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FCAFLYBOY
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QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 11:05 am

Not good news for QF employees once more as a profit warning is issued and the announcement of 1,000 jobs to be cut.

Thought this worthy of its own thread, what does this mean for QF employees? No mention in which specific area cuts will be made. Is it safe to assume outstation crew bases such as LHR may be first to be affected?

http://www.travelweekly.co.uk/Articl...it+warning+and+cuts+1000+jobs.html

[Edited 2013-12-05 03:08:06]

What lies in store for Qantas? Is it already too late for them to turnaround?


[Edited 2013-12-05 03:17:20]
 
FCAFLYBOY
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 11:48 am

A slightly more detailed overview of the full effects here. Interesting statement from SRB, although an attack on QF is no suprise of course.

That said, Qantas has always been an excellent airline and to call it poorly managed is unfair IMO.

http://www.telegraph.co.uk/finance/n...d-warns-of-immense-challenges.html
 
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cougar15
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 12:44 pm

I still wonder, where would QF be today if Boeing had not messed up the 787 so badly. Had QF have received the planes in 2008
as expected, where could/would they be today, it was an integral part of their future fleet strategy to serve EU Ports profitably.?. Yes, not buying 777´s was a bad move and to this day they are paying the Price, nonetheless,
punctual 787 deliveries would surely have resulted in QF being in a completely different Position to where they are finding themselves today.
Dropping FRA is depressing, I too found QF to be a great Airline on all my travels downunder! Hope they turn the Corner, somehow!

[Edited 2013-12-05 04:54:18]
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FCAFLYBOY
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 12:56 pm

Agreed the 787 not arriving on time was a real setback. However I also wonder what element is down to poor management, not to the extent Sir Richard Branson is stating, but how this has impacted the entire QF workforce and day-to-day running of the airline.

I do agree not ordering the 777 was a huge mistake by QF, a real missed opportunity. I wonder where many of these 1,000 jobs will be cut from, frontline or office based?

[Edited 2013-12-05 05:05:17]
 
FCAFLYBOY
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 1:06 pm

When did FRA finish? I thought they were keeping FRA and LHR? Not good news. The QF LHR based crew pretty much only fly to DXB as it is, so I guess their days may be numbered. I hope not, some of the best I've flown with.
 
FCAFLYBOY
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 1:42 pm

Would be interesting to also know how the QF partnership with EK is working - by now they must surely have some example of its benefit, and whether it is benefiting QF at all or solely EK.
 
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cougar15
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 2:12 pm

I dont recall the exact date, but think it was around 6 months ago that FRA was axed, very depressing time to the Team down
there after all those years of serving FRA.
some you lose, others you can´t win!
 
jfk777
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 2:34 pm

Quoting cougar15 (Reply 6):
I dont recall the exact date, but think it was around 6 months ago that FRA was axed, very depressing time to the Team down
there after all those years of serving FRA.

FRA was dumped in April 2013
 
FCAFLYBOY
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 2:56 pm

In that case if FRA is already gone, perhaps it's only a matter of time until LHR follows suit. Having a crew base must be costly and why bother when EK has 5 A380's daily to LHR. Sad times for QF hope they get back to their former glory sooner rather than later.
 
charliecossie
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 6:57 pm

Quoting cougar15 (Reply 6):
I dont recall the exact date, but think it was around 6 months ago that FRA was axed, very depressing time to the Team down
there after all those years of serving FRA.

22:25 CET April 15th 2013.
 
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RyanairGuru
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 7:53 pm

Quoting FCAFLYBOY (Reply 8):
In that case if FRA is already gone, perhaps it's only a matter of time until LHR follows suit.

FRA was making a loss of $300mn per year, so it is amazing it lasted as long as it did.

LHR, on the other hand, is an incredibly important market strategically, and almost certainly breaks even. It's not going anywhere.

Quoting FCAFLYBOY (Reply 4):
The QF LHR based crew pretty much only fly to DXB as it is, so I guess their days may be numbered. I hope not, some of the best I've flown with.

