Jetstar to launch Hong Kong based carrier
Join Date: Jul 2014
Location: Melbourne
Age: 37
Posts: 10
Likes: 0
Received 0 Likes
on
0 Posts
I believe Alan Joyce and his team, some five years or so back, believed the "Legacy" Airline model. aka Qantas,was dead in the water!
Hence the almost paranoid focus on growing Jetstar, while leaving QF to wither, and as pointed out in an earlier post, to even denigrate QF International!
Well a lot has changed over that time, Jetstar OS has been a disaster, Jetstar International marginal at least, and jetstar domestic makes a profit, but at the expense of Qantas Domestic, since it entered routes it was never meant to serve, eg Melbourne Sydney/Brisbane etc
LCCs have lost their gloss, and smart Legacy carriers have adapted and thrived, eg the US3, who domestically are hybrid Legacy/LCC, now that they charge for bags and food/drinks.
So it is good to see the renewed focus on growing Qantas over Jetstar!
However Qantas could well learn from Cathay Pacific/Air New Zealand who have not gone down the in house LCC path, but concentrated on the core brand.
Borghetti is not operating a small fleet of 332s to/from perth for fun, he knows the numbers from his days at Qantas, and they must stack up pretty well for him to do it!
I fail to understand why the Qantas Group, have Jetstar operating 3 A320s a day Melbourne to Perth, on a route shown to suit A332s.
Thats 531 seats from Jetstar on 3 return legs, were as Qantas could operate an A332 on 2 return legs and offer 542 seats.
I am not sure of fuel burn comparison for 6 320 flights compared to 4 A332?
But the 332 ops needs only 4 pilots per day against 6 for the 320 schedule!
The big advantage for the Qantas Group is that a double daily 332 operation, provides Qantas with an even bigger frequency advantage over Virgin Australia, to better compete for high yielding business passengers!
I have no doubt that on say a 75% Load factor, those 400 odd seats occupied on Qantas would generate more yield to the group than same number on jetstar!
Hence the almost paranoid focus on growing Jetstar, while leaving QF to wither, and as pointed out in an earlier post, to even denigrate QF International!
Well a lot has changed over that time, Jetstar OS has been a disaster, Jetstar International marginal at least, and jetstar domestic makes a profit, but at the expense of Qantas Domestic, since it entered routes it was never meant to serve, eg Melbourne Sydney/Brisbane etc
LCCs have lost their gloss, and smart Legacy carriers have adapted and thrived, eg the US3, who domestically are hybrid Legacy/LCC, now that they charge for bags and food/drinks.
So it is good to see the renewed focus on growing Qantas over Jetstar!
However Qantas could well learn from Cathay Pacific/Air New Zealand who have not gone down the in house LCC path, but concentrated on the core brand.
Borghetti is not operating a small fleet of 332s to/from perth for fun, he knows the numbers from his days at Qantas, and they must stack up pretty well for him to do it!
I fail to understand why the Qantas Group, have Jetstar operating 3 A320s a day Melbourne to Perth, on a route shown to suit A332s.
Thats 531 seats from Jetstar on 3 return legs, were as Qantas could operate an A332 on 2 return legs and offer 542 seats.
I am not sure of fuel burn comparison for 6 320 flights compared to 4 A332?
But the 332 ops needs only 4 pilots per day against 6 for the 320 schedule!
The big advantage for the Qantas Group is that a double daily 332 operation, provides Qantas with an even bigger frequency advantage over Virgin Australia, to better compete for high yielding business passengers!
I have no doubt that on say a 75% Load factor, those 400 odd seats occupied on Qantas would generate more yield to the group than same number on jetstar!
Japan
Look at the population of Japan, Jetstar, Peach, AA tried...
It's a massive market not just 40 320s worth but 100's, it's educating the local population that it's cheap to fly* compared to old times. LCC Japan are cheaper than the Shinkansen (bullet train for the belligerent). It's a growing learning market.
