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aerokiwi
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sat Jun 16, 2012 8:18 am

Quoting zeke (Reply 135):
Having 777s has not helped AC dramatically,

Really? How do you know this? Have you peered into some alternative reality to see how things would have gone had they not purchased the 777?

Quoting zeke (Reply 135):
like I said earlier on this thread, operating the 777 is not a license to print money.

No one's claiming it is. But it does reduce your exposure to a sudden demand drops (see: 2008 onwards) and provides greater flexibility for redeployment and development of new markets. Plus it lowers costs. So it gets you closer to printing money.

The focus on the 777 seems to be convenient to turn this into a AvB thing. But ultimately, it's not. QF has had a problem in the 250-330 seat long haul segment for too long. Neglecting this fleet type (whether it be A340 or 777) has, in many peoples' opinion (both laymen and professionals) contributed to the considerable losses QF's international ops are posting now. The references to 777s really just reflects the sales success of the aircraft relative to its competitors, and reported efficiency advantages.
 
Cerecl
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sat Jun 16, 2012 9:47 am

Quoting par13del (Reply 128):
Oh, ok you are talking about the A350, my bad, I was being general, harsh comments have been thrown about the 747-8, 777 additional development, 787-10, 737Max etc. etc. which was regarded as unprofessional.

 
It appears that we are on completely different wavelengths. I was not talking about the A350 in particular, it was just an example. What I cannot agree is the notion that what AJ said about the 787 is in the same league of the "U-turn". The former was respectful and professional, the latter anything but.

Quoting aerokiwi (Reply 150):
The focus on the 777 seems to be convenient to turn this into a AvB thing. But ultimately, it's not.

The focus on the 777 also has nothing to do with this thread which is 787. If AJ said QF is making a loss because it did not get the 787, the consideration of possible 777 introduction might have some relevance (although the outcome of this scenario cannot and probably will not be ascertained). As AJ said no such thing, the topic of 777 is nothing but a distraction.
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astuteman
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sat Jun 16, 2012 10:03 am

Quoting Zkpilot (Reply 106):
The A330 doesn't have the range for a lot (most) of QFs 744 flying

Although the later 238t ones most certainly do..

Quoting Stitch (Reply 143):
NH flies both planes, so I am inclined to believe their claims, and said claims (from ANA President and Chief Executive Shinichiro Ito) are their 787-8s are saving 21% more fuel per trip (flight) than the 767-300ERs.

Per our conversation on the other thread...
No way.   

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Zkpilot
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sat Jun 16, 2012 10:34 am

Quoting astuteman (Reply 152):
Quoting Zkpilot (Reply 106):
The A330 doesn't have the range for a lot (most) of QFs 744 flying

Although the later 238t ones most certainly do..

LAX-BNE? NO,
LAX-SYD? NO,
LAX-MEL? Hell NO,
Even LAX-AKL was a struggle so despite it having lower operating costs than the 744 the route was dropped as it couldn't carry much payload.
SIN-FRA? NO.
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ZK-NBT
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sat Jun 16, 2012 12:13 pm

Quoting Zkpilot (Reply 153):
LAX-BNE? NO,
LAX-SYD? NO,
LAX-MEL? Hell NO,
Even LAX-AKL was a struggle so despite it having lower operating costs than the 744 the route was dropped as it couldn't carry much payload.
SIN-FRA? NO.

They weren't 238t ones though that QF used AKL-LAX, they have a couple of domestic 238t 332s and JQ have 4 of them. I'd have though LAX-BNE and SIN-FRA would have been doable for the 238t 332.

Quoting aerokiwi (Reply 150):
Neglecting this fleet type (whether it be A340 or 777) has, in many peoples' opinion (both laymen and professionals) contributed to the considerable losses QF's international ops are posting now.


I agree with this!!! QF probably could have used A330s and 777s in their fleet. They could have still used 30 744s aswell as the 744ERs were avalible in 2002 for MEL-LAX which would have carried more than a 77E. But routes like AKL/BNE-LAX, SYD-SFO, etc could have been good with 77Es then 77Ws coming later on to replace early 744s. The A330s could have still been used for Asia.