The LHR base is almost certainly safe. Yes they only fly LHR-DXB (and before that LHR-SIN), but the crew are hired on inferior contracts (inferior even to the QCCA contracts) and it also delivers broader benefits in not having Australian crew doing 8/9 trips.

Quoting FCAFLYBOY (Reply 5):
Would be interesting to also know how the QF partnership with EK is working - by now they must surely have some example of its benefit, and whether it is benefiting QF at all or solely EK.

We have zilch to go off. The optimists say that no news is good news, the pessimists that they're hiding something.

I'm neutral at this stage, it has only been 6 months, and sales haven't even been open a year yet. I think it will take 12 months to get a better idea of how the land lies.
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EK413
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 8:38 pm

Quoting cougar15 (Reply 2):
I still wonder, where would QF be today if Boeing had not messed up the 787 so badly. Had QF have received the planes in 2008

I wonder how QF would look if the recent B787 delivered to JQ went to mainline & JQ keep the ageing A332's?

EK413
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RyanairGuru
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Thu Dec 05, 2013 9:02 pm

Quoting EK413 (Reply 11):
I wonder how QF would look if the recent B787 delivered to JQ went to mainline

Probably no different to how they currently look right now.

But of course you know that and are just stirring the pot. Keep beating that agenda   
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cougar15
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 12:11 am

Quoting charliecossie (Reply 9):
22:25 CET April 15th 2013

Wow, .... to the Minute, guess you were affected! Thinkin of ya mate!
some you lose, others you can´t win!
 
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cougar15
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 12:16 am

Quoting EK413 (Reply 11):
I wonder how QF would look if the recent B787 delivered to JQ went to mainline & JQ keep the ageing A332's?

now there is a Point, Boy this thread could actually turn into a biggie if we ´consume´that question in Detail..........     

[Edited 2013-12-05 16:29:11]
some you lose, others you can´t win!
 
AngMoh
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 12:22 am

Quoting RyanairGuru (Reply 10):
FRA was making a loss of $300mn per year, so it is amazing it lasted as long as it did.

I can not believe $300mn per year loss. Loads on SIN-FRA are normally good to very good with last minute tickets not easy to get on any class, and everyone I knew who flew this in QF always reported a packed flight. And although they were slightly cheaper than SQ and LH in J (but much more expensive than MH over KUL and TG over BKK) , Y tickets were about the same in price. If they have good loads and decent yields, losing $300mn is astounding.
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MCO2BRS
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 12:40 am

Would there be any benefit for QF to close its LHR base and open one in DXB? I imagine there would be considerable savings to be had by sharing even more infrastructure with EK (I recognise this really would be getting into bed with the devil)

Cheers

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crAAzy
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 1:53 am

Quoting cougar15 (Reply 14):

I wonder how QF would look if the recent B787 delivered to JQ went to mainline & JQ keep the ageing A332's?

now there is a Point, Boy this thread could actually turn into a biggie if we ´consume´that question in Detail..........

Please! This it's a fairly ridiculous statement since the fate of an entire airline should not rest upon the potential economic benefits of 1 new aircraft.
 
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a36001
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 2:03 am

To see Qantas in this shape is indeed very disturbing. It is a shame such a great airline has become a shadow of itself within a few years.

I feel the Qantas management over the last 15 years has not put the airline on the front foot in terms of fleet type and cabin offerings. As much as it pains me to say this, but Virgin Australia is now looking (at least on the surface) the airline that is moving with the times and is leaving Qantas behind, they have invested in their 737 cabins, invested in the A330, ATR, terminals, lounges etc. Qantas has been slow to respond, they have responded, but maybe not quick enough.

For what ever reason Qantas did not buy the 777 when they had the cash to do so, surely that is now a regretable choice they made. They didn't think of the future, in that they could of been flying the 777-300ER of what ever model, instead they kept the 747-400 (RR). They kept the 767-300ER (both GE and RR) when they could of ordered for example the 767-400ER.. or even the 737-900ER as a stop gap.

Of course, I don't know the details behind those decisions, a while ago I would of said them prudent decisions, but now, well look at where they are!

