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zeke
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RE: Australian Aviation Thread Part 90

Sun Mar 02, 2014 6:28 am

Quoting QF2220 (Reply 103):
They of course emphasised the carbon tax and the en route charges in their result announcement continuing their rent seeking campaign.

If there is one common complaint by all the various leaders of airlines in Australia, it is the carbon tax.

Quoting RyanairGuru (Reply 112):
Once SOQA is amended, there could potentially be few restrictions on how the intellectual property associated with the Qantas could be used. If I understand correctly, the "Qantas" brand is currently inseperable from the entity that comes within the consideration of SOQA. If that restriction was lifted, a private equity investor could come in and place a bid for (a) Jetstar, (b) Qantas Frequent Flyer, and (c) the intellectual property associated with the Qantas brand.

I saw on TV an Australian politician saying if the Qantas Sale Act was changed Australian would end up with the "flying panda" or "flying camel" (the name of the Aramcos DC-6). Can someone do the intellectual exercise for me and explain why the foreign investment review board cannot make the decision on what is in Australias' best interests, and let the market determine the shareholding.

Quoting Flyingsottsman (Reply 124):
reason I ask that is because an interview I heard on ABC's PM show on Thursday night interviewed the head of the Pilots Association and he said to the words and I cant remember exactly but he sought of said with QF's very high fuel bill, the A380 was the wrong sought of plane for Qantas only flying them to Heathrow and LAX where they sit all day doing nothing.

The high fuel bill is due to the high price of oil, it is industry wide. I have not seen fleet utilization data recently for QF, however I thought their long range aircraft were up around 14 hours a day.

Quoting EK413 (Reply 130):
Very interesting points you make & here I was thinking Australian wages would be far greater than European countries.

So where does this place carriers such as LH, IAG (Group), KL/AF, TK with employee wages & conditions versus QF's "legacy" wages & conditions?

When it comes to wage discussions, I think it is worth remembering that a lot of the income is in AUD, and a lot of the wages in AUD.

Quoting EK413 (Reply 135):
That'll explain why the B787's ended up at JQ whilst QF operate with the older fleet with exception of the A380's & newly delivered B738's. Really disappointing no B787 in sight for mainline & I'm really beginning to wonder if the options are going to be exercised

From what I understood the plan was with the 787s to run from SIN/KUL/BKK into various European cities that QF could not do one stop from Australia. Have the high volume aircraft running to and from these hubs, and then run high capacity aircraft to Australia. I was of the understanding that the EK deal was partially conditional on QF dropping these plans.
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koruman
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RE: Australian Aviation Thread Part 90

Sun Mar 02, 2014 6:46 am

Quoting aryonoco (Reply 149):
Qantas would be losing money no matter what aircraft it operated. Qantas's problems are much deeper and more structural than the 15% better fuel burn that a 787 brings could solve

I half-agree, but only because the 787 is two generations (77E then 77W) later than where it went wrong.

It being 2014, it reminds me of World War 1. Qantas' management team seem to be saying that the cavalry would be perfectly good against machine guns and mustard gas if only they were allowed to whip the horses a bit more.

Joyce the other day reminded me of Geoffrey Palmer's portrayal of Field Marshall Haig in the final episode of "Blackadder", playing games with toy soldiers and scooping away his troops with a dustpan and brush. As for Clifford, I'm sure that he is enjoying trying to impress his HR Nicholls friends: it's less than three months since he was guest of honour at their annual dinner, presumably for the splendid achievement of concurrently attacking his staff while having to take his begging bowl to the government. But we can all imagine General Melchett carrying that one off too without any sense of foolishness or embarrassment.

The whole thing is incoherent. Qantas' strategy is only taking them from profit to loss, yet they are ploughing ahead at full speed.

And as convenient as it is to blame the staff for the contracts that the management willingly offered them, there is still that teensie-weensie little problem of a Qantas long-haul fleet where every single aircraft without exception has two engines under each wing. In 2014. And 2015. And 2016.
 
VA82
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RE: Australian Aviation Thread Part 90

Sun Mar 02, 2014 11:21 am

Quoting aryonoco (Reply 149):
Your biggest mistake is thinking that Qantas's fleet is its major problem.

It is not.

Qantas would be losing money no matter what aircraft it operated. Qantas's problems are much deeper and more structural than the 15% better fuel burn that a 787 brings could solve.

While I completely agree with that there a structural issues at Qantas, I don't think that the fleet is an insignificant problem going forward. At the moment the A330 fleet is at 21 frames, this is 15% of the mainline fleet. For simplicity's sake we can assume that they use about 15% of Qantas's fuel. That comes in at $335m so a 15% saving would be $50m. However once the 767's are gone (and the new 738 arrive) and the A332 are transferred from Jetstar the A330 fleet will stand at 30 frames. Which will be roughly 25% of the fleet, ceteris paribus, which assuming a static fuel bill (yeah I know, not overly realistic) then we're talking about $570m of the fuel bill and $85m in savings, not including maintenance savings. On the finance cost front, I doubt it would be over $50m even with junk status (since the 789 price is meant to be very competitive...). So while it won't magically solve all of Qantas's problems overnight, it would definitely help.
 
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RE: Australian Aviation Thread Part 90

Sun Mar 02, 2014 1:17 pm

Quoting mariner (Reply 136):
Quoting QF2220 (Reply 134):
Though, thinking more and more about the results, I think the message I'm getting is that the costs are still too high and the structural adjustment pressure from outside the company still hasnt been felt enough internally. It wasnt at all felt in the Dixon era and Joyce has been left carrying the can.

I've largely stayed out of this - and intend to do so - partly because I said all I can say before the event, and partly because the rage of the Joyce/Clifford (and thus Qantas) bashers is alarming to me, like a lynch mob in full cry.

