Qantas - Some food for thought....
 

G'day,
I don't post often, but I feel the need to share this around. I received it via email through several people.

Cheers

Paul

Who wrote this? Like most things littered with half truths to suit the story and cause, in particular the bit that said that the Qantas brand started to diminish exactly when Jetstar was launched. Clearly forgetting some of the other factors that happened around the same time, such as 9/11 and the demise of Ansett. If anything the demise of Ansett allowed Qantas to ride high in that period and grow like never before, including growing Jetstar to take over marginal routes.

The rot has set in since the growth period is over and the market (both stock and passengers) want either a better return on their investment or better value. Being stuck with a high cost Qantas neither allows good return on the massive investment of the stock holders (hence the low share price) nor allows the brand to be competitive. Something must change if Qantas as a brand is to go forward.

Also bit untrue to say Qantas has not received any new aircraft. If I am not mistaken in the time of Jetstar's existance they have received 40 odd new 737's and removed all 733's, 10 A380's, 17 A330's and 25 or so Q400's. Sure no 777's, but clearly the fleet and network strategy at the time didn't require them (rightly or wronly) as Qantas had ordered the 7late7's and A380's. If these had been delivered ontime we would now be seeing the 767's starting to leave the fleet and more of the 747's would be gone too.

Also wrong to say the brand value drives the share price. What drives share price is the return on investment and at what risk. In the current market with Qantas not able to re-invent itself, the return is low due to high costs and high competition levels, meaning low fares and low to no return to shareholder with high risk.

Ash, I'm not exactly sure of the author, but what I do know is they are a Qantas employee. They wrote it because they among many others in Qantas are concerned about their future and the future of Qantas as a whole.

Paul

The stuff about JQ and what Dixon said is spot on. JQ is growing larger and larger at the expense of QF.

As for AJ - he seriously has lot the plot and needs to get on the "A-TREE-TURTEE" back to Dublin quick smart. He has more than overstayed his welcome in oz and QF.

And insulting Joyce by taking the pi$$ out of his accent is a really mature way of making an argument in what is an otherwise serious issue?!?! :rolleyes:

Maybe the staff need to stop and think why, clearly it is the only workable way that Qantas can get the costs down to stay in business.

I think those that make it personal are just trying to deflect attention away from the real issue which is the the inability of the workers to face modern reality and actually work WITH management and find a solution to reduce costs that is workable and sustainable. It wouldn't matter who was in charge the message is going to be the same.

absolutey! Why not take the pi$$ out of him?

AJ lost all respect when he trash talked his own company and blames QF employees for its woes...he needs to direct some of the analysis on himself and his performance (or lack thereof) at QF

And for the record I am not a QF employee.

So creating shelf companies offshore and paying the employees about half is the modern reality? I don't think so.

Well if you have tried for years to transform the onshore work force into a more competitive unit then I don't have an issue with it at all. And yes it is a modern reality of a very competitive industry.

I vowed not to post anything on this forum again, but reading this thread made me decide to air some opinions I have on what I have read so far. (You were right Nigel!).

There is lots that I could post up here about the current situation and from a historical viewpoint - I can't.

Having said that, the industry is not like anything else in Australia. It operates on a truly global, totally competitive basis with many carriers operating under "preferred conditions" and subsidies from their host countries. If the medical or banking sector worked this way in Australia, you'd find government intervention as it would result in people's deaths or would destablise the whole economy of this country!

Most Australians now believe it's their god given right to heavily discounted airfares anytime, anywhere - it isn't! Every sector which feed into aviation has put it's prices up - fuel, catering, aviation and airport charges, government fees and taxes (don't start me on that one!), yet the Australian public still believe that economies of scale should provide them with a "freebie".

At some point, the discounted airfares charged will make operating a wholly full service airline in this country unsustainable - this point is rapidly approaching without some rationalisation occurring.

The travelling public want latest IFE systems, full catering, extra seat pitch, etc - but don't want to dip their hands in their pockets to pay for it. They would prefer the staff wages and conditions take a cut so they can get to their holiday or business trip for next to nothing. Unfortunately, McDonalds style wages will only bring McDonalds style service - and airlines don't run with high school students working after school to pick up a little cash on the side! They work best with fully trained professionals and staff who have worked through the industry from the ground up, providing expertise and knowledge which can only be gained inside the industry. Try going to a hospital and asking for cut price service - see what they say and imagine the service you would receive - picture a medical student conducting your heart operation or a high school student dispensing class S4 drugs!

