Qantas (please read)

[planedriver]

I was sent this email ages ago and only just got around to reading it ...However, I thought i'd post it for the benefit of those that haven't seen it, as some may feel it's worthy of additional discussion.

 

 

Please don't

believe all of what is being

 

 

portrayed in the media.

 

The media is being

 

manipulated to achieve their ultimate goal.

 

Senator XENOPHON (South Australia) (19:37):

 

 

 

 

 

 

make a fortune out of this at the expense of our Aussie icon

Someone is going to

 

 

. The Senator says it all.

 

 

 

Basically, they are driving the share price down by not paying a dividend and antagonising its workforce. The current board & CEO still represent the same interests that were around at the last takeover attempt.

 

 

 

 

 

 

,

 

Why drive it down? To finish off what they started 5 years ago. Takeover

 

 

then split and sell-off the separate divisions.

 

 

 

It is very sad & the Australian public need to know the truth & what the current management are up to.

 

 

 

 

 

 

______________________________________________________________________

 

 

 

 

 

 

 

Subject: Senator Xenophon Speech in Parliament - Hansard 23Aug11

 

 

 

 

 

 

I rise to speak tonight on an issue that is close to the hearts of many Australians, and that is the future of our national carrier, Qantas. At 90, Qantas is the world's oldest continuously running airline. It is an iconic Australian company. Its story is woven into the story of Australia and Australians have long taken pride in the service and safety standards provided by our national carrier. Who didn't feel a little proud when

 

Dustin Hoffman uttered the immortal line in Rain Man, 'Qantas never crashed'?

 

 

While it is true that Qantas never crashes, the sad reality is that Qantas is being deliberately trashed by management in the pursuit of short-term profits and at the expense of its workers and passengers. For a long time, Qantas management has been pushing the line that Qantas international is losing money and that Jetstar is profitable. Tonight, it is imperative to expose those claims for the misinformation they are. The reality is that Qantas has long been used to subsidise Jetstar in order to make Jetstar look profitable and Qantas look like a burden. In a moment, I will provide detailed allegations of cost-shifting that I have sourced from within the Qantas Group, and when you know the facts you quickly see a pattern. When there is a cost to be paid, Qantas pays it, and when there is a profit to be made, Jetstar makes it.

 

 

 

But first we need to ask ourselves: why? Why would management want Qantas to look unprofitable? Why would they want to hide the cost of a competing brand within their group, namely Jetstar, in amongst the costs faced by Qantas?

 

 

 

To understand that, you need to go back to the days when Qantas was being privatised. When Qantas was privatised the Qantas Sale Act 1992 imposed a number of conditions, which in turn created a number of problems for any management group that wanted to flog off parts of the business. Basically, Qantas has to maintain its principal place of operations here in Australia, but that does not stop management selling any subsidiaries, which brings us to Jetstar.

 

 

 

Qantas has systematically built up the low-cost carrier at the expense of the parent company. I have been provided with a significant number of examples where costs which should have been billed back to Jetstar have in fact been paid for by Qantas. These are practices that I believe Qantas and Jetstar management need to explain. For example, when Jetstar took over the Cairns-Darwin-Singapore route, replacing Qantas flights, a deal was struck that required Qantas to provide Jetstar with $6 million a year in revenue. Why? Why would one part of the business give up a profitable route like that and then be asked to pay for the privilege? Then there are other subsidies when it comes to freight. On every sector Jetstar operates an A330, Qantas pays $6,200 to $6,400 for freight space regardless of actual uplift. When you do the calculations, this turns out to be a small fortune. Based on 82 departures a week, that is nearly half-a-million dollars a week or $25½ million a year.

 

 

 

Then there are the arrangements within the airport gates. In Melbourne, for example, my information from inside the Qantas group is that Jetstar does not pay for any gates, but instead Qantas domestic is charged for the gates. My question for Qantas management is simple: are these arrangements replicated right around Australia and why is Qantas paying Jetstar's bills? Why does Qantas lease five check-in counters at Sydney Terminal 2, only to let Jetstar use one for free? It has been reported to me that there are other areas where Jetstar's costs magically become Qantas's costs. For example, Jetstar does not have a treasury department and has only one person in government affairs. I am told Qantas's legal department also does free work for Jetstar.

