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MH370: Captain planned disapperance suggests new evidence

The New York magazine has obtained a confidential document from the Malaysian police investigation into the disappearance of MH370 that shows that the captain, Zaharie Ahmad Shah, conducted a simulated flight into the remote southern Indian Ocean just one month before the Boeing 777 vanished in almost identical circumstances.

According to the story by noted author Jeff Wise, Malaysia withheld this critical information from the public and he says this is the “the strongest evidence yet that Zaharie made off with the plane in a premeditated act of mass murder-suicide.”

The document says Mr Wise “presents the findings of the Malaysian police’s investigation into Zaharie. It reveals that after the plane disappeared in March of 2014, Malaysia turned over to the FBI hard drives that Zaharie used to record sessions on an elaborate home-built flight simulator. The FBI was able to recover six deleted data points that had been stored by the Microsoft Flight Simulator X program in the weeks before MH370 disappeared, according to the document. Each point records the airplane’s altitude, speed, direction of flight, and other key parameters at a given moment.”

The document reads, in part:

“Based on the Forensics Analysis conducted on the 5 HDDs obtained from the Flight Simulator from MH370 Pilot’s house, we found a flight path, that lead to the Southern Indian Ocean, among the numerous other flight paths charted on the Flight Simulator that could be of interest.”

Mr Wise says that “search officials believe MH370 followed a similar route, based on signals the plane transmitted to a satellite after ceasing communications and turning off course. However the actual and the simulated flights were not identical, though, with the simulated endpoint some 900 miles from the remote patch of southern ocean area where officials believe the plane went down.”

Mr Wise adds that “rumours have long circulated that the FBI had discovered such evidence, but Malaysian officials made no mention of the find in the otherwise detailed report into the investigation, “Factual Information,” that was released on the first anniversary of the disappearance.”

However according to Malaymail Online the Malaysian Inspector-General of Police Tan Sri Khalid Abu Bakar said police had never handed over information to any quarters in New York.

“We have never submitted such a report to any authority abroad including the FBI. This report is not true,” he told the website.


Malaysia Airlines aircraft new twist

In yet another twist Malaysia’s air force chief is denying earlier reports that military last tracked the missing Malaysia Airlines jet over the Strait of Malacca, far from where it last made contact with civilian air traffic control in the early hours of Saturday March 8th. 

Reports stated the Malaysian military had tracked the Boeing 777 with primary radar instead of the secondary radar that commercial Air Traffic Control (ATC) uses which requires the planes transponder signal for tracking. Using this primary radar it was alleged that flight MH370 changed course and continued to fly westwards for at least one hour after contact was lost with commercial air traffic control. This information explained why the search area was expanded to include the Straits of Malacca and the west coast of Malaysia. However in breaking news these reports have been denied by Malaysia’s air force chief Rodzali Daud. The air force chief says he did not make “any such statements” and said the newspaper’s report was “inaccurate and incorrect.”

Despite this denial, the search area and efforts continue to expand in the west and northwest towards the Andaman Sea whilst in the waters near Vietnam where the flight last had radar contact with ATC efforts are being scaled back. Deputy Transport Minister Pham Quy Tieu states “We still have plans to search with a few flights today, while other activities are suspended”.

In other breaking news, the lives of the two pilots, Captain Ahmad Shah (53) and and First Officer, Fariq Ab.Hamid (27) are now being investigated with reports of their homes being searched this morning. It was revealed last night on A Current Affair that pilot Fariq Abdul Hamid and his colleague broke Malaysia Airline rules in 2011 when they invited two passengers to join them in the cockpit for a one hour flight between Phuket and Kuala Lumpur. Photographs show the pilots smoking and taking pictures with the girls.

It has now been four days since the plane disappeared and whilst some 25 aircraft and 45 ships are scouring the ocean for signs of wreckage still nothing has been found and questions remain unanswered. Experts say that given the absence of any wreckage in the vicinity of the last point of contact with ATC that the aircraft’s transponder either failed or was turned off at that point and the plane has continued to fly for some time off course, where and why is yet to be answered.