This shouldnt be interpreted as mob behaviour. Ive been supportive of most of what Joyce has done over the last few years and still am of the Jetstar Asia strategy and Emirates tie up. All im saying in the above is what im reading into the general feel and theme of the corporate announcements, nothing more. On my 787 comments, Ive been of that mind for some time and is nothing new from me. I was glad in the announcements on Thursday that there was no mention of JQ or QFF being spun off and hope it stays that way.

Quoting zeke (Reply 150):
If there is one common complaint by all the various leaders of airlines in Australia, it is the carbon tax.

Doesnt mean that they shouldnt all be paying it...

Quoting VA82 (Reply 152):

High level but interesting analysis.

Quoting allrite (Thread starter):
* QF to have a tag to GIG during the World Cup

Just on the QF GIG services, the timings look to be a 2030 departure, arriving into SYD at 0610 (with a 1hr30min stopover in SCL, departing at 0150). Ill be really interested to see if there are any/many Asian connections made by pax from GIG. Anyone know how we might find this out?



And, I know that certain members of the forum can be dogged and fixed in their opinions, however, lets make sure we dont make it too personal and keep the level of the forum hight.
 
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mariner
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RE: Australian Aviation Thread Part 90

Sun Mar 02, 2014 6:50 pm

Quoting QF2220 (Reply 153):
This shouldnt be interpreted as mob behaviour.

Yes, I'm sorry if you got that impression because I quoted you. You have been a very sane voice and I used your post as a springboard for my own thoughts.

I should have put a checkmark under your words that I quoted to show that I agreed with you and I regret that I did not.

Nor was my comment limited to here. It included most of the media reaction as well and the comments by some industry leaders - Borghetti, of course, and a couple of the voices at Rex Aviation.

Borghetti chose his own battles and, I think, under slightly suspect circumstances, but I have considerably more sympathy for Rex. I think they're doing an important thing.

But they're losing me just a little because I tend to the view that if the model is broken, fix the model. I think it's fine that Rex is going to serve Arrmidale, but it does go up against Qantaslink and is that the way to go, unless it leads to a reduction in fares?

Mostly, I agree with what they're saying at Rex, but not entirely because I wonder if the model is sustainable. Just as Qantas is being forced to re-examine itself, I wouldn't mind some of that re-examination at Rex.

At the same I think the state of civil aviation in rural Australia should be a matter of grave concern for the Feds. The question then becomes, does Rex go on doing the same thing with some help, or does Rex actually branch out?

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aryonoco
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RE: Australian Aviation Thread Part 90

Sun Mar 02, 2014 8:46 pm

Quoting VA82 (Reply 152):
So while it won't magically solve all of Qantas's problems overnight, it would definitely help.

Oh the 789s are sorely needed, don't get me wrong. They are urgently needed, if only because in a few year's time everyone else will be flying them as well and then basically everyone will enjoy the same fuel saving. In order to stay alive, Qantas needs to eventually replace all of its 747s, 767s and eventually the A330s with the 787.

Getting the 787s in 2016 is still a competitive advantage for a few years before they become too prevalent. But if Qantas defers or cancels this order, then they really are doomed.

My point was that even the 787 is going to be a band-aid solution at best. It does not deal with Qantas's structural problems, and unless they are tackled (which 5,000 jobs is partly there I reckon) then they are going to go down, no matter what metal they are flying.
 
BenSandilands
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RE: Australian Aviation Thread Part 90

Sun Mar 02, 2014 10:22 pm

Clinical analysis of the current management at Qantas is underway in many places in government and finance houses, and is far more damaging I think in its direction than so called bashing, which is abhorent.

In my own platform I delete or edit personal abusive language or allegations that seem to persist in this place, although not, to its credit, in this particular thread. My new definition of anxiety, after a quick trip to Korea last week, is to be inside a jet for more than 10 hours without internet and unsure whether the stand in moderater was doing the job of vigilantly removing offensive or actionable material from the discussions.

In The Australian last week I made the point that even if we chose to accept without reservations all of the arguments advanced that Qantas is a victim of circumstance, geography and organised labour, the management performance is deficent to a degree which has profoundly damaged the carrier.

There is an additional matter to address since last Thursday, which is that Joyce has lost control of strategy to the extent that the Jetstar expansion in Asia, and on inquiry, this does mean all of Asia, is on hold, and the division of the Qantas operation into domestic and international has been stopped, and undone. The people involved have been sent back ot their original roles.

As already announced, the large A320 order book is to be restructured, and this is not contracturally an easy thing to do even though there are some suggestions circulating as to how Qantas could take delivery and better use the jets to renew its 737 NG fleet as well as churn some of the older Jetstar examples.

[Edited 2014-03-02 14:23:57]
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 12:01 am

Quoting BenSandilands (Reply 156):
As already announced, the large A320 order book is to be restructured, and this is not contracturally an easy thing to do even though there are some suggestions circulating as to how Qantas could take delivery and better use the jets to renew its 737 NG fleet as well as churn some of the older Jetstar examples.

To quantify that, doing the maths on the order book, deferrals & cancellations it would appear that 18 A320's have had their deliveries pushed back. Again, I hope hese are current generation A320's and not the A320NEO's which JQ, 3K & GK could all use. (Not to mention QF mainline)

Quoting BenSandilands (Reply 156):
There is an additional matter to address since last Thursday, which is that Joyce has lost control of strategy to the extent that the Jetstar expansion in Asia, and on inquiry, this does mean all of Asia, is on hold, and the division of the Qantas operation into domestic and international has been stopped, and undone. The people involved have been sent back ot their original roles.