And now for the 787! I think it fair to say that Boeing had a helping hand in stuffing up Qantas fleet planning (as well as other airlines, but Qantas is what we are talking about and Qantas is a very different airline from the other airlines effected: Geographically for eg). If that aircraft had of been delivered on time as advertised, the out come would of been at least better if not completely different.

As for the Qantas Sale Act, I think it a very touchy subject here in Australia. Australians feel emotionally attached to the airline (right up untill booking a seat on SQ, UA or who ever is cheapest) and forget it is a private company that needs to make money or it will fail.

These are only my thoughts and they are likely incorrect....so be nice..

Happy Christmas  
 
tullamarine
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 2:52 am

Quoting RyanairGuru (Reply 10):
FRA was making a loss of $300mn per year, so it is amazing it lasted as long as it did.

Something about this claim never made sense to me. I fail to see how a single flight could lose so much money. It means that on a daily basis they were losing over $400K each way on the sector. Were they forgetting to charge fares?? $30M, I may have believed but $300M seemed fanciful and eliminating it alone should've just about returned the int'l business to profit which it obviously hasn't.
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rb211524g
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 5:03 am

Read this from the BBC earlier with S&P cutting Qantas's credit rating:

http://www.bbc.co.uk/news/business-25252286.

So their rating has gone from BBB- to BB+
 
jrfspa320
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 6:18 am

All this talk of " QF should have ordered 777s", what would that solve, realistically QF only flies a dozen or so international routes, and struggles to compete with all routes North/West because of expensive Australian Labour and the size/economies of Asian Hub airlines.

The A330s are far cheaper and better sized for struggling asian routes, A380s have better casm to London and US. South America and J'Berg have to be operated by quads due to outdated CASA ETOPS rules. So the 777s would bring very little.

The main issue, is domestic where QF largely have the same fares as DJ but a much higher operating cost, its a no brainer.....The JQ HK/Japan should be abandonded to concentrate on Oz/NZ and Singapore.
 
1400mph
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 7:04 am

Quoting a36001 (Reply 18):
they have invested in their 737 cabins, invested in the A330, ATR, terminals, lounges etc. Qantas has been slow to respond,

Yes with money provided by state owned airlines.
 
AngMoh
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 9:21 am

Quoting 1400mph (Reply 22):
Yes with money provided by state owned airlines.

A small but important correct: they invested first and then attracted the other airlines to invest. If they did it provided with the money from other airlines, you would see these changes in 2 years from now.
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finnishway
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 9:34 am

I think they should do "AY cuts" like kick people off more and more, outsource everything, cut from quality and sell stakes in other companies.
 
ncltrident
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 10:55 am

I did a return trip to London last year on Qantas and I hate to say it but the London based crews that I had on the legs between Singapore and London and London and Singapore were probably the worst airline cabin crews I have ever had. They were rude, miserable and unkempt looking the whole lot of them, in contrast the Aussie crews on the Adelaide to Singapore and Singapore to Adelaide legs were what you would expect from Qantas, professional in every way and just to let you know I am English myself and love the UK but these crews who were not all British but a mixture of Eastern Europeans and Brits were a disgrace
 
FCAFLYBOY
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 11:17 am

So does anyone know a yet which areas of QF will be hit by these job losses, not much inf on that anywhere so far which is unusual, as airlines normally advise that with such a statement.


So Standard & Poor have indeed revised their credit rating to 'Junk'. Hope shares bounce back soon, quite a drop too...

http://www.bbc.co.uk/news/business-25252286

[Edited 2013-12-06 03:40:32 by SA7700]
 
zkncj
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 5:13 pm

Quoting jrfspa320 (Reply 21):
The JQ HK/Japan should be abandonded to concentrate on Oz/NZ and Singapore.

JQNZ is already passed the point of being able to be redeemed, they are so badly rated in the NZ market. Most people will not fy them and pick NZ everytime
 
1400mph
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 9:37 pm

Quoting ncltrident (Reply 25):
but these crews who were not all British but a mixture of Eastern Europeans and Brits were a disgrace

..you pay peanuts you get monkeys....the novelty of flying wears off quickly......especially if you ain't earning !!
 
