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Qantas The " Corporate Sook" Of Australia  
User currently offlinesparklehorse12 From Australia, joined Feb 2007, 908 posts, RR: 1
Posted (2 years 9 months 1 week 5 days 15 hours ago) and read 6203 times:

I am consistently dismayed by the behaviour of and public snipping at Virgin Australia by Qantas execs. http://www.brisbanetimes.com.au/busi...p-virgin-wings-20120313-1uyef.html

I think anyone in the industry knew that as soon as VA announced the changes to the ownership structure that Qantas were going to play the card they always play which is have a public hissy fit and claim how "unfair" it is for Qantas...diddems!!!

The truth of the matter is that the Qantas sale act is outdated. In effect Australians expect QF to be a national carrier and behave like one yet the government do not support Qantas financially like other so called "national carriers". When Qantas behave in the interests of shareholders they are criticised by unions and joe average in suburban Australian as being un-Australian. This is not to say that QF have not been the beneficiary of government support on a commercial level. It is well known 500 million of tax payers money used by public servants for travel generally goes on QF and various other favours. Qantas shareholders, particularly institutional ones, are rightly sick and tired of the QF sale act and I think it is time it goes. The only reason this debate could get traction is due to Virgin Australia outsmarting QF and now, they cry foul at VA, cry foul at the QF sale act!!!!!!!!!!!!!!!

The amount of energy, money and rapant consultant spend that will be wasted on blabbering about Virgin could be better spent worrying about the string of utter mediocrity and disasters that have been the story of QF in the past 6 -9 months. JQ Pacific, MH - QF JV are two examples. QF have no where to turn to find a partner because they are too difficult to work with, I know first hand! The MH blow up is a classic examples of Qantas having no knowledge of cultural awareness. I know the script....it just repeats. Qantas send in the bafoon headed cowboys to bust heads "we know how it is done and you will do as WE want"..."like it or lump it"..well, MH clearly told them to stick it up their shirt....

QF quit sulking and get down to developing a legitimate strategy to deal with your butts getting kicked by VA!!!!!


Airlines Flown : QF,NW,AA, CX, AC, MH, SQ, DJ, NZ, TG, PG,US, FJ, J8, AN, DD, JQ
44 replies: All unread, showing first 25:
 
User currently offlinemariner From New Zealand, joined Nov 2001, 25692 posts, RR: 85
Reply 1, posted (2 years 9 months 1 week 5 days 14 hours ago) and read 6150 times:
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Quoting sparklehorse12 (Thread starter):
The truth of the matter is that the Qantas sale act is outdated.

I think that is the point that Qantas is making and I think it is a perfectly reasonable position.

mariner



aeternum nauta
User currently offlinesparklehorse12 From Australia, joined Feb 2007, 908 posts, RR: 1
Reply 2, posted (2 years 9 months 1 week 5 days 14 hours ago) and read 6101 times:

Mariner

Yes, however, they are attacking Virgin for it.....



Airlines Flown : QF,NW,AA, CX, AC, MH, SQ, DJ, NZ, TG, PG,US, FJ, J8, AN, DD, JQ
User currently offlinemariner From New Zealand, joined Nov 2001, 25692 posts, RR: 85
Reply 3, posted (2 years 9 months 1 week 5 days 14 hours ago) and read 6083 times:
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Quoting sparklehorse12 (Reply 2):
Yes, however, they are attacking Virgin for it.....

I think that's fair. Virgin is proposing to circumvent Australia's airline ownership laws - it's entirely legal, but surely not the intention of the legislators. Or I hope it wasn't.

But if what Virgin is proposing is upheld, then Qantas should have the same freedom and not be restricted by an act that only applies to it and to no other airline.

mariner



aeternum nauta
User currently offlinesydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Reply 4, posted (2 years 9 months 1 week 5 days 14 hours ago) and read 5995 times:

Quoting sparklehorse12 (Thread starter):
I am consistently dismayed by the behaviour of and public snipping at Virgin Australia by Qantas execs.

Aw poor little Virgin under attack from the big, bad, flying Kangaroo. Poor Richard Branson, he's not renoun for having a whinge in public is he?

Quoting sparklehorse12 (Thread starter):
QF quit sulking and get down to developing a legitimate strategy to deal with your butts getting kicked by VA!!!!!

If you look at QF's domestic performance there is absolutely no justification for your statement. Sure, some Corporates have gone VA's way, but both VA and QF are still expanding capacity and are following the same script in relation to chasing mining $$$'s. Meanwhile QF's overall market share is still at 60%.

