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Qantas to hold the ‘line in the sand’ – CFO

written by australianaviation.com.au | January 24, 2014
Qantas CFO Gareth Evans has gone on the offensive to defend recent criticism.
Qantas CFO Gareth Evans has gone on the offensive to defend recent criticism.

In an op-ed piece published in Fairfax newspapers and the Qantas media page on January 24 entitled ‘Armchair Experts in the Cockpit’, Qantas CFO Gareth Evans has taken aim at some of the airline’s detractors, and has restated the Group will not relinquish its 65 percent domestic market share ‘line in the sand’.

In particular, Evans singled out former airline finance employee, Tony Webber, saying Mr Webber was “retrenched several years ago”, had recommended that Qantas “significantly shrink” its regional services which would have ignored the airline’s “role in the community” and “left the door open” to more competitors, and had a “one dimensional view of supply and demand that ignore how a multifaceted market actually works.”

Evans attributed most of Qantas’s recent woes to “record” oil prices, a “subdued” world economy”, and interestingly considering the airline’s 2013 tie up with Emirates, “Asian and Middle Eastern carriers, who can do things a lot cheaper, expand aggressively into our markets.” He stressed that while the airline isnot asking for a government subsidy”, it is arguing for “action to level what all sides of politics is a distorted playing field.”

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Regarding the 65 per cent market share claim, Evans said that strategy was about “…giving our customers a market-leading choice of destinations, frequencies and seats at the times they want to travel, adding that it “…reflects the investment we have made over many years in our regional operations and in building a national low-fares network with Jetstar.”

Evans also addressed claims that Jetstar had adversely affected the Qantas Group’s profitability, saying “Jetstar Australia is a business that has been profitable in every year of its existence, opening up low cost air travel for Australians and creating a new market alongside Qantas as part of a uniquely successful two-brand strategy.  We coordinate which brand flies which route to best serve our customers and to maximise the return for the Qantas Group.  If Qantas hadn’t created Jetstar, someone else would have – and Qantas would have been the loser.”

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

22 Comments

  • Peter

    says:

    Armchair Experts in the Cockpit can’t be blamed for what has happened at Qantas. However The CFO, CEO, Chairman and the Qantas Board can be, its everybody elses fault except theirs.
    Armchair experts have not governed the demise of Qantas.
    Gareth Evans and the rest of his crew should resign immediately.

  • Bo Meadows

    says:

    To say that Jetstar have not had an adverse effect on Qantas is pure balderdash. Many who would previously have flown Qantas now fly Jetstar because it is cheaper. So Qantas have lost lots of customers – simple.

  • simon

    says:

    I agree with Peter Qantas lacks everything Australian

  • Nick

    says:

    I wish prominent Australians would get the “Line in the sand” metaphor correct. A line in the sand is movable, like the sand. It can be washed away by the motion of the water or wind, and you can draw a new line where you want to. It’s a metaphor for temporariness, for pitching a starting point, or for making a wild guess and having an insecure foundation.
    You would hope that a CFO would be educated enough to know this, or even to be able to work it out from the words in the metaphor. However, it appears not, as it’s used extensively in the media to mean a holding position or some kind of immovable point or backstop position: the opposite of what the metaphor means.
    Reminds me of “misnomer” a few years ago, when people were misusing that word instead of “misconception”.
    But back on topic: Qantas is gradually setting itself up to offshore and sell the money-making bits, so that the only option will be for the government to step in and save the expensive bits to keep it Australian-owned. Taxpayers lose, investors win.

  • Garry

    says:

    Mr Evans is either gullible, dishonest or just incompetemt. Whatever the reason he and the rest of the ‘amazing team’ must go. Jetstar is the problem- the tapeworm that grows until it kills the host.
    To claim Jetstar having been profitable for every year since inception is delusional; no airline has ever achieved that and the initial business plan for Jetstar did not predict that. If indeed Jetstar has claimed a profit this must be ratified against the losses in Qantas mainline. Claims that Qantas does not support or subsidise Jetstar are misleading. If indeed Jetstar was a standalone business this would itself demonstrate a bad business model by creating massive duplications within the Qantas group. It therefore follows that to avoid duplication Qantas should and must be helping Jetstar in many areas with the costs lost in accounting black magic and spin.
    As for passengers benefiting from the two brand strategy I can only say that Jetstar is the best thing that ever happened to Virgin. I meet a vast number of travelers and there is a recurring theme. Qantas replaces its services with the trashy Jetstar brand, passengers continue to use Jetstar until they suffer the inevitable service failure (usually about their third flight) at which time they shift to Virgin permanently.
    Mr Evans and the board do not see the truth or perhaps they do but remain in a state of in denial. Either way they are unfit to manage and must be replaced.

