Australian Aviation’s McLaughlin ‘Aviation Journalist of the Year’

Why aren’t the following issues being discussedQantas lacks informed leadership and understanding of the basic business relying on appointing external contractors to senior mgmt. positions without the necessary background in the industry. Sydney mgmt. set about removing or redeploying Melbourne mgmt. to ensure they could dismantle much of the Melbourne Maintenance group without opposition. If Melbourne Maintenance is to be closed where will Qantas obtain the Engineering and Supply Chain expertise now made redundant. Many of the Melbourne personnel have 20 to 30 years plus experience and are regarded as “best of type” in the industry. Sydney is totally ill equipped to provide a replacement service. This action of making Melbourne Maintenance redundant is driven by the Qantas Board’s obsession to replace existing Domestic ( TAA/Australian Airlines) contracts with the low cost contracts of Jetstar. Cheaper is not better, and Qantas past reputation, so badly tarnished in recent years, has lost its vision of quality and service standards.
Why does the Qantas board close down the Qantas domestic business in Melbourne that made a before tax profit of $552 M when the airlines losses are generated from the International operation ie $ 216 M loss. managed from Sydney.
Melbourne Maintenance and Engineering excellence has been leading edge in the industry since the Boeing 737 introduction in the mid 1980’s. Boeing Reliability Engineering has recognised Qantas domestic standing as amongst world’s best in despatch and component reliability. So why dispose of an organisation whose massive 737 NG fleet will be part of the fleet mix for years to come with ongoing aircraft delivery commitments.
Why has Sydney Management enforced a total outsource of component repairs to 3 overseas International MRO without addressing the substantial Risk Management concerns raised by the Melbourne Engineering and Quality Assurance mgmt. Why were the MRO contracts signed without addressing these serious commercial and flight safety concerns.
Why did Qantas Management ignore the written concerns of Qantas Quality Management about removing the quality acceptance standards of spares that exposes Qantas to real flight safety concerns. Why are Sydney Quality staff accepting MRO exchange spares with the diluted acceptance standards making comments that it will need a major flight incident before QF mgmt. will take notice of the quality concerns being observed – “ some of the MRO exchanges are rubbish that we are compelled to accept”. New standards state anything supplied from MRO spares pool must be accepted. These exchanges can come from any Pool customer ( third world) who can have their own inferior quality standards and maintenance practices.
Qantas Supply Chain approval of the MRO ( Maintenance Repair Organisation) contracts on A330, 738 & A380 forfeited $ 10 Million immediately in existing Supplier commitments and in excess of $ 70 Million in ongoing benefits in Product Support and warranty entitlements over the term of the MRO’s contracts. No one in QF Contract Purchasing wanted to know about these offsetting benefits to the charges agreed under the MRO Cost Per Flying Hour rate. One expendable P/N, with a known warranty defect has cost Qantas $ I million over last 4 years that should have been reimbursed fully at no cost. There are many similar examples.
Qantas, by adopting the MRO support has alienated their long term relationships with the original equipment manufacturers ( OEM) as the MRO decision in many cases denies access to the OEM aftermarket service. OEM refuse assignment rights of airline entitlements to MRO as they are A direct competitor to their business. Reliability and Delivery performance, commercially supported Product upgrades and warranty support are no longer available to the MRO, that are the very basis of spares and fleet management.
Qantas has outsourced component products with over 40 % warranty coverage to MROs that cannot administer the airlines benefit. Even the major MROs acknowledge in their website exchanges, only new inexperienced airlines adopt MRO support if Warranty fleets are involved as the new airlines do not have the infrastructure, resources and experience to administer the Supplier benefits. Qantas actions, with its inhouse capability and OEM management, by outsourcing its warranty equipment to the MROs is going against normal and sound commercial practice. QF mgmt. decisions failed to consult relevant groups and understand the eventual negative reaction of the OEM. OEMs have been quite outspoken and angry at the disregard for their long term relationships and have stated Qantas cannot expect the support of the past as the reliability of their product is no longer their responsibility. Qantas is going it alone and exposing itself to major support difficulties .
Why has the Unions allowed wholesale closure of Melbourne Component Workshops and staff redundancy knowing Qantas intention was to contract all components to overseas non OEM repair sources. Why didn’t the Unions challenge the loss of hundreds of jobs to overseas interests and challenge the CEO ‘s statement of a policy of maintaining Australian work content. Why did certain union delegates receive highly sought after overseas appointments on regular basis, seen by many as a mgmt. effort to enlist Union support. The whole Qantas brand has been seriously compromised and no one is challenging the direction and concern for the very survival of this Australian Icon.
So ignorant, inexperienced and intimidated are those QF mgmt. involved that they refuse or ignore to question the direction being taken. Ongoing warranty omissions through lack of resourcing and unrealistic surplus stock saving targets will show massive shortfalls in expected budgets. Staff made redundant with critical expertise with no succession planning to replace the service. Hundreds of thousands of dollars being lost weekly – inexperienced mgmt. don’t know what they don’t know!!!