Would QF International have been profitable with the 777? Maybe not but their losses could have been alot less than what they are today imo.
 
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Stitch
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sat Jun 16, 2012 5:35 pm

Quoting astuteman (Reply 152):
Per our conversation on the other thread... No way.     


Well thanks to NH's Japanese press release, we now have the context for Mr. Itou's comments and that context is that when he said "per flight", he was referring to the fuel-burn per seat for the flight and not trip fuel.

Computer projections support a 20%+ fuel-burn reduction per seat on such a mission, so reality has been maintained and we're not living in The Twilight Zone.  
 
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zeke
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sat Jun 16, 2012 5:57 pm

Quoting Stitch (Reply 148):

But are the planes actually going out at MZFW when flying across the Sea of Japan or the Eurasian continent?

I do not think so, which is my point. The 787 has the theoretical potential to carry more payload, however with the low seating density, I do not think the comparison I made "artificially hobbles the 787's greater payload capability". The aircraft is design for a different sweet spot, it is "too much" aircraft being "abused" when operated short haul.

Quoting aerokiwi (Reply 150):

Really? How do you know this? Have you peered into some alternative reality to see how things would have gone had they not purchased the 777?

In my view QF and AC like a lot of legacy carriers have structural problems not related to the equipment they operate. AC for example have been struggling to control costs, and operating the 777 has not changed those cost issues. I think if QF had replaced all of the 767/A330s with 787s, and all of the 744s with 77Ws two years ago, they still would be struggling to be competitive. Equipment is easy to replace, work practices and taxation arrangements are a very different story.

To give you an example of how uncompetitive the taxation arrangements are in Australia, Google in Australia paid less than AUD$80,000 in corporate tax on a business that generates a massive amount revenue. A Qantas Captain may need to pay AUD$150,000 in personal tax, and QF would also need to pay payroll and corporate tax on-top of that. This translates into very high staff costs per unit of revenue which will not be fixed by operating 787s or 777s.

Alan Joyce has commented on this a number of times, he has said that rate of return QF is getting in employing its equipment in international operations is less than what they would have return if they would have invested the cash. This is due to the high costs and work practices needed to employ those assets.
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Zkpilot
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sat Jun 16, 2012 7:29 pm

Quoting ZK-NBT (Reply 154):
They weren't 238t ones though that QF used AKL-LAX, they have a couple of domestic 238t 332s and JQ have 4 of them. I'd have though LAX-BNE and SIN-FRA would have been doable for the 238t 332.

I was told otherwise, that is that QF did use HGW A332 AKL-LAX.
Even if they didn't, what you are talking about is an extra 1.5-3 hours flight time for BNE/SYD/MEL
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sunrisevalley
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sat Jun 16, 2012 9:31 pm

Quoting Zkpilot (Reply 157):
I was told otherwise, that is that QF did use HGW A332 AKL-LAX.

Assuming QF 332's weigh in similarly to TK's at about 126t DOW they should have been good for about 35t payload AKL-LAX. Westbound probably about 30t. Max volume limited payload would be about 37.5t Perhaps not good enough for the about 6100nm ESAD westbound. A word of caution , this assumes that zero on the payload/ range chart matches the TK OEW's of about 122t.
 
strangr
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sun Jun 17, 2012 12:10 am

Quoting thegeek (Reply 11):
The 787s would have helped QF, but they would have also helped the competition.


  

Quoting Zkpilot (Reply 14):
Well should have ordered the 777 way back when, but thats another issue.

  

Quoting EK413 (Reply 23):
QF could've benefited by ordering the B77L & B77W as opposed to placing all their eggs in the one basket...

  


I am not going to read the entire thread, however. QF was offered the chance to get on the 777, they refused because they said they were happy to wait for the 787.

Had QF replaced the 744 with 77W long ways back they'd be in a better position now. the 744 is a big OLD plane the 777 is big but far newer technology.
 
tayser
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sun Jun 17, 2012 12:36 am

Quoting zeke (Reply 156):
To give you an example of how uncompetitive the taxation arrangements are in Australia, Google in Australia paid less than AUD$80,000 in corporate tax on a business that generates a massive amount revenue. A Qantas Captain may need to pay AUD$150,000 in personal tax, and QF would also need to pay payroll and corporate tax on-top of that. This translates into very high staff costs per unit of revenue which will not be fixed by operating 787s or 777s.