The Story So Far
Flight 370 was operating from Kuala Lumpur to Beijing and was about 40 minutes into the flight and 144km northeast of Kota Bharu in Malaysia and under the control of Malaysia’s air traffic control at Subang Center when it disappeared off their radar screens at 1.20am local time.
Earlier investigators were saying that the plane had suffered a catastrophic explosion.
Investigators said that there are only a handful of scenarios that could cause such a catastrophic failure – the loss of a cargo door, a bomb, failure of the 777’s rear pressure bulkhead where the rear galleys are located or loss of a wing or tail.
The 777 that disappeared on Saturday was involved in a serious accident at Shanghai’s Pudong International Airport in August 2012.
In that incident the 777’s wing struck the tail of a China Eastern A340 with such force that it sheared off the wing tip and it was left embedded in the A340’s tail.
While a new wingtip was installed investigators are looking at the damage reports to see what other damage occurred.
It is also possibly they say that some more serious damage went undetected.
The worst single aircraft crash was the result of a faulty repair down to the rear pressure bulkhead of a Japan Airlines 747 in 1978.
The 747 was involved in a landing accident and sustained substantial damage to the rear underside of the fuselage and the rear pressure bulkhead.
The repair performed by Boeing was not completed correctly and eventually failed on August 12, 1985 ripping away the 747’s tail.
The loss of the tail and hydraulic lines left the crew helpless and the 747 crashed killing 520 of the 524 aboard.
Investigators will also be reviewing software upgrades to the 777. In August 2005 the airline had a serious upset with a 777 flying from Perth to Kuala Lumpur.
Flying at 11,500m about 30 minutes after take-off the 777’s software incorrectly measured speed and acceleration, causing it to suddenly shoot up 1000m. The pilot disengaged the autopilot and descended and landed safely back in Perth. The software was changed and upgraded on all 777s.
Lack of any sign of the 777 suggests that the search to locate the jet may many more days. The oil slick that was discovered along with some debri is apparently not related to the missing 777.
Flight MH370 departed Kuala Lumpur at 12.41 am for Beijing. The aircraft was scheduled to land at Beijing International Airport at 6.30am local Beijing time Saturday morning.
According to The Aviation Herald’s radar data the aircraft was last regularly seen at 1.22am about half way between Kuala Lumpur and Ho Chi Minh City (Vietnam) at FL350 (35,000ft) over the Gulf of Thailand about 260nm north-northeast of Kuala Lumpur and 160nm northeast of Kota Bharu 40 minutes into the flight, followed by anomalies in the radar data of the aircraft over the next minute.
Aviation Herald states that “Aviation sources in China report that radar data suggest a steep and sudden descent of the aircraft, during which the track of the aircraft changed from 024 degrees to 333 degrees.”
The flight was carrying a total number of 239 passengers and crew – comprising 227 passengers (including 2 infants), 12 crew members. The passengers were of 14 different nationalities:-China, 152 plus 1 infant; Malaysia, 38; Indonesia 12; Australia 6; France 3; US 3 plus 1 infant; New Zealand, 2; Ukraine and Canada 2 and Russia, Italy, Taiwan, Netherlands, Austria 1 each.
However it has now been confirmed that the Italian and Austrian were not on board but their passports were stolen some years ago
This flight was a code share with China Southern Airlines.
The flight was piloted by Captain Zaharie Ahmad Shah, a Malaysian aged 53. He has a total flying hours of 18,365hours. He joined Malaysia Airlines in 1981. First officer, Fariq Ab.Hamid, a Malaysian, is aged 27. He has a total flying hours of 2,763 hours. He joined Malaysia Airlines in 2007.
The 777 carries the registration 9M-MRO and was delivered in 2002 with 18,893 flying hours and 2,973 flight cycles.
See Geoffrey Thomas on the ABC 7.30 report
See Geoffrey Thomas on Channel 7 Sunrise



Jets changed the world

In the 100th year of the first commercial flight it is fascinating to look back at some of the major breakthroughs that have changed aviation for the passenger and to look at how passenger dress and cabin appointments have changed.

When the 707, DC-8 and Comet 4 jets entered service in the late 1950s, there was a scramble to get a seat with many airline’s flights running at an extraordinary – for the time – load factor of 90.8%. Typically airlines flights were only 60 per cent full as this was before computer reservations and of course the internet, which have enabled airlines to dramatically increase the loads on flights.

Passengers loved the jets. In the first five years of jet operations, Pan American’s overseas traffic doubled as the airline took delivery of more than 50 new Boeing 707s and Douglas DC-8s.

When Pan American launched its jet service its founder and President Juan Trippe said: “Mass travel by air – made possible by the jet age – may prove to be more significant to world destiny than the atomic bomb. For there can be no atom bomb potentaiily more powerful than the air tourist, charged with curiosity, enthusiasm and good will, who can roam the four corners of the world, meeting in friendship and understanding the people of other nations and races.” Mr Trippe was so right.

In 1960, for the first time, the number of passengers crossing the North Atlantic by air surpassed those on ocean liners. Pan Am was offering a return trip across the North Atlantic from only $298 – just slightly above what the one-way fare had been in 1952 – or just three weeks’ average salary.

Tourist class or economy class as it was now called, dominated air travel in the 1960s to the point where first class had been reduced to just a small section of the jet’s cabin.

And that cabin was luxurious with lounges and seating in economy class was very spacious with a seat pitch of up to 40 inches. Passengers wore the latest fashions with men in suits and women wearing pearls. Carry on was still just a hat and a book and overhead storage was just a hat rack.

Meals were spectacular affairs– even in economy. The rationale was there was no in-flight entertainment to speak of, so passengers had to be occupied.

Not only were fares plummeting, so were traveling times. Australia’s Qantas was able to slash the London-Sydney route from 48 to 27 hours, while the Sydney-San Francisco route tumbled from 27 hours to 18 hours. Interestingly, because of the enormous distances traveled by its passengers, Qantas had one of the biggest first class markets with 23 per cent of its travelers opting for the front end in the mid-1960s.

In the US in 1950, air travel accounted for just 14 per cent of travel, with bus and train accounting for 38 per cent and 48 per cent respectively. Thanks to the piston engine Douglas DC-6 and Lockheed Constellation, by 1959 when the first US jets entered service 47 per cent of travelers were in the air, while bus and train had been relegated to 24 per cent and 29 per cent.

In the 10 years to 1959, air travel leapt 250 per cent in the US. Ten years later in 1969, the number of passengers traveling by air in the US would triple – thanks to the new jets.