I'm interested to know exactly what "Jetstar expansion in Asia on hold" actually means. By the looks of it that means that JQ long haul will take less aircraft, 3K will need to make better use of existing assets, (cancelling SIN-CAN, taking over SIN-DRW, starting SIN-BKK-FUK etc) while GK build up to going International. But the deferral of the 18 A320's look to me to be the equivalent of deferring all of the remaining initial aircraft for Jetstar Hong Kong. So it's not really a deferral but more an acceptance of a current reality.

The division of QF International and domestic should never have been done anyway. There is too much overlap, asset swaps and cross-crewing to keep track of in that situation.

I'm also fascinated by the deferral of the last 3 787's for Jetstar. That is an acceptance of the over-capacity in Southeast Asia and, probably, an unwillingness to invest until Air Asia X's long haul strategy out of DPS and BKK are more clearly defined.

Quoting aryonoco (Reply 149):
Qantas would be losing money no matter what aircraft it operated. Qantas's problems are much deeper and more structural than the 15% better fuel burn that a 787 brings could solve.

You are entirely correct. The major problem for QF is not fuel costs, and it's not inefficient or poor aircraft choice. The biggest problem for QF is revenue and yield. You can support all the cost you want if you can generate the appropriate amount of revenue. Where did revenue fall the most? By the looks of it Domestic and JQ International. The only question is whether that revenue decline is permanent or not and, if it is, that's the failure management should get its arse kicked for. So if pressure is going to be put on the Qantas Management structure, then it should start with those responsible for revenue and yields because QF needs significantly more of the former and needs to progressively improve the latter. Hopefully the use of more A332's on International, which many of us have advocated for on here, will help to resolve some of the yield pressures along with better use of A333's domestically.
 
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RyanairGuru
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 12:06 am

Quoting sydscott (Reply 157):
There is too much overlap, asset swaps and cross-crewing to keep track of in that situation.

  

Someone correct me if I'm wrong here, but aren't virtually all of the VA international 737s ZK registered? If so, that plus the 77Ws (and associated crews) not being used on domestic flights would make it [relatively] easy to divide the business.

For QF, however, it would be much harder. The A330s and 767s are both "international" aircraft per the pilots agreement, with even the 767 pilots flying under the longhaul EBA. While FAs are cross-trained, they are also thrown together. Add to that the confusion about how you allocate assets (Domestic 332s on international flights, Skybed 333s on domestic flights etc) and it sounds like a nightmare to me.

The only way that it really makes sense to split QF, IMHO, is to pull a VA style sell off of the domestic business. That isn't happening anytime soon.

Quoting BenSandilands (Reply 156):
Joyce has lost control of strategy to the extent that the Jetstar expansion in Asia

I disagree, and like quietly forgetting the 65% "line", I think it actually represents a increased focus on strategy, as opposed to throwing capacity after bad money just for the [email protected] of it.
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eaglefarm4
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 12:19 am

Negative Ryanair Guru

VH-YI? ... 737 block is all international .

Cheers.
tourismman
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 12:22 am

Quoting eaglefarm4 (Reply 159):
Negative Ryanair Guru

VH-YI? ... 737 block is all international

Interesting, are these mostly used for DPS etc?

And when you say that YI? is "all international", does that mean that they aren't used on domestic flights? If so then the point still stands, as at the moment the same 767 or 332 could be flying to HNL or CGK one day and MEL or PER the next.
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VA82
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 1:01 am

Quoting eaglefarm4 (Reply 159):
Negative Ryanair Guru

VH-YI? ... 737 block is all international .

Cheers.

According to Airfleets the Pacific Blue fleet is still active under ZK registrations. On Flight Radar 24 ZK-PBA is shown as operating international flights recently: http://www.flightradar24.com/data/airplanes/zk-pba

I don't think VH-YIA is international, shown as operating mainly domestic (BNE-POM being the exception) on Flight Radar 24: http://www.flightradar24.com/data/airplanes/vh-yia and the same applies to VH-YIB.
 
koruman
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 1:57 am

The developing political machinations around Qantas are comedy gold, especially in terms of the Labor Party, and Tony Abbott must think that all his Christmases have come at once.

So we have a former State Owned Enterprise, whose management wishes to terminate 5,000 employees and be rid of the Qantas Sale Act's prohibitions on overseas majority ownership and offshoring.

And we have a Labor Party so beholden to its union powerbrokers that its desperation for the government to subsidise Qantas is such that it is willing to get into bed with the same management unit that actually wants to dismiss those staff.

Meanwhile Tony Abbott is showing markedly better political judgment than Joe Hockey, as he bides his time watching Labor do a deal with its devil. And then he can emerge as the voice of sanity, simply arguing that the Sale Act should go and daring Labor into a game of chicken about that matter.

It's compelling viewing, spoiled only by the thought that many thousands of families' financial security is in the hands of these comedians. The only upside of that is the fact that Abbott seems to be both well-briefed and prudent.
 
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RyanairGuru
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 2:13 am

Quoting koruman (Reply 162):
Tony Abbott is showing markedly better political judgment than Joe Hockey

I disagree, actually. At first I thought that Abbott had some sense in this area, but taking a look back at how Abbott operates I think that going for QSA rather than a debt guarantee has everything to do with the upcoming VIC and SA state elections and nothing to do with Qantas. Hockey is less of a populist than Abbott is. Especially in VIC, the state coalition government has a tough re-election campaign this year (SA should go coalition though). Trying to explain to voters in those states why Qantas deserves financial support, while the dying heavy industries do not, will be a tough task. Hockey explained why he believed the situations are not congruent, while populist Abbott would not be prepared to take the potential political flack.
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tullamarine
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 2:24 am

Quoting RyanairGuru (Reply 163):
Hockey explained why he believed the situations are not congruent, while populist Abbott would not be prepared to take the potential political flack.