The airline managements are also damned if they do and damned if they don't so I don't blame them for looking at the only variable they can influence to stay competitive without putting prices up ... but maybe, just maybe it's time for the industry prices to again be governed by an Independant Airfares Commission, just like it was back in the good old Ansett/TAA days - remember them? $1000 return in Y class Melbourne to Perth back in 1982! What would that be now? Probably about $2500 as a guesstimate, maybe more! It works for health funds who are private entities - why not the airline industry?

I can't predict the future of the airline industry in this country and I'm not in a position to influence it, but for 60,000 or so airline workers in this country it should not include wage cuts and fast food wages just so the masses can get their travel fix each weekend at a consistant bargain basement price. Joe public pays $100 return for a 20km taxi fare .. surely the price for a 2000km round trip could be reasonably expected to cost more!

Unfortunately for Qantas Lee, Emirates and the like have set an expectation with travelers that these features are available with budget pricing that Qantas has to compete against.

Unfortunately Mike, I understand that one all too well :(

"operates on a truly global, totally competitive basis with many carriers operating under "preferred conditions" and subsidies from their host countries"

I understand that people expectations are that they are not confronted by those dreaded overhead the colour projector circa 1980 and that the latest and greatest are required to compete, particularly on long haul.

It's a fact that those with the greatest to offer on the long haul get the market if the price is right of course - the problem for Qantas is that the public perception (not necessarily the truth either) has been swayed by much adverse media (again not necessarily true yet again) and by some bad reports which then get blown out of proportion. Certain unions also can not be held as blameless on this point either.

Lowering airfares may be a temporary solution and cutting staff wages (or simply not allowing wage rises) may be a stop gap however hurts those who are dedicated to the cause of keeping the airline on track and running efficiently. The wage lowering exercise then becomes a downward spiral as to save costs it happens again and again.

The old saying of "Look after your staff and you staff will look after your company" certainly is true. Unfortunately, a lot of staff also remember the Dixon era when restraint was called for and received but larger management wage packet resulted.

Really Ash
 

Ash. For years we have, as a workforce, taken pay cuts effectively, ( pay freezes). We work our guts out for on time performance, fuel saving etc etc etc. To have the management taking everything QANTAS has ever stood for and make it a skeleton of it's former self. And get bonuses.
The thing we used to have was a large and great engineering department. Now it's still great but the resources are just not there. QANTAS had the longest RB211 on wing and between overhauls. Now we outsource and it's showing.
I don't know what you do but I doubt you have the passion for the company you work for that most QF employees have.
So if transform means take stuff away and hope they can perform the same then let's hope it doesn't happen to you. It sucks.
Regards Todd.

Sorry Todd, but herein lay the root problem. Passion does not generate the money required to operate an airline let alone return sufficient money to the investors who own the company. The traveling public will not dip into their pockets and pay a premium price for this passion when they can fly on other airlines that have a substantially lower cost base. Simple economics I am afraid.

The current Qantas model was perfect for the days that Lee was referring to when the industry was heavily protected. But alas with deregulation of the domestic market and the rise and transformation of Virgin from LCC to mainstream carrier Qantas is pushing the proverbial up hill. On the international front they are facing increased competition from companies owned by oil rich gulf countries that operate as tax havens, as well as a raft of Asian carriers who have substantially lower cost bases. How is Qantas meant to compete? You tell me where they can reduce costs to allow them to be competitive. And don't roll out tripe about bonuses to exec's, in the grand scheme of things these are a drop in the ocean.

So if some how Qantas employee's can convince Joe public to pay more than their competition then clearly the status quo can exist, if they cannot then something must give.

I equate the current situation at QANTAS to be like that as an elderly reletive in a nursing home.

It had a great life from birth thru childhood and adolescence into a mature adult, but now after 90 odd years it is getting past it, it is currently in pallative care by the loyal employees, QANTAS will soon be gone, and replaced by those younger than itself, but it had a great life and will always be remembered.

There is probably nothing now that can stop the terminal decline, it's sad but face the facts, it's probably all over, and there is nothing more that can be done. :-(

I actually think that passion does and has translate into income. I believe that Qantas especially has a following that is enviable to many other airlines (and the following is not just airline enthusiasts). Qantas is quitessentially Australian and we are a proud nation, proud of Qantas and it is our airline. If it was to be acknowledged, it is probably this passion that keeps bringing return customer and account customers to Qantas. Passion like loyalty however, is only maintained if the incentive present. It would appear that the incentive is at minimal best.

You are right Dave, passion does attract loyal customers (me being one actually), so maybe my wording should have been "passion does not create SUFFICENT money to operate the airline...".

