Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
QF Separates International & Domestic Ops  
User currently offlineQFVHOQA From Australia, joined Mar 2012, 439 posts, RR: 0
Posted (2 years 3 months 1 week 3 days 11 hours ago) and read 11839 times:

According to the Sydney Morning Herald, QF will split QF international and QF domestic into two separate "businesses". Whether this means they will be separately listed remains to be seen.

Quote:
"Formally separating the management of Qantas International and Qantas Domestic will ensure that we can independently run each business according to its specific priorities and market conditions," Mr Joyce said in a statement.

Full article: http://www.smh.com.au/business/qanta...national-wings-20120522-1z25o.html

The Qantas Sale Act will prevent QF from doing the same as VA did when it split into separate companies. Any airline operating under the Qantas name needs to be majority Australian owned. This seems to just be creating extra costs by duplicating a lot of management roles.

67 replies: All unread, showing first 25:
 
User currently offlineJackbr From Australia, joined Dec 2009, 666 posts, RR: 0
Reply 1, posted (2 years 3 months 1 week 3 days 9 hours ago) and read 11609 times:

Leading on from a thread I started earlier - could this mean the complete removal of LH Cabin Crew from any domestic flights?

User currently offlinelegs From Australia, joined Jun 2006, 239 posts, RR: 0
Reply 2, posted (2 years 3 months 1 week 3 days 9 hours ago) and read 11528 times:

Quoting QFVHOQA (Thread starter):
creating extra costs by duplicating a lot of management roles.

Not only that, but how will Qantas International restructure in order to arrest their loss making ways of recent years?


User currently offlinesmi0006 From Australia, joined Jan 2008, 1531 posts, RR: 0
Reply 3, posted (2 years 3 months 1 week 3 days 7 hours ago) and read 11126 times:

I conceded I have minimal business understanding of these complexities but a few questions stand out for me; How will this impact international aircraft operating domestically? How will these resources be shared between the two business? What percentage of domestic flights are operated by internationally configured A330s and 747s?

How can two business that are very much intertwined be operated independently?

Qantas have stated that they only want to invest in the profitable growth areas of the business, whilst this has previously been JQ, as domestic seems to be preforming very well- can we now see as previously rumoured 787s going to domestic sooner?

Interesting development regardless! Shall be watching to see if this has an impact. I do hope it does.


User currently offlineOzGlobal From France, joined Nov 2004, 2718 posts, RR: 4
Reply 4, posted (2 years 3 months 1 week 3 days 7 hours ago) and read 10998 times:

Would this help Joyce to portray QF international as a loss maker and lobby for a sell off to a foreign investor? There are already assertions that the accounting in the Group favours JQ in terms of costs.


When all's said and done, there'll be more said than done.
User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 5, posted (2 years 3 months 1 week 3 days 7 hours ago) and read 10934 times:

I'm sure this all makes sense to Mr. Joyce somehow. For others it's just more shuffling of deck chairs...


Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
User currently offlinestrangr From Australia, joined Apr 2012, 110 posts, RR: 0
Reply 6, posted (2 years 3 months 1 week 3 days 6 hours ago) and read 10850 times:

QF International to become Jetstar?

This would then mean it can bypass the 50% Australian ownership rules, no?


User currently offlineRyanairGuru From Australia, joined Oct 2006, 5456 posts, RR: 5
Reply 7, posted (2 years 3 months 1 week 3 days 6 hours ago) and read 10807 times:

Quoting OzGlobal (Reply 4):
lobby for a sell off to a foreign investor?

I'm sure that he would like to do that, but...

Quoting QFVHOQA (Thread starter):
The Qantas Sale Act will prevent QF from doing the same as VA did when it split into separate companies. Any airline operating under the Qantas name needs to be majority Australian owned.

It isn't possible.



(any allegations of creative accounting in JQ's favour are just that: allegations)

Quoting peanuts (Reply 5):
I'm sure this all makes sense to Mr. Joyce somehow. For others it's just more shuffling of deck chairs...

I agree. There must be some kind of internal logic, but from the outside there doesn't appear to be any at all.

As others have already said, the two parts of the business are too inextricably linked. Indeed right now we have a thread about LH crews operating SH. Further they've just announced that they will be re-adding the 747 on SYD-PER. That would have to be operated by LH crews and using an international aircraft, even if they were able to separate the rest the operations into PMTN and PMQF.

[Edited 2012-05-22 00:43:43]

[Edited 2012-05-22 00:49:57]


Worked Hard, Flew Right
User currently offlineAirNiugini From Australia, joined Mar 2010, 235 posts, RR: 0
Reply 8, posted (2 years 3 months 1 week 3 days 6 hours ago) and read 10807 times:

Isn't Virgin Australia doing something like this to bypass ownership regulations?