And in the 50 years since 1964 the world wide aircraft fleet has grown from 3,137 to a massive 24,613 aircraft. Global passenger numbers have leapt from 412,000 a day to 8.5 million, while fares have dropped by 84 per cent. Air travel is booming!

Scoot Airline Review

Finally there is a budget carrier that has got the low cost recipe right.

Singapore Airlines low cost carrier Scoot only commenced services in June 2012 making it one of the newest carriers in the Australasian market.  The success of this airline starts with the aircraft, reconfigured ex Singapore Airlines Boeing 777-200s. To put it simply they fly only wide body or twin aisle aircraft rather than the narrow body or single aisle aircraft that most other low cost carrier use and passengers dislike. 

You won’t find 180 passengers queuing down the aisle of the aircraft for just three toilets on Scoot – oh no here you have 9 toilets for around 360 Economy passengers and there’s even space around the toilets to stand up and stretch your legs.  In addition to this there are multiple choices for seating and meals so you can choose how you want to fly and how much you want to spend.


In Economy Class, passengers have the choice of a standard economy seat, Super Seat or Stretch Seat.  In addition to this the airline also has a small child free cabin referred to as “ScootinSilence” which is something I am a huge fan of and personally think all airlines should offer. 

The standard Economy seats (clad in blue fabric) offer a comfortable 31 inch seat pitch (the distance between the back of one seat to the back of the next) and generous 6 inch recline. This is the same as most full service airlines these days. The cost to select your seat is $10 return.  

For those that want extra legroom the Super Seats (clad in yellow fabric) have a 33-35 inch seat pitch. Generally the Super Seats at the back of the aircraft have the smaller seat pitch but here there are less seats per row as the fuselage narrows giving you more personal space. The cost of this on a return ticket is $66.

The next seat type is the  Stretch (S-t-r-e-t-c-h-)  seats (yellow) which also have a 35 inch seat pitch but are in the first row of each section of the cabin as well as in the emergency exit rows meaning no one can recline into your space. These seats cost an extra $152 return.  

As mentioned above Scoot also have the “ScootinSilence” cabin which has Super and Stretch seating only. This cabin is small and private with a real feeling of space and comfort.  All economy seats regardless of type are covered in soft fabric, generous 6 inch seat recline and are adequately padded for comfort.

I was lucky enough to fly in a stretch seat in the “ScootinSilence” cabin and it was worth the extra cost.  I spoke to a few passengers on the aircraft and all agreed that paying extra for the super or stretch seating was good value especially since the final price is still significantly cheaper than the alternative full service carrier. During the flight I also sat in the super and standard economy seats and they are the most comfortable seats I have encountered on a budget carrier. The airline has comfort kits referred to as “SnoozeKit” which are available on board or you can pre purchase online for SGD25. The SnoozeKit  includes an eye mask, ear plugs, blanket, socks and neck pillow.


As with any low cost carrier it pays to pre order and pay for your meal at the time of booking. This ensures you get your choice, are served first and you save a couple of dollars.  I ordered a standard combo hot meal $14 which comes with a packet of Pringles and a choice of cold drink being a can of coke or green tea. This needs to be changed as passengers should be able to have the choice of water over soft drink.  The meals are small (size of a ladies hand – order two if you get hungry) and the meal satisfaction with regards to taste really depends on what you order and your personal preference; I had one great meal and one that I really didn’t enjoy.  If you are someone who values your food I highly recommend paying  $19 for a premium meal or upgrade to one for as little as $4.50 on FlyBagEat fares.  The premium meals are as the name suggests – premium- and you get a larger meal but remember this is a “no frills” carrier and in flight meals are never going to be a strong point.

In flight Entertainment

Again it is best to pre book your in flight entertainment whether in the form of hiring an Ipad loaded with movies or pre purchasing WiFi so you can stream movies to your own device from the onboard library.  For those that choose the streaming option and have pre paid, the cabin crew come around early in the flight with your WiFi password.  Make sure you have downloaded the Gogo video player App before boarding and have your boarding pass ready to confirm who you are!  Instructions are in one of the booklets in your seat back pocket and it really is easy to use.  The choices are limited (5 movies, a few TV series plus two shows for kids) but it’s enough provided you aren’t picky with your movie choices. I expected there to be quite a bit of variety within the five movies but three of the five were science fiction. The cost to stream the movies is $13 if you pre purchase or SGD16 on board. If you pre book a rented tablet the cost will be $17 or if you hire on board SGD20.


Staff, service and cleanliness

Call me old fashioned but I think cabin crew presentation is important – I don’t think the jeans and polo shirts that some airlines allow their cabin crew to wear are appropriate nor do they give off a good image. I was glad to see the crew nicely presented on both legs of the flight. The cabin crew were friendly, efficient and took safety seriously  – there were no bags left on the floor for take-off or landing or seatbelts undone during mid flight turbulence.  The toilets were clean enough and the cabin rubbish cleared at appropriate intervals throughout the flight.  After the meal service the lights were dimmed in the child free cabin and again in the rest of the cabin once all the passengers had been served.  At one stage I did press my call bell for the cabin crew but after waiting 20 minutes still no one came. I turned it off and pressed it again but nothing. This was frustrating but perhaps it was the logistics of being at the front of the cabin and staff coming from the back and seeing other call bells first or perhaps my call button was not registering.  

