Qantas
Back to Forum- This topic has 79 replies, 20 voices, and was last updated 26 May 2012
at 08:54 by Binman62.
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Binman62ParticipantI was sent the following today and can take no credit for what has been said however I agree entirely with the author and felt it required a wider distribution.
The management of Qantas are simpy some of the most inept in the business and the lack of sensitivity in the timing of these announcements is evidence, if it were ever required, of the depths this organisations management has plunged under the current regime and leadership.
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It’s time for some more “tips and tricks” in Airline Economics: In such difficult times it’s so important that airlines contains costs and makes those hard but necessary cuts to ensure long term viability…today the head of the an airline’s frequent flyer program announces he will personally take 10 top tier couples to the London 2012 Games – all expenses paid for a week, first class travel, first class hotels and VIP tickets to the opening games ceremony. The cost for this all important trip of a lifetime will run into several millions of dollars. At the same time, said airline announces the axing of jobs and hundreds now face an uncertain future, but it was important in order to be “economically relevant and sustainable”. It is most refreshing to see that the airline is correctly managing its funds and making those all important cost cutting measures. It doesn’t really matter that these workers are unlikely to enjoy their journey from now on, it’s kept 10 couples very happy. No doubt this generous and dare one say vulgar gesture will provide excellent future economic returns for the airline. It’s just brilliant isn’t it?
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21 May 2012
at 20:46
JohnPhelanAustraliaParticipantOh for heaven’s sake – QF is taking 20 frequent flyers to London for the opening ceremony of the Games – that will NOT be costing “millions”. (These are “Platinum One” frequent flyers, the highest tier).
In relation to the job cuts, QF curently has three heavy maintenance bases – Brisbane, Avalon and Tullamarine (the latter two in greater Melbourne). With the older aircraft going, and the new generation of aircraft needing less frequent heavy maintenance, and for cost efficiency, they announced quite a while ago that the three bases would be pared down to two. The one that will close is Tullamarine. Some workers will be offered full relocation packages to move to Brisbane, but QF estimates about 400 staff need to go.
As a comparison, Virgin Australia does NO heavy maintenance in Australia; QF will continue to do heavy maintenance on 737, 747, 767, A330 in Australia. QF also does all line maintenance in Australia.
They are the facts, without the emotive claptrap some are so fond of using to attack Alan Joyce (a large part of which, in Australia, seems to centre on the fact that he was born in Ireland, so that should be “emotive racist claptrap”).
21 May 2012
at 23:35
Binman62Participant20 passengers, all in First Class all with top tier seats at the Olympic opening ceremony and all in first class hotels in London. I would be surprised if the costs did not run to millions of aussie dollars, once the hangers on are all accounted for as well as all the hospitality.
That said like the author of the article who is also a top tier frequent flyer, I could not care less about how QF choose to spend their money as I am not a shareholder. However this is a deeply insensitive announcement when also making large scale job cuts for economic reasons.
Moreover this is an airline which whilst having many good people is badly led, lacks customer focus or concern, and is clearly in decline. The CEO grounded the carrier without warning and without the slightest regard for the passenger they stranded in many parts of the world, including children.
So I hope the top tier frequent flyers enjoy the games. Would not taking them make a difference to the jobs of 500 staff? almost certainly not! But the impression and perception is of a management detached from reality who lack grace and sensitivity. Their place of birth,race,religion, sex, colour or gender is not relevant. Their actions are.
22 May 2012
at 07:08
LPPSKrisflyerParticipantIt looks like there are going to be some organisational changes at QF:
http://www.bbc.co.uk/news/business-18155822
As I understand things, the domestic operation has subsidised the international one for some time. Presumably this will bring an end to that situation and international will have to be viable or else.
It also strikes me that it’s the complete opposite of the situation in Europe where all the major carriers struggle to make money on shorthaul and long haul is profitable. QF runs a very high quality shorthaul operation at sensible prices against several low cost alternatives. Maybe the European carriers could learn something from them.
22 May 2012
at 07:38
JordanDParticipantBinman, these might be seats on Charter aircraft – I was informed recently by a friend at STN, that QF were flying the Australian team in, and (similar to what they did in Athens & Beijing) have the aircraft based in the Olympic city for the duration of the Games.