Hopefully QF international can start pulling some decent figures to ensure it's survival.

Quoting smi0006 (Reply 3):
How can two business that are very much intertwined be operated independently?

It might just be in a managerial sense. Operationally speaking, I'm sure not too much will change.


User currently offlineFlyboyOz From Australia, joined Nov 2000, 1985 posts, RR: 25
Reply 9, posted (2 years 3 months 1 week 3 days 6 hours ago) and read 10759 times:

Quoting strangr (Reply 6):
QF International to become Jetstar?

I hope NOT! or ...QF international to become RedQ?



The Spirit of AustraliAN - Longreach
User currently offlineAirNiugini From Australia, joined Mar 2010, 235 posts, RR: 0
Reply 10, posted (2 years 3 months 1 week 3 days 6 hours ago) and read 10728 times:

Quoting FlyboyOz (Reply 9):

I reckon... Hopefully they fight hard for the international sides survival... I think the small international footprint could not possibly get any smaller, I hope we see some growth in mainline QF international services soon.


User currently offlineJackbr From Australia, joined Dec 2009, 666 posts, RR: 0
Reply 11, posted (2 years 3 months 1 week 3 days 6 hours ago) and read 10712 times:

It could be just like TAA again...

User currently onlineqf002 From Australia, joined Jul 2011, 2968 posts, RR: 2
Reply 12, posted (2 years 3 months 1 week 3 days 6 hours ago) and read 10604 times:

Quoting smi0006 (Reply 3):
How will this impact international aircraft operating domestically?
Quoting smi0006 (Reply 3):
How will these resources be shared between the two business?
Quoting smi0006 (Reply 3):
What percentage of domestic flights are operated by internationally configured A330s and 747s?
Quoting smi0006 (Reply 3):
How can two business that are very much intertwined be operated independently?

I expect that there will be virtually no change to how things are run today. The only changes are that the group is now officially appointing a CEO for the International/Domestic arms and there will be two sets of figures in the Annual Reports where there used to be one.

Quoting OzGlobal (Reply 4):
Would this help Joyce to portray QF international as a loss maker and lobby for a sell off to a foreign investor? There are already assertions that the accounting in the Group favours JQ in terms of costs.

Any Australian International airline has to remain Australian owned. It's the domestic arm that VA has opened up to foreign ownership. So this move cannot be designed to flog off the foreign arm...

In any case, as RyanairGuru pointed out, the QF Sales Act restricts QF from using the same ownership laws as VA.

Quoting peanuts (Reply 5):
For others it's just more shuffling of deck chairs...

I find myself leaning towards this view. This is about creating a clear accountability for different parts of the business and setting up a more structured corporate structure.

Hopefully having dedicated arms will allow the respective businesses to better focus on their market/business as an independent entity, without having every single decision negotiated with the respective executives. This should create better results...


User currently offlineAusA380 From Australia, joined Jan 2009, 310 posts, RR: 0
Reply 13, posted (2 years 3 months 1 week 3 days 5 hours ago) and read 10529 times:

It will be really interesting to see how corporate costs and IT etc are allocated to the different "portfolio entities".

User currently offlineRyanairGuru From Australia, joined Oct 2006, 5456 posts, RR: 5
Reply 14, posted (2 years 3 months 1 week 3 days 5 hours ago) and read 10490 times:

Quoting qf002 (Reply 12):
The only changes are that the group is now officially appointing a CEO for the International/Domestic arms and there will be two sets of figures in the Annual Reports where there used to be one.

I'm leaning towards this view, but I have to question how they will split costs on the balance sheet.

Will QFD nominally "lease" the international 747s, 330s and 767s used on domestic routes from QFI? Or will QFD collect the revenue and QFI pick up the tab? If it's the latter then that is clearly an attempt to inflate QFD's profits and QFI's losses.

The same applies to QFI crew on QFD aircraft - all the 767 pilots are LH, and some SH aircraft operating domestic flights are crewed by LH FAs. Does QFD pay QFI to "contract" that labour? Again, if not then that is passing the labour costs to QFI but keeping all the revenue in QFD.

I guess it does go both ways: QFD aircraft are used on the Tasman routes (albeit crewed by JetConnect) and Noumea - but those two markets are still sufficiently small that there will be a net "loss" for QFI if there isn't some form of leasing/contract agreement.