So yes maybe passion has in the past generated money which has kept Qantas afloat for so long. However it is rather apparent that people are voting more with their wallets and are flying the competition. Of course made all the worse by the current very public stoush between employee's, union and management. Neither side being Saints in the damage they have caused the company.

So Ash, if you were a Qantas employee, would you want to have to move overseas just to keep your job?

And would you accept a massive paycut like you're proposing these poor souls should?

Mick

I hope this is not the case ultimately, although current soushes/comments from unions and Qantas management seem to point to this demise...

Ash, I concede, you are probably correct.

Paul why do staff have to move offshore to keep their jobs? If the workforce could reform into a more competitive outfit there is no reason why the bulk of the jobs couldn't stay on shore. Afterall Virgin Aus and Jetstar are mainly onshore operations with mostly Aussie staff and are both competative.

Though if I were a Qantas employee the question I would be asking is do I want a job or no job at all? Unfortunately if things keep going the way they are the latter will be the case.

Who said anything about massive pay cuts? I know I didn't. I was talking about reforming the organisation and work practices, nothing to do with pay, two different things I am afraid.

Though since you brought up pay, why for example is it ok find for someone at company Q) to be payed $49,000 to do the same job as an employee at company V) who is getting payed $25,00. Is the employee of company Q over payed or is the employee in company V underpayed, or a bit of both?

Now put yourself in the shoes of company Q how do you compete with company V? Remembering that brand and customer loyalty will only take you so far.

Then add into the equation international ops, who does company Q compete with Asian carriers with cheap labour and gulf airlines that operate in tax havens?

I really REALLY hope this does not happen.

Come on QANTAS, pull your socks up. :(

Why do you recon joyce was put there.It was not to build up Qantas.look at where his grass roots are.Qantas will be gone as domestic carrier and Jetstar will be built up.Thus payoing staff at half the rate they are now

I remember a thread from some time ago on this board (or the old board maybe) where people were discussing the fact that, at that time, it was starting to look like Qantas would morf into Jetstar then disappear all together. Scarily that looks like a lot closer to the truth than anyone really thought!!

and AJ is in a race to the bottom...

so true Montague - a very fast race indeed.

So then what is the alternative? That's what I would like to hear from the Unions. What is the Union plan to turn QF around and enable it to compete on a global platform?

It is very easy to launch personal attacks on the CEO and to start polls, claim misinformation and to complain about "management" getting huge bonuses but how about offering an alternative?

Given that deregulation and free market policy are here to stay and given that QF cannot compete on a fair basis with overseas carriers what is the plan from the Unions then to keep their members in gainful employment? Surely a healthy vibrant, growing Qantas only delivers healthy, vibrant, growing Unions?

Also, given the membership base the Unions should be in the best position to identify potential changes within Qantas and to work with Qantas in creating changes to enable Qantas to better compete. Examples would be to use international Union contacts to help Qantas gain fair access to overseas markets such as additional EU ports or to lobby the AU government to enable Qantas to have the same depreciation rates on capital equipment enjoyed by overseas carriers, to lobby the AU government to reform air services and to reform airport pricing, customs and immigration charges and remove other unfair costs (like the air movement cap at Sydney airport). I am sure there are many other costs within Qantas that the Union would be aware off.

So what is the alternative plan on offer?

As always there are three sides to this story; what the Unions say, what QF Management says...and then there's the truth. :rolleyes:

Kelvin, notice that no one had replied to your very spot on post. I wonder if that is because it is easy to complain and blame management then it is to do some sole searching and come up with answers. Or maybe it could well be there is no alternative.

I don't know what the engineer's have claimed, but what is wrong with what the pilots have claimed? That being to keep Australian jobs in Australia.

I fail to see what's wrong with that? How is that not workable?

Mick

You are unlikely to get much comment from any Qantas crewmember at this stage due to the sensitivity of the issue.

Sufficed to say that many suggestions have been put forward by the pilot group, as they want the airline to prosper, but with the one proviso - they come with a guarantee of a future for Qantas pilots. That does not mean they cannot be dismissed, or made redundant - just that the offshoring of jobs into sham companies and the drive to the bottom must stop.

I don't understand, why is it OK to launch personal attacks against a company CEO in a public forum but offering suggestions on how an airline could halt its decline is too sensitive?

As yet I don't have enough information to form an opinion as to who is right and who is wrong. What I do know is as a long term passenger who controls his own travel budget and the budget of 7 staff the decline of Qantas is not new and started well before the current CEO. What I also know is it is very hard to continue to fly Qantas in a premium cabin for international flights when the price is often twice that of a competitor who offers a better hard product (flat bed over angle bed), and makes it harder to get to where I need to go compared to a competitor's direct flying.