Virgin is the least of the Qantas problems.

Quoting mariner (Reply 3):
Virgin is proposing to circumvent Australia's airline ownership laws - it's entirely legal, but surely not the intention of the legislators. Or I hope it wasn't.

To clarify, what Virgin is doing is the same as what Ansett did. That is split off the domestic business and make sure the International part is ringfenced by having at least 51% Australian ownership. Ansett accomplished that by having an outside group of Australian Institutions hold 51% of Ansett International. Virgin, to date, has articulated no such plans so all Qantas is doing is asking the IASC to clarify the new entities ownership structure and how exactly Virgin will make sure the 49% foreign holding isn't breached before air rights are transferred into the new entity. That's a fair and reasonable thing for Virgin to do.


User currently offlinemariner From New Zealand, joined Nov 2001, 25692 posts, RR: 85
Reply 5, posted (2 years 9 months 1 week 5 days 13 hours ago) and read 5938 times:
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Quoting sydscott (Reply 4):
Virgin, to date, has articulated no such plans so all Qantas is doing is asking the IASC to clarify the new entities ownership structure and how exactly Virgin will make sure the 49% foreign holding isn't breached before air rights are transferred into the new entity.

Virgin has certainly articulated a plan to split domestic and overseas operations which can - or could if you prefer - change the domestic/overseas ownership structure:

http://www.smh.com.au/business/qanta...p-virgin-wings-20120313-1uyef.html

"QANTAS has demanded a review of Virgin Australia's radical shake-up of its ownership structure, which will open the way for more foreign investors and airlines to snap up stakes in its domestic business.

Less than three weeks before Virgin completes the restructure, Qantas has called for a ''comprehensive, public review'' into the changes to ensure its rival's international operations - to be split into a separate entity - meet the rules needed for it to retain rights to fly overseas routes as a designated Australian carrier"


As I sad, it is entirely legal, but I think the Qantas position is entirely reasonable.

mariner



aeternum nauta
User currently offlineTruemanQLD From Australia, joined Feb 2007, 1596 posts, RR: 0
Reply 6, posted (2 years 9 months 1 week 5 days 13 hours ago) and read 5918 times:

While I realise I am usually taking QF side on most arguments on this board (as some would well know), I do, once again agree. I don't think this is DJ's fault, so much the laws regarding it. Why should QF be subject to any different laws than DJ? or TT for that matter. I do not agree with the law that domestic carriers can be 100% foreign owned, but thats another matter. QF should be subject to exactly the same laws as DJ. end of story as far as I am concerned.

Also, this whole notion that keeps getting plastered on the forums is that DJ has suddenly became a larger airline than QF and is beating QF in every aspect. I think QF real concern is not DJ, but SQ/EK/EY/TG and other airlines like that. DJ has a very small international presence with no plans to expand with their own metal and their domestic market share is no where near QF's.


User currently offlineqf002 From Australia, joined Jul 2011, 3020 posts, RR: 2
Reply 7, posted (2 years 9 months 1 week 5 days 12 hours ago) and read 5823 times:

Quoting sparklehorse12 (Reply 2):
Yes, however, they are attacking Virgin for it.....

I don't think that it's fair to say QF are attacking Virgin over this... They are calling for a "comprehensive, public review".

QF isn't attacking anyone -- it's attacking the QF Sales Act. And so it should, in this situation.

IMO, the Australian Government either has to allow QF to operate completely independently of the Government (ie abolish the Sales Act), or they have to take some responsibility for the company and it's situation. In the past, the Government has adopted a fairly protectionist policy with regards to QF (ie Pacific rights restrictions and so on), and that was fair given the constraints QF faces in doing business.

If those protectionist measures are now removed (which I think is the right thing to do), then so should the restrictions surrounding QF. They have to be able to compete on a fair playing field to every other player.


User currently offlineAngMoh From Singapore, joined Nov 2011, 505 posts, RR: 0
Reply 8, posted (2 years 9 months 1 week 5 days 12 hours ago) and read 5801 times:

Quoting TruemanQLD (Reply 6):
While I realise I am usually taking QF side on most arguments on this board (as some would well know), I do, once again agree. I don't think this is DJ's fault, so much the laws regarding it. Why should QF be subject to any different laws than DJ? or TT for that matter. I do not agree with the law that domestic carriers can be 100% foreign owned, but thats another matter. QF should be subject to exactly the same laws as DJ. end of story as far as I am concerned.

While one one hand the QF Sale Act causes restrictions, it also had indirect benefits. I don't think SQ would have been refused SYD-LAX flights if it was DJ protesting. Also, QF would have been 100% owned by BA a long time ago without that act.