  • Paul

    says:

    Gareth Evens is good at putting spin on Jetstar. It maybe truthful that Jetstar Australia has made a (modest) profit every year, albeit with much free support at QANTAS expense, but it’s Asian entities have cost the group plenty with no profit to show for the hundreds of millions that have been invested in them. Who has paid for it all. Not Jetstar Australia I’d bet.

  • Glen CBR

    says:

    What good is “65% of market share” (which seems to translate to “65% of passengers”) if QF are making zero% profit? Qantas management/board seems to need acollective “enema” – thank goodness they have good staff, at least until they sack them all. Don’t waste time and resources reviewing staffing or engineering or even routes, just REVIEW and CULL the management and give us back the very successful pre-Dixon Qantas.

  • Michael

    says:

    Maybe it’s time the CEO and CFO were paid the same as their equivalents in Asia who are running bigger more successful airlines (China Southern) and getting paid a fraction of what these ineffective execs are getting……..then at least we would know they were serious about the welfare of the airline.

  • John

    says:

    Qantas complains about the “record” oil prices. It fails to mention the cost recovery attributed to the fuel surcharge charged to customers and how much thus contributes to their bottom line.

  • aggi

    says:

    As is stated Mr Webber some time ago”, He had recommended that Qantas “significantly shrink” its regional services. They have gone further than just that. No longer can you fly in a Qantas plane’ for instance Perth to Europe. Emirates have that privilege. Flying from Melbourne or Sydney the second leg of their journey from Dubai into Europe is Emirates.
    This is business decision, most I speak with that is not what they want, and see this as the edge of the wedge. Emirates is not Australian, could be the trouble having a non-Australian at the helm. Akin going into a Dublin bar asking for a Guinness and get Fosters?

  • J Priest

    says:

    No point making detailed arguments about where Qantas is now compared to what it was before. Just look at its figures, including how its share is doing on the stock exchange since the CEO came on. The current Board, CEO and entire top management are collectively responsible for Qantas current parlous state. The factors, such as oil price hike and increased competition, are the same faced by other airlines. Our iconic “national” airline has been thrashed by the current mob. The latest rationalisation is an example of head-in-the sand management who think they know what Qantas is about. Hey, look at your figures and your stats.

  • P1

    says:

    The unions have been screwing Qantas for years . the fact that they have not replaced any planes and their fleet is ancient the sooner some one takes it over the better for all and that includes Jet Star who are so anal about luggage policy’s i will not fly with them. If you look at other airlines flying out Australia they are are all better options fly with I do a lot travelling and Qantas would be my last choice as their flight services are bad they would not hold a candle to Emirates in flight services, best shut the door on it the flying kangaroo is over.

  • Radar

    says:

    Qantas does not appear to want to protect any ‘line in the sand’ for its international market.

  • D Mercer

    says:

    Qantas has been compromised by extremely incompetent and excessively paid directors and senior executives who seem more interested in lining their pockets rather than operating a successful airline brand that is iconic and if PROPERLY managed would have the total support of ALL Australians. My future travel will be with Virgin as I am totally fed up with the garbage that Qantas throw up. They charge a fuel levy and carbon tax offsets higher than other airlines which would have the potential to offset the fluctuations in fuel prices – no one complains about that cost. A fee for using credit card when buying tickets is a 6.5% slug over and above the credit agency charges – and so it goes on. JETSTAR!!!!!!!!!!!!!!! forget it!!!!!!!!!!!!!!!! the airline is an embarrassment and I have only had the experience on 2 occasions – both out of Darwin, and that was it – rude, arrogant and so unhelpful I vowed never again. Virgin, on the other hand, young, vibrant, yes cheeky, but oh it is so nice to feel welcome and respected.
    I have been a Qantas Frequent Flyer for nearly 40 years but it means diddly squat – whereas with Virgin I am respected and thanked for using their services………any wonder Qantas is a disaster waiting to happen! Tie the shareholders took matters into their hands and appointed people who are committed to returning Qantas to the true icon of the past. And I do not live in the past!

  • Patrick Kilby

    says:

    Peter on your point “Armchair experts have not governed the demise of Qantas”; I think Mr Webber might be the exception here (as he seemed to have strong ideas while on staff as what to do with QANTASLINK); an as for P1 “the fact that they have not replaced any planes and their fleet is ancient”. Apart from Canberra with old 734s (now being replaced); and 767s (now being replaced), all I see is A380s, A330s, and new 738s. I think the average age is the lowest it has been; so not sure where/what the evidence is.

