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Simplifying the Qantas dispute ?

Simplifying the Qantas dispute ?

One of Qantas’s arguments in this dispute with the pilots, engineers and TWU, is that they need to reduce the percentage of running costs devoted to staff.  This chart shows some comparisons with other airlines:

a graph with colorful lines and numbers

But it looks like staff costs are not the real concern:

The biggest concern Qantas is facing is cost of fuel. Fuel represented less than 11 percent of costs for Qantas in 2000, but that figure rose to 25 percent last year. At Emirates, fuel accounts for more than a third of total expenses.

This is where the makeup of airline fleets is critical. The A380, when it was introduced, boasted 10 percent greater fuel efficency over other large aircraft in service around at the time. According to Qantas has just nine of them out of a fleet of 140. Cathay Pacific meanwhile is consolidating its fleet around the fuel-efficient Boeing 777, which already accounts for a third of its 129 strong fleet. As oil prices rise, the fuel efficiency of the fleet will become an even more signficant cost differential.

So Joyce is up against it on two fronts: his costly staff and inefficient fleet. I wouldn’t want to be in his shoes. Well, alright, maybe for $5 million.

Scource: BNET – Australian Edition

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