Worked Hard, Flew Right
User currently onlineqf002 From Australia, joined Jul 2011, 2968 posts, RR: 2
Reply 15, posted (2 years 3 months 1 week 3 days 5 hours ago) and read 10349 times:

Quoting RyanairGuru (Reply 14):

I imagine the splitting of costs will occur in the same way as they do internally today -- QF already reports separate domestic/international profit figures, so they must be splitting the costs somehow in their financing as it is.

It will be really interesting to read through the first financial reports next February, hopefully we will be able to get some idea of the processes QF uses... It would be very interesting if there was a substantial change in the profit distribution (ie showing that QF has been unfairly attributing costs to International).


User currently offlinestrangr From Australia, joined Apr 2012, 110 posts, RR: 0
Reply 16, posted (2 years 3 months 1 week 3 days 5 hours ago) and read 10312 times:

I think as it stands at the moment the sale act is preventing Qantas being a profitable business. This act was struck if i am not mistaken when TAA was sold (a government owner) to a private company.

The only way I can see QF becoming profitable at present is for them to sell something. Other then that i believe the aim is to run them lower and lower until something switches, they could have a sale act that states certain things like Must remain Qantas Name, Must remain with the Flying Roo, must have x employees from australia.


User currently offlineRyanairGuru From Australia, joined Oct 2006, 5456 posts, RR: 5
Reply 17, posted (2 years 3 months 1 week 3 days 5 hours ago) and read 10278 times:

Quoting strangr (Reply 16):
This act was struck if i am not mistaken when TAA was sold (a government owner) to a private company.

TAA and Qantas were both government owned. The government merged their two entities and sold the resulting company (which - as we all know - maintained the QF name)


Re qf002 - true, I'd forgotten that they already give profit figures for both halves of the business. I guess this dispels my questions since splitting the company would make it harder to hide cross-subsidisation.



Worked Hard, Flew Right
User currently onlineqf002 From Australia, joined Jul 2011, 2968 posts, RR: 2
Reply 18, posted (2 years 3 months 1 week 3 days 4 hours ago) and read 10119 times:

Quoting strangr (Reply 16):
I think as it stands at the moment the sale act is preventing Qantas being a profitable business.

   It's ridiculous that a private company can be so heavily restricted by the government in the supposedly open/free market that the rest of the industry enjoys.


User currently offlinevhtje From United Kingdom, joined Jan 2009, 371 posts, RR: 0
Reply 19, posted (2 years 3 months 1 week 3 days 4 hours ago) and read 10056 times:
Support Airliners.net - become a First Class Member!

Quoting qf002 (Reply 18):
It's ridiculous that a private company can be so heavily restricted by the government in the supposedly open/free market that the rest of the industry enjoys.

Fine. You get elected parliament and be the politician brave enough to introduce an amendment to the Qantas Sale Act that allows Qantas to be majority foreign-owned. Or be the politician brave enough to scupper the Qantas Sale Act in its entirety.

Look - I am not saying you're wrong, nor am I saying that the Qantas Sale Act is fair and doesn't hinder Qantas' performance - I'm just pointing out that no politician will ever allow it to be changed. Can you imagine the public outcry and consequential political fallout if was changed?

Public opinion may change in the future, who knows, but the time certainly isn't now.


User currently offlineNZ107 From New Zealand, joined Jul 2005, 6417 posts, RR: 38
Reply 20, posted (2 years 3 months 1 week 3 days 4 hours ago) and read 9994 times:

Quoting strangr (Reply 16):
I think as it stands at the moment the sale act is preventing Qantas being a profitable business.

What does the ability to sell a higher percentage of an airline to foreigners have in common with being a profitable business?



It's all about the destination AND the journey.
User currently onlineqf002 From Australia, joined Jul 2011, 2968 posts, RR: 2
Reply 21, posted (2 years 3 months 1 week 3 days 4 hours ago) and read 9920 times:

Quoting vhtje (Reply 19):
I'm just pointing out that no politician will ever allow it to be changed. Can you imagine the public outcry and consequential political fallout if was changed?

100% agree.

Quoting NZ107 (Reply 20):
What does the ability to sell a higher percentage of an airline to foreigners have in common with being a profitable business?

The QF Sales Act goes much, much further than foreign ownership... It also dictates restrictions on things like the location of "the principal operational centre for Qantas" (the majority of facilities that facilitate international services -- things like mx, catering etc -- have to be in Australia), the nationality of it's directors, the location of the HQ etc.

It really does restrict their ability to cut costs in the same way other airlines.


User currently offlinegemuser From Australia, joined Nov 2003, 5640 posts, RR: 6
Reply 22, posted (2 years 3 months 1 week 3 days 3 hours ago) and read 9820 times:

Quoting NZ107 (Reply 20):
What does the ability to sell a higher percentage of an airline to foreigners have in common with being a profitable business?