  • Watto

    says:

    All I can say is thank goodness we are well serviced over here in the west by other carriers as far as International travel goes. As Radar said they no longer seem interested in their share of the International market and now all we get is one dedicated QF service to Singapore once a day. Singapore Airlines offer 3 a day(and a hell of a lot better service). Then we still have Thai, Cathay, Emirates (3 times daily), Etihad, Qatar, Malaysian, Air New Zealand offering full service flights before we mention the budget carriers. Good decision QANTAS if you want WA people to continue supporting the Airline – Not!!!!

  • James from Sydney

    says:

    It’s funny how after Gareth Evans talked about armchair experts that there seems to be so many of them submitting comments on this article. Will we ever learn?

  • NeilP

    says:

    You all seem to be ignoring a significant point. QF international is where it is because, for many years, people have chosen to fly with other carriers. It is a self serving situation. Less pax, reduced flights. Reduced flights, less demand. Eventual cancellation. You only have yourselves to blame for the state of choice that we have now. Blaming the board for this is pointless and time wasting.

    In any business that has multiple divisions, it is quite common for cross support. Qantas is no different when it comes to Jetstar.

    If you really want to support Qantas, then next time you travel overseas, use them instead of saving $15 flying SIA.

  • Fergo

    says:

    People vote with their hip pockets. If there’s a cheaper flight they’ll take it. That’s why we have low-cost carriers. With LCCs you get what you pay for, and in the case of Jet Star that’s not very much at all (and sometimes not even an aeroplane!). Long haul is slightly different from domestic, especially for regular travellers. Paying a bit more for decent leg room and service makes good sense; it only takes one horror long-haul flight in a cramped economy seat to drive the lesson home (almost literally!). I flew Australia-Washington DC return late last year and had a great flight both ways in Qantas Premium Economy – can’t fault it and I’d do that again; it was no better or worse than Cathay Pacific’s Premium Economy product and service. I’ll be flying Qantas to Singapore and back in a few days time, this time in economy class (company rules…): I’ll find out then whether or not Qantas is charging full-service fares for an LCC product down the back. My recent experience of QF economy in long-haul has been OK, but I notice that Singapore offers wider seats with greater leg room at a slightly lower price. If Qantas wants to survive, it needs to retain both the money and the affection of its paying customers (regardless of the dollar exchange rate), and therefore needs to compete on its long-haul routes with the full-service carriers (price, space and service), or just give the game away entirely and hand all of its routes over to Jet Star. That seems to be the issue that Qantas’s leadership is grappling with – are they a full-service carrier or an LCC? You can’t be both.

  • John

    says:

    let’s face it QF is stuffed. In a year or 2, all it will be flying is BNE-SYD-MEL-CBR-PER & nothing else, as everything else will either be Jetstar or codeshared.

    The unions have killed QF. You can’t compete when everyone at QF paid so much for doing so little.

    JQ doesn’t fly peak hour flights in golden triangle. Same with TT now.

  • David

    says:

    QANTAS needs a new CEO,CFO and a new board. Also a new fleet, an improved product. Stop blaming the staff. QANTAS is a good product in need of vigorous leadership.

  • Ben

    says:

    Ansett had nearly 40% of the market… Right up until it collapsed.

Leave a Comment

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Qantas to hold the ‘line in the sand’ – CFO

written by australianaviation.com.au | January 24, 2014
Qantas CFO Gareth Evans has gone on the offensive to defend recent criticism.
Qantas CFO Gareth Evans has gone on the offensive to defend recent criticism.

In an op-ed piece published in Fairfax newspapers and the Qantas media page on January 24 entitled ‘Armchair Experts in the Cockpit’, Qantas CFO Gareth Evans has taken aim at some of the airline’s detractors, and has restated the Group will not relinquish its 65 percent domestic market share ‘line in the sand’.

In particular, Evans singled out former airline finance employee, Tony Webber, saying Mr Webber was “retrenched several years ago”, had recommended that Qantas “significantly shrink” its regional services which would have ignored the airline’s “role in the community” and “left the door open” to more competitors, and had a “one dimensional view of supply and demand that ignore how a multifaceted market actually works.”

Evans attributed most of Qantas’s recent woes to “record” oil prices, a “subdued” world economy”, and interestingly considering the airline’s 2013 tie up with Emirates, “Asian and Middle Eastern carriers, who can do things a lot cheaper, expand aggressively into our markets.” He stressed that while the airline isnot asking for a government subsidy”, it is arguing for “action to level what all sides of politics is a distorted playing field.”

Advertisement
Advertisement

Regarding the 65 per cent market share claim, Evans said that strategy was about “…giving our customers a market-leading choice of destinations, frequencies and seats at the times they want to travel, adding that it “…reflects the investment we have made over many years in our regional operations and in building a national low-fares network with Jetstar.”