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cougar15
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Fri Dec 06, 2013 9:40 pm

Quoting zkncj (Reply 27):
..you pay peanuts you get monkeys....the novelty of flying wears off quickly......especially if you ain't earning !!

But that´s not a specific QF issue, but "" just another bad day at the Office"" when flying one of the ME3......
and you happened to pick the wrong one on the wrong day, even in J!
some you lose, others you can´t win!
 
1400mph
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sat Dec 07, 2013 6:41 am

Quoting cougar15 (Reply 29):
But that´s not a specific QF issue, but

Well it is a bit if QF London based crews are on substantially inferior contracts.
 
FCAFLYBOY
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sat Dec 07, 2013 12:43 pm

I actually thought UK QF crew were all in pretty good contracts, I know a few crew for QF and they are all Aussie's and seniors too...

I wonder if we will see VA step in and poach some of the affected 1,000 staff or are QF hoping this's only happens through attrition, as so far no mention of where cuts will take place?
 
klinit
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 1:22 am

I found the LHR based crew to be fine. Interestingly I flew QF9 MEL-SIN earlier this year and the whole crew (which was excellent) seemed to be kiwi thanking us for choosing to fly "w'th the sp'r't of 'stralia".
 
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lightsaber
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 1:35 am

Quoting rb211524g (Reply 20):

The bond rating drop is huge going below investment grade. That will make it far tougher for QF.

Will I too guest I on some of the allocations of losses, the bond rating drop is abpain indicator going high.

Lightsaber
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Lufthansa
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 4:30 am

Quoting lightsaber (Reply 33):

It's no secret QF has needed change for a long time. It's not the only one. We've had the likes of BA, AF, SAS( i cant stress it enough in SAS case!!!!) and you could probably throw in Air Canada, Lufthansa and Iberia all without too much trouble. Add to that list JAL as well... this isn't a distinctly western problem more just a problem with legacy carriers not adapting fast enough for all kinds of historical reasons.
'

QF have to take some serious action though. They need domestic profitable in order to basically finance the restructure
of long haul. My fear here is, if Virgin's deep pocketed investors allow VA to lose this cash... to deliberately damage
QF domestic, it's gonna force QF to do something extreme like what Austrian did with Tyrolean Airways... You know, have Eastern Australia or Sunstate all of a sudden find itself operating 737 or even 767s with QF domestic shut down. Yes it seems crazy, and yes, the unions will go completely off their rocker.

Here's the thing. Alan Joyce has given himself a pay cut. that should ring HUGE alarm bells. That means he knows hes gonna need to take very tough action and he's saying it starts with his own wage. Not many CEO's make such decisions. I don't think the full consequences of the reason he's elected to do that have fully hit home yet.
 
fiscal
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 7:26 am

It's rock and a hard place situation for Qantas management. Whether cutting 1000 jobs is seen as fat trimming I am not sure, but they still have some serious legacy issues and Sale of Qantas Act problems to overcome.

When your cost base is higher than your competitors, and foreign investment is basically a no-no, then it could all go pear shaped fast. Whilst I have not seen it done on such a large scale, getting employees to seek a greater "ownership" of their employer may be one important option to pursue. When staff know that their company is in serious trouble, they may wish to rally around, buy into the firm, have a greater say-so in the operations, and make an effort to save their jobs and those of their mates. You never know, Qantas may well become a success story again.
 
anstar
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 2:21 pm

Quoting 1400mph (Reply 28):

..you pay peanuts you get monkeys....the novelty of flying wears off quickly......especially if you ain't earning !!
Quoting 1400mph (Reply 30):
Well it is a bit if QF London based crews are on substantially inferior contracts.
Quoting FCAFLYBOY (Reply 31):
I actually thought UK QF crew were all in pretty good contracts,

The QF UK crews earn alot more than BA mixed fleet & Virgin Atlantic crews... so they are actually one of the better paid UK airlines to work for.
 
