Treacherous Aussie Companies

[Jerry_Atrick]

Th QANTAS (or iIMHO, QANTARSE) shipping 840 jobs off to India (and hiding the fact there was an AI element) seems to hve created a bit of a backlash. But this is not the first time they have done it and won't be the last. In fact, the earliest I know of was in the mid 90s with Telstra offshoring a lot of its information technology jobs, too. 

 

So I asked chat to generate me a table of private and publicly listed Australian companies that have off-shored jobs from Australia. Its context response is:

"I’ll consolidate this into one table and distinguish four measures: Australian roles transferred, offshore staff hired to support Australian operations, proposed transfers, and jobs brought back onshore. I’ll exclude global headcounts unless there is evidence they serve Australian operations."

 

Here is the table:

 

So offshoring not necessarily that bad, but look at the second table - People they outright hire overseas to support Aussie operations. .which means rather than create the job here, create it somewhere else. 

 

Also, note that there are a couple of offshoring initiatives I know of that are missing, so this is an understatement. Consider there are no resource/mining companies in that mix. And the QANTAS maintenance outsourcing.. So, I would suggest the numbers are a lot higher than the above and a decent more number of companies 

 

Also consider that there have been foreign takeovers of Aussie companies that may have shipped jobs O/S before the takeover but certainly did afterwards. And this does not include foreign companies.. e,g, IBM and the like, which no doubt take work in Australia (e.g. build  government department a bespoke system) and then ship the work to a low cost destination. I am not saying IBM have done this... it is hypothetical, but it is a good way for the government to get the benefit of cheaper overseas resources without directly offshoring its operations. 

 

So, I get the backlash against QANTAS. But, there is a lot more doing and have done so for a long time, And I bet QANTAS are betting, like the backlash when they exported maintenance jobs overseas, it will all die down and because they have the lion's share of the capacity in Australia (airport slots/gates), it will blow over and not materially impact the bottom line And, no other copany on the above list seems to have suffered as a result of that they have done..

 

 

[facthunter]

They don't all run around pretending to be the Spirit of Australia. Nev

[facthunter]

Qantas has been a very privileged and protected Airline many times during it's long History.  Also some questionable management. Nev.

[Jerry_Atrick]

18 hours ago, facthunter said:

They don't all run around pretending to be the Spirit of Australia. Nev

Well, no but aoart from say the Commonwealth Bank and Telstra - most don't have their roots in privatisation of such recognisable brands. 

 

But almst all excet the consultancies have a strong claim to being Australian birn and bred and in a spirit of being Australian that is pivotal to their emotional marketing. Most aso market heavily in their contribution to Australian society. So the fact one has a catchhrase the spirit of Australia does not mean that they ar the only ones trying to market the same message in differnt ways. 

18 hours ago, facthunter said:

Qantas has been a very privileged and protected Airline many times during it's long History.  Also some questionable management. Nev.

Absolutely. All pollies should not be allowed to join the Chariman's club based on a conflict of interest. Even in the  allegedly more corrupt UK, those sort of pers are against Erskine's rules of parliament (the closest thing to a written constitution the UK has). Then decisions such as not allowing QATAR Arlines to fly to Australia shortly after COVID lockdowns were dropped would have less of an air of biased protection, 

 

Of course, the biggest protection is no government nor the ACCC are going to force the airport operators to surrender a portion of QANTAS slots and gates to other airlines to brig in true competition, Allwe have now is, in reality, a two airline system we always had, but with companies making profits. But, I accept that the pricing has improve significantly for the consumer. 

 

But this got me thinking. Is this short term bonuses to the execs that the journos are all writing about? I am sure part of it is that.. but I am also sure there is a longer term plan. 

 

QANTAS is a publicly listed airline. In order for it to continue to provide a return to its shareholders, it has to provide growth. One of the problems QANTAS has is it is generally an expensive airline. That is OK in Australia for two reasons. Firstly, the cost of doing business in Australia makes QANTAS competitive to Virgin Aus or Blue or whatever it is called today. The brand loyalty and sheer capacity over its competitor makes it formidable in Australia even if it costs a bit more.. That brand loyality is really strong in Australia. 

 

But its route model is one that is based around flying people domestically and flying people between the rest of the world and Australia. That means the market is somewhat capped. An to be honest, QANTAS is usually far more expensive than the other airlines getting you from the rest of the word to Australia. In this trip and the last, the cheapest non-code shared trip was double the price of QATAR last time and Singapore this time. Double! Even before I shredded brand loyalty thanks to the move of maintenance overseas, when I went to QANTAS first, I wouldn't take that much of a hit. I could have got  code share flying some airline I wouldn't normally to the middle east and then QANTAS from there, I think.. 

 

There is no doubt a bit of profiteering and yes, Joyce gutted the company, which was driven largely by short termism. However, the only way I can see QANTAS growing in anything more than too much CPI once the short term cost reductions are made is to grow its international network. That is difficult enough due to capacity constraints globally, but impossible with a high cost base that has to make a profit. 

 

For example the last time I flew from London to San Francisco was with JAL. That's right, a Japanese airline. Their model is (or was) routes all over the world. Unless I was doing  multi-city, no one is going to take o flight of the route to get from Tokyo to San Francisco and back. They may integrate it into their trunk routes, but it is designed to be a service from London to the USA. In order to improve growth in the future, QANTAS execs may be thinking they need to expand their routes to attract pax not intending to visit Australia. As these people are likely not Australian, they have no brand loyalty (generally - I do know a couple of yanks that will only fly QANTAS when the route supports it - thanks to Rainman). 

 

So, in order for Australia to compete on the big stage, it has to lower costs to it can price v quality compete The obvious is to move back office ops to a cheaper location and automate as much as possible..

 

That is my alternate theory.

 

 

[facthunter]

Operating out of the Middle East DID give operators an advantage Down here WE are at the end of the Line. There were Problems before Joyce. Joyce had to contend with COVID and that was a hard time for Airlines. Nev