Evans also addressed claims that Jetstar had adversely affected the Qantas Group’s profitability, saying “Jetstar Australia is a business that has been profitable in every year of its existence, opening up low cost air travel for Australians and creating a new market alongside Qantas as part of a uniquely successful two-brand strategy.  We coordinate which brand flies which route to best serve our customers and to maximise the return for the Qantas Group.  If Qantas hadn’t created Jetstar, someone else would have – and Qantas would have been the loser.”

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

22 Comments

  • Peter

    says:

    Armchair Experts in the Cockpit can’t be blamed for what has happened at Qantas. However The CFO, CEO, Chairman and the Qantas Board can be, its everybody elses fault except theirs.
    Armchair experts have not governed the demise of Qantas.
    Gareth Evans and the rest of his crew should resign immediately.

  • Bo Meadows

    says:

    To say that Jetstar have not had an adverse effect on Qantas is pure balderdash. Many who would previously have flown Qantas now fly Jetstar because it is cheaper. So Qantas have lost lots of customers – simple.

  • simon

    says:

    I agree with Peter Qantas lacks everything Australian

  • Nick

    says:

    I wish prominent Australians would get the “Line in the sand” metaphor correct. A line in the sand is movable, like the sand. It can be washed away by the motion of the water or wind, and you can draw a new line where you want to. It’s a metaphor for temporariness, for pitching a starting point, or for making a wild guess and having an insecure foundation.
    You would hope that a CFO would be educated enough to know this, or even to be able to work it out from the words in the metaphor. However, it appears not, as it’s used extensively in the media to mean a holding position or some kind of immovable point or backstop position: the opposite of what the metaphor means.
    Reminds me of “misnomer” a few years ago, when people were misusing that word instead of “misconception”.
    But back on topic: Qantas is gradually setting itself up to offshore and sell the money-making bits, so that the only option will be for the government to step in and save the expensive bits to keep it Australian-owned. Taxpayers lose, investors win.

  • Garry

    says:

    Mr Evans is either gullible, dishonest or just incompetemt. Whatever the reason he and the rest of the ‘amazing team’ must go. Jetstar is the problem- the tapeworm that grows until it kills the host.
    To claim Jetstar having been profitable for every year since inception is delusional; no airline has ever achieved that and the initial business plan for Jetstar did not predict that. If indeed Jetstar has claimed a profit this must be ratified against the losses in Qantas mainline. Claims that Qantas does not support or subsidise Jetstar are misleading. If indeed Jetstar was a standalone business this would itself demonstrate a bad business model by creating massive duplications within the Qantas group. It therefore follows that to avoid duplication Qantas should and must be helping Jetstar in many areas with the costs lost in accounting black magic and spin.
    As for passengers benefiting from the two brand strategy I can only say that Jetstar is the best thing that ever happened to Virgin. I meet a vast number of travelers and there is a recurring theme. Qantas replaces its services with the trashy Jetstar brand, passengers continue to use Jetstar until they suffer the inevitable service failure (usually about their third flight) at which time they shift to Virgin permanently.
    Mr Evans and the board do not see the truth or perhaps they do but remain in a state of in denial. Either way they are unfit to manage and must be replaced.

  • Paul

    says:

    Gareth Evens is good at putting spin on Jetstar. It maybe truthful that Jetstar Australia has made a (modest) profit every year, albeit with much free support at QANTAS expense, but it’s Asian entities have cost the group plenty with no profit to show for the hundreds of millions that have been invested in them. Who has paid for it all. Not Jetstar Australia I’d bet.

  • Glen CBR

    says:

    What good is “65% of market share” (which seems to translate to “65% of passengers”) if QF are making zero% profit? Qantas management/board seems to need acollective “enema” – thank goodness they have good staff, at least until they sack them all. Don’t waste time and resources reviewing staffing or engineering or even routes, just REVIEW and CULL the management and give us back the very successful pre-Dixon Qantas.

  • Michael

    says:

    Maybe it’s time the CEO and CFO were paid the same as their equivalents in Asia who are running bigger more successful airlines (China Southern) and getting paid a fraction of what these ineffective execs are getting……..then at least we would know they were serious about the welfare of the airline.

  • John

    says:

    Qantas complains about the “record” oil prices. It fails to mention the cost recovery attributed to the fuel surcharge charged to customers and how much thus contributes to their bottom line.

  • aggi

    says:

    As is stated Mr Webber some time ago”, He had recommended that Qantas “significantly shrink” its regional services. They have gone further than just that. No longer can you fly in a Qantas plane’ for instance Perth to Europe. Emirates have that privilege. Flying from Melbourne or Sydney the second leg of their journey from Dubai into Europe is Emirates.
    This is business decision, most I speak with that is not what they want, and see this as the edge of the wedge. Emirates is not Australian, could be the trouble having a non-Australian at the helm. Akin going into a Dublin bar asking for a Guinness and get Fosters?

