ridiculous deals from its existence.

    Exactly! Virgin doesn’t bother with stuff like apprenticeships and engineering programs. It doesn’t get itself burdened with local maintenance of its fleet.

    Unions are helping euthanise an aging airline business, but I’m not grateful.

  15. IPA permalink
    December 5, 2013 2:16 pm

    Xenophon is a weathervane in search of a breeze.

  16. December 5, 2013 3:27 pm

  17. Tom of Melbourne permalink
    December 5, 2013 3:49 pm

    I’m not sure anyone’s sexual orientation is an indication of their competence

  18. December 5, 2013 3:58 pm

    It hasn’t… but he a narcy short Gay man. I lived with one they and short man syndrome, bitchy and power hungry in a small package = no conscience, cant be told, not my fault and never wrong.

  19. egg permalink
    December 5, 2013 4:00 pm

    ‘…but he a narcy short Gay man.’

    Oh my dog!

  20. December 5, 2013 4:04 pm

    ‘…but he a narcy short Gay man.’

    Ahem… How would you like to banned – the express option or the economy route?

  21. Giggling Walrus permalink
    December 5, 2013 4:15 pm

    Just open the spaminator and toss him in

  22. TB Queensland permalink
    December 5, 2013 4:39 pm

    A planned economy would be so much better than the chaos of the market.

    LOL! One extreme to ‘tother … but both rely on competent people and curbing of greed …

    ++++++++++++++++++++++++++++++++++

    Paul Howes routinely tells Qantas what it should be doing.

    Well I’m no fan of Piggy Howes but someone should be telling them … Joyce lost the plot before he even had one …

    ++++++++++++++++++++++++++++++++++

    Virgin is newer an nimbler and never allowed ridiculous deals from its existence.

    Oviously a better management team and more satisfied employees …

    ++++++++++++++++++++++++++++++++++

    Virgin doesn’t bother with stuff like apprenticeships and engineering programs. It doesn’t get itself burdened with local maintenance of its fleet.

    Are you being sarcastic here? I certainly hope so …

    Oh … I see … it just takes the cream … mmmm … what a way to run a business … have you ever tasted Virgin’s version of food … I’m sure Sir Richard ain’t!

  23. TB Queensland permalink
    December 5, 2013 4:40 pm

    Just open the spaminator and toss him in

    LOL! Didn’t know whether to laugh or point the finger … LOL! Apologies, sreb … Giggle Wally made me do it!

  24. TB Queensland permalink
    December 5, 2013 4:42 pm

    Its —- The Sreb Norton Show!

    Rec Chair Segment coming up after the break … giggle …

  25. Tom of Melbourne permalink
    December 5, 2013 5:35 pm

    Perhaps Ricky doesn’t understand that some of us were banned at the Café for objecting to the range of homophobic comments (excused/condoned by the blog admin) directed at Joyce during the last Qantas dispute.

  26. TB Queensland permalink
    December 5, 2013 5:38 pm

    I think Ricky might get a second chance here tho’ … for the reverse …

  27. Walrus permalink
    December 5, 2013 5:45 pm

    Since Jetstar Asia was Joyce’s and the Board’s idea, which although perhaps a good idea, has become a disaster under them I think it’s now time for Joyce and the Chairman to go and for the Qantas Sale Act to be amended to allow foreign ownership of Qantas.

    I mean for fucksake as much as we bleat about closing down that other Aussie icon Holden who the fuck owns it ?

    That’s right………………….foreigners

  28. December 5, 2013 5:48 pm

    I agree with Walrus.

    Get rid of Joyce (who’s clearly out of his depth) sack the board and sell the bloody thing off to the Chinese…

  29. TB Queensland permalink
    December 5, 2013 5:55 pm

    Why not sell Australia to the Chinese?

    There’s 23,000,000 of us just add another six naughts and we could all be millionaires and just fk off anywhere …

    I’ve always said, Joyce was out of his depth … he’s just a narcy … oops … 😉

  30. Walrus permalink
    December 5, 2013 6:04 pm

    “Why not sell Australia to the Chinese? ”

    Already done………………..currently being shipped by Sea Freight care of Rio and BHP

  31. December 5, 2013 6:05 pm

    Ok Reb that was a bit harsh, i’m a bit emotional about my shares in the castrated Skippy.. I most wholeheartedly retract and apologise for any offence.

    I stupidly went through a spell of buying Aussie shares including Qantas when I was working on a tender for them.

    The long term viability of the business was killed by idiotic economic rationalism short term vision.

    The downfall started when they closed down there LAME training and pilot schools, then killed of the maintenance & catering business, which was a huge earner for them. Fuel costs and the corporate merged conglomerates they are competing with will see them die a slow painfull death.

    This nationalistic sentimental vegemite syndrome is ridiculous and Hokeys platitudes will do nothing to fix what was cast in the market over the past 10 years. You gotta love this government hoisting the flag of free market economy as core ideology then bitching about failing or protecting monopolies controlled by their mates.

    I have two mates that worked for Q and they were snapped up in the private sector because of their LAME qualifications.
    No being gay has nothing to do with being an incompetent prick who is nothing more than a hatchet man who would outsource taking a piss.

  32. Walrus permalink
    December 5, 2013 6:06 pm

    “Get rid of Joyce (who’s clearly out of his depth) sack the board…….”