Abbott is playing the politically shrewd move by not giving QF a guarantee. Apart from having to explain a quite complicated differential game as to why QF deserves money and SPC etc doesn't which will always fail in a news-bite world, he has successfully wedged Shorten and the ALP who now incongruously are supporting a fairly unsuccessful management team who want to sack 5000 of the ALP's natural constituency. He has further worked out another wedge saying that the ALP can support QF to the tune of $100M p.a. by passing the abolition of the Carbon Tax.

JB was playing a very smart game on Friday when he said the best thing that could be done for his airline was the removal of the carbon tax. It would've been music to the government's ears and was worth more to them than 100 Chairman Lounge memberships!!!
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 2:50 am

My understanding of the VA 737 fleet is the YI* block is those aircraft are equipped for International ops (IIRC they have additional life rafts) but they alternate between domestic and international so in theory a YI aircraft can rotate MEL-BNE-VLI-BNE-SYD-DPS-PER-HKT-PER-ADL-MEL. I believe a few VU aircraft are also in this configuration.
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TruemanQLD
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 3:55 am

Quoting Vhqpa (Reply 165):

My understanding of the VA 737 fleet is the YI* block is those aircraft are equipped for International ops (IIRC they have additional life rafts) but they alternate between domestic and international so in theory a YI aircraft can rotate MEL-BNE-VLI-BNE-SYD-DPS-PER-HKT-PER-ADL-MEL. I believe a few VU aircraft are also in this configuration.

This maybe a stupid question, but do these restrictions apply to Tasmanian flights (e.g. extra life rafts)?
 
vhebb
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 7:41 am

Anyone know when the changes to QF intl schedule will be published?

QF have already announced some changes that will kick in from November 2014:

*Retimed LHR-DXB-MEL (QF10)

*A330s replace B744s on all BNE-SIN and SYD-SIN services

*A330s replace B763s on the SYD-HNL route

*Allocation of the spare A380, apparently the spare A380 will allow SYD-HKG to be daily A380 and a few of the SYD-LAX- SYD services (QF107/108) will become A380 replacing B744s.
 
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zeke
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 8:34 am

Quoting QF2220 (Reply 153):
Doesnt mean that they shouldnt all be paying it...

I dont agree or disagree, however it is yet another cost that airlines based in Australia have to pay, that others dont. There is a multitude of ways promoting efficient technology, and there are philosophical differences on both sides of government on how this should be done.

The current system is not market based, so it not floated internationally, many would argue the cost is too high. The other thing is it does not reward efficiency, the aviation sector is one of the most efficient, if not the most efficient sectors in industry. Government in my view should be encouraging investment in efficient technology, rather than taxing based upon consumption.

Quoting sydscott (Reply 157):
I'm interested to know exactly what "Jetstar expansion in Asia on hold" actually means.

The ASX announcements have been reasonably clear,

http://www.asx.com.au/asxpdf/20140227/pdf/42n14wbnf0wwm1.pdf
http://www.asx.com.au/asx/statistics...ment.do?display=pdf&idsId=01495892

Jetstar in Singapore will see no more expansion (they had a 9% increase in ASK in the last figures), they are also dropping the 747 freighter. What did surprise me from the documents is the 24% increase in capacity from Singapore/Malaysia into Australia, this is more than the rest of the world combined (8% UK/Europe/ME, 4% China, USA 2%, Tasman 4%).
“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
 
VHSMM
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 9:30 am

The Australian Government announces changes to Qantas Sal Act

http://www.abc.net.au/news/2014-03-0...changes-to-qantas-sale-act/5295700
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Gemuser
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 9:46 am

Quoting VHSMM (Reply 169):
The Australian Government announces changes to Qantas Sal Act

Political grandstanding! The chances of getting this thru the current Senate are very slim & he knows it. Who knows what the chances are after the new Senate election in WA.

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aryonoco
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:00 am

Quoting zeke (Reply 168):
Government in my view should be encouraging investment in efficient technology, rather than taxing based upon consumption.

Well I'm glad that's how you feel zeke, but thankfully we had a few prominent economists look at this issue, held consultations over it, generated reports around it, and after long debates everyone agreed that a carbon tax is the simplest, most efficient way of curbing greenhouse emissions, and encouraging the market to shift to cleaner alternatives. Everyone including the then leader of the opposition agreed.

Those of us with a liberal view of economics argue that "investment in efficient technology" is best left to the market, that government meddling in such affairs with subsidies and whatnot always produces sub-optimal and inefficient outcomes.

Is the current system perfect? Far from it. But just because airlines don't like it doesn't mean it should be scrapped or that it's not good for the overall economy.
 
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KarelXWB
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:04 am

Sydney and Melbourne will receive Etihad A380 services from December.

http://twitter.com/FlightDKM/status/440421695653175296
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koruman
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:42 am

Well that has gone incredibly badly for Joyce and Clifford, and I almost feel sympathy for them.

I've just watched the Abbott/Truss/Hockey press conference.

Abbott was eventually absolutely withering towards Qantas management, going so far as describing them as "wanting the government to play favourites". He added that “In some of his [Joyce's] utterances this was something Qantas wanted us to do but that is fundamentally wrong.”

He also went very far indeed - further than even I would - in describing Virgin Australia as an equally Australian enterprise, stating that “I defy anyone to stand up and say the Virgin is not in a meaningful sense an Australian national carrier.”

Hockey looked incredibly uncomfortable, and I felt sorry for him being sent out to a press conference to try to defend his "four points" speech of three weeks ago in which he said that Qantas met the criteria for state intervention.

Borghetti has rightly faced considerable criticism in recent weeks for the Virgin contribution to the capacity war. But his press conference when he announced the financial results last Friday now looks like a masterstroke, because he pushed every Liberal Party button imaginable, from Virgin support for abolition of the Qantas Sale Act to deregulation to competition to abolition of the Carbon Tax.