PHX787
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 2:33 pm

Guys, I'm gonna say it and youre gonna hate me.
JL? BK. Still having debt issues.
AA? Bk, and merger.
QF? Losing a lot of money, BB+ credit rating.
IB? A nightmare.
Something is in the water with o.w. and whatever it is, BA must be immune to it. (but then again they're busy parenting IB.)
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jetfuel
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 2:36 pm

Qantas has less than $ 3 billion left. I see people already reticent about booking Qantas due to fear of a collapse. I do really think its very serious. Nothing to do with how much money virgin has from foreign investors. It all comes down to bad management, especially the Jetstar losses in Asia


When Ansett boss Gary Toomey went cap in hand to the federal government in early 2001 he made a fateful remark. Meeting prime minister John Howard, Toomey pointed out that $1 billion in cash was sitting on the airline's balance sheet. According to those present, Howard's focus shifted almost immediately to his next appointment, and Toomey's pleas for the government to step in to save the airline fell on deaf ears.
Eight months later Ansett collapsed.


Read more: http://www.smh.com.au/business/as-st...-20131206-2ywt0.html#ixzz2mtUek6bs
Where's the passion gone out of the airline industry? The smell of jetfuel and the romance of taking a flight....
 
vv701
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 3:25 pm

Quoting RyanairGuru (Reply 10):
LHR, on the other hand, is an incredibly important market strategically, and almost certainly breaks even. It's not going anywhere.

On slide 47 of the recent IAG Capital Markets Day meeting Lynne Embleton of BA said that in Q2 and Q3 of 2013 BA had achieved a £30 million profits improvement on the LHR-SIN-SYD route compared to the same period of 2012 and following the cancellation of the Joint Services Agreement with QF.

I suspect that a strong contributor to this improvement has been flying this route with a 77W. However since the JSA required BA to share their own and QF's costs and revenue on this route, it seems possible that some of this plus for BA could be because they are no longer carrying some of QF's high costs.

You can check out Lynne Embleton's presentation here:

http://edge.media-server.com/m/p/cfkmnebh/lan/en
 
multimark
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 5:11 pm

Once the Australian gov't of the day decided to hand avaiation to EK, QF was doomed. How long till it follows Ford Australia and soon Holden to the industrial dustbin?
 
FCAFLYBOY
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 7:16 pm

$3bn is nothing for an airline the size of QF. If short haul is so unprofitable, why carry on the can? Although I suppose long haul is probably not massively profitable as their Long Haul network is so small.

I do hope QF turn this around, perhaps it really is do or die, would be sad to see the demise of Qantas personally, let's hope it's not too late for change.
 
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ClassicLover
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Sun Dec 08, 2013 7:30 pm

Quoting VV701 (Reply 39):
On slide 47 of the recent IAG Capital Markets Day meeting Lynne Embleton of BA said that in Q2 and Q3 of 2013 BA had achieved a £30 million profits improvement on the LHR-SIN-SYD route compared to the same period of 2012 and following the cancellation of the Joint Services Agreement with QF.

I suspect that a strong contributor to this improvement has been flying this route with a 77W. However since the JSA required BA to share their own and QF's costs and revenue on this route, it seems possible that some of this plus for BA could be because they are no longer carrying some of QF's high costs.

You're also missing out on the fact that the LHR-SIN-SYD route has moved to Mixed Fleet cabin crew at BA as well.

I would say quite a bit of cost has also been removed as a result of that move as well, not just the switch to 77W.

Therefore, I think the assumption that BA was carrying QF's high costs is nothing more than speculation. Certainly possible, but it hasn't been proven in any way.
I do enjoy a spot of flying, especially when it's not in economy!
 
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qf2220
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Mon Dec 09, 2013 12:09 am

Quoting VV701 (Reply 39):

Just because profitability has improved does not mean a route is profitable. I have my doubts that it is as if it was they would be claiming it was....
 
Lufthansa
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Mon Dec 09, 2013 1:04 am

Quoting fiscal (Reply 35):
When staff know that their company is in serious trouble, they may wish to rally around, buy into the firm, have a greater say-so in the operations, and make an effort to save their jobs and those of their mates. You never know, Qantas may well become a success story again.