If the aircraft are heading that way already, might not be costing them all that much to put some top tier FFs onto the flights …
22 May 2012
at 08:37
MartynSinclairParticipantBusiness can be insensitive, but the bottom line is that Qantas are incentivizing their top tier clients/customers/pax to remain loyal to the airline and irrespective of redundancies, it is a balancing act.
The most I could expect from BA is a ticket on the northern line to the Olympic Village.
The other point on this matter is that I hope Qantas have considered the Bribery Act 2010 in awarding this incentive to their top loyal clients.
http://www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf
22 May 2012
at 08:42
LeTigreParticipantI know it’s not completely relevant, but I did manage to get Olympics tickets myself the other day, for the women’s basketball. I’m really looking forward to it, and the ticket includes a zone1-9 travelcard so actually is good value. I won’t be getting my Northern line tickets from BA!
22 May 2012
at 09:07
JohnPhelanAustraliaParticipantIn the last financial year, QF Domestic made a profit of about $520 million. QF International made a loss of about $130 million. So as LPPS says, a very profitable operation domestically, and making a decent profit all up. In contrast, its local rival, Virgin Australia, has NEVER made a profit.
Given the state of most of the world’s airlines, QF is doing very well. It’s also one of the very few airlines in the world to be rated “ïnvestment grade” by various financial agencies.
Not sure where you get your information about QF’s financial status, Binman, but I would suggest you find some more credible sources.
And heavy maintenance staff had to be reduced, given the airline’s forecast of a 60% drop in heavy maintenance hours required for the fleet by the end of the decade.
So they’re the financial facts re QF’s current situation and fleet.
And if you honestly think 20 return airfares (probably out of award inventory and at worst at QF’s cost price, not its retail price), 10 hotel rooms for a week (at industry rates), 20 Opening Ceremony tickets and some food and local ground transport is going to run into “millions”, then you and I have very different outlooks on financial reality.
22 May 2012
at 12:55
Tete_de_cuveeParticipantmmm Qantas are one notch above Junk Status with a negative outlook so I wouldn’t bang on too much about the “Investment” Grade” Phelan, as it covers anything above Junk.
22 May 2012
at 13:15
LPPSKrisflyerParticipantJohn: Interesting, I had not realised the Virgin Australia had never made a profit. I’ve used them occasionally when they have covered a route that QF don’t or QF had no availability and I failed to be impressed. It was diffcult to know what they wanted to be and I didn’t much like the style.
For short haul, QF operate one of the best operations in the world IMO, well since the demise of AN who I think were unmatched. It’s just a pity that other legacy carriers don’t learn from them. People will pay a sensible price for quality service but in Europe we have the constant race to get to the bottom.
22 May 2012
at 13:26
JohnPhelanAustraliaParticipantLet me rephrase to keep Tete happy – QF is one of the few airlines in the world rated above “Junk” status.
And I’ve spoken to you before about the rudeness in adressing others just by their surnames. The vast majority of people on this site want civility and good manners. Please feel free to join us.
22 May 2012
at 13:36
LeTigreParticipantI think that excluding this whole VIP package controversy, Qantas is an airline operating in a difficult environment and operating from an out of the way continent is also difficult.
Understanding how the management allowed the international arm to become quite so unprofitable is even more difficult.
I think everyone knows that there are decisions being made now that really are 2 years behind schedule. What have they been doing?
Another thing…
I noticed those (lovely) Qantas A380s the other day at Heathrow and can’t help thinking what a waste of time and money having them on the ground for almost 24 hours is. Some ideas to use the time:
-let BA dry lease them during the day with their own crew and everything, perhaps on some Europe routes
-operate a BA route using BA slots themselves! (I’m sure BA would let them operate one of their routes, for a fee)
-allow paying visits (£20 each) to go and visit the planes, explore
-turn the planes into restaurants, using existing seatingAnyone agree?
22 May 2012
at 13:37
MartynSinclairParticipantCertainly think BA would derive benefit if only by parking one of them in T5 and ensuring the BA anticipated 380 ops are working. Can you imagine, day 1 of the 380 ops and the pier doesn’t connect!
Not sure what the base cost of running a 380 short haul would be but I feel sure the Qantas board hate the idea of such an asset being parked up for so long.
22 May 2012
at 13:43 -
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