Google only pays miniscule taxes in many jurisdictions around the world - that wont last.

A Qantas pilot may need to pay $150,000 in PAYG? Do Qantas pilots earn 350-400k?



If you earn 179,999 you pay $55k in tax - to be paying $150k in tax, you need to be earning $400k (400k-180k = 220k * 0.45 = 99k + $55k)

And someone who clears $120k a year ($180k gross) will live a very comfortable life in Australia probably without their spouse needing to work - whinging about PAYG wont get you very far when you earn into the 6 digits.
 
phxa340
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sun Jun 17, 2012 12:37 am

Quoting strangr (Reply 159):
I am not going to read the entire thread, however. QF was offered the chance to get on the 777, they refused because they said they were happy to wait for the 787.

Which at the time of the 787 launch was not that bad of a decision. I think many members are forgetting that. With that being said , successful business often have hedging policies in place to protect themselves against an unforeseen, this is where I believe QF made the biggest mistake.
 
AngMoh
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sun Jun 17, 2012 1:11 am

Quoting PHXA340 (Reply 161):
Which at the time of the 787 launch was not that bad of a decision. I think many members are forgetting that. With that being said , successful business often have hedging policies in place to protect themselves against an unforeseen, this is where I believe QF made the biggest mistake.

  

With the 787 they would have a good Australia to Asia/Middle East (non-stop!) network with the capability to go on to smaller cities in Europe.
Their mitigation strategy when the 787 was delayed became worse than disastrous. For example SQ ended up leasing 17 A330 (vs 20 787s on order) for short 5-7 year leases - and they turned out to be good enough to get 15 more. On the other hand, I have no clue what QFs plan was except stating every year since 2008 that they will get there first 787 "next year" even though a donkey could see that was not going to happen.
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zeke
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sun Jun 17, 2012 3:36 am

Quoting tayser (Reply 160):
Do Qantas pilots earn 350-400k?

A senior QF Captain will, and on a per hour basis is a lot more than say a CX Captain based in Australia that also is employed in Australia and pays tax in Australia.

Quoting tayser (Reply 160):

If you earn 179,999 you pay $55k in tax - to be paying $150k in tax, you need to be earning $400k (400k-180k = 220k * 0.45 = 99k + $55k)

From what guys tell me who are based in Australia, ontop of the PAYG tax, there are various government levies which add up to several percent as well. I believe with these levies, the actual top tax rate is over 50%.
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qf002
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sun Jun 17, 2012 11:04 am

Quoting Zkpilot (Reply 157):
I was told otherwise, that is that QF did use HGW A332 AKL-LAX.
Even if they didn't, what you are talking about is an extra 1.5-3 hours flight time for BNE/SYD/MEL

QF International only flies older A332's, the HGW are in domestic configuration so certainly did not fly AKL-LAX.

I think that the speculation around the potential for the A332 on BNE-LAX came from the fact that the difference in the length of AKL-LAX and BNE-LAX was pretty similar to the increase in range that the HGW brought. It would have probably been possible, but would have been a massive drop in capacity, even with an extra weekly flight.

There was even the suggestion (IIRC) that SYD-SFO could be operated with the HGW, but that there would probably need to be seasonal diversions. Certainly there was a big discussion about the potential for SIN-Europe (ie CDG, FCO, ATH, FRA). But QF sent them to domestic instead...

Quoting strangr (Reply 159):
Had QF replaced the 744 with 77W long ways back they'd be in a better position now. the 744 is a big OLD plane the 777 is big but far newer technology.

I have to say that I'm not sure that's true at all. Replacing say half the 747 fleet (15 frames) back when they were 15-16 years old with 77W's would have cost QF $4bn at list price, plus all the additional training, conversions etc. Even with a hefty discount from Boeing, QF would have been facing $2.5-3bn cost for the switchover.