I have had some great experiences flying Qantas and I have had some awful experiences. Sadly the good experiences are now few and far between and generally come from the younger crew, while the awful flights are the more consistent, especially in the premium cabins on international flights.

So QF is in trouble because it no longer represents what the flying public want in an airline, yet it seems unable or unwilling to change. What anyone involved in the international section of QF needs to understand is when you loose a previous long term loyal passenger they generally don't return.

This brings me back to my original point, the Unions want all of these new conditions for members, QF management want to restore the airline to being relevant and viable. Yet I have not seen in the public domain a proposal from the Union which would deliver the conditions to members and yet also enable the reform necessary for the airline to continue. Deliver that and you will instantly gather the support of the flying public, save a company and deliver what the members want at the same time.

Because even the armchair experts have limitations ;)

Kelvin, you have summed it up very well.

In the current situation, it is very similar to politics except in this case, the unions are the opposition and management is the government of the day. Caught between the two are the (mainly) innocent - the staff and the customer.

Both of the negotiating parties claim to be representing their "members" (shareholders or employees).

Unfortunately in the current play, it seems neither are particularly tuned in to the reality (and enormity) of the situation. Or more to the point, they are tuned in but a blithely ignorant of the imminent danger of "short termism".

The world of commerce is like so many other things - it is cyclical. One day shareholders are king, the next capital and the next customers. Regardless of that, employees remain, suffering at the whim of the "current king" and occasionally benefitting.

Right now, IMHO, the shareholder is king, management are focused upon short term wins to appease the king and the rest are falling in line behind them.

With choice now more readily available to the customer (a more aggressive and focused Virgin Australia), the customer is starting to gain some ascendancy. Soon, the shareholders will gain more sway over management to think ahead and there will be a shift but as we all realise, "oil tankers" don't change course quickly.

There will be more pain and there will be some casualties along the way - perhaps Clifford and/or Joyce and some others. Somewhere in the shadows, Bain, McKinsey or Booz are awaiting the call to come and assess the situation, make recommendations and arrest the decline.

Won't be of the epic proportions we saw on the waterfront, however, sustained change towards a more agile, competitive and responsive Qantas will only come with a compelling vision for change, a commitment to achieving it and a recognition from all parties that the dance lasted for a long while and now the party is over. Job guarantees, wishful salary increases and attractive fringe benefits come at a cost. So too, executive bonuses.

Until the compelling vision is formulated, communicated and adopted, the posturing will continue and so too will the decline.

Time for the boys and girls to collect their toys, manage their egos and earn their keep.

If they don't, there'll be less earnings to keep.

Grant, don't think Kelvin's post was aimed at armchair critics, but more so at those from within the company who are willing to whinge and whine and point fingers at Joyce, rather than trying to come up with solutions to the clearly obvious problem in an attempt to keep the majority in a job.

I was speaking to a buddy about an hour ago who was stuck at ADL due to QF cancellations but was able to change to a DJ flight.

Anyway, he commutes two days a week each week between ADL and SYD and noticed on his QF flight last week that there was only one flight attendant serving drinks/meals etc. He said he wasn't served on his SYD-ADL flight until the plane was over around Mildura which is well over half way into the flight.

He is into aviation as well and out of interest asked the flight attendant why there was only one person serving on that flight. The flight attendant apparently said "it's called Alan Joyce" according to my friend and said she continued that each flight attendant used to serve up to 30 passengers but now it is 178 as of very recently.

I know I have read on the board about minimum crew numbers etc., but could this be true on 737 CityFlyer services? I have no reason to doubt my friend's story as he is cluey on these things and not the average punter whose horror travel stories appear in the papers.

And assuming it is true, it's not good if QF staff are publicly making statements like that to their customers about the CEO of the company. Morale for that staff member at least seems to be very low.

Airline AOCs mandate that you have to have a flight attendant for every 50 seats or part thereof on an aircraft, so a 737 must have four flight attendants on board to assist in emergency situations.

If she was serving alone, the other three were probably doing other things in the galleys.

Thanks. Makes sense.

Its not very good for staff morale when the CEO calls the pilots of the company rogues and kamikaze's in the media either. Could you get much more offensive to a loyal and experienced group of aviators?

As to the Alan Joyce comment, there is some truth to it. It isn't a nasty comment, just a factual one. Just a few short years ago you would get 5 cabin crew on a service. Then it went to 4. Same on longhaul flights, which went from 16, to 15, to 14. However, the CC are expected to deliver the same service standards. That is exactly why there is only one or two serving in the cabin, compared to the past when you would have more.

That is part of the reason you see fewer of them in the cabin - there are simply fewer of them on the aircraft.