OzJet, will they be a success?

[whogivesa????]

Both the May issue of Australian Aviation and Aircraft and Aerospace contained articles on OzJet. The article in Australian Aviation seemed very positive towards the airline and their formula ie 15 minute check-in etc. However Aircraft and Aerospace were totally the opposite. They list numerous airlines that have tried a similar formula overseas and only one has worked (Midwest Airlines) and apparently they are on the verge of bankruptcy. The article in Australian Aviation quotes a break-even load factor “south of 50” per cent, can that really be achieved?

There appears to be a lot of question marks around certain aspects of the airline, such as the reliability of the B737-200’s and their frequency (or lack of). The business passenger wants a flight between the capitol cities at least every hour and preferably every half hour, can OzJet provide that?
Have they secured terminal space in Sydney, Canberra, Adelaide and Brisbane, including space for their business style lounges? Last time I looked at Sydney, T2 was full (look at what just happened to REX) and in Brisbane the centre figure is now used by Jetstar.

Will some of the smaller corporations be attracted to OzJet or will they stick to Qantas and Virgin Blue?
They also plan to fly between Adelaide and Port Lincoln, could their formula work at other regional destinations such as Wagga, Tamworth, Coffs etc, where passenger normally pay $150-$200 each way?

So over to the PPRUNE expects, do you think they will be successful?

[ROCKSTEADY]

Ozjet have taken a big gamble. I think it could go either way real quick. If it doesnt make a profit in the first year I think it wont work the way they planned and they will have to try a different strategy. I bet all there planning has minimized the risk should it go 'south' unexpectedly.

I would like to see Ozjet take advantage of having 'older planes', by going retro all the way...Back to the 70's/80's. For e.g. cabin crew uniforms, paint schemes etc. Something which is imaginative and nostalgic. This has worked very well for the likes of Pionair, and will at least take some of the heat of from the media slamming these 30 year old planes.

My thoughts anyway. Maybe i'll start my own airline and join in on the fun:ok:

[fruitbatflyer]

The big guys QF and DJ could pull a 'dirty tricks' campaign to make their life difficult. CASA could give them a hard time with the old airplanes. The investors could get cold feet if it doesnt start on time. The business community might not see a bit of healthy enterprise as deserving of their support. These are the unknowns.
But, they seem to have a good team and a scrapper for a boss in Paul Stoddard. From all accounts he is a success story in his own right. He knows a bit about turning a buck with older machinery and is reputed to be real fussy about engineering. He has obviously already sunk a goodly amount of his own cash into this thing. So, are any of us here at this gossip site smarter than him? I reckon not. If we were, we would be richer.
Just because it did not work elsewhere probably means nothing in a local context as our business market is definitely under serviced since Ansett went down the toilet and QF dropped their service standards in the low cost war.
As for the definitely knowns - the 737 Guppy seems to be their choice to get it going, mainly because they already own them. This thing is about as good as any Boeing ever got before Airbus got the drop on them. The CFM 56 engine in the later 737 series is a very expensive thing to overhaul. In fact you can buy a good Guppy complete with heaps of engine time for less than the price of two CFM 56 overhauls. Guppy has simple systems, goes well even if it does guzzle fuel and lots of spares are available from the desert in Arizona. So if the engineering is done right why should it be unreliable? Plenty of them still flying in hostile places like Alaska, so they can't be unsafe or they would have crashed or been banned by now. And ya gotta love that crackle from the JT8D. None of that pussy whanging fan noise and it doesn't catch as many birds because it is smaller. When it does catch them it eats them a whole lot better too.

[Laikim Liklik Susu]

Now there was a refreshing change for "Australian Aviation" NOT to put an anti spin on something that is NOT Qantas. Wonders seemingly do never cease - maybe the passing of the old editorial guard has been a good thing for AA?

[HGW]

T2 in Sydney is technically not full. 6 gates are leased by Jetstar and 6 by Virgin Blue leaving 6 as common user. Rex have given up their lounge between gate 35 and 37 and the Blue Room may be available soon. For Sydney, there could be enough room for all. Melbourne has room with common user gates as does Brisbane on the satellite pier. Lounges are easy to build.

[Highbypasss]

Yes.

..............................................H.:cool:

[TIMMEEEE]

Fruitbat Flyer.

Yes, the CFM 56 may be an expensive engine to overhaul but then again its probably the amongst the most reliable and cost effective engines in the world.
QF/AN and others have had the engines on the wing for excess of over 25,000 flying in some cases without a removal.

I loved flying the old JT8's, but they require alot more maintenance overall, are alot more finicky (especially the combustion chambers) and not nearly as reliable or efficient.

Airlines such as Qantas, Southwest and Virgin Blue have done extensive research and guess which engine comes out ahead?

Also, are Ozjet considering using BAe146's ?
For their sake I hope they pay the engineers alot of money for the time required to maintain those ALF502's - they really do need a heap of TLC compared with other engines.