User currently offlinesydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Reply 9, posted (2 years 9 months 1 week 5 days 12 hours ago) and read 5801 times:

Quoting mariner (Reply 5):
Virgin has certainly articulated a plan to split domestic and overseas operations which can - or could if you prefer - change the domestic/overseas ownership structure:

You mis-understand what I was saying. Virgin has not yet said how the are going to gaurantee the 51% Australian shareholding. Ansett had 51% big Insto's on board. Who does Virgin have and how do the plan to ensure the 51% is alwas complied with? They haven't stated any of that and what Qantas, and we agree reasonably, is asking for are details on how they plan to do this.


User currently offlineTruemanQLD From Australia, joined Feb 2007, 1596 posts, RR: 0
Reply 10, posted (2 years 9 months 1 week 5 days 12 hours ago) and read 5764 times:

Quoting AngMoh (Reply 8):
While one one hand the QF Sale Act causes restrictions, it also had indirect benefits. I don't think SQ would have been refused SYD-LAX flights if it was DJ protesting. Also, QF would have been 100% owned by BA a long time ago without that act.

Sure, I don't doubt that it has its benefits, but so does it have its drawbacks. QF evidently sees that the drawbacks outweigh the benefits.


User currently offlineqf002 From Australia, joined Jul 2011, 3020 posts, RR: 2
Reply 11, posted (2 years 9 months 1 week 5 days 12 hours ago) and read 5747 times:

Quoting TruemanQLD (Reply 10):
Sure, I don't doubt that it has its benefits, but so does it have its drawbacks. QF evidently sees that the drawbacks outweigh the benefits.

+ Many of the benefits have also been eroded significantly in recent years. Eg the SQ across the Pacific example -- SQ might not be flying the route, but VA/DL now are instead... The tie-up with SA to JNB could be another example -- this is now being shut down as well...


User currently offlinesparklehorse12 From Australia, joined Feb 2007, 908 posts, RR: 1
Reply 12, posted (2 years 9 months 1 week 4 days 18 hours ago) and read 5002 times:

Sydscott - It is not a case of poor little DJ being beat up by the big bad kangaroo as you call it. I did not make this allegation. If you reread my post rather than fire-off half cocked you would realise that I am suggesting the Qantas Sale Act is utterly stupid and not fair for QF or institutional investors.

One other point I am making is that QF should get their own house in order before trying to put a spoiler move on DJ who are actually making QF look like a bunch of school yard kids playing "lets run an airline". Having a government relations team laboring over a submission to attempt to block capacity reallocation to Indonesia is an utter waste of time! This is corporate sulking at it's worst and demonstrates clearly that DJ are wining this "dog fight"....they have been hopelessly outmanouvered on many many fronts.

Lets look at the facts of why they are getting their butts comprehensively kicked. The alliances DJ have put together while still in their infancy are a strategic masterpiece compared to the bungled MH OW sponsoring by QF, JQ disaster in Vietnam, Fleet Grounding, "RED Q" implosion, network cut backs, loss of corporate market share. Given your position as continual QF apologist I am sure you will come back saying all these things were "beyond QF control"....

There are still issues with JQ Japan that are yet to roost....

By the way..Richard Branson is a million miles from DJ in influence. I acknowledge he is a large shareholder and holds two board positions but he is not even in the picture.....



Airlines Flown : QF,NW,AA, CX, AC, MH, SQ, DJ, NZ, TG, PG,US, FJ, J8, AN, DD, JQ
User currently offlinegemuser From Australia, joined Nov 2003, 5815 posts, RR: 6
Reply 13, posted (2 years 9 months 1 week 4 days 17 hours ago) and read 4912 times:

Quoting AngMoh (Reply 8):
Also, QF would have been 100% owned by BA a long time ago without that act.

Well that's your opinion, and that's fine, but I must disagree. IMHO you are ignoring the history of Australia/UK relations since 1942 (the Fall of Singapore, ironically enough!). It would NEVER have happened, politically, economically or socially. QF would have imploded first. In fact you could argue that it was more likely that QF would own 100% of BA and that would have faced exactly the same problems from the other direction.

Gemuser



DC23468910;B72172273373G73873H74374475275376377L77W;A319 320321332333343;BAe146;C402;DHC6;F27;L188;MD80MD85
User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Reply 14, posted (2 years 9 months 1 week 4 days 17 hours ago) and read 4853 times:

Quoting sparklehorse12 (Reply 12):
It is not a case of poor little DJ being beat up by the big bad kangaroo as you call it. I did not make this allegation. If you reread my post rather than fire-off half cocked

I even quoted it in my post for you. You said it.