 

 

 

Then there is the area of disruption handling where flights are cancelled and people need to be rebooked. Here, insiders tell me, Qantas handles all rebookings and the traffic is all one way. It is extremely rare for a Qantas passenger to be rebooked on a Jetstar flight, but Jetstar passengers are regularly rebooked onto Qantas flights. I am informed that Jetstar never pays Qantas for the cost of those rebooked passengers and yet Jetstar gets to keep the revenue from the original bookings. This, I am told, is worth millions of dollars every year. So Jetstar gets the profit while Qantas bears the costs of carriage. It has also been reported to me that when Qantas provides an aircraft to Jetstar to cover an unserviceable plane, Jetstar does not pay for the use of this plane.

 

 

 

Yet another example relates to the Qantas Club. Jetstar passengers can and do use the Qantas Club but Jetstar does not pay for the cost of any of this. So is Qantas really losing money? Or is it profitable but simply losing money on paper because it is carrying so many costs incurred by Jetstar? We have been told by Qantas management that the changes that will effectively gut Qantas are necessary because Qantas international is losing money but, given the inside information I have just detailed, I would argue those claims need to be reassessed.

 

 

 

Indeed, given these extensive allegations of hidden costs, it would be foolish to take management's word that Qantas international is losing money. So why would Qantas want to make it look like Qantas international is losing money? Remember the failed 2007 private equity bid by the Allco Finance Group. It was rejected by shareholders, and thank goodness it was, for I am told that what we are seeing now is effectively a strategy of private equity sell-off by stealth.

 

 

 

Here is how it works. You have to keep Qantas flying to avoid breaching the Qantas Sale Act but that does not stop you from moving assets out of Qantas and putting them into an airline that you own but that is not controlled by the Qantas Sale Act. Then you work the figures to make it appear as though the international arm of Qantas is losing money. You use this to justify the slashing of jobs, maintenance standards and employment of foreign crews and, ultimately, the creation of an entirely new airlines to be based in Asia and which will not be called Qantas. The end result? Technically Qantas would still exist but it would end up a shell of its former self and the Qantas Group would end up with all these subsidiaries it can base overseas using poorly paid foreign crews with engineering and safety standards that do not match Australian standards. In time, if the Qantas Group wants to make a buck, they can flog these subsidiaries off for a tidy profit. Qantas management could pay the National Boys Choir and the Australian Girls Choir to run to the desert and sing about still calling Australia home, but people would not buy it. It is not just about feeling good about our national carrier-in times of trouble our national carrier plays a key strategic role. In an international emergency, in a time of war, a national carrier is required to freight resources and people around the country and around the world. Qantas also operates Qantas Defence Services, which conducts work for the RAAF. If Qantas is allowed to wither, who will meet these strategic needs?

 

 

 

I pay tribute to the 35,000 employees of the Qantas Group. At the forefront of the fight against the strategy of Qantas management have been the Qantas pilots, to whom millions of Australians have literally entrusted their lives. The Australian and International Pilots Association sees Qantas management strategy as a race to the bottom when it comes to service and safety. On 8 November last year (2010), QF032 experienced a serious malfunction with the explosion of an engine on an A380-800 aircraft. In the wrong hands, that plane could have crashed. But it did not, in large part because the Qantas flight crew had been trained to exemplary world-class standards and knew how to cope with such a terrifying reality. I am deeply concerned that what is being pursued may well cause training levels to fall and that as a result safety standards in the Qantas Group may fall as well. AIPA pilots and the licensed aircraft engineers are not fighting for themselves; they are fighting for the Australian public. That is why I am deeply concerned about any action Qantas management may be considering taking against pilots who speak out in the public interest.