[Magoodotcom]

"Now there was a refreshing change for "Australian Aviation" NOT to put an anti spin on something that is NOT Qantas. Wonders seemingly do never cease - maybe the passing of the old editorial guard has been a good thing for AA?"

LLS - care to elaborate?:hmm:

[rescue 1]

Like anybody making an investment (small or large) in a business activity, I hope they do well; good for them in taking the risk to live there dream.

Good luck OzJet!

[pullock]

I for one hope that they do well.

With a unique product combining customer service and quality they are filling a niche that the sucmbag carriers have ignored.

Im happy to pay for my comfort and will patronise any airline who maintains my comfort and convenience as a priority.

[Borneo Wild Man]

Maybe they'll end up like his two Minardi cars and not make it off the grid!!!!!!!!!!!!!!

[leading edge]

I may defect to Ozjet..............

As a long standing and relatively high spending QF customer,
I object to the reduction of service caused by transferring routes to Jetstar.

I have recently "suffered" a flight from HTI to MEL on Jetstar because QF do not operate the route. I was on a QF ticket. Horror when I saw the words "operated by Jetstar" I paid a QF ticket price not a cheap Jetstar price.

Stale sandwiches which were obviously loaded at MEL on the MEL HTI sector being offered for sale at silly prices (I don't mind paying for it if its fresh) and spewing kids, uncomfortable seats and FA's more interested in preening themselves than doing any work.

OzJet cannot come soon enough for me. I am not precious, I just want what I pay for. If I buy QF, I want QF and I don't want to be "dumped' onto Jetstar.

Once OzJet starts, I will do the "dumping" and it will be QF that gets dumped.

Rant over, sorry.

[Chris Higgins]

Leading Edge.

The trouble with your announcement is that as soon as the entrant is announced, QF will reallocate their resources, then you'll go back, and they know it!

[Legal_Counsel]

I totally agree Chris Higgins, Leading Edge though has a right to vote with his/her feet and that is not something I would criticise.

The fact is nothing really has changed as far as seating and service is concerned although we tend to believe it has either by way of these forums or by press reports. What has significantly changed is mainly around the way we are treated as customers before we board and how we have now a lack of choice in seat space (e.g. you used to be able to buy ugrades remember?)

I am talking about the introduction of non-refundable fares, delays because the aircraft are operating to tighter schedules, increased anxiety because of internet advertising at the point of sale, tv, radio and billboards, to name a few. All these things have delivered the public with low cost benefits but also with increased stress levels. However, the seat spacing is basically the same in economy.

I have always said that the nature of the beast is such that we will complain publicly because of an incident with service on a Jetstar flight but a hair on a piece of pizza which might cause serious harm is rarely reported by us in the same way.

My view is that you try to match the service you really need for the day. You flew Hamilton to Melbourne, about a 3 hours flight. I can tell you from my research at Cranfield UK that the break point is 2 Hrs 15 minutes. Beyond this you would need to be ergonomically well adjusted to the seating. What I am saying is that the airline has not adjusted its seating to take this into account so you really do have a right to complain.

An Ozjet aircraft on that sector would give you that comfort and it would cost Ozjet about $110 per seat in direct operating costs (fuel/crew/maint/nav charges/land fees). This cost typical is only 50% of the actual costs once airline overhead is added. So could be as high as $220.

Even so Jetstar might charge $163 + GST which is below operating cost and the fully flexible fare $454 + GST but it couldn't afford to sell all the seats at that lower price. At the most maybe 25%.

Based on my research, the current average fare in Australia is $210 + GST (revenue/passengers carried). This would be more realisable on a 2 hr trip. For a 125 seat Boeing 717.

Let me get a bit mathematical here:

If you look at a two tier Jetstar fare structure, and take the load factor to be 75%, the formula is

a 163 + b 454 = (125 seats x $210/seat ave/75%) = 35,000
a + b = 125x75% = 94 passengers

so from the second equation

a 163 + b 163 = 15,322

subtracting this from the first equation gives

0 + b 291 = 19,678 giving a value of

b = 68 passengers and

a = 25 passengers.

ChecK === > 25 x 163 + 68 x 454 = 4,075 + 30,872 = 34,947 OK
and 25 + 68 = 93 OK

Some rounding error to make passenger number a whole number.

Now this means that Ozjet will compete against the 68 passengers on this flight who will pay $454 per seat. This suggests that Ozjet will try to take anywhere between 44% and 88% of Jetstar's fully flexible market (Avalon excluded) and that seems incomprehensible. If it were lucky to get 10% that would still only be 7 passengers. I cannot see it personally, so Leading Edge you might be better directing your complaint to Qantas.

Of course, a new entrant could challenge this whole system by introducing a product like Delta have. Hopefully that will happen and perhaps return some sanity to personal space.

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