    Yep

    Change the Act but also we need some “clean air” at Board and Exec level

  33. December 5, 2013 6:11 pm

    Apology accepted Ricky. 🙂

    It’s shame you bought shares in Qantas…

    No one in their right mind would recommend buying shares in an airline…

  34. Tom of Melbourne permalink
    December 5, 2013 6:40 pm

    LAME training continues, the problem is the work practices. There are just too many of them, and in best practice airlines they are more supervisory than hands on.

    LAMEs are highly qualified and expensive, to have them doing basic tradesman work is a poor work practice, which it is driven by union coverage.

    When Qantas LAMEs go and work for other airlines, they aren’t doing the same work as at Qantas.

  35. Tom of Melbourne permalink
    December 5, 2013 6:42 pm

    There are just too many of them (too many LAMEs I mean)

    Qantas needs less of them and more qualified aircraft tradespeople doing the maintenance work.

    (but not wishing to start a debate that I can’t continue, because I’m now off for dinner)

  36. December 5, 2013 6:45 pm

    Forgive my ignorance – what is a LAME qualification?

  37. December 5, 2013 6:50 pm

    Licensed Aircraft maintenance Engineer. Qantas trained the best in the world. They were the benchmark. The company used to do maintenance for other airlines, now they outsource..since accountants don’t do taxes any more they run the world.

  38. Tom of Melbourne permalink
    December 5, 2013 7:01 pm

    A LAME is a Licensed Aircraft Maintenance Engineer’. To become a LAME you require an aircraft trade, ie engine & airframe or avionics.

    Beyond this qualification a lengthy work record on various aircraft is required- a Schedule of Experience.

    Once this is completed there is a lengthy course on an aircraft type, lasting several months. A separate course is required for the various different models of 747s, 767s, 737s, each type of Airbus.

    The commitment to this training is huge and expensive. LAMEs earn huge incomes.

    In most airlines they are used mainly for oversight. In Qantas they’re mainly hands on.

    This is a stupid waste of an expensive resource.

    (I’m off!)

  39. December 5, 2013 7:02 pm

    I see. Thanks Ricky…

  40. TB Queensland permalink
    December 5, 2013 7:17 pm

    Already done………………..currently being shipped by Sea Freight care of Rio and BHP

    Bloody hell … yer firin’ today, Wally! LOL! 😆

  41. TB Queensland permalink
    December 5, 2013 7:22 pm

    … since accountants don’t do taxes any more they run the world.

    Aw fk, Ricky, now you’ve upset the resident bean counter … a group of zombies almost human beings who have no sense of humour …

    Wally is a CPA* or CPR* or sumfink … ignore the posts above Wally must have been drinking all week …

  42. December 5, 2013 7:29 pm

    That’s the thing with bean counters. If they were in charge of actually running a company, they go broke immediately coz they’d be too fin scared to spend any money!

  43. December 5, 2013 7:29 pm

    I thought Walrus was a bookkeeper? 😯

  44. TB Queensland permalink
    December 5, 2013 7:37 pm

    LOL!

  45. December 5, 2013 7:49 pm

    I worked for Price Waterhouse for a while, the beanies got all jealous I had my own office, apparently that was a big thing in beanieland..they were a weird mob.. All fiberal born to rule old boys. They loved me because I saved them shitloads of money, the way to a bean counter is through their wallet… theys get all excited about depreciation while I got all excited about my secretary 🙂

  46. December 5, 2013 7:59 pm

    Hey heres some irony for ya, my super @ PW was a very generous 15% non contributory in their own scheme..It went belly up. Pissed myself laughing actually.

  47. IPA permalink
    December 5, 2013 8:37 pm

    What is a country without a Unionised National Carrier!?

    OI!

  48. December 5, 2013 9:26 pm

    ‘ ‘ ‘ ‘ ‘I agree with Walrus.

    Get rid of Joyce (who’s clearly out of his depth) sack the board and sell the bloody thing off to the Chinese’ ‘ ‘ ‘ ‘
    Ditto. We don`t need another dedicated welfare industry like auto`s.

    Easy to rejig the jingle too,

    l`ve been to city`s that never shut down,
    from Bangkok to Hanoi to old Beijing town,
    no matter how far, or how wide l roam,
    l still call Jakarta home, 🙂

  49. Tom of Melbourne permalink
    December 5, 2013 9:43 pm

    It’s interesting that the industries people wish to close are the ones that provide apprenticeship and technical training

  50. December 5, 2013 9:51 pm

    Is Joyce the sol trujillo of the airline industry? Veritably Errol Flynning his way through the industry. Whats wrong with this picture? An incompetent irish free market cowboy with no fucking idea slashing the workforce first to pay for his stupidity rings the sentimental nationalistic icon bell for protectionism. Its the next GM Ford Toyota fiasco Then we Have Corgi Beastiality complaining that News can’t compete with the “leftist” ABC when they have 76% of the market…This lot are genius’s arn’t they. 🙂

  51. Walrus permalink
    December 5, 2013 10:54 pm

    “.It went belly up. Pissed myself laughing actually.”

    So you were obviously on the Board of Trustees advising on investment strategies.

  52. Walrus permalink
    December 5, 2013 11:07 pm

    Actually I can’t find any reference to such a fund going” belly up”

    Care to elaborate as to when ?

  53. December 5, 2013 11:27 pm

    Around 1994/5 ish, it was the private super fund of PW, something they set up themselves, I have no idea what it was called. I remember when I joined the company it was part of my package @ 15% non contributory and about six months to a year after I left I got a letter saying so long thanks for the fish. I had an AMP super account which I put my super in on top of it (I have always paid double super since I started work), but I know a few of the partners took a big hit.