Another important thing to mention is the company’s call centre.  My travelling companion had to use this and was amazed that the call was answered within 5 minutes, she got to speak to a real person and the problem was immediately solved. This is important and one of the things that so many airlines not just budget airlines do badly.

Check in staff at both Perth and Singapore was extremely friendly and helpful.

Overall Opinion

Overall I was extremely impressed with the in flight product, incredible value for money and twin aisle aircraft.  A fellow passenger stated it was as good as Singapore Airlines but I had to disagree as its nothing like Singapore Airlines, it is however arguably the best budget carrier in Australasia and it is without a doubt amongst the top 10 best budget carriers in the world.  Scoot are competing on routes that many other low cost carriers serve but none offer the value for money and comfort that Scoot does. 

-See more passenger reviews-

Tips For Travellers

  • Keep your boarding pass on you as you need it to receive anything you have pre-booked such as meals and in flight entertainment
  • Stick to the baggage allowance – a standard “FlyBag” ticket only includes 15kgs of checked baggage – if you need more then upgrade to 20+ kilos at the time of booking
  • The Super and Stretch seats are popular and very good value for money  – don’t wait till a week before your flight to get one of these seats buy it at the time of booking otherwise you might miss out
  • Take an empty water bottle and fill it up at the airport boarding lounges on board
  • Changes to meals must be done 72 hours before the flight and ancillary items such as in flight entertainment, baggage and snooze kits 42 hours prior
  • This airline has so many sales so “like” their facebook page or join their mailing list to be among the first to know

Government reports on pilot shortage

There’s a building pilot shortage among regional airlines in the United States. The issue: just how significant is it? The government’s Government Accountability Office concludes in a just-released report there’s “mixed evidence regarding the extent of [the] shortage.”

This much is sure: according to the report, “Pilot schools that GAO interviewed reported fewer students entering their programs resulting from concerns over the high cost of education and low entry-level pay at the regional airlines.”

The report says it can cost more than US$100,000 to get a degree from a four-year aviation program. According to the U.S. Air Line Pilots Association the average staring pay for regional airlines first officers is US$22,400. In contrast, the average pay for an assistant manager at fast-food McDonalds is $28,622 according to

There’s a dramatic disconnect here, one underscored in red when you consider the assistant manager of the fast-food restaurant isn’t responsible for the lives of a cabin full of passengers hurtling through the heavens at 35,000 feet.

How’s this potentially affect you? GAO says, “Some mainline airlines (from those majors often recruit pilots) expressed concerns that entry-level hiring problems could affect their regional airline partners’ ability to provide service to some locations.” In recent years, legacy airlines like American, Delta and United have contracted with regionals to take over an ever-increasing share of the flying, even on some routes formerly the province of large jets.

The good news is those new first officers in the right-hand seat of regional aircraft now have to have at least 1,500 hours as a pilot. It used to be 250. The rule was changed in the wake of the infamous crash of Colgan Air (Continental Connection) Flight 3407 back in 2009. The accident was the result of pilot error. Fifty people died.

GAO indicates regional airlines are responding to the pilot shortage by partnering with aviation schools. Some regionals have even “offered new first officers signing bonuses or tuition reimbursements to recruit new pilots” says the report

It might take precisely that sort of approach to avoid what could be a nasty surprise looming just over the horizon: plenty of regional airline passengers, but not enough pilots to fly them.

See comprehensive report here;

Pilot shortage looms

Over the past few years, analysts and airline officials in the US have been predicting a shortage of qualified pilots. With the looming threat, airlines considered how to meet the challenges at the same time government officials were changing the rules to require more flight hours for prospective pilots.

“I think everything that has happened has been predicted,” said Regional Airline Association President Roger Cohen. “It just happened faster. The cold reality of it is obviously worse than the prediction.”

In January, the industry came face to face with the first real manifestation of those prognostications when a small regional carrier, Great Lakes Airlines operating out of Wyoming announced it would suspend service to a half dozen small cities because it didn’t have enough pilots.

“Due to the unintended consequences of the new congressionally mandated pilot regulatory requirements, the Company feels it is in the best interest of our customers, communities and other employees to suspend service from these stations until we are able to rebuild our staff of pilots in order to provide reliable service,” said Great Lakes CEO Charles Howell in a statement.

The shortage is attributed in large part to a recent change in rules from the US Federal Aviation Administration requiring 1500 hours and an ATP license for prospective commercial pilots. In the past, many regional carriers hired candidates with fewer hours offering the new pilots the chance to build up their hours and experience with a shot at moving on to higher pay as a pilot with a legacy carrier. The new rules went into effect in August 2013.

US Aviation officials sought to tighten the standards and the training following a tragic crash of a Colgan Air Q400 in February 2009 that killed 49 people. The accident investigation found that the two pilots had not been adequately trained to respond to a stall and had violated sterile cockpit rule which limits conversation specifically to aircraft function. The incident sparked a flurry of self-examination on the part of airlines as well as government regulatory agencies.

Cohen said airline representatives had worked with the FAA to ease some of the restrictions, such as an option to substitute an accredited university program for a portion of the required hours.

The new 1500 hour requirement effectively “moved the goal posts” for students currently enrolled in a university program who planned to pursue a carrier in aviation upon graduation, said Cohen.

“We’ve lost thousands of prospective pilots and turned off thousands going forward,” said Cohen. “There are thousands of highly trained qualified professional pilots coming out of universities that aren’t even able to interview with an airline.”