Quoting sparklehorse12 (Reply 12):
One other point I am making is that QF should get their own house in order before trying to put a spoiler move on DJ who are actually making QF look like a bunch of school yard kids playing "lets run an airline".

I'd have thought culling jobs, cutting routes and locking out your workers to bring an end to the industrial disputes was QF trying to get its house in order. (Whether or not we agree that they're doing it the right way is another matter)

Quoting sparklehorse12 (Reply 12):
Having a government relations team laboring over a submission to attempt to block capacity reallocation to Indonesia is an utter waste of time!

Ultimately the Virgin bid will be successful. All the QF submission will do is force Virgin to reveal publicly how its now International Airline Company will maintain its 51% Australian Shareholding which it is required to have under the Air Navigation Acts. I'd have though the IASC would also need to consider this as part of a capacity allocation in order to ensure the airline receiving the capacity can legally use it.

Quoting sparklehorse12 (Reply 12):
This is corporate sulking at it's worst and demonstrates clearly that DJ are wining this "dog fight"....they have been hopelessly outmanouvered on many many fronts.

Which dogfight are Virgin winning again? Are they winning the re-structure dogfight that QF legally can't participate in? Are they winning the dogfight to Indonesia where they compete against Jetstar and not QF?

Quoting sparklehorse12 (Reply 12):
bungled MH OW sponsoring by QF

The establishment of Jetstar Asia gives OW options in Southeast Asia. And although QF is the sponsor, without other airlines in the grouping backing them MH wouldn't be admitted anyway. THe advantages of QF and MH allying with each other are too great an opportunity to pass up even if you do have to work with Tony Fernandes.

Quoting sparklehorse12 (Reply 12):
JQ disaster in Vietnam

Vietnam has been a difficult market for JQ from the outset and was probably a little too ambitious. However with the shareholding issues now settled and with Vietnam Airlines now using JQ Vietnam like Qantas uses JQ here, you will see the brand moving forward. Hell it may even bring Vietnam Airlines and QF closer together. Again, that would be a good thing since QF already codeshares on their services.

Quoting sparklehorse12 (Reply 12):
Fleet Grounding

There were probably better ways but Industrial disputes have to be brought to an end one way or another and the unions should have played their cards better. I mean you don't go out and pick a fight with a Company whose Chairman smashed the mining unions in his previous position and expect to come out of it without a black eye.

Quoting sparklehorse12 (Reply 12):
"RED Q" implosion

That was always pie in the sky rubbish. They should focus on Jetstar expansion in Asia.

Quoting sparklehorse12 (Reply 12):
network cut backs

We all knew QF was not performing well on HKG-LHR and on SIN-BOM. The surprise was that they lasted as long as they did. But a re-focus on SIN and premium A380 services to LHR while building services with LAN @ SCL and AA @ DFW will hopefully arrest the slide. Along with the new 744 interiors QF is at least exectuing a though through plan even if we disagree with it.

Quoting sparklehorse12 (Reply 12):
loss of corporate market share

When you start off with 100% of something there is only 1 way it's going to go!


User currently offlinemariner From New Zealand, joined Nov 2001, 25692 posts, RR: 85
Reply 15, posted (2 years 9 months 1 week 4 days 16 hours ago) and read 4744 times:
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Quoting Sydscott (Reply 14):
There were probably better ways but Industrial disputes have to be brought to an end one way or another and the unions should have played their cards better.

I'll defend that action by Alan Joyce until the cows come home, and it did exactly what it set out to do - brought some industrial peace.

But we agree on the way the unions played it.  

mariner



aeternum nauta
User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Reply 16, posted (2 years 9 months 1 week 4 days 14 hours ago) and read 4663 times:

Quoting mariner (Reply 15):
I'll defend that action by Alan Joyce until the cows come home, and it did exactly what it set out to do - brought some industrial peace.

Mariner, I'm also a supporter of it in that I believe such a showdown has been inevitable at QF for years. The buck had been passed from Geoff Dixon to Alan Joyce and AJ finally just said enough was enough, the answer to your demands is no.

The only group I feel sorry for are the pilots because their form of industrial action, while annoying, was hardly disruptive. I think their Union Leaders, more than any others, played their cards wrong and got the strategy wrong. If they had stopped their industrial action when a showdown became inevitable with the other 2 unions, the pilots could have re-started it now and kept it going until the short haul pilots EBA comes up this year. With both pilot groups in negotiations the Unions would have had a much stronger hand to play in negotiations.