No way would the 77W have saved them that amount in operating costs. QF International is posting losses of a couple of hundred million $$ a year (taking into account the skewed nature of recently released figures, which include massive sort term restructuring costs) not billions. And not all that loss is coming from flying less efficient aircraft. The long term cost of having the additional type into the mid/late 2020's would also have been significant. In any case, the 77W would have been equally superseded by the 787 and A350 -- QF doesn't have the freedom to run tight fleet renewal programmes like SQ/EK et al.
 
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sunrisevalley
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Sun Jun 17, 2012 12:20 pm

Quoting qf002 (Reply 164):
QF doesn't have the freedom to run tight fleet renewal programmes like SQ/EK et al.

One reason is that the Ausralian CCA rules are much less generous than say those that apply to SQ.
 
fiscal
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 12:42 am

It has been interesting reading this discussion, and whilst I know it has digressed from it's original subject matter, being the consequences of a delayed 787 delivery, the discussion on 744 v 777 has got me thinking. There are a lot saying we should have had the 777 to fill QF gaps in the 250+ pax markets etc, but being someone who has a knack at finding problems easily   I offer the following comments and thoughts -

1. Every medium / long haul QF flight I have been on in the past few years (UK and USA) has always had a high load factor. Dropping back to a 777 would have meant that some pax could not have traveled, unless QF had twice daily 777 flights.

2. Forget regulatory issues for now - is there a demand for the increased frequency on the UK / USA routes? If yes, at what load factor would both 777's begin to be be profitable?

3. Is QF losing customers due to high load factors on the existing routes (UK / USA)?

4. What new (or previous) markets could be consistently profitable, quickly, to help QF cash flow. I am thinking of the consequences of high capital costs, and fixed operating costs whilst a market is developed.

These are just a few thoughts, and I don't necessarily have any answers, it was just musings.
 
cmf
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 1:15 am

Quoting sunrisevalley (Reply 165):
One reason is that the Ausralian CCA rules are much less generous than say those that apply to SQ.

That is a red herring. Both airlines are using longer terms than allowed under Australian rules. As is EK.
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Sydscott
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 1:54 am

Quoting tayser (Reply 160):
Google only pays miniscule taxes in many jurisdictions around the world - that wont last.

Actually it probably will. Without going into it in too much detail, the reason why Google pays such a small amount of tax is in Australia is because google is able to re-charge, using various transfer pricing methods, the costs of R&D and shared services based in the US and other jurisdictions. As long as these are justifiable and Google continues to innovate and invest you won't see any demonstrable increase in taxation revenues at a Company level. But that $80k is also only the headline Corporate Tax and doesn't include Wages withholding, payroll, workers comp, GST and other levies they would also be paying on top of this.

Quoting zeke (Reply 163):
From what guys tell me who are based in Australia, ontop of the PAYG tax, there are various government levies which add up to several percent as well. I believe with these levies, the actual top tax rate is over 50%.

The top tax rate is 45%, plus the 1.5% medicare levy. This year there is also a flood levy depending on income level of up to 1%. Then if you don't have private Health Insurance and you earn over the Medicare Levy Surcharge Threshold you pay an additional 1.5% penalty for not having it. So this year the maximum rate of tax you can, if you're really dumb, is 49%. That will drop to 48% next year when the Flood Levy comes off.

Quoting sunrisevalley (Reply 165):
One reason is that the Ausralian CCA rules are much less generous than say those that apply to SQ.

Qantas only has itself to blame for that. If anything the Australian rules more effectively reflect aircraft life than Singapores.

Quoting fiscal (Reply 166):
Every medium / long haul QF flight I have been on in the past few years (UK and USA) has always had a high load factor. Dropping back to a 777 would have meant that some pax could not have traveled, unless QF had twice daily 777 flights.

The problem with the UK and the US was the density of the aircraft flying the routes. Having a 74 with a 307 seat, heavy premium config is fine in the good times when there are people to pay full fare but not good for what we have right now. The reconfig of all of those aircraft, the 744ER's and a couple of the standard 744's is almost done so should result in a better mix of revenue coming in.

Quoting qf002 (Reply 164):
Certainly there was a big discussion about the potential for SIN-Europe (ie CDG, FCO, ATH, FRA). But QF sent them to domestic instead...