I'm surprised there has been no Jestar India or Jestar Indonesua yet..... :
It's a massive market not just 40 320s worth but 100's, it's educating the local population that it's cheap to fly* compared to old times. LCC Japan are cheaper than the Shinkansen (bullet train for the belligerent). It's a growing learning market.
I'm surprised there has been no Jestar India or Jestar Indonesua yet..... :
Too narrow a view?
it's educating the local population that it's cheap to fly* compared to old times. LCC Japan are cheaper than the Shinkansen
- extra transit time just to get to/from the airport,
- huge cab costs if that's your preferred mode,
- time allowance for lengthier checkin procedures,
- time allowance for security procedures, and
- arguably greater likelihood of weather or other delays.
Time will tell if it's really a market for hundreds of LCC A320s. I think there is a lot of life in the Shinkansens yet!
Join Date: May 2005
Location: oz
Posts: 307
Likes: 0
Received 0 Likes
on
0 Posts
"LCC Japan are cheaper than the Shinkansen (bullet train for the belligerent)."
Yeah I've always had it in for the stinkin Shinkansen and I'll beat down on that MOFO any chance I get!!! Full FU(&!N noise!
Is that belligerent enough??
Yeah I've always had it in for the stinkin Shinkansen and I'll beat down on that MOFO any chance I get!!! Full FU(&!N noise!
Is that belligerent enough??
Shinkansen
Point taken Shinkansen is CBD to CBD, I've travelled in it many times instead of fly, comfortable = yes, fast = yes, get up walk around = yes.
However the S is not practical over longer distances or water, hence LCC.
Before LCC I paid around $400 USD one way Tokyo to Sapporo, now Ya can do for a quarter. Don't know what rates before LCC to Okinawa were but I'm tipping a lot cheaper now!
Like the old Ansett/Qantas days in AUS where it was a duopoly and flying was expensive. LCCs have changed that, wether it for the better or worse, but they have changed what is expected. Yes still costs money to put them in the sky but let's face it certainly not to the effect of the fares we used to pay.
Yes using the word belligerent was a little out of line, I should have said for those of you unlucky enough to have not been to Japan and played on the bullets!
Me thinks LCC in Japan there to stay, be it J*, Peach, etc. When you have a pool of traveling millions......
Like I said before surprised no J* India or Indo 🙈🙉🙊!
However the S is not practical over longer distances or water, hence LCC.
Before LCC I paid around $400 USD one way Tokyo to Sapporo, now Ya can do for a quarter. Don't know what rates before LCC to Okinawa were but I'm tipping a lot cheaper now!
Like the old Ansett/Qantas days in AUS where it was a duopoly and flying was expensive. LCCs have changed that, wether it for the better or worse, but they have changed what is expected. Yes still costs money to put them in the sky but let's face it certainly not to the effect of the fares we used to pay.
Yes using the word belligerent was a little out of line, I should have said for those of you unlucky enough to have not been to Japan and played on the bullets!
Me thinks LCC in Japan there to stay, be it J*, Peach, etc. When you have a pool of traveling millions......
Like I said before surprised no J* India or Indo 🙈🙉🙊!
Join Date: Jan 2014
Location: Adelaide
Posts: 106
Likes: 0
Received 0 Likes
on
0 Posts
Ohhhh.....Global Aviator....
You have stumped the recalcitrant's now!!!! You have used real world experiences to counter their desktop driven conspiracy theory skepticism.
What are they going to base their whining and moaning on now? Maybe they can mutter about the quality of their company provided meals?
LOL
You have stumped the recalcitrant's now!!!! You have used real world experiences to counter their desktop driven conspiracy theory skepticism.
What are they going to base their whining and moaning on now? Maybe they can mutter about the quality of their company provided meals?