User currently offlinemariner From New Zealand, joined Nov 2001, 25692 posts, RR: 85
Reply 17, posted (2 years 9 months 1 week 4 days 14 hours ago) and read 4632 times:
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Quoting sparklehorse12 (Reply 12):
Lets look at the facts of why they are getting their butts comprehensively kicked. The alliances DJ have put together while still in their infancy are a strategic masterpiece compared to the bungled MH OW sponsoring by QF, JQ disaster in Vietnam, Fleet Grounding, "RED Q" implosion, network cut backs, loss of corporate market share.

I think it is nonsense to compare Virgin Australia - international - with Qantas. How many overseas routes does Virgin Australia actually fly? Are you content to fly with other airlines every time you book on Virgin, which is, internationally, almost a virtual airline? That doesn't do much for Australian air crews.

To what extent is Virgin been exposed to the brutal competition by the Middle Eastern and Asia carriers?

Quoting Sydscott (Reply 16):
The only group I feel sorry for are the pilots because their form of industrial action, while annoying, was hardly disruptive. I think their Union Leaders, more than any others, played their cards wrong and got the strategy wrong. If they had stopped their industrial action when a showdown became inevitable with the other 2 unions, the pilots could have re-started it now and kept it going until the short haul pilots EBA comes up this year. With both pilot groups in negotiations the Unions would have had a much stronger hand to play in negotiations.

I agree that the pilot action was not disruptive but generally I felt that reason had been thrown out of the window and cumulative effect applied.

As old union man myself (who once took his union to court) I was appalled at how badly I thought the (non-pilot) unions played it, coming on like over-muscled apes. I felt that we had lurched back in time a few decades.

mariner



aeternum nauta
User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Reply 18, posted (2 years 9 months 1 week 4 days 12 hours ago) and read 4541 times:

Quoting mariner (Reply 17):
I agree that the pilot action was not disruptive but generally I felt that reason had been thrown out of the window and cumulative effect applied.

Agreed. I think the Unions assumed that they still had James Strong or Geoff Dixon in the chair who both rolled over to Union demands. With a Chairman like Leigh Clifford behind him, there was no way Alan Joyce was going to cave into anything QF Management thought was unreasonable.

The Unions were spoiling for a fight, the got one and then they complained about "Management activism" in Industrial relations. As if the Company has no rights to answer its disruptive workforce in industrial disputes!


User currently offlineIndependence76 From United States of America, joined Jul 2007, 276 posts, RR: 0
Reply 19, posted (2 years 9 months 1 week 4 days 11 hours ago) and read 4489 times:

The problem with Qantas is not just stuck in Australia nor exclusive to only the company.


The union issues are a given and multiple airlines are having this issue regardless of location, competitors, and culture, so I see no need to explore on this issue. We see it's something that needs to be fixed and it's too precise of a problem to generalize about it.

The alliance strategy has been too reliant and comfortable (along with many Oneworld carriers). With the downfall of Ansett Australia in 2001, Star Alliance no longer had a hold on the market. Air New Zealand joined two years earlier and reserved from room for competition, but Qantas was a giant in comparison. The trend I've seen across most Oneworld carriers is making strides through simplicity and ease, but most of the carriers have seemingly gotten careless both financially and product-wise. Qantas, in this case, allowed previously no-name airlines (such as Emirates and Etihad) to gain their geographical foothold and take control of a market which was previously a "wet financial dream" for them. Compare Qantas' economy product to that of Emirates and it's a no-brainer. Qantas appeared to ignore the warning signs and got comfortable with their QF-BA connections. The bizarre conflict between them and CX is more of a mystery than anything.

It's clear that Qantas and some international partners are in deep trouble - AA is in bankruptcy, Malev is dead, Mexicana drowned after one year, and Kingfisher will likely not live to see the year 2013. Each of these airlines (besides Kingfisher) appear to have been too conservative on their financial plans and route structures. AA has had the same old seats and cabins since 2000, Malev did not act fast enough in relation to their government support and competitive services, and Mexicana jumped into "celebratory" long-haul operations with odd equipment and cancelled their international flights within a year. It's clear from this perspective that the cavalier attitudes amongst the members (including Qantas) has resulted in the inability to step back and look at the evolution of the markets they held dominantly for years. Japan Airlines also went into bankruptcy, but the recovery has been swift and their fleet has gone back to efficient and modern basics (while keeping their service competitive). Cathay Pacific recently released some numbers of a reduction in profits, but nothing to panic about. CX has been, in my opinion, a driving example of service the rest of the alliance should have noticed. Profitability, 5-star status, a strong route system, updated cabins and fleets, and finally a keen eye for airlines in the region and their movements to compete - the latter is what I'm claiming to be the issue with nearly all Oneworld carriers.