  54. December 6, 2013 10:52 am

    This is what you are dealing with, Hypocritical tosspots that politicise the opening of a matchbox
    http://www.theaustralian.com.au/national-affairs/policy/environment-minister-greg-hunt-says-carbon-tax-put-106m-on-qantas-costs/story-e6frg6xf-1226776131931

  55. December 6, 2013 2:51 pm

    Qantas staff blame Jetstar for airline’s woes…

    http://www.smh.com.au/business/aviation/qantas-staff-blame-jetstar-for-airlines-woes-20131205-2ytmx.html

  56. Tom of Melbourne permalink
    December 6, 2013 2:56 pm

    Jetstar was built from the remnants of the old Impulse Airlines, that’s why they have a low cost structure.

    It has probably been the saviour of the Qantas business, Qantas employees live in an isolated world, who take high pay and discount airfares for granted. They need a powerful wakeup call.

  57. December 7, 2013 9:30 pm

    ***A LAME is a Licensed Aircraft Maintenance Engineer.***
    CORRECT
    .
    ***To become a LAME you require an aircraft trade,***
    ie engine OR airframe OR INSTRUMENT(electronics/avionics.)
    Each one is a specialty, the workers have no hope in hell of qualifying in all `fields` and keeping-up with the alterations, up-grades, alterations etc,
    .
    ***Beyond this qualification a lengthy work record on various aircraft is required- a Schedule of Experience.***
    Must be kept by Law, mandatory.
    .
    Once this is completed there is a lengthy course on an aircraft type, lasting several months. A separate course is required for EACH OF the various different models of 747s, 767s, 737s,(boeings) each type of Airbus.
    .
    ***The commitment to this training is huge and expensive.***
    ***LAMEs earn huge incomes.***
    Compared to what.? Obviously not the boardroom.
    .
    ***In most airlines they are used mainly for oversight.***
    adamair
    ***In Qantas they’re mainly hands on.***
    casa.? Required by Law, just as other Licensed people are required `by-Law` to do the work in other fields/industry`s, plumbers, shotfirers, electricians, gas-workers, welders, machine/truck drivers.
    .
    ***This is a stupid waste of an expensive resource.***
    Qantas verses adamair and the rest of the airlines that have used plenty of passengers as crash-test dummy`s.

  58. egg permalink
    December 7, 2013 9:56 pm

    ‘THE biggest airline in Asia, state-owned China Southern, held detailed discussions last year to bankroll a group of wealthy investors – including former Qantas chief executive Geoff Dixon, adman John Singleton and retail king Gerry Harvey – to buy a cornerstone shareholding in the national carrier.

    ‘The Weekend Australian understands the powerhouse Asian carrier was introduced to the consortium by billionaire trucking magnate Lindsay Fox and that Mr Dixon held discussions with China Southern chairman Si Xianmin, encouraging the Chinese to provide financial backing for the syndicate, which had acquired a stake of about 2 per cent in Qantas.’

    Kitney & Creedy / Oz

  59. Tom of Melbourne permalink
    December 8, 2013 12:19 am

    I suppose I should be grateful that 7.30 provides an opportunity to illustrate the lack of general knowledge of aviation in the public. But somehow, I’m not.

    For any airline to operate in Australia it must have CASA approval of its maintenance and approval airworthy systems, without this the airline can’t fly in our airspace.

    So when Virgin gets its heavy maintenance done in Vietnam or China, or Thailand or India, does he think that it’s all done by our LAMEs or perhaps that the work is mainly performed by their own labour but supervised by people with licences that meet CASA requirements?

    Thanks 730, but best you stick to _”teabagz blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, teabagz blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, teabagz blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah,t eabagz blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah,
    teabagz blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, teabagz blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, teabagz blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah

  60. Tom of Melbourne permalink
    December 8, 2013 12:22 am

    …and perhaps 730 would explain why AMWU, AWU and ETU have lobbied for an overhaul of the aircraft licences systems, as the current structure limits the skill and career development of their members.

  61. TB Queensland permalink
    December 8, 2013 5:49 pm

    … and perhaps 730 would explain why AMWU, AWU and ETU have lobbied for an overhaul of the aircraft licences systems, as the current structure limits the skill and career development of their members.

    Perhaps you could explain why that’s a bad thing, ToM?

    And in similar vein … what a pity anyone without qualifications can become a manager or consultant … if a business degree was involved we might get better outcomes … at least they’d understand something on planning, leading, organising and controlling … rather than marketing and simple cost cutting …

  62. Tom of Melbourne permalink
    December 8, 2013 8:23 pm

    LAMEs are very, very expensive TB and other airlines use the capability to oversee the maintenance work, which is performed in Australia by well paid tradesmen who have spent years learning to work on aircraft.

    As you probably recall, best practice normally means that tradespeople sign off their own work, but here that isn’t possible. Tradesman can’t sign off their own work as complete. A LAME does that.

    It’s an archaic approval structure and only exists to fortify union coverage and allow LAMEs to gain a financial windfall.

  63. December 9, 2013 10:47 pm

    ‘ ‘ ‘ ‘For any airline to operate in Australia it must have CASA approval of its maintenance and approval airworthy systems, without this the airline can’t fly in our airspace.’ ‘ ‘ ‘

    But once they receive `casa` approval, the `corporate-airline` is then free to `out-source` their maintenance to `outside` contractors, just as every other `corporate` does. As the chain of `out-sourcing` gets longer, the ability to retain `quality`/safety control plummets.