FCO/ATH was going to be Jetstar and they have the HGW planes that could do it. But they chose SIN-AKL and MEL-SIN-PEK instead. Probably a good move considering what happened in Europe.

CDG - isn't viable due to capacity constraints in the Australia/France blateral. QF is much better off feeding Air France flights that have daily, or double daily in the case of HKG, frequency.

FRA - QF needs a 3 class plane into FRA. My experience flying in there is that while there are a fair amount of upgrades there's also alot of Premium Economy demand that is willing to pay so a two class A332 would miss that.

Not to mention QF needed them in domestic. I find the whole QF 777 debate mis-guided to be honest. What QF needed, just like what SQ needed, was substantial numbers of A330's for both domestic and regional services. The 744's are fine and can be re-configured. It's the 767's that need to be gone right now and if QF had copied what SQ had done in relation to the A330, I think they'd be in a much better position than they are now with alot more flexibility.
 
Gemuser
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 1:56 am

Quoting sunrisevalley (Reply 165):
Ausralian CCA rules

???, please.

Gemuser
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slcdeltarumd11
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 2:52 am

There are alot of people angry with Boeing over the 787.........i dont see the big deal here. They have a right to complain
 
Sydscott
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 2:53 am

Quoting gemuser (Reply 169):
???, please.

Capital Allowance/Depreciation regime.
 
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Zkpilot
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 4:43 am

Quoting qf002 (Reply 164):
QF International only flies older A332's, the HGW are in domestic configuration so certainly did not fly AKL-LAX.

QF does have some older A332s, however the aircraft that flew to LAX were new build and delivered in 2008/9
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Sydscott
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 4:52 am

Quoting Zkpilot (Reply 172):
and delivered in 2008/9

You mean 2007/2008.   VH-EBG to VH-EBL were delivered between very late 07 and very early 08. EBM was delivered in 09, EBN, EBO and EBP at various times during 2010.
 
strfyr51
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 5:15 am

Is He REALLY Pissed off or is he going to HollyWood with this 787 thing??
 
qf002
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Mon Jun 18, 2012 7:06 am

Quoting Sydscott (Reply 168):

I was talking more in relation to the potential of the extra range that the HGW A332's brought... I don't think A332's would have worked to Europe either, but it would have been possible with the aircraft.

And I agree that QF should have found more A330's from somewhere (probably leased), but some A343's would have been very useful delivered 10-12 years ago.

Quoting Zkpilot (Reply 172):
QF does have some older A332s, however the aircraft that flew to LAX were new build and delivered in 2008/9

When I say 'older' I mean the older variant ie the 233t frames. The International frames are Qantas' oldest A332's -- JQ has the earlier frames.
 
thegeek
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 5:24 am

Quoting Zkpilot (Reply 144):
There are something like 130 airlines flying into DXB. Many of which are in OW or could be code-share partners with QF. BA of course flies there too.

Hmm, interesting. I don't see the point with connecting with a BA LHR flight in DXB, but perhaps a MAN flight (for example) could make some sense. All these code shares would need to be negotiated before even starting the flight. It's pointless to try without the feed. I'd also question whether the bilaterals would allow it.

But the SYD-DXB flight can be operated by a 744. This is not an option enabled by the 777 (any mark), although the 77W/77L would increase the amount cargo which could be carried.
 
ha763
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 6:42 am

Quoting thegeek (Reply 176):

But the SYD-DXB flight can be operated by a 744. This is not an option enabled by the 777 (any mark), although the 77W/77L would increase the amount cargo which could be carried.

 

EK flies SYD-DXB with a 77W. The great circle route falls within 120 min ETOPS.

If you are talking about SYD-JNB, a 777 can fly it, but it just won't be on the great circle route if flying under 180 min ETOPS. If you could get certified for 330 min ETOPS, then you would be able to do it on the great circle route.
 
thegeek
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 9:16 am

I think you may have misread what I wrote.
 
qf002
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 10:32 am

Quoting ha763 (Reply 177):

The point that thegeek is trying to make is that the 777 discussion has nothing to do with the potential of QF flights to DXB. If they wanted to put together some arrangement with BA and other airlines to route European pax through DXB then they could do so with their existing aircraft...