You don't need to be Freud to see that Mr Abbott is deeply unhappy with Alan Joyce's behaviour - and who knows, it really might go back to the ambush in the First Class lounge en route to the Mandela funeral. It is equally obvious that Abbott sees Borghetti as precisely the sort of corporate citizen he values and wishes to encourage.

This must be a deeply unsettling time for Qantas staff. And it must be absolutely terrifying for Alan Joyce, as he sees the emergency exit looking more and more distant.

[Edited 2014-03-03 02:46:15]
 
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zeke
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:44 am

Quoting aryonoco (Reply 171):
Well I'm glad that's how you feel zeke, but thankfully we had a few prominent economists look at this issue, held consultations over it, generated reports around it, and after long debates everyone agreed that a carbon tax is the simplest, most efficient way of curbing greenhouse emissions, and encouraging the market to shift to cleaner alternatives. Everyone including the then leader of the opposition agreed.

The carbon tax does not curb emissions, it taxes emissions at a rate not linked to the market. It is not being used to reduce emissions, introduce more efficient technology etc. All Australia had seen is around a 10-20% increase into inputs used in businesses which is killing profitability, which in turn is killing government revenue, growth, and jobs.

http://www.aigroup.com.au/portal/bin.../Carbon_price_impacts_Jan_2013.pdf

Quoting aryonoco (Reply 171):
Is the current system perfect? Far from it. But just because airlines don't like it doesn't mean it should be scrapped or that it's not good for the overall economy.

I dont even need to live in Australia to read of the widespread problems the tax is having through the whole economy. As far as I am aware, it does not apply to transport fuels.
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:49 am

Quoting KarelXWB (Reply 172):
Sydney and Melbourne will receive Etihad A380 services from December.

Yet Brisbane can't even get a non-stop service    but at least it's daily right.  
 
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allrite
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:50 am

Quoting VHSMM (Reply 169):
The Australian Government announces changes to Qantas Sal Act
Quoting gemuser (Reply 170):
Political grandstanding! The chances of getting this thru the current Senate are very slim & he knows it. Who knows what the chances are after the new Senate election in WA.

1) Fits in with the "Australia is open for business!" (ie for sale) policy

2) An excuse to blame the Labor Party and Greens if it doesn't get through the senate.

Via Mr Sandilands, Mr Abbott said “I defy anyone to stand up and say the Virgin is not in a meaningful sense an Australian national carrier.”

Well, if, for argument's sake, they are being used as a pawn by foreign competitors to damage what is arguably a national carrier then maybe they don't make a very good national carrier themselves. And let's not forget VA's impressive range of international destinations that they fly to themselves... (Notice the *sarcasm*).

Maybe it would be a good time to for Australia to ask itself what it needs as a nation out of its airlines. Unlike a European nation with no national carrier we have no adjoining land borders and our largest cities are far away from anywhere (apart from NZ, and that's far away from anywhere too). We need to shift people around the country and ship 'em in and out. There is the need to serve both major cities and regional areas for both tourism and business.

Could New Zealand, Singapore, the UAE (as they diversify away from oil) be successful without national airlines that ensure a steady flow of passengers from around the world?

[Edited 2014-03-03 03:57:55]
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 11:01 am

Quoting zeke (Reply 174):
All Australia had seen is around a 10-20% increase into inputs used in businesses which is killing profitability, which in turn is killing government revenue, growth, and jobs.

http://www.aigroup.com.au/portal/bin...3.pdf
Quoting zeke (Reply 174):
I dont even need to live in Australia to read of the widespread problems the tax is having through the whole economy. As far as I am aware, it does not apply to transport fuels.

Yes, certain rent seeking industry groups, a certain political party that represents them and a certain media group that those parties are beholden to are very good at complaining loudly about the carbon tax, non-existent wages explosions and anything else that means they might have to change their behaviour. They probably even claim to be innovative in their materials...

Look at the effect that higher electricity prices (mostly NOT carbon tax related) have had on consumers. They have started using less electricity, thus hurting the poor multinational electricity corporations... *sob* *sob* I so feel for their investors, how dare my child have a little more chance of growing up in a not-so-hot world.

Here's something direct from Qantas:

Quote:
ISSUE: Claims that the carbon tax is a key issue facing Qantas
FACTS: The major issues faces Qantas are not related to carbon pricing.
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 11:36 am

Qantas would be losing money no matter what aircraft it operated. Qantas's problems are much deeper and more structural than the 15% better fuel burn that a 787 brings could solve.

How true.

Unless they get the house in order, they will need a Government guarantee to stay in business with the existing fleet, let alone acquire new.
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 11:52 am

Have to say that, in my opinion, this is a very wise decision by the Aussie government. And that, unless the opposition somehow 'queers the pitch,' the decision provides every chance that Qantas shares will rise and the firm will get out of trouble within months.

"Prime Minister Tony Abbott has announced the Federal Government will look to repeal the part of the Qantas Sale Act which restricts foreign ownership.

"However, Mr Abbott says he is not proposing to offer a debt guarantee or line of credit to the struggling airline.

"The Qantas Sale Act currently restricts overall foreign investment to 49 per cent, ensuring the airline remains majority Australian-owned.

"Mr Abbott says Federal Cabinet discussed Qantas for almost two hours this evening and agreed to repeal Part 3 of the Act, removing all foreign ownership restrictions."


http://www.abc.net.au/news/2014-03-0...changes-to-qantas-sale-act/5295700
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 12:08 pm

Quoting zeke (Reply 174):
The carbon tax does not curb emissions, it taxes emissions at a rate not linked to the market. It is not being used to reduce emissions, introduce more efficient technology etc.
Quoting zeke (Reply 174):
I dont even need to live in Australia to read of the widespread problems the tax is having through the whole economy. As far as I am aware, it does not apply to transport fuels.