  • J Priest

    says:

    No point making detailed arguments about where Qantas is now compared to what it was before. Just look at its figures, including how its share is doing on the stock exchange since the CEO came on. The current Board, CEO and entire top management are collectively responsible for Qantas current parlous state. The factors, such as oil price hike and increased competition, are the same faced by other airlines. Our iconic “national” airline has been thrashed by the current mob. The latest rationalisation is an example of head-in-the sand management who think they know what Qantas is about. Hey, look at your figures and your stats.

  • P1

    says:

    The unions have been screwing Qantas for years . the fact that they have not replaced any planes and their fleet is ancient the sooner some one takes it over the better for all and that includes Jet Star who are so anal about luggage policy’s i will not fly with them. If you look at other airlines flying out Australia they are are all better options fly with I do a lot travelling and Qantas would be my last choice as their flight services are bad they would not hold a candle to Emirates in flight services, best shut the door on it the flying kangaroo is over.

  • Radar

    says:

    Qantas does not appear to want to protect any ‘line in the sand’ for its international market.

  • D Mercer

    says:

    Qantas has been compromised by extremely incompetent and excessively paid directors and senior executives who seem more interested in lining their pockets rather than operating a successful airline brand that is iconic and if PROPERLY managed would have the total support of ALL Australians. My future travel will be with Virgin as I am totally fed up with the garbage that Qantas throw up. They charge a fuel levy and carbon tax offsets higher than other airlines which would have the potential to offset the fluctuations in fuel prices – no one complains about that cost. A fee for using credit card when buying tickets is a 6.5% slug over and above the credit agency charges – and so it goes on. JETSTAR!!!!!!!!!!!!!!! forget it!!!!!!!!!!!!!!!! the airline is an embarrassment and I have only had the experience on 2 occasions – both out of Darwin, and that was it – rude, arrogant and so unhelpful I vowed never again. Virgin, on the other hand, young, vibrant, yes cheeky, but oh it is so nice to feel welcome and respected.
    I have been a Qantas Frequent Flyer for nearly 40 years but it means diddly squat – whereas with Virgin I am respected and thanked for using their services………any wonder Qantas is a disaster waiting to happen! Tie the shareholders took matters into their hands and appointed people who are committed to returning Qantas to the true icon of the past. And I do not live in the past!

  • Patrick Kilby

    says:

    Peter on your point “Armchair experts have not governed the demise of Qantas”; I think Mr Webber might be the exception here (as he seemed to have strong ideas while on staff as what to do with QANTASLINK); an as for P1 “the fact that they have not replaced any planes and their fleet is ancient”. Apart from Canberra with old 734s (now being replaced); and 767s (now being replaced), all I see is A380s, A330s, and new 738s. I think the average age is the lowest it has been; so not sure where/what the evidence is.

  • Watto

    says:

    All I can say is thank goodness we are well serviced over here in the west by other carriers as far as International travel goes. As Radar said they no longer seem interested in their share of the International market and now all we get is one dedicated QF service to Singapore once a day. Singapore Airlines offer 3 a day(and a hell of a lot better service). Then we still have Thai, Cathay, Emirates (3 times daily), Etihad, Qatar, Malaysian, Air New Zealand offering full service flights before we mention the budget carriers. Good decision QANTAS if you want WA people to continue supporting the Airline – Not!!!!

  • James from Sydney

    says:

    It’s funny how after Gareth Evans talked about armchair experts that there seems to be so many of them submitting comments on this article. Will we ever learn?

  • NeilP

    says:

    You all seem to be ignoring a significant point. QF international is where it is because, for many years, people have chosen to fly with other carriers. It is a self serving situation. Less pax, reduced flights. Reduced flights, less demand. Eventual cancellation. You only have yourselves to blame for the state of choice that we have now. Blaming the board for this is pointless and time wasting.

    In any business that has multiple divisions, it is quite common for cross support. Qantas is no different when it comes to Jetstar.

    If you really want to support Qantas, then next time you travel overseas, use them instead of saving $15 flying SIA.