In anticipation of the shortage, Cohen said regional airlines have taken aggressive steps to resolve the issue such as offering signing bonuses, raising starting salaries and establishing bridge programs with universities. But it hasn’t been enough.

The high cost of gaining flight hours and certification coupled with low starting salaries has not helped attract good candidates. Young people are not enamored enough with the idea of flying to sink deeply into debt in exchange for living a dream of flight.
United Airlines announced major cuts to its Cleveland hub in February, owing in part to its regional partners feeling the pinch of the new government regulations.

“These new regulations have caused mainline airlines to hire regional pilots, while simultaneously significantly reducing the pool of new pilots from which regional pilots can hire,” United officials wrote in a letter to employees announcing the cuts. “Although this is an industry issue, it directly affects us and requires us to reduce our regional partner flying, as several of our regional partners are beginning to have difficulty flying their schedule due to reduce new pilot availability.”

The carrier said the Cleveland hub had not been profitable generating “tens of millions of dollars in annual losses” in recent years. Some 460 jobs will be lost at the hub.

Republic Airways, a regional partner with United at its Cleveland hub, announced this week is would be grounding 27 ERJs this year because the company is having trouble hiring enough pilots.

In a filing with the US Securities and Exchange Commission, Republic stated it was taking the action because of a “significant reduction” in the number of qualified pilots who meet the 1500 hour rule. The reduction in flying will also affect Republic’s partner, American Airlines.
“The applicant flow problems continue to persist in the new year and it has become all too clear that we can no longer consider extending all our small jet contract,” Republic President and CEO Bryan Bedford stated in a letter to employees.

ALPA tries to debunk shortage

The handwringing over whether there is a pilot shortage was refuted in early February by ALPA (Air Line Pilots Assn. International) which called it a “myth.” ALPA represents nearly 50,000 pilots at 31 airlines in the US and Canada.

“There may be a shortage of qualified pilots who are willing to fly for US airlines because of the industry’s recent history of instability, poor pay and benefits,” said ALPA president Lee Moak in a statement. Moak said there are thousands of qualified pilots on furlough or working overseas who would gladly return to US cockpits if conditions were favorable.

He cited the recent closure or US regional carrier Comair, which furloughed 800 experienced pilots who are now looking for jobs in addition to 1,154 ALPA members currently on furlough.

In the US average starting salary for regional airline is $21,285 plus benefit. Starting co-pilots at Delta and United earn $61,000 plus benefits, according to ALPA.

“The real solution to preventing any future pilot shortage is for airlines to produce consistently profitable results,” Moak Observed. “Congress can support this goal by implementing pro-growth aviation policies that reduce the tax burden on airlines and give industry an opportunity to compete and prevail in the international marketplace.”

Republic’s Bedford agreed in part but pointed out that some 18,000 US pilots will be reaching the mandatory retirement age of 65 over the next decade.

“There are ample pilots for today’s needs, but these young people, who have graduated with aeronautical aviation degrees no longer qualify for employment,” Bedford told employees. “And there are not enough ways for them to get the hourly time the new law requires.”
Cohen and airline officials expect there will continue to be pilot shortages and discontinuation of service to smaller communities.

“We don’t need another report on what the issues are,” said Cohen, who recently announced the formation of task force of regional airline CEOs to come up with ways to maintain service. “We are focused on trying to find some short term solutions. Each day sees another headline about reduced service and those are going to continue.”


Who Shot The Roo?

On Thursday February 27th the blame game erupted within seconds of Qantas posting its sickening result of a A$235 million loss on the Australian Securities Exchange.
Most had their crosshairs fixed on the airline’s embattled chief executive Alan Joyce but the reality is that everyone at Qantas, its unions and the Government is to blame.
A degree of blame also lies with the airline’s former chief executives Geoff Dixon and the late James Strong, who ignored global market trends, bought the wrong planes and did not take on some of the unrealistic unions decades ago.
Qantas started to lose loyal passengers when Mr Strong refused to put seat-back videos into economy class in the early 1990s to match Singapore Airlines.
It would be another 10 years before Qantas finally had its international fleet similarly equipped.
Mr Strong also turned his back on premium economy in 1997 despite the fact that Australians are the world’s second tallest travellers (behind the Dutch) and fly the second longest distances (after New Zealanders).
He told The West Australian at the time that he “couldn’t make the business case”.
When the airline finally embraced premium economy in 2008, it admitted it was a “real winner”.
The blunders cost Qantas dearly, with passengers embracing companies such as Singapore Airlines, Cathay Pacific and Emirates that were first to market customer innovations.
Possibly Mr Strong’s and Mr Dixon’s biggest mistake was turning their backs on the 365-seat Boeing 777 300 — the world’s most economical and versatile plane.
It is estimated that if Qantas had bought the 777, it would have saved more than $1 billion in fuel in the past 10 years.
Added to the mix is that Qantas has accumulated a great deal of excess baggage in the past 93 years, with many of its staff contracts having salary, conditions and restrictions that date back to the 1960s.
The stark reality is, according to Oxford Economics, the average salary at Qantas is $92,000 compared with $47,000 at Emirates.
However, most staff at the coal face are paid well under that “average”.
And in the domestic space, Qantas’ costs are 17 per cent higher than Virgin Australia’s.
That is unsustainable by any measure.
Mr Joyce was bound to be unpopular delivering the medicine he did on Feb 27th but he has been held in a headlock by unions that seem to be refusing to embrace the reality of today’s aviation world. That world is the least profitable and the most rapidly changing.
Countless major airlines have gone bankrupt over the past 50 years, including pioneering icons such as Pan American and Trans World Airlines.
Every major US airline has entered Chapter 11 bankruptcy protection and restructured labour costs, with pilots for instance suffering pay cuts of 40 per cent over the past 10 years.
Qantas’ militant unions must accept the gravy train of a government-owned and protected airline of the 1980s is well and truly over.
At almost every turn they have disrupted the airline’s attempt to get its operations more competitive and to strip away inefficiencies.
The pilots’ union was telling its members that in its view “the Qantas announcement is a consequence of a long string of misguided management decisions over the past 10 years that include poor aircraft decisions, questionable foreign investment decisions, poor strategic decisions and disastrous brand management”.
The Transport Workers Union talked of strike action, putting doubt into the minds of travellers.
During 2011, the TWU and the Australian Licensed Aircraft Engineers Association conducted an aggressive campaign to disrupt the travel plans of millions of passengers in support of unrealistic wage and job security claims.
That campaign drove many loyal Qantas customers to try Virgin Australia and they liked what they saw. It is not a question of whether pilots, ground staff or engineers are worth what they are paid.
The question is will the passengers pay the price and the answer, more and more, is that they will not.
Only 17 per cent of Australians fly Qantas into and out of Australia — down from 45 per cent in 1988. Just as millions of Australians are working harder and smarter for less, so must Qantas staff.
It is time for Qantas staff, and their union leaders, to enter the departure lounge for the 21st century

