Under Alan Joyce, Qantas is being downgraded to "junk"?

17 replies

wilsoni Banned

wilsoni Banned

Qantas - Qantas Frequent Flyer

Member since 28 Sep 2011

Total posts 302

How can Joyce remain at Qantas when on his watch it is being downgraded to "junk"? The oldest continuously operating passenger airline in the world seems in real danger of collapse. Our airline. To quote, and with apologies to, Shakespeare: Go...and if 't'were done, better 't'were done quickly".

TheRealBabushka

Member since 21 Apr 2012

Total posts 2,059

A couple of months ago I rung the Qantas call centre in Hobart with a query. The poor lady at the other end shared my concern and was exasperated at the way things are done at Qantas. Apparently she had flagged the query with management but said "Sydney is a closed shop".

Perhaps AJ is not the problem but the symptom of a wider Sydney centric management malais?

Joshb

Qantas - QFF Platinum

Member since 20 Mar 2012

Total posts 123

I think it would be interesting to see where the massive losses are coming from, eg is international now worse with EK partnership or has Domestic gone from being highly profitable to a loss making division all in the name of 65% market share. The indications are that Jetstar and QFF make money as they're on the table to sell.

It is a real shame that this is where the airline is heading. I've been flying Qantas my whole life and rate it highly. I know not many people do anymore but as a Platinum member I feel they reward and appreciate my loyalty.

hutch

Member since 07 Oct 2012

Total posts 761

I'd be suprised if the international losses had not decreased in the last 24 months ago - with the route cuts that have occurred.

I suspect this loss has to do with the 65% line in the sand for the domestic market share- in my opinion, QF's management biggest mistake. Better off having 50% market share and making money as opposed to flying just to keep your market share higher. Adding two planes for each of VA's is dumb... focus on your customers and your product and the market share will take care of itself.

moa999

Qantas - Qantas Frequent Flyer

Member since 02 Jul 2011

Total posts 835

Note that at present Qantas is only one of two airlines that isn't junk.

Almost no airline in the world is doing well at the moment. Up until recently it was only the domestic operations that were protecting Qantas.

074061

Cathay Pacific - Asia Miles

Member since 25 Apr 2013

Total posts 262

I can already name three that aren't junk - Qantas, Emirates and Cathay Pacific. Don't think the latter two are dropping much, or are they?

spinoza

Member since 01 Feb 2012

Total posts 218

Alvin - how sure are you that Emirates and CX are rated? I don't think Emirates issue debt, and I can't find any credit rating assigned to them. CX might be a similar case. So technically they're not junk, but I just don't think they're rated.

It's helpful to note that BA are rated single B by moodys.

074061

Cathay Pacific - Asia Miles

Member since 25 Apr 2013

Total posts 262

Thanks for your advice.

spinoza

Member since 01 Feb 2012

Total posts 218

Yes, it is frustrating as a financially literal person reading the papers (and forums) criticising Qantas. I'm not saying management is great, but they are definitely nowhere as bad as people are saying. There was a stupid article in the smh yesterday where they quoted employees blaming everything on Jetstar, saying something like, oh I know a Jetstar employee who's being paid by Qantas! 

That was so stupid on so many levels, esp as we know Jetstar is quite profitable, and it is QF international that is bleeding money. And junk might sound very perjorative, but many reasonable healthy companies are BB/Ba nowadays. 

wilsoni Banned

wilsoni Banned

Qantas - Qantas Frequent Flyer

Member since 28 Sep 2011

Total posts 302

Is there a case for slashing international routes, if that's the millstone? I'd think LAX would be in profit, but should LHR be sacrosact? - so many carriers go there now on the same one-stop basis. Frankly I'm surprised that China, potentially huge, has been "outsourced" to CZ - an aerror of judgment or recognition that QF no longer has the resources (or even the goodwill) to use their own metal?

spinoza

Member since 01 Feb 2012

Total posts 218

We also shouldn't just take 1-2 years of performance and conclude some routes must go. 

As many have noted, problem is that QFF points are basically worthless without international routes. The routes just exist to prop up the QFF system. 

Its just hard to compete with airlines with a lower cost base. Look at routes like Syd-hkg, or syd-sin; somehow CX and SQ can support 4 flights but QF can only support 1 or 2

kash

Member since 20 Feb 2012

Total posts 5

CX /SQ lower cost base is more about their effective management.

they face higher taxes and charges at HKG especially and their employers are not silly- they have unions and continually fight to be on par/above the rest of the world.

QF should stop making excuses. Delta/BA etc operate just fine in western countries. QF needed to learn from BA how to tackle Virgin management- instead they stabbed BA in the back much to BA's benefit.

hutch

Member since 07 Oct 2012

Total posts 761

Hong Kong & Singapore are populus city/states. Both are regional financial hubs. Both have airports that are regional transport hubs. Both are geographically blessed with large surrounding populations - they are very well positioned to transfer passengers from one country, through their respective city and onto another country. They may or may not have effective management, but they have been dealt a good hand.

SQ/CX can sustain multiple flights per day, as the can fly passengers from Aus to HKG/SIN and then to a large number of countries throughout Asia and the world. Qantas cannot do that. They can fly passengers to SIN/HKG and send passengers to some other destinations (through limited partners), but no where near as many, and not on their own metal.

I don't know enough about HKG income tax levels. I know airport levies are high. But SIN income tax levels are lower than Australia. It is very well known that labour costs in Australia are high - and to my knowledge, higher than both SIN/HKG.

Delta is not a good example. Every major US airline has had bankruptcy protection since 2001... including Delta. BA (IAG) has started to turn its business around, once again, well placed geographically and in a large financial hub. But BA has been through some tough times of its own.

Qantas can learn little from BA's battle with Virgin (and I assume you mean Virgin Atlantic) as Virgin Atlantic and Virgin Australia are two different beasts. VirginAus is still primarily a domestic carrier, but has good international network due to its strong & quality partners (owners). Virgin Atlantic is essentially a long-haul carrier (apart from some recently started domestic routes) without any passenger feed. Virgin Atlantic lost 130million before tax in 2010 and 80million pounds last year and hence the effective management at SQ off-loaded them.

The idea that QF /  BA businesses make good partners just does not make sense when there are so many good one stop options out there. The whole one stop option is the foundation as to how CX/SQ can be so successful.

QF managament may  be as useless as tits on a bull.... but not for the reasons you write.

TheRealBabushka

Member since 21 Apr 2012

Total posts 2,059

So spinoza, if many reasonably healthy companies are BB/Ba, do you think this is all headline grabbing confection by Qantas management?

I don't disagree with you that this is not the end for Qantas but who is going to call their bluff?

watson374

Qantas - Qantas Frequent Flyer

Member since 17 Aug 2012

Total posts 1,285

"This is not the end. It is not even the beginning of the end. But it might be the end of the beginning."

QFi is quite simply hamstrung by its metal - too many 744s that burn too much fuel and have too many seats, not enough A330s to go around, A380s that can only do a few strong routes.

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