On the contrary, the carbon tax has reduced emissions in the sectors of the economy to which it applies. Quite significantly in the case of electricity generation.

While the carbon tax does not apply to general transport, it does apply to aviation, rail and marine transport. If you read things published by the Australian Industry Group, of course you'll think the carbon tax is causing problems. They are hardly a disinterested or rational observer! They campaign in their own narrow short-term financial interest, disregarding the long-term consequences of climate change.
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 12:24 pm

Quoting zeke (Reply 174):
The carbon tax does not curb emissions, it taxes emissions at a rate not linked to the market

That oxymoronic statement surely doesn't deserve an answer.  
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 1:01 pm

So the government is only proposing to remove the ownership restrictions? Nothing about maintenance requirements? Considering that Qantas can't raise any money with its credit status, for the short-medium term, removing ownership restriction is meaningless for it.

Of course it's the right thing to do, but I wish they went further and repealed the whole Act.
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 1:21 pm

Quoting allrite (Reply 177):
They have started using less electricity, thus hurting the poor multinational electricity corporations... *sob* *sob* I so feel for their investors, how dare my child have a little more chance of growing up in a not-so-hot world.

I read Australian produces the same amount of emissions in a year than what China does in a week. Reducing Australias emission by even 90% would have no meaningful worldwide effect except to kill the economy, Australia only produces around 1% of the worldwide emissions.

The tax in itself does not reduce any emission, likewise putting tax on cigarettes, plain packaging, ban on advertising etc does not stop people smoking.

Quoting allrite (Reply 177):
Quote:
ISSUE: Claims that the carbon tax is a key issue facing Qantas
FACTS: The major issues faces Qantas are not related to carbon pricing.

"The introduction of the carbon tax drove up operating expenses by $106 million. "

"Qantas Domestic Underlying EBIT of $365 million for the year ended 30 June 2013 was $98 million down from the prior
year.

The reduction in Underlying EBIT was driven by the introduction of the carbon tax and capacity growth in the Australian
domestic market of eight per cent30, exceeding market demand."

77 of that 98 million reduction was from the carbon tax.

"The Qantas Domestic result includes $77 million of carbon tax"

http://www.qantas.com.au/infodetail/...stors/preliminaryFinalReport13.pdf

Where did that 106 million go ? did it go to industry to get more efficient or more general revenue ?

Quoting cbrboy (Reply 180):
On the contrary, the carbon tax has reduced emissions in the sectors of the economy to which it applies. Quite significantly in the case of electricity generation.

Yes great, the manufacturing and value adding sectors are moving else where, jobs go, tax base decreases.

What is the increase in solar generation ?
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 1:55 pm

A new article out this morning:

http://www.theage.com.au/federal-pol...o-split-in-two-20140303-340p0.html

So instead of changing QSA or a debt guarantee, the govt will let it mirror VA???

Also, something to consider about the new world of taxation. This article is a great piece about producer surplus and the MRRT. Consumption taxes, whilst different, have similar impacts on what is known as consumer surplus, where a consumer is consuming something that they dont neccessarily need. A carbon tax is just that.

http://www.theage.com.au/business/co...-pays-the-rent-20140228-33rb1.html

Quoting zeke (Reply 174):
I dont even need to live in Australia to read of the widespread problems the tax is having through the whole economy. As far as I am aware, it does not apply to transport fuels.

With respect zeke, you need to live in Australia to understand what impact it is not having and to what extent it is being blamed by politicians for other policy settings in the economy. And, it most definately does apply to transport fuels, avgas is one of them. It does apply to land transport fuels however the size of the entity that is liable for them is larger than the size of most companies that use such fuels who are therefore exempt.

Quoting cbrboy (Reply 180):
On the contrary, the carbon tax has reduced emissions in the sectors of the economy to which it applies. Quite significantly in the case of electricity generation.

Indeed. It actually started the reduction before it was implemented as companies recognsed they needed to act and had a reason to do so.

Quoting mariner (Reply 154):

Ah great! Thanks for the clarification, I've always thought you are quite sensible too. All good.

Quoting aryonoco (Reply 155):

Great summary of my sentiments.
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 4:18 pm

Quoting zeke (Reply 183):
I read Australian produces the same amount of emissions in a year than what China does in a week. Reducing Australias emission by even 90% would have no meaningful worldwide effect except to kill the economy, Australia only produces around 1% of the worldwide emissions.

So what? Who is talking about worldwide emissions? Those who want to wait until there is a global binding treaty can stay inactive and let the world pass them. Meanwhile if Australia was to reduce its emissions by 90% as you suggest, it would overnight become a beacon of innovation in energy production and distribution. In a few years it would find itself with a massive supply of experts in all sorts of renewable energy, expertise that it could then leverage and sell. The opportunities that such an act would provide would create such a remarkable fusion of talent and entrepreneurship that could catapult the economy into an enviable position in world stage.

Economics is not a zero sum game.

Necessity is the mother of all inventions.

But of course that would be such painful act in the short to medium term that it would be political suicide on the part of the government which introduced it, which is why it won't happen, at least not in a democracy.

Quoting zeke (Reply 183):
The tax in itself does not reduce any emission, likewise putting tax on cigarettes, plain packaging, ban on advertising etc does not stop people smoking.

Actually they do (up to a point). Taxes on cigarettes clearly have reduced smoking rates, that's undeniable. Sure, after a certain threshold as the tax becomes an ever greater portion of the end price, the demand that's left becomes price inelastic and the tax loses its efficacy, and there is an argument that in Australia we have already passed that threshold. But no one argues that taxes on tobacco did not reduce demand for cigarettes.