  • Fergo

    says:

    People vote with their hip pockets. If there’s a cheaper flight they’ll take it. That’s why we have low-cost carriers. With LCCs you get what you pay for, and in the case of Jet Star that’s not very much at all (and sometimes not even an aeroplane!). Long haul is slightly different from domestic, especially for regular travellers. Paying a bit more for decent leg room and service makes good sense; it only takes one horror long-haul flight in a cramped economy seat to drive the lesson home (almost literally!). I flew Australia-Washington DC return late last year and had a great flight both ways in Qantas Premium Economy – can’t fault it and I’d do that again; it was no better or worse than Cathay Pacific’s Premium Economy product and service. I’ll be flying Qantas to Singapore and back in a few days time, this time in economy class (company rules…): I’ll find out then whether or not Qantas is charging full-service fares for an LCC product down the back. My recent experience of QF economy in long-haul has been OK, but I notice that Singapore offers wider seats with greater leg room at a slightly lower price. If Qantas wants to survive, it needs to retain both the money and the affection of its paying customers (regardless of the dollar exchange rate), and therefore needs to compete on its long-haul routes with the full-service carriers (price, space and service), or just give the game away entirely and hand all of its routes over to Jet Star. That seems to be the issue that Qantas’s leadership is grappling with – are they a full-service carrier or an LCC? You can’t be both.

  • John

    says:

    let’s face it QF is stuffed. In a year or 2, all it will be flying is BNE-SYD-MEL-CBR-PER & nothing else, as everything else will either be Jetstar or codeshared.

    The unions have killed QF. You can’t compete when everyone at QF paid so much for doing so little.

    JQ doesn’t fly peak hour flights in golden triangle. Same with TT now.

  • David

    says:

    QANTAS needs a new CEO,CFO and a new board. Also a new fleet, an improved product. Stop blaming the staff. QANTAS is a good product in need of vigorous leadership.

  • Ben

    says:

    Ansett had nearly 40% of the market… Right up until it collapsed.

Leave a Comment

Your email address will not be published. Required fields are marked *

Qantas to hold the ‘line in the sand’ – CFO

written by australianaviation.com.au | January 24, 2014
Qantas CFO Gareth Evans has gone on the offensive to defend recent criticism.
Qantas CFO Gareth Evans has gone on the offensive to defend recent criticism.

In an op-ed piece published in Fairfax newspapers and the Qantas media page on January 24 entitled ‘Armchair Experts in the Cockpit’, Qantas CFO Gareth Evans has taken aim at some of the airline’s detractors, and has restated the Group will not relinquish its 65 percent domestic market share ‘line in the sand’.

In particular, Evans singled out former airline finance employee, Tony Webber, saying Mr Webber was “retrenched several years ago”, had recommended that Qantas “significantly shrink” its regional services which would have ignored the airline’s “role in the community” and “left the door open” to more competitors, and had a “one dimensional view of supply and demand that ignore how a multifaceted market actually works.”

Evans attributed most of Qantas’s recent woes to “record” oil prices, a “subdued” world economy”, and interestingly considering the airline’s 2013 tie up with Emirates, “Asian and Middle Eastern carriers, who can do things a lot cheaper, expand aggressively into our markets.” He stressed that while the airline isnot asking for a government subsidy”, it is arguing for “action to level what all sides of politics is a distorted playing field.”

Advertisement
Advertisement

Regarding the 65 per cent market share claim, Evans said that strategy was about “…giving our customers a market-leading choice of destinations, frequencies and seats at the times they want to travel, adding that it “…reflects the investment we have made over many years in our regional operations and in building a national low-fares network with Jetstar.”

Evans also addressed claims that Jetstar had adversely affected the Qantas Group’s profitability, saying “Jetstar Australia is a business that has been profitable in every year of its existence, opening up low cost air travel for Australians and creating a new market alongside Qantas as part of a uniquely successful two-brand strategy.  We coordinate which brand flies which route to best serve our customers and to maximise the return for the Qantas Group.  If Qantas hadn’t created Jetstar, someone else would have – and Qantas would have been the loser.”

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

22 Comments

  • Peter

    says:

    Armchair Experts in the Cockpit can’t be blamed for what has happened at Qantas. However The CFO, CEO, Chairman and the Qantas Board can be, its everybody elses fault except theirs.
    Armchair experts have not governed the demise of Qantas.
    Gareth Evans and the rest of his crew should resign immediately.

  • Bo Meadows

    says:

    To say that Jetstar have not had an adverse effect on Qantas is pure balderdash. Many who would previously have flown Qantas now fly Jetstar because it is cheaper. So Qantas have lost lots of customers – simple.

  • simon

    says:

    I agree with Peter Qantas lacks everything Australian

  • Nick

    says:

    I wish prominent Australians would get the “Line in the sand” metaphor correct. A line in the sand is movable, like the sand. It can be washed away by the motion of the water or wind, and you can draw a new line where you want to. It’s a metaphor for temporariness, for pitching a starting point, or for making a wild guess and having an insecure foundation.
    You would hope that a CFO would be educated enough to know this, or even to be able to work it out from the words in the metaphor. However, it appears not, as it’s used extensively in the media to mean a holding position or some kind of immovable point or backstop position: the opposite of what the metaphor means.
    Reminds me of “misnomer” a few years ago, when people were misusing that word instead of “misconception”.
    But back on topic: Qantas is gradually setting itself up to offshore and sell the money-making bits, so that the only option will be for the government to step in and save the expensive bits to keep it Australian-owned. Taxpayers lose, investors win.