 

 

 

A lot of claims have been made about the financial state of Qantas international but given the information I have presented tonight, which has come from within the Qantas Group, I believe these claims by management are crying out for further serious forensic investigation. Qantas should not be allowed to face death by a thousand cuts-job cuts, route cuts, quality cuts, engineering cuts, wage cuts. None of this is acceptable and it must all be resisted for the sake of the pilots, the crews, the passengers and ultimately the future of our national carrier.

 

 

 

 

 

Please forward this on to all Australians & all your contacts. I will not & can't let this happen as a current PROUD staff member of Qantas Airways Ltd... So bring it on Alan Joyce & all other management involved..

 

 

 

 

[youngster]

Or, the management could be fulfilling their duty to bring Qantas into the 21st century by reforming unproductive and inefficient work practices, and Senator Xenophon is using this as a great publicity tool - after all, who doesn't want their local pollie standing up for an "Aussie Icon"? Of course, if this information was genuine, the good Senator would not have to hide behind Parliamentary Privilege to make his anonymously sourced allegations. Never let the truth get in the way of a good publicity opportunity.

 

Qantas service staff are rubbish in general (I have no idea about maintenance, pilots etc), and I support Joyce trying to shake things up a bit. I fly about 100 flights a year with Qantas, and the flight attendents, gate staff, and Qantas Club staff generally seem to have forgotten that they work in the service industry, and that they rely on me and my continued patronage for a job.

 

Based on reports in the media, Qantas has a massively bloated workforce, paid at the highest rates in the world. In the globally competitive airline market, you cannot compete on those terms. The company has to change to remain competitive.

 

 

[winsor68]

Youngster... to put it mildly as someone who has seen this industry from the inside... you are plain misled. This is just dirty business.

 

 

[youngster]

Youngster... to put it mildly as someone who has seen this industry from the inside... you are plain misled. This is just dirty business.

On the political side of things, I work right in the thick of it, and I have no doubts at all that the Hon Senator is using this issue to boost his profile. He did the same thing by naming that priest in SA, despite having no credible evidence to support his claims, which would have been defamatory if made outside the protection of Parliament.

 

 

[coljones]

Parliamentary Privelege can be a force for good. There are people and groups out there who keep a cloak on things just by having lots of money and the threat of court action.

 

The sad thing is that the high cost of legal representation (far in excess of the modicrum charged by RAA for membership fees) can bankrupt a legal combatant even before an issue gets to court.

 

While a court "may" award costs to a winner there are usually many costs that don't get awarded in the judgement. Remember they are styled "Courts of law" not "courts of justice".

 

Properly used, Parliamentary Privilege is a strong force for good and helps weight out the relative powers of those with and without money. Mark Latham monstering Jane Singleton over NRMA (presumably in support of his mate Nick Whitlam) was not, however, a good look and there needs to be a right of reply to the use of privilege.

 

QANTAS will use its massive funds and contacts and threat of litigation to preserve its position. Qantas shareholders and the travelling public and society in general probably only have parliament as a protector.

 

Xenophon has at least brought the issue to the table to enable a more informed debate.

 

Col

 

 

[Guest Howard Hughes]

Or, the management could be fulfilling their duty to bring Qantas into the 21st century by reforming unproductive and inefficient work practices,

You can increase profits by either cutting costs, or growing the business, sadly Qantas management seems to be only capable of the former. Growing the business takes not only business accumen, but knowledge of the business. Now where is Qantas's knowledge of the airline business? And no, having worked for a few poor performing airlines doesn't mean you have that knowledge...

 

Qantas service staff are rubbish in general (I have no idea about maintenance, pilots etc), and I support Joyce trying to shake things up a bit. I fly about 100 flights a year with Qantas, and the flight attendents, gate staff, and Qantas Club staff generally seem to have forgotten that they work in the service industry, and that they rely on me and my continued patronage for a job.

I have travelled many times with Qantas in the last twelve months and have always received excellent service!