To support my argument, MH is joining Oneworld next year (under financial trouble) and QF wanted to join in on the fun. It clearly went downhill fast (although the reason for this is not fully explained at this point). Instead of making a sincere effort to compete on the Trans-Asian routes, they were already jumping in bed with yet another future member of the club. One could argue that this alone would be a sincere effort to regain a hold on such routes, but seeing how the negotiations went would potentially suggest a different story on the matter. Qantas needs a new strategy and now it seems they have only themselves to solve the problem. Hopefully we can see a passionate, independent business model be introduced here.


Virgin Australia is successful because Virgin was able to get a good look on the market before they jumped into it. For years, Virgin Blue and all other associated carriers carved out a sufficient amount of marketshare while also watching how the Australian/New Zealand aviation industry evolved. When they time was right, they introduced long-haul operations with a proven long-distance and high-density aircraft - the 77W. The observation of the market and partnerships allowed them to see how to make friends properly. Someone above mentioned Virgin beating out Qantas in the Indonesian market - which proves my point. The union structure of Virgin Australia also allows them to compete without as much of a hassle as Qantas, but I don't see how that's important to this discussion.

I personally believe that if Qantas took the chance to order the 77W and 77L for Pacific (and some Asian) operations, they would have seen increased profitability. Compare a 77W's economics to a slightly larger (and therefore more passengers) 747-400/ER. You have two less engines, only a few less seats, and increased distance capabilities. Many argue that "it's too late" or "that ship has sailed" on the potential for ordering these aircraft and I personally don't see how it will realistically happen at this point. However, those who insisted that the 777 would compliment Qantas' fleet excellently have been proven right. Virgin jumped on the idea and now they're a newcomer making a profit.


Alan Joyce is not the man for the job. A CEO who gives his paycheck a (noticeable) boost in times of financial difficulty shows the signs of lack of interest, a desire for undeserved innocence, and most likely greed. It has made the union unhappy and destroys the trust of the shareholders which he spent months building up. His treatment and failure of the MH negotiations, to me, is a warning sign that these familiar alliances practices will not work under his management. The solution/person best for the job, however, is anybody's guess (as is with any other airline with inadequate corporate employees).


In conclusion, I believe the market is fair. Competition has gained a foothold where Qantas has turned a blind eye and the consequences are obvious to aviation enthusiasts and the people of Australia. Virgin observed the evolution of the aviation market before jumping into it and their success is noticeable. Qantas has relied too much on their alliance practices and now they're falling behind and trying to find ways to get back in the game. The way I see it, it's only going to be harder with Joyce at the end of the table.



"In general, pride is at the bottom of all great mistakes." - John Ruskin
User currently offlinemariner From New Zealand, joined Nov 2001, 25692 posts, RR: 85
Reply 20, posted (2 years 9 months 1 week 4 days 11 hours ago) and read 4427 times:
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Quoting Independence76 (Reply 19):
Virgin Australia is successful because Virgin was able to get a good look on the market before they jumped into it.

Um - Virgin (Blue or Australia) owes much of its initial success to the collapse of Ansett - nothing to do with "getting a good look at the market."

As to its present success, certainly it was profitable in the last six months of 2011 - well done:

http://www.marketwatch.com/story/vir...ofit-amid-qantas-strike-2012-02-23

"Virgin Australia doubles profit amid Qantas strike"

It did have the Qantas strikes to help it along, of course, and the first six months of 2011 were a very different story:

http://www.smh.com.au/business/earni...s-eyes-rebound-20110825-1jazb.html

"Virgin Australia has slumped to a $68 million annual loss due to the effects of natural disasters, higher fuel prices and a meltdown of its reservation system late last year."

So - on balance - (calendar) 2011 was a loss for Virgin Australia. Qantas was profitable for the full (calendar) year, so how are you defining success?

And I'll say again - Virgin Australia has very little international exposure.

Quoting Independence76 (Reply 19):
Alan Joyce is not the man for the job.

He's one of the very few Australian airline managers to have fought the unions and won.

Quoting Independence76 (Reply 19):
It has made the union unhappy and destroys the trust of the shareholders which he spent months building up.

