jamesnixon.com
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THE WHITE RAT ...
Qantas Troubles Reach A Peak
On the 26th February 2014 I wrote:
What will Qantas announce, 12 years to the day that Fox & Lew killed any chance of Ansett MkII?
I predict: International : Kangaroo and Wallaby routes only. Domestic: Shark Patrol* and PER to the east coast destinations (BNE.SYD.MEL), Jetstar to get the rest.
Kill Jet* Vietnam (I predict a $65M loss), Japan, HKK maybe NZ. Jet* Sing? A lot of work for $2M ... outsource all heavy maintenance and back office to PI and a little to India.
Sale and leaseback of the fleet ($900M for which they'll get $600M), sale and leaseback of terminals and jet base. Pain all 'round. Feel sad for thousands of loyal QF staff who are gonna get kicked in the guts.
Joyce? Not all his fault (Jet* O/S expansion excepted) ... blame Dixon for handing him a poisoned chalice: absolutely no plan B - the 747 replacements were the A380s and the 767 replacements the NightMare (Dreamliner) ... the day that both these aircraft were late (as all new a/c are); the fate was sealed. There was no plan B ... Joyce was silly to accept it. Sad.
* The Shark Patrol: BNE-SYD-MEL-ADL (with ADL dropping-off the day GMH closes its doors)
Today, 6th March 2014:
That was my prediction BEFORE the announcement. It stands. This is what will eventually be left. I have read the briefing to the stock exchange and I think he has a chance of stemming the flow. Last year they were bleeding $1.5M a day. Now it's down to $M1.28 ... Some old 767s and 747s have gone. The last old 737 did its last flight two weeks ago. PER-SIN is finished. The CNS base will close and the crews are being redeployed.
The problem is that the Labor Gvt privatised 100% of this company 19 years ago and people think that is still a Gvt carrier. Allegedly, after being funded by the QLD Gvt in its startup phase, Virgin Australia is more gvt-owned than Qantas. The government has to allow QF to operate on a level playing field with respect to ownership. Today that amendment has passed the House Of Reps but has yet to pass the Senate. I doubt ANY international carriers would be silly enough to buy a share of QF - but KLM went to bed with Air France (questionable) and BA went to bed with Iberian, so there are precedents.
Qantas is a business, not a charity. The staff and customers must get this. I used to fly MEL-SYD for $237 return in 1980. You can get this same fare, or cheaper, in today - 34 years later it SHOULD cost $931 according the RBA website with inflation averaging 4.2%.
Joyce should contact every Mayor of every charity route, (CNS.TVS.MKY.ROK etc etc - he has about 60 calls to make); and say:
" If you want the White Rat to continue your daily service, it's gonna cost $XX,000 per week. We WILL do it for you, better and cheaper than anyone ... AND if you think you can start your own airline cheaper, call the Mayors of Mackay and RockVegas ( who went and started their own Fokker 100 airline after Ansett) and ask them”.
EVERYTHING ELSE needs to move to Jetstar - which is gonna grow and grow.
In the longer term I'd turn Jet* from a Low Cost / Crap Service offering into a Low Cost / Nice Service offering based-on Babara Cassani's GO (BAs low cost carrier killed by Rod Eddington).
The longer he keeps loss-making routes happening, the faster the parent bleeds. He MUST get the staff levels per aeroplane from the 385 (pre Ansett death) to about 120. The sooner he does it, the sooner he crawls out of the grave. If he doesn't, it'll die. That may take 5,000 jobs - it may take 6,000. The day the flight crews started using Ipads instead of paper for their inflight manuals, the people updating them daily became obselete - the cost of modernisation.
But the Pollies and Unions hate Joyce. Grounding the airline, as he did, sealed his fate. A senior Australian businessman / ex Mayor told me on Monday (over a nice crumbed Whiting), that the only way to complete the recovery is with a new broom of management - for whom "THE OLD WAYS" is history, not standard business practice.
All the pollies and unions know : this is a fight between two men, the CEOs of Virgin and QF. They are set against each other and with Virgin losing $0.45M a day ... the stakes are high, and they are using hard working loyal staff members as chips.
* Those readers new to this page, who are interested in previous QF posts - inc QF32, scroll down to : QF32 PRELIMINARY REPORT
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