 

Based on reports in the media, Qantas has a massively bloated workforce, paid at the highest rates in the world. In the globally competitive airline market, you cannot compete on those terms. The company has to change to remain competitive.

Don't believe everything that you read in the media, if you look at the main players on the World stage at the moment, they all pay as much, or more than Qantas to their key staff, the only area where Qantas seems to lead the way are executive salaries.

 

 

[coljones]

On the political side of things, I work right in the thick of it, and I have no doubts at all that the Hon Senator is using this issue to boost his profile. He did the same thing by naming that priest in SA, despite having no credible evidence to support his claims, which would have been defamatory if made outside the protection of Parliament.

Youngster, you're not an apparatchik for the Qantas bosses are you? (or of a private equity firm trying to denigrate the firm in prep for a buyup?)

 

If you are in the thick of it it might be of value to reveal yourself so we can judge the quality of your submissions.

 

Cheers,

 

Col

 

++++++++++++++++++++++++

 

Colin Jones

 

Summer Hill

 

 

[P4D]

Astroturfing?

 

Maybe, maybe not.

 

Astroturfing is a form of advocacy in support of a political, organizational, or corporate agenda, designed to give the appearance of a "grassroots" movement. The goal of such campaigns is to disguise the efforts of a political and/or commercial entity as an independent public reaction to some political entity—a politician, political group, product, service or event. The term is a derivation of AstroTurf, a brand of synthetic carpeting designed to look like natural grass.

 

Like other advocates, astroturfers attempt to manipulate public opinion by both overt (outreach awareness, etc.) and covert (disinformation) means. Astroturfing may be undertaken by an individual promoting a personal agenda, or by organized professional groups with money from large corporations, unions, non-profits, or activist organizations. Services may be provided by political consultants who also provide opposition research and other services. Beneficiaries are not "grass root" campaigners but the organizations that orchestrate such campaigns.

 

 

[Yenn]

A lot of truth in what the senator says. I stated my opinion months ago on this forum that Qantas was trying to kill the company to enable the stalled take over to go ahead. There is no doubt in my mind that CEO's and company directors have all lost the ability to look after the company and the shareholders. The only people making money out of a lot of the worlds big businesses is the directors and some staff who get massive awards for mediocre working.

 

 

[Guest Howard Hughes]

I think when the inevitable sell off happens the shareholders will do just nicely, after all they won't let it happen unless it's worthwhile for them! Not to mention those in power are shareholders too.

 

Totally agree the CEO and Directors are not interested in the company just what it is worth.

 

 

[Litespeed]

The sad thing is the share holders are basically in the dark as well- they have very limited information.

 

They get screwed as the rest of us

 

 

[youngster]

Youngster, you're not an apparatchik for the Qantas bosses are you? (or of a private equity firm trying to denigrate the firm in prep for a buyup?)If you are in the thick of it it might be of value to reveal yourself so we can judge the quality of your submissions.

 

Cheers,

 

Col

 

++++++++++++++++++++++++

 

Colin Jones

 

Summer Hill

I work in Federal politics. No vested interest in Qantas or private equity firms, not that I'm opposed to any gifts of a few million shares in Macquarie Bank if anyone is offering!

I get a bit frustrated with this whole 'poor shareholders' argument, because no one is required to buy Qantas shares. If fact, I dont own any, because I don't think it is a good business. I also agree that offering massive pay rises and incentives to either management, or engineers, or pilots, or any other staff, is not going to turn it into a good business. How Alan Joyce can take a multi-million dollar salary from a business that is barely turning a profit is beyond me. At the same, the pay rises and other conditions demanded by Sheldon and his mates were similarly outrageous.

 

I just know that centuries of experience in a range of highly competitive industries shows the highly unionised companies will eventually lose out to more efficient and productive competitors (think steel in the 1800s and the auto industry in the 1990-2000s).

 

 

[winsor68]

The industries don't lose out Youngster... they do quite nicely out of de-unionizing their workforces. Its the average wage earner who loses...

 

 

[eightyknots]

. At 90, Qantas is the world's oldest continuously running airline.

