Qantas - Some food for thought....

[Lee G]

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!

[Mike W]

Originally Posted by Lee G

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.

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.

[Lee G]

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.

[Todd Hendry]

Originally Posted by Ash W

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.

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.

[Ash W]

Originally Posted by Todd Hendry

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.

[Anthony T]

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. :-(

[Dave Dale]

Originally Posted by Ash W

Passion does not generate the money required to operate an airline let alone return sufficient money to the investors who own the company.

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.

[Ash W]

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.

[Paul Waters]

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

[Dave Dale]

Originally Posted by Anthony T

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

Originally Posted by Ash W

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...".

Ash, I concede, you are probably correct.