The unions were "unhappy" long before that.

mariner



aeternum nauta
User currently offlineIndependence76 From United States of America, joined Jul 2007, 276 posts, RR: 0
Reply 21, posted (2 years 9 months 1 week 4 days 10 hours ago) and read 4381 times:

Quoting mariner (Reply 20):
Um - Virgin (Blue or Australia) owes much of its initial success to the collapse of Ansett - nothing to do with "getting a good look at the market."

As to its present success, certainly it was profitable in the last six months of 2011 - well done:

http://www.marketwatch.com/story/vir...ofit-amid-qantas-strike-2012-02-23

"Virgin Australia doubles profit amid Qantas strike"

It did have the Qantas strikes to help it along, of course, and the first six months of 2011 were a very different story:

http://www.smh.com.au/business/earni...s-eyes-rebound-20110825-1jazb.html

"Virgin Australia has slumped to a $68 million annual loss due to the effects of natural disasters, higher fuel prices and a meltdown of its reservation system late last year."

So - on balance - (calendar) 2011 was a loss for Virgin Australia. Qantas was profitable for the full (calendar) year, so how are you defining success?

And I'll say again - Virgin Australia has very little international exposure.

I'm mainly defining success based on marketshare + profits gained. While the numbers in 2011 were not too impressive, I think the link's information does come in my defense to a degree. The article states:

"Apart from having to contend with higher jet-fuel prices, the airline had $50 million ripped from its earnings by disruption caused by the Queensland floods and cyclone, $15 million due to the earthquake in New Zealand and $7 million from the ash cloud in June."

The year before was much better and indeed profitable. Natural disasters in this case (along with the reservation system blunder) took major tolls. It's difficult to argue that their organization "does not work" when natural events change their financial structure in such a way.

I don't think it's too soon or irrational to believe their 77W's are better at making more money than Qantas' 747-400/ER's. Virgin may not have immediate international exposure, but I think it's rational to assume it's growing. They are now under one brand in AU/NZ and it will be easier to make a name for themselves as time goes on.

Quoting mariner (Reply 20):
He's one of the very few Australian airline managers to have fought the unions and won.

Yes, but they had to be locked out for a number of days before something was officially done. He succeeded, but he had to put the airline through hell to get it. Thankfully, it's seemingly sorted out now.

Quoting mariner (Reply 20):
The unions were "unhappy" long before that.

The first part of my sentence was not directly associated with the last part. I'm clearly aware of the union troubles of the past. Mere misunderstanding.



"In general, pride is at the bottom of all great mistakes." - John Ruskin
User currently offlinemariner From New Zealand, joined Nov 2001, 25692 posts, RR: 85
Reply 22, posted (2 years 9 months 1 week 4 days 10 hours ago) and read 4357 times:
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Quoting Independence76 (Reply 21):
I'm mainly defining success based on marketshare + profits gained. While the numbers in 2011 were not too impressive, I think the link's information does come in my defense to a degree. The article states:

"Apart from having to contend with higher jet-fuel prices, the airline had $50 million ripped from its earnings by disruption caused by the Queensland floods and cyclone, $15 million due to the earthquake in New Zealand and $7 million from the ash cloud in June."

Indeed. And Qantas had many (all?) of the same problems. I guess you know how much money Qantas made in that same period?

Quoting Independence76 (Reply 21):
I don't think it's too soon or irrational to believe their 77W's are better at making more money than Qantas' 747-400/ER's. Virgin may not have immediate international exposure, but I think it's rational to assume it's growing.

We can all wish - hope - dream - but I am not aware that Virgin Australia has any unfulfilled orders for any 777's.

Quoting Independence76 (Reply 21):
Yes, but they had to be locked out for a number of days before something was officially done. He succeeded, but he had to put the airline through hell to get it. Thankfully, it's seemingly sorted out now.

As the British SAS troops say - "who dares wins". Mr. Joyce dared - and he won.

It has yet to be seen if Mr, Joyce has a grand vision for Qantas. Equally, it is yet to be seen if CEO Borghetti has a grand vision for an international Virgin Australia.

mariner

[Edited 2012-03-15 01:13:11]


aeternum nauta
User currently offlineBill142 From Australia, joined Aug 2004, 8466 posts, RR: 8
Reply 23, posted (2 years 9 months 1 week 4 days 9 hours ago) and read 4213 times:

Corporate sook of Australia? That's bit rich, clearly no ones read any news featuring Clive Palmer lately.