Unfortunately, Senator Xenophon is incorrect. KLM is the oldest airline in the world.

 

From Wikipedia:

 

Koninklijke Luchtvaart Maatschappij N.V., operating under the name KLM Royal Dutch Airlines (Dutch: Koninklijke Luchtvaart Maatschappij, pronounced [ˌkɔnɪŋkləkə ˌlʏxtfaːrt maːtsxɑˈpɛi̯], literally "Royal Aviation Company"; usual English translation: Royal Dutch Airlines), is the flag carrier airline of the Netherlands and is part of Air France-KLM. KLM's headquarters is in Amstelveen near its hub at Amsterdam Airport Schiphol. KLM operates worldwide scheduled passenger and cargo services to more than 90 destinations. It is the oldest airline in the world still operating under its original name. As of 31 March 2010, it has 31,787 employees.[1]

 

KLM was formed in 1919 making it 93 years old in October this year.

 

 

[coljones]

Unfortunately, Senator Xenophon is incorrect. KLM is the oldest airline in the world.

Was KLM operational during the time that the germans invited themselves to Holland and its stuff? If not, Planedriver is quite correct.

 

Cheers

 

Col

 

 

[eightyknots]

Was KLM operational during the time that the germans invited themselves to Holland and its stuff? If not, Planedriver is quite correct.Cheers

 

Col

Yes, even though KLM couldn't operate from its home base in Holland, it continued to fly a limited number of routes, including in West India, a place where no World War II conflicts reached:

 

" The advent of World War II changed the fortunes of the Dutch airline, as it did almost every other major airline in the world. KLM stopped all its European flights in August 1939 except to Scandinavia, Belgium, and London. Despite defiant attempts to continue regularly scheduled service after the war began, KLM had to close all its European operations in May 1940 when the Nazis invaded and occupied the Netherlands. Amazingly, the company continued to provide services in eastern Asia even though it no longer had a “home” country. For a while, KLM operated out of New York. Longtime KLM president Plesman quickly resumed regular operations as the war neared its end. In April 1945, he received a loan of 14 Douglas C-54 four-engine transports (the military version of the DC-4) from the U.S. government. Using these planes, KLM once again began service from Amsterdam to Jakarta, inaugurating a new postwar era for one of the greatest airlines in European aviation history. "

 

Source: http://www.centennialofflight.gov/essay/Commercial_Aviation/netherlands/Tran24.htm

 

 

[Suitman]

Unfortunately, Senator Xenophon is incorrect. KLM is the oldest airline in the world.

Not exactly. KLM is the oldest airline in the world, but QANTAS represents the world's oldest continuously operating airline.

 

See http://en.wikipedia.org/wiki/List_of_airlines_by_foundation_date?banner=none

 

 

[eightyknots]

Not exactly. KLM is the oldest airline in the world, but QANTAS represents the world's oldest continuously operating airline.See http://en.wikipedia.org/wiki/List_of_airlines_by_foundation_date?banner=none[/quote]

 

If you go to the link you gave (above), you will see recorded next to KLM, the following entry:

 

Operations stopped during World War II apart from the operations in the Dutch Antilles in the Caribbean. Merged with Air France in 2004. Currently the oldest airline to exist.

 

In addition to the Dutch Antilles operations, KLM also operated in East India throughout World War II, even though it couldn't operate from its home base in the Netherlands. Despite the fact that KLM's flights were cut back, it still maintained a continuous operation, both in Asia and South America. It has, therefore, an unbroken history of operations, which began before QANTAS was formed by Charles Kingsford-Smith and others, to the present day.

[jcamp]

Merged with Air France in 2004

Actually

 

Air France-KLM, which is incorporated under French law with headquarters at Paris-Charles de Gaulle Airport

So like Jetstar (or Jetstar Vietnam?)

 

 

[coljones]

So KLM is now just a pseudo company - another trophy head on the wall of life. Despite Qantas' best endeavours they are not yet a trophy head.