LOL
Like I said before surprised no J* India or Indo
Join Date: Jul 2014
Location: Harbour Master Place
Posts: 662
Likes: 0
Received 0 Likes
on
0 Posts
Qantas chief says Jetstar Hong Kong decision sends worrying signals about rise of protectionism
August 4, 2015 by Jordan Chong
Qantas chief executive Alan Joyce says the Hong Kong government’s decision on Jetstar Hong Kong sends worrying signals about the rise of protectionism in the aviation sector.
Jetstar Hong Kong, a joint-venture between Qantas, China Eastern and Shun Tak Holdings, was left grounded in June when the Hong Kong Air Transport Licensing Authority (ALTA) ruled the proposed airline did not meet the territory’s principal place of business test.
Joyce said the decision showed a “blatant application of the rules to Jetstar Hong Kong that did not apply to the other carriers”.
“That is a distortion and shouldn’t be allowed,” Joyce told delegates at the CAPA – Centre for Aviation Australia Pacific Aviation summit in Sydney on Tuesday.
“We certainly went into a process, looking, as we always do, that the process was going to be legitimate, fair and balanced.
“If those rules and that decision was applied to Cathay or Hong Kong Express, they wouldn’t have qualified as a Hong Kong carrier. In fact those if those rules applied to Virgin and Tiger here in Australia they wouldn’t qualify to operate in this market.
“We are all about the same rules being applied to the carriers operating in the same market.
Moreover, the Qantas chief executive said he was “extremely worried about what that means in terms of protectionism”.
In its June decision, the ATLA said Jetstar Hong Kong did not meet the legal requirement of Hong Kong being the planned low cost carrier’s principal place of business, obeserving that “JHK [Jetstar Hong Kong] cannot make its decisions independently from that of the two foreign shareholders.”
It would have been the fourth Jetstar franchise in the fast-growing Asian region behind Singapore’s Jetstar Asia, Vietnam’s Jetstar Pacific and Jetstar Japan and Joyce noted those airlines were able to be established on an even playing field.
“This is the first time setting up an airline that we have seen different rules apply to different people in the same jurisdiction,” Joyce said.
“That’s why it was a surprise to us and that’s why we don’t believe it is the right call and we think it is a very dangerous call for fair competition.”
Officially, the parties said the decision is under review. However, analysts say there is unlikely to be any way back for the proposed franchise.
In terms of Jetstar Hong Kong’s options following the ATLA decision, Joyce said in a statement after the conference: “Jetstar Hong Kong has to decide what its next steps are, but from a Qantas perspective we won’t be investing any more funds in this airline.”
Qantas said in June its investment in Jetstar Hong Kong was valued at $10 million in its latest financial accounts.
Meanwhile, Joyce said Qantas’s proposed partnership with China Eastern would hopefully make the Chinese carrier’s Shanghai hub more competitive with rival hubs such as Hong Kong.
“If we look at most of the traffic going over Hong Kong connecting into the rest of China, that’s what we want to offer more competition against,” Joyce said.
“The best way of doing that is with China Eastern.”
Qantas and China Eastern’s application for their proposed alliance is currently before the Australian Competition and Consumer Commission (ACCC). The competition regulator said in its draft decision it was inclined to reject the tie-up arguing it would give the airlines too much power on the Sydney-Shanghai route.
However, the two airlines have received strong backing from the Australian and Chinese governments, as well as tourism and industry groups.
August 4, 2015 by Jordan Chong
Qantas chief executive Alan Joyce says the Hong Kong government’s decision on Jetstar Hong Kong sends worrying signals about the rise of protectionism in the aviation sector.
Jetstar Hong Kong, a joint-venture between Qantas, China Eastern and Shun Tak Holdings, was left grounded in June when the Hong Kong Air Transport Licensing Authority (ALTA) ruled the proposed airline did not meet the territory’s principal place of business test.
Joyce said the decision showed a “blatant application of the rules to Jetstar Hong Kong that did not apply to the other carriers”.
“That is a distortion and shouldn’t be allowed,” Joyce told delegates at the CAPA – Centre for Aviation Australia Pacific Aviation summit in Sydney on Tuesday.