See the geoffrey’s interview withLateline here

See Geoffrey’s interview on Sunrise

Qantas dive

airfares may

Qantas will shed 5000 jobs, cut routes and  ground planes after posting a record statutory loss before tax of $305 million for the six months to December 31.

The airline is pulling all levers in an effort to pull the icon flying kangaroo out of the nose dive.

It will cut routes and ground planes.

The airline is facing intense competition from overseas airlines and only commands 17 per cent of the inbound / outbound market to Australia.

Its average staff cost is $92,000 compared to Singapore Airlines at $42,000.

On the domestic front its costs are estimated to be up to 17 per cent higher than Virgin Australia which now offers a business class product.

Since Virgin Australia launched its business class in 2011 premium class airfares have plummeted by 40 per cent.

From 2001 when Ansett collapsed till 2011 Qantas enjoyed a monopoly on domestic business class.

Earlier this month Qantas chief executive Alan Joyce warned in a speech in Canberra that the cuts would be greater than those achieved by American Airlines in 2012 of 17 per cent.

In a separate announcement Qantas said it had reached agreement with Brisbane Airport Corporation (BAC) covering terminal and runway access at Brisbane Airport, which includes arrangements for the airline to dispose of its long-term lease on its terminal.

Qantas holds a 31 year lease, signed in 1987, on the northern end of the Domestic Terminal at Brisbane Airport which is due to expire on 30 December 2018.

Under the new arrangements, Qantas would retain exclusive use and operational control over much of the northern end of the terminal until the end of 2018 while securing rights to key infrastructure beyond this period.

In addition, BAC plans to make a significant investment in upgrading and improving facilities and services within the terminal, such as lounges and will assume control of the retail space of this part of the terminal.

Qantas will receive total cash proceeds of $112 million from BAC under the arrangements.

The arrangement also covers Qantas’ use of the runway system at Brisbane Airport, including current infrastructure and the new parallel runway, currently under construction.

Qantas Group Chief Executive Officer Alan Joyce said the agreement was a win-win for both parties which would have significant benefits to Queensland.

“Brisbane Airport is one of the most important airports for Qantas today and increasingly so into the future. This investment is vital to the ongoing growth of aviation in Queensland which helps drive tourism and boost the economy,” Mr Joyce said.

See the Qantas Group Strategy here 


Qantas Group Strategy

We post without chnages the Qantas Group Strategy


Key points:

• $2 billion cost reduction, including 5,000 jobs

• More than 50 aircraft to be deferred or sold

• $1 billion capital expenditure reduction

• Core investment in customer service to continue

SYDNEY, 27 February 2014: Qantas today announced detail of its $2 billion cost reduction program and capital expenditure review.

Qantas will take action to permanently reduce costs in all parts of the Qantas Group through to FY17, including fleet and network changes, productivity improvements, consolidation of business activities, new technology and procurement savings. More than 50 aircraft will be deferred or sold and the Group’s workforce will be reduced by 5,000 full-time equivalent positions by FY17.

The Qantas Group’s planned capital expenditure net of operating lease liability1 will be reduced to $800 million in both FY15 and FY16, a total reduction of $1 billion.

Qantas has reached agreement on the return of its Brisbane Airport terminal lease, together with related assets, to the airport owner at a cash value of $112 million. The broader structural review of the Qantas Group portfolio continues and no final decisions have been made on other assets.

Chief Executive Officer Alan Joyce said Qantas would do everything in its control to overcome some of the toughest market conditions it had ever faced.

Market Conditions

“It’s clear that the market Qantas operates in has changed, with structural economic shifts exacerbated by an uneven playing field in Australian aviation policy,” Mr Joyce said.