That said, DXB (or the middle east in general) is a silly idea for QF, unless they were in partnership with EK/EY/QR. Much better to lower the cost of the operation by utilising a closer scissor hub in Asia, funnelling 6-7 regional flights into a couple of long haul flights. Plus using SIN allows QF to offer a more competitive service for the local market. The Aus-UAE market is significantly smaller.
 
strangr
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 10:52 am

Quoting fiscal (Reply 166):
2. Forget regulatory issues for now - is there a demand for the increased frequency on the UK / USA routes? If yes, at what load factor would both 777's begin to be be profitable?

This i'd like to know also, however 2 daily flights from Sydney and Melbourne to LAX one morning one night would sure be full, if not very close. Melbourne flights could fly through BNE or AKL for extra passengers.

QF I think have made a big mistake not jumping on the T7's a long time ago. just my few cents worth.
 
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zeke
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 12:20 pm

Quoting Sydscott (Reply 168):
The top tax rate is 45%, plus the 1.5% medicare levy. This year there is also a flood levy depending on income level of up to 1%. Then if you don't have private Health Insurance and you earn over the Medicare Levy Surcharge Threshold you pay an additional 1.5% penalty for not having it. So this year the maximum rate of tax you can, if you're really dumb, is 49%. That will drop to 48% next year when the Flood Levy comes off.

They tell me there is around 15% tax on their pension savings, capital gains, gst, petrol, excise, car, property, land, rates etc.

Quoting fiscal (Reply 166):
If yes, at what load factor would both 777's begin to be be profitable?

Probably a lot higher than what one would think, in terms of direct operating costs, fuel would make up around 60% of the costs, the price of fuel has been very high. Yields across the industry have been low. On the salary front, QF work on MTOW, so a 777 would expect them to command a salary comparable to the 744/743 If forced off the bigger aircraft they would retain their salary. Being slower than the 744/380 it would cost QF more, as from I understand for every minute they exceed a period of flight time, not sure if it 12 or 14 hrs, they are on overtime. Combine that with the inability for get a 777 rapidly without leasing them, so they would be paying a premium on the aircraft and engine leases. Then in terms of training, they would need to send pilots to be trained elsewhere, or buy a simulator for 20 million, not to mention aircraft spares, and maintenance training,and cabin crew training.

So a 777 may have some direct operating costs that are lower, it may however turn out mor expensive to operate than their 744s that they have paid off, can train in house, and have competitive maintenance arrangements.
“Don't be a show-off. Never be too proud to turn back. There are old pilots and bold pilots, but no old, bold pilots.” E. Hamilton Lee, 1949
 
tayser
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 1:26 pm

Quoting zeke (Reply 181):
They tell me there is around 15% tax on their pension savings, capital gains, gst, petrol, excise, car, property, land, rates etc.

so Hong Kong's a third world country with zero tax on everything and everyone earns the same amount? I just dont get why you keep on talking about these conversations without having grasped what the taxes you mention actually are. Australia's a high cost country - we're a victim of our own success, but you're looking at it from a ridiculously high level and merging everything in together.

A pension in Australia is one from a government - you only get one if you have no superannuation, every employee earns superannuation - minimum 9% on top of your base salary - it's quite in a salary package but in reality you do not get to touch this money until you're at retiring age (65) - so it's irrelevant in your argument.

Capital Gains tax has... what to do with what a person earns in the airline industry? Oh that's right, QF pilots earn $400k a year so they've all got a portfolio of 20 properties that they regularly flip and they dont like Capital Gains tax. boo hoo - it's irrelevant to the income an employee earns (unless you're in the business of property development).

GST: name a country in the world that doesnt have a consumption tax? Australia's is low by western standards (flat 10% nationwide, not like in the US where consumption taxes vary by state and even municipality or just have high rates like NZ or the UK/EU).

Petrol excise: the excise amount is minimal and what has more an impact is if the price - which is not kept steady by the government like in many Asian and Middle Eastern countries - goes up.

Australia doesnt manipulate its a) currencies like all of Asia except Japan or b) energy prices (especially in Victoria) to keep prices stable.