    30 years of `out-sourcing` in the textile and footwear industry, now `nearly` guarantees (just-about) every shoe or shirt most of us buy is produced in, sweatshop, child-worker, slavery supplied.

    .

    ‘ ‘ ‘ ‘LAMEs are very, very expensive’ ‘ ‘ ‘
    But nowhere near the boardrooms big-bucks.

    .
    ‘ ‘ ‘ ‘heavy maintenance done in Vietnam or China, or Thailand or India, does he think that it’s all done by `our` LAMEs’ ‘ ‘ ‘
    lt will be done under `that` nations laws and regs. `Free-trade` anus flexing then lets the other nation do a trade `swap`, you-let-us, and we will let you. Don`t count on the inspection regime and quality control being the `decision`/deal maker.

    ‘ ‘ ‘ ‘the work is mainly performed by their own labour but supervised by people with licences that meet CASA requirements?’ ‘ ‘ ‘

    As l said previously, adamair. You might do better finding which `airlines` and which `nations` have had their `air-space` permissions retracted/canceled, and why.

    What is lndonesia`s airline permission status yomm.?
    And what country has the Australian `out-sourcing` gone to.?
    And what is the status of that country.?

  64. Tom of Melbourne permalink
    December 10, 2013 12:33 pm

    No idea what you’re on about 730.

    For an airline to fly in Australian airspace they require an approved engineering system.

    Other airlines use their licenced engineers for oversight, supervision etc, we largely use them as tradesmen.

    Do you think that is a good use of a valuable resource, or do you think it might be more cost effective to use actual tradesmen to perform trades level work?

  65. Jared wilson permalink
    February 25, 2014 12:43 am

    Qantas has made some large mistakes, just like Ansett, they have old 767 aircraft, take to long to get new aircraft, never ahead of the competitors with in-flight products. A big mistake was join forces with Emirates, Qantas joined forces with a player which is too big, I keep seeing the future of qantas being owned by Emirates, no kangaroo on the tail but a camel….
    The qantas alliance fit should be British Airways, Cathay and Qatar all one world airlines. Qatar is a fairly young airline, the alliance would help both carriers , currently I see to much capacity on the Sydney-Dubai etc., I read somewhere that qf a380 aircraft are not full heading to Dubai?

    I live in perth, it’s a disgrace, qantas only flys once a day out of perth to singapore, that’s right Australian Airline, they only fly 1 time a day, no more Hong Kong, Japan, Bali.
    Etc

    Qantas is letting the competitions take over, qantas use to fly 2 times daily to singapore, ever since they cancelled one flight
    Singapore airlines flys min. 3 times a day some days 4 , tiger increased to 2 daily and now scoot started daily, and soon most likely double daily

    All these airlines are singapore airlines corp.

    These are some of the issues with qantas

  66. Tom of Melbourne permalink
    February 25, 2014 9:02 am

    QANTAS is gearing up to axe 5000 jobs and sell its terminal at Melbourne Airport to prove to the Abbott Government it can make the tough business decisions required to obtain federal assistance

    Qantas appears likely to terminate the employment of all the overheads in Mascot- rout planning, yield, human resources/training, much of finance.

    It’s a short term measure, as it will need some of these functions in a year or so.

    Then I’d tip that planning and accounting could be outsourced to an overseas partner, training etc contracted. In the longer term there would be huge savings via contracting and offshore services. Next we’ll see all heavy maintenance being performed offshore. Qantas appears determined to rescue itself.
    http://www.news.com.au/finance/business/qantas-set-to-axe-5000-jobs-and-sell-its-melbourne-airport-terminal-to-negotiate-federal-assistance/story-fnkgde2y-1226836584967#

  67. February 25, 2014 9:23 am

    Qantas appears determined to ask the government to rescue itself.

  68. February 25, 2014 9:27 am

    I flew Qantas return to Bangkok and it was like taking a trip back in time. The aircraft was a relic from the past.

    While other more progressive airlines have large touch screen onboard entertainment screens, this Qantas plane had those tiny little screens the size of a cigarette box with the stupid remote control attached to the seat with a retractable cord.

    The management is simply inept….

  69. Tom of Melbourne permalink
    February 25, 2014 10:16 am

    Yes, some of the fleet is a little dated, but they hold aircraft longer because they maintain them to such high standards.

    …and the high standards are a consequence of the entire maintenance and engineering system, not because they’re overloaded with highly paid LAMES.

  70. February 25, 2014 10:46 pm

    l heard on tonights tv-news that mr-rabbit is going to `dump` the `ownership` restrictions this week _ #watch-list

  71. February 26, 2014 7:47 pm

    ex-qantas big-shot rekons that a 300-mill$ loss will mean `restructure` of 10%-to-20% of the workforce, 10%=3300-jobs(approx), union dude rekons only one job should go, ‘Joyce’

  72. February 26, 2014 7:50 pm

    it also seems qantas `landing permits` rely on being govt-backed/owned which is hindering mr-rabbits ability to unfetter `ownership`

  73. Jherek Jagged permalink
    February 26, 2014 8:08 pm

    Tony Abbott will subsidise (in a manner) to not protect Australian jobs, but will not subsidise to save them?

  74. February 26, 2014 10:12 pm

    it is not up to the govt to `subsidise` (in `any` manner) corporate `jobs`,

    it is the false belief held by `both` sides of the duopoly to do so

    (state/s and federal)

  75. Neil of Sydney permalink
    February 26, 2014 10:31 pm

    Strange that all the companies in the news in trouble have strong Unions.