I'm against plain packaging, and there is also an argument that most smokers are of lower socioeconomic classes and taxes on tobacco are actually taxing the poor unfairly (and that's an argument very close to my heart) but, the relationship between tax and demand is very well established. It's basic game theory. I suggest you look it up.

[Edited 2014-03-03 08:20:13]

[Edited 2014-03-03 08:22:13]
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:00 pm

Quoting aryonoco (Reply 185):
Meanwhile if Australia was to reduce its emissions by 90% as you suggest, it would overnight become a beacon of innovation in energy production and distribution

....or we'd become Tasmania, a beautiful place but no jobs. I don't know if that is the future I want for my kids.

The carbon tax's removal is one way the government can improve the profitability of our airlines. If everyone is happy for the airlines to continue to pay the tax at the expense of profitability so be it. Of course, if the opposition parties continue to block the removal of the carbon tax, the government do have the option of rebating all carbon taxes the airlines paid back to them but other industries could, rightly, see this as favoritism.

As a shareholder I would have loved a quick fix to QF's problems so I can sell but realistically the government's tough love is more likely to set them up for long-term success as they concentrate on structuring themselves they way they need to be. They will be forced to concentrate on profitable routes, staff and shareholder engagement, core business; all of the things that appear to have been ignored in the past 6 or 7 years.
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:33 pm

Quoting zeke (Reply 168):
Jetstar in Singapore will see no more expansion (they had a 9% increase in ASK in the last figures), they are also dropping the 747 freighter.

But that's not true at all. 3K is adding SIN-DRW and SIN-BKK-FUK to the schedule this year while dropping SIN-CAN so while they may say "no more expansion" that's not reflected in reality. So, as I said, when they say no more expansion, what does that actually mean? It doesn't mean they're not adding new routes, and it doesn't necessarily mean they're not adding more ASK's to 3K.

Quoting tullamarine (Reply 186):
The carbon tax's removal is one way the government can improve the profitability of our airlines. If everyone is happy for the airlines to continue to pay the tax at the expense of profitability so be it.

With respect, that's complete garbage. The idea of the Carbon Tax is to pass the price on to consumers. If Borghetti and Joyce pulled back from the ridiculous price way they've been engaged in they would be able to do just that. So for either of them to come out and blame the carbon tax for losses is highly opportunistic but also a reflection on both of their poor management. (And for the record I don't support the Carbon Tax but neither do I support poorly managed businesses blaming it for their woes)
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:45 pm

Quoting zeke (Reply 150):

Quoting EK413 (Reply 130):
Very interesting points you make & here I was thinking Australian wages would be far greater than European countries.

So where does this place carriers such as LH, IAG (Group), KL/AF, TK with employee wages & conditions versus QF's "legacy" wages & conditions?

When it comes to wage discussions, I think it is worth remembering that a lot of the income is in AUD, and a lot of the wages in AUD.

Thanks for pointing that out to me it's probably the key piece of information I missed.

Quoting zeke (Reply 150):
From what I understood the plan was with the 787s to run from SIN/KUL/BKK into various European cities that QF could not do one stop from Australia. Have the high volume aircraft running to and from these hubs, and then run high capacity aircraft to Australia. I was of the understanding that the EK deal was partially conditional on QF dropping these plans.

The aircraft are also part of the B744 fleet replacement. With the EK deal this enabled QF to cut back on expense's introducing new fleet of aircraft, training, etc.
I believe had the A380 & B787 delivers for mainline gone to plan I believe we'll be looking at a very different QF today.

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tullamarine
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:49 pm

Sportsbet have a market going on whether AJ will still be CEO on 1/3/15.
Sportsbet Link

He's currently at $2.20 which are pretty generous odds IMHO. The sad thing is this is the level he has been reduced to, a sideshow clown on a betting website. An ASX200 company cannot go on like this.
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 10:57 pm

Quoting tullamarine (Reply 189):
He's currently at $2.20 which are pretty generous odds IMHO. The sad thing is this is the level he has been reduced to, a sideshow clown on a betting website. An ASX200 company cannot go on like this.

It's very Australian - famously, Aussies would bet on two flies climbing up a wall.

I don't see the problem.

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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 11:00 pm

Quoting tullamarine (Reply 189):

Wow. He could double up on his salary.
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 11:19 pm

The Australian Broadcasting Corporation (ABC) has very kindly posted the video of the Australian Government's press conference featuring Prime Minister Tony Abbott, Treasurer Joe Hockey and Transport Minister Warren Truss. It makes for rapturous viewing:

http://www.abc.net.au/news/2014-03-0...hange-the-qantas-sales-act/5296062

Key highlights for me:

Treasurer Hockey: "Qantas is in a fundamentally sound financial position."

PM Abbott: "We do not believe in government by checkbook."

PM Abbott: "We certainly don't believe in any normal circumstances that government should be playing favourites between competing private businesses."

PM Abbott: "I reject... this idea that Qantas is Australian and Virgin isn't because let's face it, Virgin is employing Australians and it's serving Australians so it's hard really to say that Virgin is substantially less Australian than Qantas itself."

PM Abbott: "Look at Virgin. Virgin employs Australians. It carries Australians. It provides a great service to our country. I defy anyone to stand up and say Virgin is not, in a meaningful sense, an Australian operation. Of course, in a very meaningful sense it is an Australian operation and we should give Virgin credit... for what it does for our country and for our people."

Treasurer Hockey: "As I said in relation to this matter we are being dragged kicking and screaming. And that's because we do not want to be in the business of subsidising any one single enterprise. It is not sustainable in the long term."

PM Abbott: "Well, we have been in receipt of all sorts of communications from Qantas and there are all sorts of things that Qantas would like. I think what Qantas would like most of all is for the Government to play favourites. I think Qantas would like most of all for the Government to say that we're backing Qantas vis-à-vis the competition. Well, that's not how this government operates."