Car tax? There's a luxury car tax, but that makes airline labour in Australia uncompetitive how? I forgot again, the $400k earning QF pilots dont like paying a bit extra when they purchase their maseratis. [insert rolling eye emoticon here]

Council Rates: again, name a western country that doesn't a local government "tax".

Land Tax: yeah, $400k earners and their portfolio of 20 properties would like to see no land tax, again irrelevant to PAYG / cost of employing airline labour in Australia.

I bet none of your conversations mentioned the long-term goal of flattening the PAYG tax brackets and lowering rates.

Quoting Sydscott (Reply 168):
Actually it probably will. Without going into it in too much detail, the reason why Google pays such a small amount of tax is in Australia is because google is able to re-charge, using various transfer pricing methods, the costs of R&D and shared services based in the US and other jurisdictions. As long as these are justifiable and Google continues to innovate and invest you won't see any demonstrable increase in taxation revenues at a Company level. But that $80k is also only the headline Corporate Tax and doesn't include Wages withholding, payroll, workers comp, GST and other levies they would also be paying on top of this.

I don't disagree, however one thing you missed though (probably the biggest): is how much GST Google has indirectly generated by connecting people with markets in Australia where GST is levied on the purchases they make - many multiples of $80k.
 
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zeke
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 2:13 pm

Quoting tayser (Reply 182):

My conversations are with people who work for the same employer, same rank. Our Australian based pilots are employed in Australia, and we compared what we have left after tax in a months salary, and than what that salary can buy you. They keep complaining that the cost of living keeps going up. Hong Kong is pegged to the US, not all of Asia manipulates currencies, and that is not to say the reserve bank in Australia does not buy and sell its own currency, or change interest rates which has the same effect.

In terms of a pension, called a mutual benifit fund here, standard employer contribution across our contracts is 15%, and we can elect to top that up. We have no tax on that, and they pay 15%. Hong Kong does not have a consumption tax or local government rates, we do not pay capital gains tax on property, shares, or currencies. They also have to pay tax on rent on property they have in Hong Kong they rent out, most of them lived in Hong Kong at some stage.

I agree with you when you said Australia is a high cost country, I said similar above. However a passenger flying to or from Australia does not care about the cost of production of an airfare, they just want to know the ticket price. It is this high production cost that is hurting Qantas on the international Scale. Having a 787 today would not help QF with many of its structural problems, they are not related in my view to the type of aircraft being operated.

The interview I heard on the radio indicated that advertising revenue from Google is being billed from Ireland, and content being served from outside of Australia, GST is not payable. Qantas does not have this luxury, unless it can start basing more of its assets and staff outside the Australian tax system, eg the Asian Roo of whatever shelf company it would be called.
“Don't be a show-off. Never be too proud to turn back. There are old pilots and bold pilots, but no old, bold pilots.” E. Hamilton Lee, 1949
 
Sydscott
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 10:47 pm

Quoting zeke (Reply 181):
They tell me there is around 15% tax on their pension savings, capital gains, gst, petrol, excise, car, property, land, rates etc.

15% tax on pensions - The Superannuaton system is taxed at 15% of contributions and earnings but that tax is payable by the Super Fund, not the individual. So while it's a tax it's not counted towards the individual. Once a person reaches their preservation age, 65 at the moment, the money can be withdrawn tax free.

Capital Gains - If you hold an asset for longer than 12 months, any gain is reduced by 50% automatically. A person than pays tax at their marginal rate on the profit after that. So if you're in the highest marginal tax bracket you will pay tax at 45% on that profit, if you're in the 30% bracket, you'll pay tax at 30% etc.

GST - This is to fund the States. Every Western Nation, with the exception of the United States, has some sort of VAT or GST so it's hardly unique. And ours is one of the lower rates out of all of those.

Petrol Excise - is currently arond 38 cents per litre. Again, by OECD averages it's not high.

Property Taxes - We don't have these as such. We do have Rates which are payable to local council based on the land value of a property.

Land Taxes - You have to own multiple property's, or be rich and have a massive piece of real estate, before this effects you.


Quoting zeke (Reply 183):
I agree with you when you said Australia is a high cost country, I said similar above.