  76. Jherek Jagged permalink
    February 27, 2014 8:19 am

    n all the noise about the travails affecting Qantas – high labour costs, fuel, state-owned and hugely resourced global competitors from China and the Middle East – very little is mentioned about strategic errors from management or the board.

    In the past five years, it has deliberately alienated customers, conducted a war of attrition with its employees and bitterly disappointed its shareholders. Management, meanwhile, has been handsomely rewarded.

    How will taxpayers fare?

    http://www.abc.net.au/news/2014-02-26/qantas-has-softened-up-the-public-for-a-helping-hand/5285552

  77. Jherek Jagged permalink
    February 27, 2014 8:19 am

    According to none other than the chairman of the particular tourism forum, Liberal MP for Wannon Dan Tehan, Joyce said the Qantas Sale Act was preventing it from further capital raising. This is nonsense. Qantas never had the slightest problem making capital raisings — most of them oversubscribed, under the “restrictive” Qantas Sale Act  — until the current management took over five years ago.

    It was often argued that the QSA actually improved the attractiveness of Qantas to overseas investors because it guaranteed that at least 51% of the enterprise would be supported by Australian investors on the share register because of the cap on foreign domiciled shareholders. Qantas raised $1.2 billion from offers that were often jointly supported by domestic and foreign investors in nine offers pre-Joyce.

    http://www.crikey.com.au/2014/02/13/flying-monkeys-qantas-wish-list-wont-save-joyces-management

  78. Splatterbottom permalink
    February 27, 2014 9:17 am

    “Strange that all the companies in the news in trouble have strong Unions.”

    Not strange at all. Companies protected by subsidies or monopoly status can, in the short term at least, pass on the costs. Typically management of such enterprises has grown fat and lazy, not having to face market forces. They are only too willing to be extorted by Unionland thugs.

    No one, least of all ripped-off consumers, will shed a tear when Ponzi scheme ends in the destruction of businesses that might otherwise have survived under competent management.

  79. Walrus permalink
    February 27, 2014 10:01 am

    “…but they hold aircraft longer because they maintain them to such high standards.”

    Plus being Long Haul ex Australia routes and return there are fewer takeoffs and landings per 10,000 kms travelled and consequently less stress on the ship itself.

  80. Walrus permalink
    February 27, 2014 10:53 am

    Qantas getting smashed up a bit down 11c to $1.16

  81. Jherek Jagged permalink
    February 27, 2014 11:35 am

    “Strange that all the companies in the news in trouble have strong Unions.”

  82. Tony permalink
    February 27, 2014 11:44 am

    What unique rights and/or obligations does Qantas have as Australia’s so-called “national carrier”? This term gets used a lot to justify proposed special treatment for Qantas. Does it have any meaning, or is it just a carry over from before privatisation, when Qantas was government owned?

  83. Jherek Jagged permalink
    February 27, 2014 11:56 am

    The Government uses tax payers dollars to prop up a business that has shown it is reckless with money, and, as soon as they get their Guarantee, sack 5,000 people. The Government REFUSE to help companies who will save jobs with tax payer dollars.

    We, the taxpayer, are now actually paying to destroy jobs rather than save them. This is the Government we have voted in.

    I wonder how many Qantas workers believed the media campaign?

  84. February 27, 2014 11:59 am

    “We, the taxpayer, are now actually paying to destroy jobs rather than save them. This is the Government we have voted in.”

    EXACTLY!

    And here I was thinking that “Australia was open for business now that the adults are in charge…” 😯

  85. Jherek Jagged permalink
    February 27, 2014 12:04 pm

    Australia IS open for business reb. It just depends on your business

    Thérèse Rein will be raking it in.

    Tom Joads Ghost will be returning soon at this rate.

  86. Walrus permalink
    February 27, 2014 12:15 pm

    “Unionized Air New Zealand posts $300m profit on the same day……”

    And last year it posted a $71M Loss.

    So are you now advocating we buy back Qantas ?

  87. Walrus permalink
    February 27, 2014 12:18 pm

    I do wish Qantas just had an ugly looking Funnel Web Spider on its tail.

    Sentiment towards it might be different

  88. Walrus permalink
    February 27, 2014 12:18 pm

    Perhaps a Cane Toad ?

  89. Jherek Jagged permalink
    February 27, 2014 12:19 pm

    are you now advocating we buy back Qantas

    Not with the current board it has. They have done so much damage, it is probably terminal by now anyway

  90. Splatterbottom permalink
    February 27, 2014 12:25 pm

    Was “terminal” a pun?

  91. Walrus permalink
    February 27, 2014 1:09 pm

    I don’t believe it is terminal but it needs radical surgery.

    Internationally it has to compete with completely different cost structures (i.e. lower) and now it cannot differentiate its product enough to coax customers to choose it over much cheaper rivals. Afterall most airlines are now the safest they have ever been and the aircraft themselves don’t need as much maintenance these days. Even Garuda has cleaned up its act.

    Domestically it still makes money because its competitors are subject to base similar cost structures but they are crucially without the featherbedding and inflexibilty which has built up over the years that Qantas has to endure.

    Joyce should go plus most of the Board because their venture into Asia has been a disaster and I don’t think people really like flying through a Middle Eastern city (clash of culture ?) compared to going via Singapore or Bangkok where there is greater “Western tolerance”.

    I certainly wouldn’t like it but since my last Qantas flight when my bread roll was lobbed by the hostess over the heads of 2 adjoining passengers rather than passed over in a civilized manner* we fly Singapore/Thai/Malaysian anyway.