User currently offlinesparklehorse12 From Australia, joined Feb 2007, 908 posts, RR: 1
Reply 24, posted (2 years 9 months 1 week 4 days 7 hours ago) and read 4025 times:

Quoting mariner (Reply 17):
I think it is nonsense to compare Virgin Australia - international - with Qantas. How many overseas routes does Virgin Australia actually fly? Are you content to fly with other airlines every time you book on Virgin, which is, internationally, almost a virtual airline? That doesn't do much for Australian air crews.

To what extent is Virgin been exposed to the brutal competition by the Middle Eastern and Asia carriers?

Nonsense??? There is no comparison to be had. Borghetti had the vision and the desire to develop a way to build an extensive network through alliances. How many failed alliances have QF had in recent times??? MH and BA come to mind. QF had the opportunity to work with EY and CX but everyone knows QF are to hard to work with. They had the opportunity and squandered it...

Syd Scott - Honestly. If Red Q was "pie in the sky" why was there an entire team of ex big 4 management consultants working with Lesley Grant on the project?? It was a massive failure and to resign it to "pie in the sky" is an indication that you find it hard to admit that QF have made some school boy errors. SE Asia is a grave yard of Australian businesses going up there with all guns blazing and failing...Fosters had the same issue in Vietnam....

On another point too, aviation in the corporate market is a zero sum game so you rightly point out that when you start high it is there to be lost. However, you underestimate the power of indumency in the corporate travel market and I can tell you DJ sales team are useless, it is Borghetti that is doing all the heavy lifting. So an entire QF sales team against one guy. I know you will scoff at this suggestion but I have a better idea than you would...



Airlines Flown : QF,NW,AA, CX, AC, MH, SQ, DJ, NZ, TG, PG,US, FJ, J8, AN, DD, JQ
25 TN486 : It would appear they have not learnt anything in the last 30 years. Amen to both. off topic I know, but when you have a leading union heavyweight (!!
26 tayser : HAHAH!! and LOL @ the thread title! very good summary - one point I'd like to point out however: VA haven't received or ordered anymore 77Ws - they a
27 Independence76 : The article stated it in the afterward. You already mentioned that Virgin does not have the international exposure Qantas does - which is likely a ma
28 mariner : A major factor in what? The international arm of Qantas was said to be losing money last year, so the profits mostly came from domestic, Jetstar and
29 Independence76 : Some certain routes have gained some financial footing that would not be immediately expected (SYD-DFW-BNE-SYD). I'm not entirely sure why they dumpe
30 mariner : They may be the way to go for Virgin - as I said I think it is possible that Australia cannot sustain two airlines with complex international route m
31 Sydscott : Because the cash flows from DFW were deemed to be better than SFO. I'll tip that either QF or JQ will return to SFO with the 787 in the future. And t
32 AusA380 : It needs to be remembered that all the people and businesses that purchased shares when QF was floated and have continued to purchase shares in the y
33 Post contains images 747m8te : QF are a far bigger airline, with a major route network VA could only dream of...VA doesn't have the issues QF has to deal with because they still do
34 Independence76 : That's my main argument on their international losses. The Trans-Asia market is now a bloodbath between such carriers. The only truly competitive edg
35 RyanairGuru : They already have an 'alliance' of sorts with SQ who is there Asian distributor. So long as that relationship works out they have no need for Air Asi
36 Sydscott : QF wouldn't need to negotiate as Dubai has already said it's open to another airline to hub there for flights. So QF could move from Singapore to Dub
37 RyanairGuru : It's within A330 range from PER and 744/380 range from the East Coast. The key benefit is that is within A330 range of Europe. Increasingly I'm wonde
38 mariner : As a concept, it works for me. Hindsight is always perfect vision but I believe now what I believed at the time - that the biggest single mistake tha
39 Sydscott : It works for me too. As I said above, QF wanted more beyond rights through Hong Kong so if they got that I could imagine QF using that as a second hu
40 Post contains images VH-BZF : Well said Mariner! Look no one doubts that Virgin have had to reinvent themselves to be relevant and MORE profitable in the Australian market. They a
41 RyanairGuru : Having reflected on my earlier comment, I think I've discovered a new-found respect for this model: VA is not loosing money on its international "net
42 sparklehorse12 : Transforming itself......? Wow, how are they doing that? By: Squashing everyone into QCC & QCA? Going open plan? Coming out with "Grow With Asia"
43 Post contains images mariner : I don't like alliances, I don't use them. If I want fly on Etihad (which I do) why would I book on Virgin? And since any trip I make to London will a
44 5MillionMiler : Well technically Bain and BCG are not "Big Four". "Big Four" are accounting firms: PwC, Deloitte, Ernst & Young and KPMG. All the geniuses suppor
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