I would say that parts of Australia are high cost, while parts aren't. The thing about it is that lots of people want to move and live here and that has created an overall demand/supply imbalance. When that happens prices inevitably go up. The good thing is that standards of living and salaries have also gone up for alot of Australians at the same time. My brother just moved back to Australia after living in Europe and Asia for the last 10 years and doesn't stop whinging about how much it costs. But when you've gotten used to paying next to nothing and have been working for a multinational Company alot of expats get a shock when they move back. The expect Australia to still be as it was when they left and the fact is that it's changed beyond all measure.

Quoting zeke (Reply 183):
The interview I heard on the radio indicated that advertising revenue from Google is being billed from Ireland, and content being served from outside of Australia, GST is not payable. Qantas does not have this luxury, unless it can start basing more of its assets and staff outside the Australian tax system, eg the Asian Roo of whatever shelf company it would be called.

Lets make this clear, in terms of airfares Domestic airfares are subject to 10% GST and have this included in their price. No International airfare sold by Qantas, or anyone else for that matter, contains GST. So if you bu a ticked between SYD-HKG there will not be GST. If you buy MEL-SYD-HKG then there will be GST on the MEL-SYD and no GST on the SYD-HKG. The biggest cost differential for Qantas is the pay rates of their crew, a tax debate is a bit of a red herring in the scheme of things.

In relation to Google, the ATO doesn't care where you bill stuff from. What Google would have here in Australia is, I'm guessing, some sort of service and support subsidiary and its services would be billed back to its parent on some sort of recovery or Cost plus method. Now whether or not those services are subject to GST depends on exactly what the sub is doing on behalf of its parent. We don't know so we can't guess.
 
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Zkpilot
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Tue Jun 19, 2012 11:15 pm

Quoting zeke (Reply 181):
Then in terms of training, they would need to send pilots to be trained elsewhere, or buy a simulator for 20 million, not to mention aircraft spares, and maintenance training,and cabin crew training.

Well theres VA and NZ close by. Both of which use QF facilities for various purposes.... 3 small airlines like that have to have understandings like that. Also QF has been training up MH pilots on the A380....MH of course has 777s.
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qf002
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Wed Jun 20, 2012 3:40 am

Quoting Sydscott (Reply 184):
Property Taxes - We don't have these as such. We do have Rates which are payable to local council based on the land value of a property.

Land Taxes - You have to own multiple property's, or be rich and have a massive piece of real estate, before this effects you.

There are no ongoing property/land taxes as such but there is stamp duty that you pay to the State when buying land/property. The rate varies, but tends to sit around 4-5% of the purchase price.
 
Sydscott
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Wed Jun 20, 2012 4:23 am

Quoting qf002 (Reply 186):
There are no ongoing property/land taxes as such but there is stamp duty that you pay to the State when buying land/property.

Yeah there is. The State Governments levy Land Tax if the land you own is over a certain threshold.

http://www.osr.nsw.gov.au/taxes/land/

http://www.sro.vic.gov.au/SRO/sronav...AB6BE64979127CA2575A100441FA4?open

http://www.osr.qld.gov.au/land-tax/index.shtml

etc
 
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EK413
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Wed Jun 20, 2012 4:33 am

Quoting qf002 (Reply 179):
That said, DXB (or the middle east in general) is a silly idea for QF, unless they were in partnership with EK/EY/QR. Much better to lower the cost of the operation by utilising a closer scissor hub in Asia, funnelling 6-7 regional flights into a couple of long haul flights. Plus using SIN allows QF to offer a more competitive service for the local market. The Aus-UAE market is significantly smaller.

Very well said... Totally agree with your points...

EK413
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qf002
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Wed Jun 20, 2012 7:37 am

Quoting Sydscott (Reply 187):

Sorry, I phrased that poorly. I was trying to say that while you're right in saying land taxes only apply to a few, Stamp Duty applies to virtually every home buyer, and could be considered to be a land/property tax.
 
SA7700
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RE: Qantas CEO "very P*ssed Off" With Boeing Over 787

Thu Jun 21, 2012 5:36 am

As this thread has now evolved into a general discussion about Australian tax rates, it will be locked for further contributions. Any posts added after the thread lock will be deleted for housekeeping purposes only.


Regards,


SA7700
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