“This situation is reflected in the financial result Qantas announces today, an Underlying PBT1 loss of $252 million for the half-year. This is an unacceptable and unsustainable result. Comprehensive action is needed in response.

“Qantas’ competitors have increased capacity to Australia by 46 per cent since 2009, more than double the world average, at a time of record fuel costs and economic volatility.

“We have met these challenges head on. Over the past four years, we have been carrying out the biggest transformation since Qantas was privatised – cutting comparable unit costs1 by 19 per cent over four years, introducing new aircraft and technology on a large scale, modernising work practices and revitalising service. But this is not enough for the circumstances we now face.

1 For definitions please see ‘Qantas Group Financial Result’ media release Attachment 1 – Review of Operations.

“The Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia to be majority-owned by three foreign government-backed airlines – yet retain access to Australian bilateral flying rights.

“Late last year, these three foreign-airline shareholders invested more than $300 million in Virgin Australia at a time when, as Virgin Australia reported to the ASX on 6 February, it was losing money. That capital injection has supported continued domestic capacity growth by Virgin Australia despite its growing losses.

“The Virgin Australia Group has increased capacity into the domestic market at more than twice the rate of the Qantas Group since July 2011. As a result of these combined capacity increases, the total domestic profit pool has been shrunk from more than $700 million in FY12 to less than $100 million in 1H14.

“We have been clear with the Australian Government about the uneven playing field and the measures we believe could address it. But our focus today is on the immediate steps that Qantas must take.”

Immediate Priorities

“We must take actions that are unprecedented in scope and depth to strengthen the core of the Qantas Group business.

“To reach $2 billion in cost cuts over three years, we have to work our assets harder, become more productive, retire older aircraft, and make sure that our fleet and network are the right size. We must defer growth and cut back where we can, so that we can invest where we need to.

“We have already made tough decisions and nobody should doubt that there are more ahead.

“While the implementation and pace of delivery must change, the guiding principles of our strategy will not. Safety remains our first priority and we are committed to being the airlines of choice for customers in all our markets.

“Our long-term goal remains the transformation of the Qantas Group for profitable, sustainable growth.

“Over the next three years, we aim to secure our strong Group domestic position and maximise Qantas International’s competitiveness.

“Qantas Loyalty will continue to access new markets and revenue streams, building on its success to date.

“When it comes to Jetstar in Asia, we need to take the right decisions in accord with current market circumstances and our balance sheet. In Singapore, growth has been suspended by the Jetstar Asia Board until such time as conditions improve.

“The over-arching focus in Asia continues to be profitably bedding down existing businesses and partnerships. Jetstar has been a pioneer Australian brand across Asia and we continue to see major opportunities for it in the world’s fastest-growing aviation region.”

Commitment to Customers

“Despite the tough decisions we have to make, we will keep delivering outstanding service for our customers,” Mr Joyce said.

“Important customer investments will continue, such as the upgrade of our Airbus A330 fleet and the opening of new lounges in Hong Kong and Los Angeles, and the service that Qantas passengers

receive will not be compromised. Thanks to the skill and commitment of our people, we have earned record customer advocacy, and we plan to keep it there.”

Accelerated Qantas Transformation Program

Fleet and Network

After a detailed review of network and schedules, the Qantas Group will re-assign aircraft to better match demand, defer aircraft orders, dispose of aircraft, increase fleet utilisation and exit under-performing routes.

• Qantas Domestic will increase utilisation of narrow-body aircraft, allowing Airbus A330 aircraft in the domestic market to concentrate solely on East-West services and peak services on the Sydney-Melbourne-Brisbane triangle.

• A330-200s will be freed up to enter the Qantas International fleet as replacement aircraft, helping to accelerate the retirement of older Boeing 747 aircraft.

• All six of Qantas International’s non-reconfigured B747s will be retired ahead of schedule, by the second half of FY16. Nine reconfigured B747s with A380-standard interiors will remain.

• Qantas’ final two B737-400s have been retired this month and all B767s will be retired by the third quarter of FY15, resulting in cost and passenger benefits from fleet simplification.

• Qantas International’s eight remaining A380 orders will be deferred, with an ongoing review of delivery dates to meet potential future requirements. Schedule changes will allow maximum use of Qantas’ current 12 A380s.

• The final three of 14 Jetstar B787-8s on firm order will be deferred.

• Jetstar’s A320 order book has been restructured.

In total, more than 50 aircraft will be deferred or sold.

By FY16, the Group’s passenger fleet will have been simplified from 11 aircraft types to seven aircraft types, with an average age of eight years.

Over the next 12 months, Qantas will exit underperforming routes and make aircraft changes on certain routes to better match capacity to demand.

• Qantas International will withdraw from the Perth-Singapore route (first quarter FY15).

• Qantas’ Brisbane-Singapore and Sydney-Singapore services will be operated by A330s, replacing B747s (first quarter FY15)

• Qantas services between Melbourne and London will be re-timed in November 2014 to reduce A380 ground time in Heathrow (second quarter FY15). There are no changes to overall capacity on London flights.

• The Melbourne-London service change frees up an A380 for additional flying, and Qantas will evaluate opportunities to use the aircraft on other routes.

Workforce Changes

Over the next three years, Qantas will reduce employee numbers across the Group by the equivalent of 5,000 full-time positions, through measures including:

• Reduction of management and non-operational roles by 1,500.