“We certainly went into a process, looking, as we always do, that the process was going to be legitimate, fair and balanced.
“If those rules and that decision was applied to Cathay or Hong Kong Express, they wouldn’t have qualified as a Hong Kong carrier. In fact those if those rules applied to Virgin and Tiger here in Australia they wouldn’t qualify to operate in this market.
“We are all about the same rules being applied to the carriers operating in the same market.
Moreover, the Qantas chief executive said he was “extremely worried about what that means in terms of protectionism”.
In its June decision, the ATLA said Jetstar Hong Kong did not meet the legal requirement of Hong Kong being the planned low cost carrier’s principal place of business, obeserving that “JHK [Jetstar Hong Kong] cannot make its decisions independently from that of the two foreign shareholders.”
It would have been the fourth Jetstar franchise in the fast-growing Asian region behind Singapore’s Jetstar Asia, Vietnam’s Jetstar Pacific and Jetstar Japan and Joyce noted those airlines were able to be established on an even playing field.
“This is the first time setting up an airline that we have seen different rules apply to different people in the same jurisdiction,” Joyce said.
“That’s why it was a surprise to us and that’s why we don’t believe it is the right call and we think it is a very dangerous call for fair competition.”
Officially, the parties said the decision is under review. However, analysts say there is unlikely to be any way back for the proposed franchise.
In terms of Jetstar Hong Kong’s options following the ATLA decision, Joyce said in a statement after the conference: “Jetstar Hong Kong has to decide what its next steps are, but from a Qantas perspective we won’t be investing any more funds in this airline.”
Qantas said in June its investment in Jetstar Hong Kong was valued at $10 million in its latest financial accounts.
Meanwhile, Joyce said Qantas’s proposed partnership with China Eastern would hopefully make the Chinese carrier’s Shanghai hub more competitive with rival hubs such as Hong Kong.
“If we look at most of the traffic going over Hong Kong connecting into the rest of China, that’s what we want to offer more competition against,” Joyce said.
“The best way of doing that is with China Eastern.”
Qantas and China Eastern’s application for their proposed alliance is currently before the Australian Competition and Consumer Commission (ACCC). The competition regulator said in its draft decision it was inclined to reject the tie-up arguing it would give the airlines too much power on the Sydney-Shanghai route.
However, the two airlines have received strong backing from the Australian and Chinese governments, as well as tourism and industry groups.
Oh please. Joyce is still spewing the same BS that he’s continuously spewed. Cathay Pacific, Dragon Air, Hong Kong Airlines and Hong Kong Express are all majority owned by shareholders that have their “Principal Place of Business” here in Hong Kong. Hong Kong doesn’t have a citizenship rule like Australia and most other countries because there is no such thing as Hong Kong citizenship, hence the “Principal Place of Business” in the Basic Law. Unlike Australia, Hong Kong doesn’t have domestic air services either. All flights including to mainland China are International requiring negotiated agreements. Maybe if Australia allowed Hong Kong Carriers to set up an international carrier based in Australia but majority foreign owned then he may have a point. Until then he is a hypocrite that needs to crawl back into the hole he’s stuck his head out of. Hong Kong is no more “Protectionist” than Australia. Infact being an Australian who’s lived in Hong Kong for 15 years, I would argue Hong Kong is less “Protectionist”.
Now let me get this straight. No longer invest in the Hong Kong venture or the lot? If he is talking about not investing in Japan then it is dead in the water. Qantas has invested $100 million over the last two years(2x$50million) in Japan and his words not mine was the business is stable but "losing money" at a rate of between A$8-12 million a year which means it is heading for bankruptcy. Due diligence is a basic board member's prime responsibility and again this is not their money! Remember this is not our sandpit! The IPPB rules were always there, nothing has changed!
If it was possible to compound Joyce's error in Asian aviation markets he has just done so.
By complaining in public about the treatment Qantas has received in respect of Jetstar Hong Kong (which was totally predictable from the very beginning of all the Asian adventures) he has broken an unwritten Asian rule.