  • Garry

    says:

    Mr Evans is either gullible, dishonest or just incompetemt. Whatever the reason he and the rest of the ‘amazing team’ must go. Jetstar is the problem- the tapeworm that grows until it kills the host.
    To claim Jetstar having been profitable for every year since inception is delusional; no airline has ever achieved that and the initial business plan for Jetstar did not predict that. If indeed Jetstar has claimed a profit this must be ratified against the losses in Qantas mainline. Claims that Qantas does not support or subsidise Jetstar are misleading. If indeed Jetstar was a standalone business this would itself demonstrate a bad business model by creating massive duplications within the Qantas group. It therefore follows that to avoid duplication Qantas should and must be helping Jetstar in many areas with the costs lost in accounting black magic and spin.
    As for passengers benefiting from the two brand strategy I can only say that Jetstar is the best thing that ever happened to Virgin. I meet a vast number of travelers and there is a recurring theme. Qantas replaces its services with the trashy Jetstar brand, passengers continue to use Jetstar until they suffer the inevitable service failure (usually about their third flight) at which time they shift to Virgin permanently.
    Mr Evans and the board do not see the truth or perhaps they do but remain in a state of in denial. Either way they are unfit to manage and must be replaced.

  • Paul

    says:

    Gareth Evens is good at putting spin on Jetstar. It maybe truthful that Jetstar Australia has made a (modest) profit every year, albeit with much free support at QANTAS expense, but it’s Asian entities have cost the group plenty with no profit to show for the hundreds of millions that have been invested in them. Who has paid for it all. Not Jetstar Australia I’d bet.

  • Glen CBR

    says:

    What good is “65% of market share” (which seems to translate to “65% of passengers”) if QF are making zero% profit? Qantas management/board seems to need acollective “enema” – thank goodness they have good staff, at least until they sack them all. Don’t waste time and resources reviewing staffing or engineering or even routes, just REVIEW and CULL the management and give us back the very successful pre-Dixon Qantas.

  • Michael

    says:

    Maybe it’s time the CEO and CFO were paid the same as their equivalents in Asia who are running bigger more successful airlines (China Southern) and getting paid a fraction of what these ineffective execs are getting……..then at least we would know they were serious about the welfare of the airline.

  • John

    says:

    Qantas complains about the “record” oil prices. It fails to mention the cost recovery attributed to the fuel surcharge charged to customers and how much thus contributes to their bottom line.

  • aggi

    says:

    As is stated Mr Webber some time ago”, He had recommended that Qantas “significantly shrink” its regional services. They have gone further than just that. No longer can you fly in a Qantas plane’ for instance Perth to Europe. Emirates have that privilege. Flying from Melbourne or Sydney the second leg of their journey from Dubai into Europe is Emirates.
    This is business decision, most I speak with that is not what they want, and see this as the edge of the wedge. Emirates is not Australian, could be the trouble having a non-Australian at the helm. Akin going into a Dublin bar asking for a Guinness and get Fosters?

  • J Priest

    says:

    No point making detailed arguments about where Qantas is now compared to what it was before. Just look at its figures, including how its share is doing on the stock exchange since the CEO came on. The current Board, CEO and entire top management are collectively responsible for Qantas current parlous state. The factors, such as oil price hike and increased competition, are the same faced by other airlines. Our iconic “national” airline has been thrashed by the current mob. The latest rationalisation is an example of head-in-the sand management who think they know what Qantas is about. Hey, look at your figures and your stats.

  • P1

    says:

    The unions have been screwing Qantas for years . the fact that they have not replaced any planes and their fleet is ancient the sooner some one takes it over the better for all and that includes Jet Star who are so anal about luggage policy’s i will not fly with them. If you look at other airlines flying out Australia they are are all better options fly with I do a lot travelling and Qantas would be my last choice as their flight services are bad they would not hold a candle to Emirates in flight services, best shut the door on it the flying kangaroo is over.

  • Radar

    says:

    Qantas does not appear to want to protect any ‘line in the sand’ for its international market.