I wouldn't go down that path. It was an absolute disaster for United when they tried this. Basically the problem lies with this. The employee can't give their own bosses their orders. It never works. There's got to be a direct chain of command and somebody take responsibility especially when unpopular decisions need to be made. Employee ownership of companies turns companies away from a profit focus and into some kind of giant social program. Costs will never stay completely under control. Board members will be dominated by the union which obviously aren't going to want to do things like close stations or outsource things when it means existing employees won't keep their benefits. They'll only act when the company is in a serious financial state. A well run company doesn't wait until things are dire before they take action. The idea sounds great it just doesn't work in reality. However there are other ways to turn around a company's moral. Look at the amazing job Delta have done in recent years! That being said, the bankruptcy judge forcibly cut their staff's conditions. There's no such ability to do that at QF under Australian law and QF has some of the industries best conditions as well as some very outdated work practices.
 
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qf2220
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Mon Dec 09, 2013 1:46 am

Quoting Lufthansa (Reply 44):

Some form of employee share ownership though will help employees realise what the problem is (ie they will see the shares do nothing). I think a big problem across all of these industries (ie Qantas, Holden, general manufacturing amongst others) that are going through pain at the moment is that the people who have it good (a) dont realise how good they have it compared to other areas of the business that are suffering (eg engineering vs finance) and (b) dont realise how much they are impacting the business. There is a (c) where the majority of the employees dont understand the forces acting on the company at the market level (ie global competition, need for returns to capital etc ) and therefore dont think the hard decisions that need to be made should be made, their financial literacy is poor. Australia is a high cost country and the sooner it collectively realises this and starts making steps to lower its cost (either forcibly or through some collective recognition) the better the economy will be. Do we need that consumer good, or to eat out 3 times in a weekend etc etc. If the public does it itself, there wont need to be redundancies and the like, but I just know in our current consumer driven society it will have to be hard decisions to turn the cost of people around....
 
Lufthansa
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Mon Dec 09, 2013 2:36 am

Quoting QF2220 (Reply 45):
If the public does it itself, there wont need to be redundancies and the like, but I just know in our current consumer driven society it will have to be hard decisions to turn the cost of people around....

I wish there was some way to get it through to people. It's very hard to make a lot of general staff members think in terms of business decisions. To give you a perfect example, they can see a full flight and assume it must be making money. Yet, the last decade in the US showed us exactly the opposite. Load factors were at all time record highs and for most of the last decade the US industry largely lost money. I have spent many hours explaining why, even before we look at labour costs at all, the carriers with hubs in the middle have the natural geographic advantage. In the middle of the night one night high above the pacific, whilest everybody was sleeping I spent 3 hrs explaining basic airline economics to a CSM and a few interested colleagues Why QF couldn't generate the same yields and frequency now to destinations like Rome. Just simple things like SIA can feed a SIN-Rome flight from everywhere from Hong kong to malaysia, to thailand, to all of indonesia, the Philippines, vietnam plus all of Australia and New Zealand. Where as QF can only feed such a flight from Australia and to a lesser extent NZ.(which is less competitive as it involves an australian transit). This only means SQ could operate a larger aircraft with a lower CASM and operate at a higher frequency which will generate a revenue premium even before we look at our operating expenses/product/labour situation etc. And these are people who've worked in the industry 30 years! Now I hold a bachelor of economics so such things come naturally to me because I've been trained to think in those terms but not so for most people. Many staff simply think QF just needs more aircraft and to serve these destinations in their own right. but without sufficient feed from elsewhere they'll never compete on frequency as plenty of them wouldn't even be able to go daily so they'd never get the high yielding pax.

Most are shocked when I tell them the industry on average across the globe has a mere 5% return. I also point out to them what a term deposit in a bank pays... in other words the shareholders would make more buy liquidating the entire thing and simply sticking the assets in a term deposit. Most have no idea or simply don't believe me.
 
vv701
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Mon Dec 09, 2013 10:06 am

Quoting ClassicLover (Reply 42):
Therefore, I think the assumption that BA was carrying QF's high costs is nothing more than speculation. Certainly possible, but it hasn't been proven in any way.

