Qantas will axe 5000 jobs, ditch unprofitable routes and retire ageing gas-guzzling planes, in the biggest shake up of its operations since it was floated.

Read more: http://www.smh.com.au/business/aviation/qantas-chief-alan-joyce-cuts-5000-jobs-20140227-33j48.html#ixzz2uTjHibUa

As usual, Joyce blames others than his own management skills for the flop... It's more than time Joyce got his golden parachute... I can say here with confidence that, as a cartoonist, I could do a better job than Joyce at the helm of the Aussie kangaroo... But then some people would tell me I am deluded... Sure I would say, but remember I used to be in ADVERTISING... With Joyce at the helm, any advertising campaign is going to sound hollow...  and to say the least, I don't think people are prepared to let him get away with success. Just a nagging feeling... I could be wrong of course... But... Usually when a company performs badly, the CEO is sent packing with a "here-is-your-golden-(sorry plated)-watch" handshake, a few millions in preferred shares and a "good-bye-do-not-come-back" through the door. 
No excuses.

 

A Qantas A380 superjumbo has collided with another of the airline's Boeing 747 aircraft on the ground at Los Angeles International Airport, damaging the wings of both aircraft.

The incident is understood to have occurred at about 4.30pm (AEST time) on Friday afternoon while the two aircraft were being towed at the airport.

Sources said they believed the planes had suffered "millions of dollars" worth of damage.

The wing span of a Qantas A380, which can carry 484 passengers, is almost 80 metres.

The incident caps off a woeful week for Qantas, which on Thursday confirmed it will axe 5000 jobs, cancel planes orders and retire gas-guzzlers in an attempt to strip $2 billion in costs out of the business.

Scrapes and close shaves between planes at airports often occur when planes are pulled back from terminals.

Read more: http://www.smh.com.au/business/aviation/qantas-crash-in-los-angeles-causes-millions-of-dollars-damage-20140228-33r3w.html#ixzz2ubHdGbUr

The Abbott government’s chances of getting its proposed Qantas deregulation through the Senate have been dealt another blow with crossbench senators Nick Xenophon and John Madigan announcing their opposition to the plan.

The senators, who could see their influence increase if the rerun of the West Australian Senate election on April 5 reduces the number of votes the Coalition can call upon, were both highly critical on Tuesday of the government’s plan to remove all requirements for the national carrier to be located in Australia, be majority-owned and run by Australians and to employ Australians.

The plan is also opposed by Labor, the Greens and Clive Palmer’s Palmer United party. Along with the opposition by the two independent senators this means it has no chance of passing the Senate.

Independent senator Nick Xenophon, a fierce critic of the current Qantas management, said he would not support the proposed amendments to the Qantas Sales Act.

“No, I won’t support them. This is a red herring, the real problem here is the failed strategy pursued by Qantas management,” Xenophon told Guardian Australia.

Madigan, of the Democratic Labour party, said it appeared the Abbott government’s strategy was “to fly the white flag and surrender Australia to world markets”.

“I am extremely wary, extremely sceptical about this idea,” he said.

“I am very cynical about the arguments being put forward and I wonder whether this will mean we are exporting our jobs and our wealth creating assets overseas.

“And I think the government is sending out entirely contradictory messages; they say they want to leave it to the market but then they say there are all these other safeguards in place, they say they want a level playing field but we know other governments stand behind their airlines so if we really want a level playing field then that is what we should do, too,” Madigan said.

Palmer issued a statement Tuesday reaffirming his opposition to the idea.

Blaming Qantas’s problems on “board and management failure”, Palmer said the airline was a “vital part of Australia’s fabric” and the government had a moral obligation to ensure it remained in Australian hands.

Senators-elect David Leyonhjelm and Bob Day have both said they would support the government’s proposed changes, but without votes from Labor, the Greens, Palmer United party, Xenophon and Madigan the changes cannot pass the new Senate.

http://www.theguardian.com/business/2014/mar/04/crossbench-senators-vow-block-deregulate-qantas

While the Government grapples with Qantas, it should also look at tightening a loophole in the Air Navigation Act that Virgin has been more than happy to exploit, writes Michael Janda.

The political debate of the past week has centred on whether the Qantas Sale Act should be amended to level the playing field with Virgin Australia.

But perhaps politicians and the media are asking the wrong question.

The alternative question is whether the Air Navigation Act (ANA) should be amended to close off the legal loophole being used by Virgin Australia to Qantas's disadvantage.

It's a question Qantas hasn't asked because, should the Sale Act be amended, it's the same loophole Qantas would use to allow foreign shareholders to own more than half the airline.

You see, about two years ago Virgin hatched a nifty plan to circumvent a requirement of s11A of the Act that Australian international airlines must be no more than 49 per cent foreign owned.

At the time, foreign players had just about reached the limit, and the Virgin board was going to have to knock back further share purchases by overseas buyers to avoid breaching the Act.

The restriction also meant that capital injections of the kind the airline undertook to raise $350 million late last year - much of it from its foreign airline owners Air New Zealand, Etihad and Singapore Airlines - would have been impossible.