  • D Mercer

    says:

    Qantas has been compromised by extremely incompetent and excessively paid directors and senior executives who seem more interested in lining their pockets rather than operating a successful airline brand that is iconic and if PROPERLY managed would have the total support of ALL Australians. My future travel will be with Virgin as I am totally fed up with the garbage that Qantas throw up. They charge a fuel levy and carbon tax offsets higher than other airlines which would have the potential to offset the fluctuations in fuel prices – no one complains about that cost. A fee for using credit card when buying tickets is a 6.5% slug over and above the credit agency charges – and so it goes on. JETSTAR!!!!!!!!!!!!!!! forget it!!!!!!!!!!!!!!!! the airline is an embarrassment and I have only had the experience on 2 occasions – both out of Darwin, and that was it – rude, arrogant and so unhelpful I vowed never again. Virgin, on the other hand, young, vibrant, yes cheeky, but oh it is so nice to feel welcome and respected.
    I have been a Qantas Frequent Flyer for nearly 40 years but it means diddly squat – whereas with Virgin I am respected and thanked for using their services………any wonder Qantas is a disaster waiting to happen! Tie the shareholders took matters into their hands and appointed people who are committed to returning Qantas to the true icon of the past. And I do not live in the past!

  • Patrick Kilby

    says:

    Peter on your point “Armchair experts have not governed the demise of Qantas”; I think Mr Webber might be the exception here (as he seemed to have strong ideas while on staff as what to do with QANTASLINK); an as for P1 “the fact that they have not replaced any planes and their fleet is ancient”. Apart from Canberra with old 734s (now being replaced); and 767s (now being replaced), all I see is A380s, A330s, and new 738s. I think the average age is the lowest it has been; so not sure where/what the evidence is.

  • Watto

    says:

    All I can say is thank goodness we are well serviced over here in the west by other carriers as far as International travel goes. As Radar said they no longer seem interested in their share of the International market and now all we get is one dedicated QF service to Singapore once a day. Singapore Airlines offer 3 a day(and a hell of a lot better service). Then we still have Thai, Cathay, Emirates (3 times daily), Etihad, Qatar, Malaysian, Air New Zealand offering full service flights before we mention the budget carriers. Good decision QANTAS if you want WA people to continue supporting the Airline – Not!!!!

  • James from Sydney

    says:

    It’s funny how after Gareth Evans talked about armchair experts that there seems to be so many of them submitting comments on this article. Will we ever learn?

  • NeilP

    says:

    You all seem to be ignoring a significant point. QF international is where it is because, for many years, people have chosen to fly with other carriers. It is a self serving situation. Less pax, reduced flights. Reduced flights, less demand. Eventual cancellation. You only have yourselves to blame for the state of choice that we have now. Blaming the board for this is pointless and time wasting.

    In any business that has multiple divisions, it is quite common for cross support. Qantas is no different when it comes to Jetstar.

    If you really want to support Qantas, then next time you travel overseas, use them instead of saving $15 flying SIA.

  • Fergo

    says:

    People vote with their hip pockets. If there’s a cheaper flight they’ll take it. That’s why we have low-cost carriers. With LCCs you get what you pay for, and in the case of Jet Star that’s not very much at all (and sometimes not even an aeroplane!). Long haul is slightly different from domestic, especially for regular travellers. Paying a bit more for decent leg room and service makes good sense; it only takes one horror long-haul flight in a cramped economy seat to drive the lesson home (almost literally!). I flew Australia-Washington DC return late last year and had a great flight both ways in Qantas Premium Economy – can’t fault it and I’d do that again; it was no better or worse than Cathay Pacific’s Premium Economy product and service. I’ll be flying Qantas to Singapore and back in a few days time, this time in economy class (company rules…): I’ll find out then whether or not Qantas is charging full-service fares for an LCC product down the back. My recent experience of QF economy in long-haul has been OK, but I notice that Singapore offers wider seats with greater leg room at a slightly lower price. If Qantas wants to survive, it needs to retain both the money and the affection of its paying customers (regardless of the dollar exchange rate), and therefore needs to compete on its long-haul routes with the full-service carriers (price, space and service), or just give the game away entirely and hand all of its routes over to Jet Star. That seems to be the issue that Qantas’s leadership is grappling with – are they a full-service carrier or an LCC? You can’t be both.

  • John

    says:

    let’s face it QF is stuffed. In a year or 2, all it will be flying is BNE-SYD-MEL-CBR-PER & nothing else, as everything else will either be Jetstar or codeshared.

    The unions have killed QF. You can’t compete when everyone at QF paid so much for doing so little.

    JQ doesn’t fly peak hour flights in golden triangle. Same with TT now.

  • David

    says:

    QANTAS needs a new CEO,CFO and a new board. Also a new fleet, an improved product. Stop blaming the staff. QANTAS is a good product in need of vigorous leadership.

  • Ben

    says:

    Ansett had nearly 40% of the market… Right up until it collapsed.

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