The problem is the small size of the Australian capital markets. QF can't effectively make a share issue, which it should, because of this. In any share issue it has to make sure that only 50% goes to non Australians, very difficult in practice and the Australian probably couldn't absorb a $500 million capital raising now or in the near future.

This lack of capital, as opposed to debt is why QF has deferred the A380s and they haven't ordered more A330 etc. It is a major problem for all large Australian companies, but especially for QF with the ownership restriction other companies don't have.

IMHO QF should make a large capital raising that is under written by the Commonwealth Government, because they are preventing QF from doing it. That way if any shares are not sold on the market are paid for by the government and can be sold back on to the market slowly over time.

Gemuser



DC23468910;B72172273373G73873H74374475275376377L77W;A319 320321332333343;BAe146;C402;DHC6;F27;L188;MD80MD85
User currently offlineaerokiwi From New Zealand, joined Jul 2000, 2700 posts, RR: 4
Reply 23, posted (2 years 3 months 1 week 3 days 2 hours ago) and read 9508 times:

Quoting FlyboyOz (Reply 9):
QF international to become RedQ?

RedQ operated by... Jetstar? Maybe QFI could simple contract out its operations to JQ (in QF guise) and lease them the aircraft, thereby generating lease revenue while lowering costs fairly substantially.

Convoluted sure, but possible?


User currently offlinepar13del From Bahamas, joined Dec 2005, 7148 posts, RR: 8
Reply 24, posted (2 years 3 months 1 week 3 days 2 hours ago) and read 9270 times:

Quoting qf002 (Reply 12):

I expect that there will be virtually no change to how things are run today. The only changes are that the group is now officially appointing a CEO for the International/Domestic arms and there will be two sets of figures in the Annual Reports where there used to be one.

In my opinion the decision is about money, if everything is going to remain the same the cost will also. I expect the international arm to start having more non-Australian Staff working at lower wages, more a/c being based outside of Australia effectively making Australian runs visit versus a return to home, a/c spend more time outside of Australia where cost may be lower, and how knows, eventually all cabin crew will be non-Australian based quite likely also at lower wages.
Does the Qantas act also state that the majority of staff be Australian?