    * Business Class was fully booked

  92. Tom of Melbourne permalink
    February 27, 2014 3:03 pm

    Qantas suffers from a range of ailments, including-
    • Some of the route planning has been unsuccessful
    • Some of the choices in aircraft and fleet configuration have not been ideal

    However, its cost structure is entirely unsatisfactory-
    • Direct employment of ground staff, and all the bells and whistles that goes with the airline industry. Competitors contract out similar functions. Qantas even employs its own catering division churning out poor food.
    • Poor structure of its engineering and maintenance workforce, with too many that are paid too much, overlaid with classification/pay/union driven training. Other airlines sue these highly skilled people sparingly, for oversight rather than for hands on mechanical work.
    • Overburdened with middle management types, who are often covered by a union award.
    • Capacity limitations, with operations based in the congested and costly Mascot area.
    • Highly paid cabin crew, who make as much out of their meal/travelling allowances as they do in wages.

    Qantas requires more offshore outsourcing to lower its cost base. There are Malaysian and Vietnamese support organisations that are able to carry out route planning, aircraft maintenance, back office functions, just as capably as people n Mascot, but at a much lower cost.

    That’s the future of Qantas, unfortunately, because many of the employees haven’t valued their company or their jobs.

  93. Jherek Jagged permalink
    February 27, 2014 3:04 pm

    Qantas suffers from a range of ailments, including-

    its board

    End of story

  94. Tom of Melbourne permalink
    February 27, 2014 3:04 pm

    Other airlines sue use these highly skilled

  95. Jherek Jagged permalink
    February 27, 2014 3:18 pm

    Other airlines don’t have the safety record of Qantas

    Other airlines are also massively subsidised by Governments

    Other airlines don’t have Joyce

  96. February 27, 2014 3:21 pm

    “Other airlines don’t have Joyce”

    Bingo!

  97. Tom of Melbourne permalink
    February 27, 2014 3:35 pm

    Joyce is willing to take on some sacred cows, which is necessary.

    The other CEO candidate, John Borghetti, didn’t have the reform courage, he was part of the traditional management dead hand. The board made the right decision in choosing Joyce in front of him.

  98. Jherek Jagged permalink
    February 27, 2014 3:36 pm

    Stranding your entire customer base is “reform courage”?

  99. February 27, 2014 6:37 pm

    sbs1, qantas 5000 #jobs to go,

    (more wet-dreams fulfilled eh yomm)

  100. February 27, 2014 6:45 pm

    True/False.? _ 3-out-of-4 aussies do NOT fly qantas, but use other airlines.?

  101. Tom of Melbourne permalink
    February 28, 2014 12:53 pm

    I listened to Dick Smith on the ABC this morning, interviewed by Jon Faine, Smith was interviewed as an “aviation expert”

    Faine got a little bothered because Smith said Qantas could not compete with airlines that paid their pilots half our rates and cabin crew 10%. He said that Qantas need to source more of its labour out of Asia.

    Faine, typically, could only splutter – “that would create industrial chaos”, inadvertently identifying the root cause of Qantas’ problem. Smith made some telling points.

    People in Qantas have great jobs, but they’re generally isolated from the reality of employment conditions in other industries, and in other parts of the international aviation industry.

    Largely Qantas people don’t value their company or their jobs sufficiently. Holden, Ford, Toyota, Alcoa, SPC… should form some type of wake up call for them, but I suspect the unionised employees remain delusional.

  102. Jherek Jagged permalink
    February 28, 2014 12:57 pm

    Holden, Ford, Toyota, Alcoa, SPC… should form some type of wake up call for them, but I suspect the unionised employees remain delusional.

    Except that in all of those cases, the companies came out and contradicted the Governments (and your) argument that it was because of labour costs

  103. Tom of Melbourne permalink
    February 28, 2014 1:29 pm

    Haven’t you figured it out yet? ‘High dollar’ means high wages, on international comparison.

    If our $ was about US$0.40, do you think anyone would be talking about high wages?

  104. Jherek Jagged permalink
    February 28, 2014 1:37 pm

    High dollar’ means high wages, on international comparison.

    Just when I thought you might be able to be taken seriously.

  105. Tony permalink
    February 28, 2014 1:41 pm

    But, but, Qantas is a National Icon!

    OI!

  106. Jherek Jagged permalink
    February 28, 2014 1:51 pm

    But, but, Qantas is a National Icon!

    So WAS Holden 😦

  107. Tom of Melbourne permalink
    February 28, 2014 2:10 pm

    In case you haven’t figured it out, manufacturers prefer to say “high A$” rather than “high wages”, it’s the politically correct terminology. But that may have passed you by JJ.

  108. Jherek Jagged permalink
    February 28, 2014 2:36 pm

    it’s the politically correct terminology

    Rubbish. When wages are too high, employers say wages are too high. When the Aus dollar is at parity with the US making exporting difficult or impossible, they say the dollar is too high.

    You are really living in fairy land Tom. Is this the kind of rubbish you try and push onto your clients?

    Manufacturers are the least of all employers to use PC terms. Although, what your attempting isn’t even PC, it’s utter rubbish. Bullshit is a more colloquial term for it.

  109. armchair opinionator permalink
    February 28, 2014 3:01 pm

    😆

  110. Tom of Melbourne permalink
    February 28, 2014 3:08 pm

    Why have those manufacturers closed down? They usually say “high dollar”

    “High dollar”, means high domestic costs.