Virgin Australia's other choice would have been to offload or close down its international arm.

And, in theory, offloading its international division was what it did. In theory. In law. Not in reality.

What Virgin did was create a separate, non-listed private company called Virgin Australia International Holdings (VAIH).

At a time when Virgin Australia Holdings (VAH) (the ASX listed company) still had less than the maximum 49 per cent foreign ownership, it gave its then shareholders one share in the new holding company for its international operations (VAIH) for every share they owned in VAH.

Except they wouldn't control the shares. A trustee controls the VAIH shares "owned" by the then VAH shareholders on their behalf. These "shareholders" cannot even sell their shares, except to a subsidiary of Virgin Australia.

Therefore, Virgin Australia International Holdings is, in the words of Virgin from its 2012 information statement, a wholly owned subsidiary of VAH Sub, itself being a wholly owned subsidiary of VAH.

VAIH does have its own board, with a majority of independent directors.

However, VAIH does not have its own management. That is contracted out to Virgin Australia under a service agreement.

Neither does VAIH have its own planes, nor does it lease any - it uses Virgin Australia's aircraft.

It also uses Virgin Australia's crew; maintenance and engineering; intellectual property; IT systems; lounge access; distribution, marketing and sales; check-in counters and office space; risk management services; insurance; frequent flyer program; operations services; administrative and secretarial services; assistance with reporting requirements; tax services; accounting; human resources services; and "all other support services necessary to operate the Australian International Airline business".

VAIH also gets loans from Virgin Australia to "ensure VAIH has access to sufficient funding to continue to carry on the Australian International Airline business."

In short, Virgin Australia International Holdings does not exist, except on a bit of paper at ASIC's offices, and with the minimum indicia of corporate life to tick the regulator's boxes.

Its sole purpose is to provide the legal edifice that defeats the Air Navigation Act's restriction of foreign ownership in Australian international airlines to 49 per cent.

It can do that because the ANA refers to ownership, not control.

Because clearly, Virgin Australia is in practical, if not legal, control of a subsidiary that contracts out almost every aspect of business to it. VAIH has no life or purpose if Virgin Australia ever pulls the plug.

There's currently no point in Qantas performing this legal magic, because the Qantas Sale Act limits foreign ownership in both its international and domestic divisions.

If the Sale Act goes, expect Qantas to perform a similar trick, or just separate and cast off its loss-making international division altogether - although it's not clear if there's anyone out there who will buy it.

So, if the Government can't get its changes to the Qantas Sale Act through the Senate to level the playing field that way, perhaps it could tighten the Air Navigation Act to do what it was intended to and ensure that Australia's international airlines are not only technically owned, but actually practically controlled, by Australian shareholders.

Otherwise, while it's getting rid of s3 of the Qantas Sale Act, the Federal Government may as well ditch s11A of the Air Navigation Act too, because Virgin has found a relatively painless legal workaround and the legislation is now not worth the paper it's written on.

http://www.abc.net.au/news/2014-03-05/janda-an-act-of-foreign-ownership-trickery/5299048
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MEANWHILE at the Flying Goose headquarters:

Political debate has focused on whether Qantas has changed its tune about the impact of an “unrecovered” $106m carbon tax bill on its current financial difficulties – a tax bill the government insists is a direct “hit” on Qantas and its workers.

But on closer questioning it turns out Qantas does not have a $106m “unrecovered” carbon tax bill at all.

According to a spokesman, Qantas recovered all of that $106m through the ticket surcharge it imposed at the time of the carbon tax introduction. The net effect of the carbon tax itself on the airline’s bottom line was therefore zero. Qantas maintains the sum is “unrecovered” because its ticket prices have fallen by more than the surcharge due to the fierce capacity war it is waging with arch rival Virgin.

But the chairman of the Australian Competition and Consumer Commission, Rod Sims, has suggested that if the carbon tax is repealed, airlines such as Qantas are also likely to be forced to remove the surcharges they are levying to pay for it – which would mean the airline’s bottom line would be no better off after repeal.

Qantas’s chief executive, Alan Joyce, said this week “the carbon tax has been a big cost for us. It’s $106m last year. It’s going to be over that again this year. And it is absolutely one of the factors that is impacting the airline.”

The Qantas website says “when the carbon price was introduced, Qantas added a small surcharge to domestic fares to reflect the impact on our cost base and attempt to recover some of that cost. Since 1 July 2012, this cost recovery has been unsustainable due to the challenging conditions in the Australian aviation industry. The table below indicates the estimated impact of the carbon price on Qantas per passenger, per sector, rather than any additional revenue we are collecting,” it says above a table showing a surcharge of between $1.93 and $7.25 depending on the length of the flight.

Sims, who is charged by the government with ensuring the carbon tax repeal is passed through to consumers, said that “as a general rule” any surcharges imposed due to the carbon tax should be removed once the tax was abolished.

http://www.theguardian.com/world/2014/mar/06/qantas-carbon-tax-bill-has-been-covered-by-ticket-surcharge