25 QFVHOQA : I think this is the largest issue with the QF Sale Act. The inability to raise capital on foreign markets, where Asutralia is viewed as a high intere
26 Post contains links RyanairGuru : Bizarrely no. The act does state that 66% of Directors must be Australian citizens, the company cannot be incorporated outside of Australia, and the
27 par13del : Thanks for the info, not being a lawyer I'm thinking that the word "compared" is what management might have used to get a lot of out-sourced maintena
28 Post contains links and images qf002 : The legislation you linked to is the original form -- there have been multiple ammendments since 1992. The legislation as it stands today can be foun
29 aerorobnz : No, Jetconnect aircraft trans tasman are ZK-ZQx series. They are not domestic at all as they are NZ based.
30 Boeing773ER : This is so strange, a few weeks ago I was going to make a post on here about the idea having two separate companies with the same brand name (one bein
31 strangr : we are seeing it at the moment with Telstra... Wholesale and Retail Divisions, this was I believe a FORCED separation. I can understand that the gover
32 JQflightie : Very possible, they already do this with Cobham, operating as QantasLink on B717 aircraft.
33 Zkpilot : Looks like just another accounting trick to make Intl appear to be performing badly.
34 qf002 : If anything, quite the opposite. We will now be able to see inside all the finances for both parts of the business which will make it very hard for Q
35 Bill142 : Or Jetstars costs.
36 LHRFlyer : Unless this is groundwork for a very radical restructuring I can't see how it will change anything. The constraints of geography, fleet, regulation,
37 travelhound : My thoughts as well. With JQ, frequent flyers and their transport arm currently representing a fair proportion of QF's total turnover, it could be ti
38 aerokiwi : I'm not sure publicly traded companies can employ, and get away with, accounting "tricks". Surely someone with a bit of nous would have obtained the
39 ditzyboy : Erroneous post. Sorry.[Edited 2012-05-23 05:04:34]
40 QFVHOQA : Public companies can get away with all sorts of accounting tricks, even if they are audited. Enron is a huge example, and its auditors Arthur Anderse
41 ditzyboy : Tasman flights using VH-registered aircraft (of which there are many) are operated by QAL pilots and cabin crew.
42 OzGlobal : I said "Lobby" (i.e. the government remove obstacles) to sell to a foreign interest. Joyce ONLY knows and therefore enjoys running an LCC. QF interna
43 RyanairGuru : Oh really? I didn't realise that, sorry
44 qf002 : It's actually very rare to see VH aircraft on the Tasman, aside from those few flights that are actually operated by QF rather than Jetconnect. As it
45 ADent : Huh??? It is said every company keeps 3 sets of books. 1 maximizing profits and shown to the investors. 1 maximizing losses to shown to the tax autho
46 ditzyboy : Perhaps I was forward thinking, but I suggest you look at the planned flying from June.
47 ditzyboy : Perhaps I was forward thinking, but I suggest you look at the planned flying from June.
48 brons2 : Why hasn't AJ been fired yet? All he seems to cause is turmoil. At some point, I'd think people would realize that he is the problem, not the solution
49 gemuser : Because the Board of Directors disagree with you! They (and the rest of the local financial community) like what he is doing. Gemuser
50 sunrisevalley : The problem is the change in the market that QF finds it self in. The addition of VA and DL on the North American market . the Arab carriers siphonin
51 fiscal : A bit of a contradiction there? They did get found out, and the auditors paid for not being duly diligent. AJ's actions may well be an accountability
52 bos2laf : see also: Air Canada Public Participation Act for another outrageous bit of legislation To legislate how a (now) private company must run its busines
53 Post contains images RyanairGuru : The AC legislation is even worse than the QF one! Isn't there a provision in there that all customer-facing staff have to be bilingual? Needless to s
54 Post contains links QantasAirways : Here's a link to the article about Alan Joyce http://www.theaustralian.com.au/news...belts/story-e6frg8h6-1226349882403
55 Post contains images qf002 : I am just looking at QFSource, so can't see ahead in the schedules. I was just basing my post on the past 12 months... And the Board of Directors are
56 aerokiwi : Someone always brings up Enron. That was a decade ago, in the United States, and accounting practices (and monitoring of them) have been changed sinc
57 ZK-NBT : So whats happening then? I notice QF141/114 SYD-AKL-SYD and also QF45/46 SYD-CHC-SYD and QF135/136 MEL-AKL-MEL plus ZQN services. I'm not sure on MEL
58 Zkpilot : They can and do get away with it. So long as they aren't tax dodging or breaking other laws the government really doesn't care if the books show QF (
59 Post contains links QFVHOQA : I never actually accused QF of accounting tricks, I was merely providing an example that a publicly listed company is capable. I do think many compan
60 qf002 : AJ left EI a decade before it went downhill, in fact he was working for them in their heyday. And he left AN 18 months before they went bust... In an
61 aerokiwi : Transfer pricing is mostly about transnational companies using their various bases of operations (tax jurisdictions) to gain a tax advantage, eg. Goo
62 RyanairGuru : He left EI in 1998 - at the peak of its game. aerlingus[blob]com came to be in 2003 He was in middle management ... not the bloody CEO! Thank you. An
63 fiscal : Not in Australia. Paul Keating introduced tax laws to counter this practice years ago, and took all the pleasure out of it.... I dont think ASIC woul
64 Post contains images RyanairGuru : While the ATO might not care too much so long as they get their $$$s, misleading the market is a serious breach of a director's duties and can result
65 Post contains images par13del : An interesting way of looking at it, or for me, ignoring the true situation. LCC's appeared because legacy carriers were catering to their market seg
66 Zkpilot : So I hear an interesting rumour recently.... Apparently the Qantas board has done a secret deal of sorts with a Chinese carrier (and not EK as has bee
67 qf002 : This rumour seems really, really far fetched to me.
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
QF Confirm International Equipment Upgrades posted Mon May 31 2010 02:43:47 by tayser
DHL US Domestic Ops Done? posted Sat Jan 3 2009 04:54:40 by Tjwgrr
DHL To End US Domestic Ops posted Mon Nov 10 2008 08:14:55 by Apodino
QF Slashes International Capacity posted Wed Jun 4 2008 23:11:28 by Aussie747
783 - US Domestic Ops... posted Fri Jun 22 2007 18:44:22 by FlyABR
Delta International ATL Ops Prior To 1994 posted Tue Apr 17 2007 02:49:42 by 1337Delta764
New Airline Starts Domestic Ops In Guatemala posted Wed Aug 30 2006 16:07:01 by Carmenlu15
These Safety Things - Affecting Domestic Ops? posted Sat Aug 12 2006 15:28:47 by Joffie
787-3 Or 787-8 For Delta Domestic Ops? posted Thu Dec 29 2005 21:10:18 by 1337Delta764
International-domestic Transfer @ BOM posted Fri Nov 18 2005 18:16:23 by Pe@rson