    Some examples of domestic costs incurred by manufacturers-
    • Direct wages
    • Expansion/construction of plant (wages are 50% of costs)
    • Plant overhaul (wages are 70% of cost)
    Other domestic costs include-
    • Transport – internationally set price for fuel
    • Power – we’re intent on coughing up our competitive advantage in low cost power

    High dollar actually means high wages to manufacturers. They’re just too polite to say it directly.

  111. armchair opinionator permalink
    February 28, 2014 3:58 pm

    Martin Ferguson urges Tony Abbott to make more radical changes to Fair Work Act:

    http://www.abc.net.au/news/2014-02-28/fair-work-act-needs-reform-ferguson/5290282

    eh??

    …Mr Ferguson was the resources minister in the Rudd-Gillard governments and retired from politics at the last election.

    He now chairs an advisory board for the Australian Petroleum Production and Exploration Association (APPEA)…

    ohhh really?

    it’s that corporate controlled political duopoly again, what chance do the mere citizens have?

  112. Jherek Jagged permalink
    February 28, 2014 3:58 pm

    “High dollar”, means, that the dollar is high 😯

  113. Jherek Jagged permalink
    February 28, 2014 4:00 pm

    Martin Ferguson urges Tony Abbott to make more radical changes to Fair Work Act:

    Dead, Buried, Cremated.

    “But ours is called ChoiceWork, not WorkChoice” (It must be a Kiwi thing)

  114. Neil of Sydney permalink
    February 28, 2014 4:04 pm

    JJ

    In the 1970’s we used to make almost everything in Australia and now it is almost all gone.

    What is your explanation for this??

  115. Jherek Jagged permalink
    February 28, 2014 4:10 pm

    What is your explanation for this?

    Too many Liberal Guvmints? 🙂

  116. Neil of Sydney permalink
    February 28, 2014 4:14 pm

    Too funny.

    As you well know Labor was in power for most of the time manufacturing was leaving. 13 years of Hawke/Keating and 6 years of Rudd/Gillard compared to 11 years of Howard.

    A large chunk of manufacturing left when Hawke dropped the tariff barriers.

  117. Meta permalink
    February 28, 2014 4:14 pm

    (What is your explanation for this?

    Neocon neoliberalism; read the final Orgill Report and extrapolate; if government(s) don’t own or do nuthin’ any more, and nuthin’ of any considerable standard, neither does anyone else, especially the much-vaunted private sector, perty much. But you probably missed that key observation, since nobody from the MSM reported it; and now those same forward thinkers of the past thirty years, from both major parties, want to trash the ABC to improve standards; and to trash just about anything else left they can spin off into oblivion, to complete the best-and-worst-of-all-possible-worlds outcome. Or something like that. Oh, and without better or even adequate information, you too can be ‘not even an informed purchaser’, these days; not about government, not about the private sector, not about anything. really; and so it goes in the free choice future.)

  118. Jherek Jagged permalink
    February 28, 2014 4:14 pm

    What is your explanation for this?

    Adjusting to a global economy. And, we always fought to keep things here, now, we actively participate into forcing them offshore

    We did have a viable manufacturing industry. It was re-adjusting its size to fit in with the global economy. It could/would have survived with two car manufacturers, three was always a stretch, particularly when the parent company is suffering. Never before has a Government actively engaged in chasing jobs offshore in such an ideological manner. It is a national shame that they have chosen ideology over peoples livelihood.

    Qantas, however, was also a viable concern, until joyce got hold of it and drove it into the ground.

  119. Jherek Jagged permalink
    February 28, 2014 4:16 pm

    What Meta said, only not as well.

  120. Neil of Sydney permalink
    February 28, 2014 4:20 pm

    And, we always fought to keep things here”

    Really?? We fought to keep making TV’s, fridges, washing machines, irons etc??

    I bet you the Hawke govt made the decision that it would be better if we imported these things cheaply and got our workers doing something else.

  121. armchair opinionator permalink
    February 28, 2014 4:34 pm

    As you well know Labor was in power for most of the time manufacturing was leaving. 13 years of Hawke/Keating and 6 years of Rudd/Gillard compared to 11 years of Howard.

    I agree with meta too

    The ‘capitalist worker’ era, the total embracement of neoliberal economics by both sides.

    …except the things that protected workers against the free market have now been dismantled…medicare, education, skills training etc

  122. Tom of Melbourne permalink
    February 28, 2014 4:45 pm

    until joyce got hold of it and drove it into the ground.

    I see.

    So what exactly is your plan to salvage the airline (beyond blaming Joyce)?

  123. Splatterbottom permalink
    February 28, 2014 5:05 pm

    Saving the airline is easy: Double staff wages; double the number of staff; ask the government to pay for it. Keep some of that for management and shareholders and everyone is happy. What’s not to like about that?

  124. February 28, 2014 5:07 pm

    “So what exactly is your plan to salvage the airline”

    Sack the board and Joyce and sell what’s left to Singapore Airlines.

  125. armchair opinionator permalink
    February 28, 2014 5:09 pm

    My feeling is that joyce cosied up to abbott and co long before they got into power and a stitch up deal was done then. That is why we had the big lock out and customers were stranded. We are now seeing the end of the drama play out exactly as rehearsed pre election. Don’t for one minute think this isn’t another attack on the workers as planned by the qantas board and the libs.

    Forgive the cut & paste of comment that I saw on the marn ferguson article, I think it is relevant.
    http://www.abc.net.au/news/2014-02-28/fair-work-act-needs-reform-ferguson/5290282#comments

    gra_x2 1:32 PM on 28/02/2014
    OK – There are 2 big problems in all of this that gets totally lost in the rhetoric.
    1) “Wages” are too high. Which “wages” are people talking about? Treating it as a catch all is crazy. Yes there are undoubtedly some industries where staff costs are far too high for the work being done. But it is hard to argue that some of the lowest paid and most vulnerable are overpaid for what they do.