• Operational positions affected by fleet and network changes.

• Restructure of line maintenance operations.

• The closure of Avalon maintenance base, as previously announced.

• Restructure of catering facilities including the closure of Adelaide catering, as previously announced.

The wage freeze for executives implemented in December 2013 will continue and will be extended to all Qantas Group employees.

The wage freeze will be:

• Ongoing for executives.

• Immediate for open EBAs.

• Proposed for other EBA-covered staff.

This is in addition to the reduction of fees paid to the Qantas board and a reduction in the take home pay of the Qantas CEO by 36 per cent this financial year.

No pay rises or bonuses will be contemplated until Qantas is profitable again on a full-year Underlying PBT basis.

Mr Joyce said these were hard but necessary decisions to protect as many Qantas jobs as possible and build a strong business for the future.

“I regret the need for these wide-ranging job losses, but we will do everything we can to make the process easier for employees who leave the business,” Mr Joyce said.

“At the end of this transformation, Qantas will remain an employer of more than 27,000 people, the vast majority based in Australia – and we will be a better and more competitive company.”

Capital Expenditure and Financial Position

The Group’s planned capital expenditure net of operating lease liability in FY14 will be $1 billion.

Planned capital investment, including movements in operating lease liabilities, will be $800 million per year in FY15 and FY16 – a total reduction of $1 billion over the two years. Qantas will maintain flexibility to make further changes if needed.

Transformation through FY17 will be funded through the reprioritisation of capital, future free cash flow as benefits from the cost reduction program begin to flow, and asset sales. Qantas continues to target positive free cash flow1 from FY15, with capital expenditure aligned to financial performance.

Qantas has total liquidity of $3 billion, comprising $2.4 billion in cash and $630 million in standby debt facilities, as at 31 December 2013.

Update on Structural Review

Qantas has reached agreement on the return of its Brisbane Airport terminal lease, together with related assets, to Brisbane Airport Corporation, with a cash value of $112 million to be recognised in the second half of FY14.

Qantas continues to work through the broader structural review of the Qantas Group portfolio launched in December 2013.

The review has identified a number of high-quality assets of significant value.

No final decisions have been made about other assets within the Group’s portfolio.

Air New Zealand soars

Air New Zealand, Airline of the Year for 2014, has announced a record interim result for the first half of the 2014 financial year.

The airline today announced normalized earnings before taxation for the half-year of NZ$180 million, an increase of 29 per cent on the previous corresponding period.  Statutory earnings before taxation were NZ$197 million, with net profit after taxation of $140 million, an increase of 40 per cent.

And the news gets better. Chairman Tony Carter says that with stable fuel prices and a traditional seasonal earnings pattern of a stronger first half, Air New Zealand expects to deliver a full year result of normalized earnings before taxation in excess of NZ$300 million.

“Air New Zealand’s Go Beyond strategy is clear.  We have a relentless focus on global sales and marketing excellence, combined with a keen eye on continuously improving our cost base while delivering a world class customer experience,” Mr Carter says.

Chief Executive Officer Christopher Luxon says the hard work of Air New Zealand’s 11,000 staff has placed the airline in a position where it is able to adapt to a changing macro-economic and competitive environment.

“As we continue through a period of strong earnings growth, we are demonstrating that we can deliver increasing returns to shareholders.  Our improved commercial results are also enabling us to invest in the customer experience, explore new markets and invest in our people and culture,” Mr Luxon says.

“The journey ahead is shaping up as incredibly exciting, particularly given the positive economic outlook in many of our key revenue markets.  We are well placed to take advantage of this, with significant fleet additions soon to arrive. We expect to deliver capacity growth of around 8 percent in the 2015 financial year as new Boeing 787-9s and 777-300s enter our fleet from the middle of this calendar year. Additionally, new Airbus A320 and ATR72-600 aircraft will be growing capacity in our Domestic network over the next year.”

Mr Luxon says the combination of a competitive cost base and economies of scale achieved through growth will be a material benefit for Air New Zealand in the coming years.

“We have worked hard on improving our cost base in an environment where we have not grown. In fact, we have reduced our capacity flown overall as we realigned our long-haul network. With new fleet additions and capacity growth, our scale grows.  Our new aircraft will be significantly more efficient than those they replace and having fewer aircraft types drives unnecessary complexity out of our operations.”

Mr Luxon says a highlight of the first six months of the 2014 financial year was the continuing strength of Air New Zealand’s alliances.

“Through our alliance partnerships we are able to offer more connections, frequencies and destinations than ever before. Alongside our 27 Star Alliance partner airlines we also have deep individual alliance relationships with Virgin Australia and Cathay Pacific and look forward to working on our new relationship with Singapore Airlines.”

Air New Zealand and Singapore Airlines recently unveiled a proposed new alliance which, subject to regulatory approval, would see the return of Air New Zealand onto the Singapore route and enable customers to access codeshare travel on Singapore Airlines’ extensive global network.

“Forming the right alliances with the right partners allows us to deliver on our strategy of profitable growth as a Pacific Rim airline.”

Mr Luxon says Air New Zealand continues to be optimistic about the future of Virgin Australia.

“Virgin Australia has a sound strategy and I look forward to helping the airline to realise its potential when I join its Board.  We are confident that over the coming years Virgin Australia can deliver consistent earnings performance.”




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