PM Abbott: "I refer you to the statement of Ralph Willis all those years ago saying that it would be just wrong for the Commonwealth to take upon itself Qantas' liabilities....That is what in some of his utterances Mr Joyce is asking us to do but that would be fundamentally wrong under the circumstances."

Transport Minister Truss: "The decision to target a 65% market share was one made by Qantas management and it's a decision that Qantas can undo just as readily as it made it in the first place !"

Treasurer Hockey: "If it were a debt guarantee it could be up to six or seven billion dollars !"
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 11:20 pm

Quoting tullamarine (Reply 189):
He's currently at $2.20 which are pretty generous odds IMHO. The sad thing is this is the level he has been reduced to, a sideshow clown on a betting website. An ASX200 company cannot go on like this.

Well at the rate of value destruction that has been happening they might not be an ASX200 for much longer..................kidding! But as Mariner says, I don't see a problem with this. We've been able to bet on elections for years and we don't see them as sideshow clowns.................wait that's a bad example.
 
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RE: Australian Aviation Thread Part 90

Mon Mar 03, 2014 11:34 pm

It's all about the destination AND the journey.
 
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RE: Australian Aviation Thread Part 90

Tue Mar 04, 2014 12:24 am

Quoting sydscott (Reply 193):
! But as Mariner says, I don't see a problem with this. We've been able to bet on elections for years and we don't see them as sideshow clowns.................wait that's a bad example.

Too right. LOL.

I did have a more serious point, though. I loved Virgin Blue, I thought it was one of Branson's grandest inventions, cheaper (than Qantas) and cheerful, a bit larrikin and fun. Virgin Blue did not take itself too seriously - even the name was a revered Aussie joke.

Once the dust settled from Ansett, I didn't mind the new duopoly because I thought each airline was appealing (with some overlaps) to different markets, whereas Ansett had been chasing the same market as Qantas.

It's what I don't like about Virgin Australia, it's a gentrified view of Australia, all the larrikin elements dumped in favour of smart bland.

It seems to reflect what I think of as the bad side of Branson. The good side of Branson, the dazzling larrikin giving his finger to the establishment, has me cheering. Couple that with his devotion to the good causes - however self-serving - and I'm cheering again.

The bad side if Branson is when he tries to become like the establishment. I think the problem with Virgin Atlantic - an originally brilliant, if borrowed, concept - was that he became obsessed with sticking it to British Airways, and I see that history repeating itself now - sticking it to Qantas seems to be the propelling imperative these days.

So I think it's grand that folk can bet on Joyce's tenure and I hope they'll start a book on Borghetti, too. For this Australian, a sense of humour governs everything and it's pretty good odds that Joyce will go sooner rather than later, because the tenure of Australian CEO's is notoriously short - average 4.2 years at at October 2013:

http://www.theaustralian.com.au/busi...t-top/story-fn91v9q3-1226740570642

"Aussie chiefs find it tough, and brief, at top

THE average tenure of an Australian chief executive has fallen to 4.2 years, making this country one of the riskiest places in the world to run a major listed company, according to a study by global management consulting firm Booz & Co."


Joyce has already beaten the average. Someone else will come in, probably sooner rather than later, and will probably be cheered.

But Joyce will have done the hard yards.

mariner

[Edited 2014-03-03 16:30:41]
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RE: Australian Aviation Thread Part 90

Tue Mar 04, 2014 12:46 am

I've just read Sam Taranto Executive Manager Customer Experience & Catering has resigned.

"It is with considerable regret that I announce that Sam Taranto has informed me that after an exceptional 10 years at Qantas she believes the time is right to leave Qantas to pursue other interests and move on to the next phase of her career.

Sam currently holds the position of Executive Manager Customer Experience and Catering in the Domestic Airline and has been an outstanding contributor, a great leader and a trusted member of our team. A passionate supporter of the customer, Sam and her team have been instrumental in enabling Qantas to achieve remarkable improvements in our Net Promoter Score and customer satisfaction. Our performance in these dimensions are achievements that Sam will look back on with enormous pride.

Source: www.facebook.com/Airlinehubbuz/posts/620083454729664

EK413
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tullamarine
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RE: Australian Aviation Thread Part 90

Tue Mar 04, 2014 12:48 am

Quoting mariner (Reply 195):
Joyce has already beaten the average. Someone else will come in, probably sooner rather than later, and will probably be cheered.

But Joyce will have done the hard yards.

I think you're right that AJ's days are numbered. He is just too toxic seemingly having added a poor relationship with the government to his notoriously bad relationship with his workforce. His replacement will be cheered by the investment community (provided it is a half-decent appointment) as it will afford QF the clear air it needs to sort out its problems.

Joyce has commenced the hard yards but hasn't had enough wins to keep on the credit side of the ledger. I doubt he can expect to be looked on as a great of Australian aviation with his name on the side of an A380 in years to come.
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tullamarine
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RE: Australian Aviation Thread Part 90

Tue Mar 04, 2014 12:55 am

Quoting EK413 (Reply 196):
I've just read Sam Taranto Executive Manager Customer Experience & Catering has resigned.

I assume there are 3 possibilities here:

1. She has received a job offer too good to refuse (hint: James Hogan is in town!!!)
2. She believes the current situation will mean her area will suffer intolerable cuts in the short term and refuses to participate.
3. She needs a break and nothing sinister at all.

For everyone's sake I hope it is 1 or 3!!!
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RE: Australian Aviation Thread Part 90

Tue Mar 04, 2014 1:11 am

Quoting VA82 (Reply 175):
Yet Brisbane can't even get a non-stop service    but at least it's daily right.  

I would look for this to change fairly soon
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