    2) We either believe in the free market or we don’t. At the end of the day companies sell their product for the highest price the market will bare. It is not a cost plus model. Why should workers not be able to sell their labour at the highest price they can get? Gina bangs on about the high cost of labour whilst making record profits. You can’t have it both ways. Mine workers were able to extract those wages based on supply and demand as well.

    Cost reduction and maximising profit is the aim of any business. The low hanging fruit is direct costs so the lazy companies go after that. And aussie companies are generally lazy. The hard earned gains come from process improvement and innovation. Look at Germany etc. High cost but ultra efficient. Look at the US – Low cost, socially splintered and going out backwards.

    You want to see efficiency and productivity fall? Treat your staff as a commodity. You watch, you can remove all the protections entirely and poorly run inefficient companies will still fail. Innovation people!

  126. Jherek Jagged permalink
    February 28, 2014 5:28 pm

    You can’t have it both ways.

    sshhh. Don’t tell Gina

  127. Tom of Melbourne permalink
    February 28, 2014 5:46 pm

    That’s reasonable AO.

    If Australia wants to be a high wage country, it needs to develop a reputation as one with a very reliable workforce. Australia might have a reasonably skilled workforce, but it was a well earned reputation for unreliability and chain dragging.

    No one with a few billion to invest seriously thinks about putting it into any of Australia’s non mining industries, and that is significantly because our reputation for reliability is polluted.
    ———–
    Sack the board and Joyce and sell what’s left to Singapore Airlines.

    That’s a likely outcome, and the sell it to Singapore bit will be a little sad.

  128. egg permalink
    February 28, 2014 5:51 pm

    ‘Sack the board and Joyce and sell what’s left to Singapore Airlines.’

    Seems perfectly reasonable, but I think the Chinese would pay more.

  129. Jherek Jagged permalink
    February 28, 2014 6:29 pm

    but it was a well earned reputation for unreliability and chain dragging.

    Do you have some kind of evidence to support this assertion?

    No one with a few billion to invest seriously thinks about putting it into any of Australia’s non mining industries

    Tell that to the renewables industry, or IT, or Film production, or tourism, or real estate, or car manufacturing before they were chased offshore.

    It might sound a bit weird when Gina says it, it’s a downright affront to reality when you do.

    Mind you, this Government is starting to make it a reality. Which really doesn’t lend itself to the “High wage” argument.

  130. Neil of Sydney permalink
    February 28, 2014 8:02 pm

    JJ

    You know i don’t think there is a single thing you say i agree with.

  131. February 28, 2014 11:20 pm

    ”””””””””’Haven’t you figured it out yet? ‘High dollar’ means high wages, on international comparison.”””””””””correct

    Haven’t you figured it out yet?

    High property/home prices require high wages,

    FACT, PEOPLE NEED A HOME,
    thus, ultra-cheap rental/purchase program needed for the ultra-low-paid you advocate FOR yomm, your road-map to detroit will only provide higher homeless rates and crime rates, but no solutions flow out from your cubicle

  132. Neil of Sydney permalink
    February 28, 2014 11:23 pm

    “High property/home prices require high wages,”

    From what i have seen not many people earn what Toyota/Holden production line workers earn.

    I have seen figures of > 100K/year with overtime.

    How many people are on wages like that??

  133. February 28, 2014 11:33 pm

    Some examples of domestic costs incurred by citizens-
    • Shelter/Home, rental or purchase
    • Energy Utility/s, Electric and/or Gas
    • Transport, Vehicle with Insurance and Rego to `get` to shit-job (petrol,lots)
    • Food and Grocery`s (we need to eat)
    .
    All increasing much faster than those of us on the bottoms `earnings`

  134. February 28, 2014 11:37 pm

    Add to that list,
    * Communications, internet to find shit-job, (thus Landline), household mobile so shit-job is NOT missed

    #yay.for.depriving.citizens

  135. March 1, 2014 1:08 am

    bleat, bleat, bleat, kneel, your stupid comment on wages (`auto`) 1-aint-qantas and 2-not-relevant without hours worked, 100k=what? in terms of hours/shift.? 40-hours=?

  136. Tom of Melbourne permalink
    March 4, 2014 11:38 am

    It really is pathetic that Qantas has become a political football.

    • The ALP is pathetic for seeking to continue to load it up with a shocking range of inefficiencies about where is can get its catering, maintenance, admin done. That’s just pandering to union driven inefficiency.

    • The government is pathetic for not having an interim plan, to assist Qantas stabilised while it seeks the lifting of the burdensome legislative changes.

    Even after getting rid of 5,000 people, Qantas will still employ almost 30,000 people, in good, well paid jobs with outstanding airline benefits.

  137. Walrus permalink
    March 4, 2014 12:01 pm

    Last week I thought there might be some future for Qantas.

    Now its just another “Deadman Walking”

  138. March 5, 2014 11:46 pm

    ”””’Qantas has become a political football.”””””’

    When it is the worker getting it in the neck, Teabags call it a `political-football`.

    When Joyce was getting his million$ in $alary and Bonu$, Teabags saw `no-problem` and remained silent in their cubicle.
    .
    .
    ”””Now its just another “Deadman Walking”””’

    Agree, and Joyce is the executioner.

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