It is not speculation that BA was carrying half of QF's costs on the Kangaroo route, That was a fundamental feature of the JSA.

Whether or not the QF costs on the Kangaroo route were high or not is not entirely clear. Nevertheless the subject of this thread and QF exiting the JSA with BA and entering a partnership with EK are surely indicators. Now add BA's stated "£30 million profit improvement" on the Kangaroo route since the termination of the BA / QF JSA. Taken together some might think that a picture is beginning to emerge. However there may be contrary indicators. If there are it would be interesting to hear them.

It is also important to note the context in which the statement on profits improvement was made. BA's long-haul routes were described as being either "strong", "mature" or "underperforming". The Kangaroo route was in the last of these three categories.

It was stated that routes in this "underperforming" category were subject to one of two strategies. They are to "strengthen" or "exit" the route. The Kangaroo route was the example used for the "strengthen" category. Those to EBB and LUN were illustrative of the "exit" category.

Quoting QF2220 (Reply 43):
Just because profitability has improved does not mean a route is profitable.

Quite. That is why I used exactly the same words that Lynne Embleton used in her presentation. She neither claimed nor denied that the route is now profitable. She simply said that there was a "£30 million profits improvement" over Q2 and Q3 2013 compared to the same period of 2012. Nevertheless a £30 million profit swing in six months is more than significant. Should it be viewed while remembering the alternative "exit" strategy applied to EBB and LUN?
 
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qf2220
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RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Mon Dec 09, 2013 11:34 am

Quoting VV701 (Reply 47):
Quoting QF2220 (Reply 43):
Just because profitability has improved does not mean a route is profitable.

Quite. That is why I used exactly the same words that Lynne Embleton used in her presentation. She neither claimed nor denied that the route is now profitable. She simply said that there was a "£30 million profits improvement" over Q2 and Q3 2013 compared to the same period of 2012. Nevertheless a £30 million profit swing in six months is more than significant. Should it be viewed while remembering the alternative "exit" strategy applied to EBB and LUN?

Ok that is releiving. Im very aware of how corporate comms are crafted and dont like seeing people mislead by them. I still maintain the route is probably not profitable otherwise they would be claiming that it is, despite (I do not disagree) a significant improvement in the route result.

Quoting Lufthansa (Reply 46):

If there was more economic and financial education in the community, I think we would agree that the whole thing would function a lot better!! From one Ecos degree holder to another, I understand!

Maybe that is what QF management should be doing, giving their staff a session on airline economics so that they understand what needs to be done? Would they be receptive to this? Some no, some maybe. But the more maybes the better.
 
koruman
Posts: 2179
Joined: Mon Feb 06, 2006 9:08 pm

RE: QF To Cut 1,000 Jobs - Issue Profit Warning

Mon Dec 09, 2013 12:05 pm

Quoting Lufthansa (Reply 44):
Basically the problem lies with this. The employee can't give their own bosses their orders. It never works

Firstly, you must see the irony in you saying this whilst using the nom de plume "Lufthansa". Because the entire German industrial model is built upon employers integrating unions and employees into the organisational structure and not trying to shortchange them. Any organisation can view its employees as invested stakeholders or the enemy. Leigh Clifford's record makes it clear how he chooses to operate.

Secondly, even the reddest, most extreme unions at Qantas could make a damn sight better fist of running the company than clowns like Clifford and Joyce.

For the last three weeks we have seen them make the ignorant Nick Xenophon look like an all-knowing sage.

The Clifford/Joyce think-tank has come up with the following little pearl for Qantas International:

"Costs are too high, it must be the contracts we signed with our employees. So we will retain an operating structure in which 100% of long-haul flights are operated by 4-engine aircraft and we won't let Qantas International have the 788s which it ordered and paid for, and we'll give them to Jetstar instead."

Yes Lufthansa, keep the employees out of the decision-making process. They could never match the Joyce/Clifford model for Qantas International, they just aren't smart enough.

Maybe Joyce and Clifford should give their genius model a name. I'd like to suggest "4 engine 4 long-haul beyond 2014"

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