Breaking that rule, instead of copping it sweet, is now going to cost Qantas mainline big time in Chinese markets. I predict main line access to Chinese markets is now about to receive "The death of a Thousand cuts".
I didn't think it was possible for someone to be stupider than Dixon, but by publicly complaining about the Chinese treatment of Jetstar, Joyce has overtaken Dixon.
To put that another way: Joyce has just declared that the Qantas Group is the sworn enemy of China - at least that is how the Chinese will see it and react accordingly.
By complaining in public about the treatment Qantas has received in respect of Jetstar Hong Kong (which was totally predictable from the very beginning of all the Asian adventures) he has broken an unwritten Asian rule.
Breaking that rule, instead of copping it sweet, is now going to cost Qantas mainline big time in Chinese markets. I predict main line access to Chinese markets is now about to receive "The death of a Thousand cuts".
I didn't think it was possible for someone to be stupider than Dixon, but by publicly complaining about the Chinese treatment of Jetstar, Joyce has overtaken Dixon.
To put that another way: Joyce has just declared that the Qantas Group is the sworn enemy of China - at least that is how the Chinese will see it and react accordingly.
Join Date: Apr 2010
Location: Asia
Posts: 1,030
Likes: 0
Received 0 Likes
on
0 Posts
Sunfish I doubt It matters, and I doubt QF care either.
The Rapid chinese expansion is coming from Chinese carriers only (Xiaman Air next) I do note either Alan or Jayne quoted a few months ago that China was low yield and they were not overly interested long haul or ex Singapore (Tiger got in early). It's as simple as Chinese Passengers sticking with Chinese Carriers. A lot of group tour/packages are all bundled together ex China, working alongside Chinese carriers. Jetstar is going Cooly to Wuhan, but it's a paid agreement, so they wouldn't last if it was on their own two feet.
China expansion is probaly done for the short/medium and possibly long term for Qantas. Some opportunities to Japan, any expansion will come from Asian carriers. Jetstar Pacific is done (about to get hammered by Vietjet), Jetstar Singapore is done (Scoot/Tiger might pose a problem shortly) which leaves Jetstar Japan (AirAsia about to join the fray).
The Rapid chinese expansion is coming from Chinese carriers only (Xiaman Air next) I do note either Alan or Jayne quoted a few months ago that China was low yield and they were not overly interested long haul or ex Singapore (Tiger got in early). It's as simple as Chinese Passengers sticking with Chinese Carriers. A lot of group tour/packages are all bundled together ex China, working alongside Chinese carriers. Jetstar is going Cooly to Wuhan, but it's a paid agreement, so they wouldn't last if it was on their own two feet.
China expansion is probaly done for the short/medium and possibly long term for Qantas. Some opportunities to Japan, any expansion will come from Asian carriers. Jetstar Pacific is done (about to get hammered by Vietjet), Jetstar Singapore is done (Scoot/Tiger might pose a problem shortly) which leaves Jetstar Japan (AirAsia about to join the fray).
Join Date: Jul 2014
Location: Sydney
Age: 70
Posts: 19
Likes: 0
Received 0 Likes
on
0 Posts
Sunfish
I couldn't agree more but will try. By choosing a megaphone as his means of communicating he can be assured that the only response he will get will be the echo of his own voice.
As to busdriver007's comments, I believe the total committed capital to GK by QF to date is about AUD 165m at current exchange rates. Current cash bleed is between AUD 6-7m per month. There will need to be an additional cash injection by the end of this calendar year. JL is not keen to pour more money into the hole so there appears to be a Mexican standoff. I do agree with the conclusion that if there is no further investment, the business is headed for insolvency.
I couldn't agree more but will try. By choosing a megaphone as his means of communicating he can be assured that the only response he will get will be the echo of his own voice.
As to busdriver007's comments, I believe the total committed capital to GK by QF to date is about AUD 165m at current exchange rates. Current cash bleed is between AUD 6-7m per month. There will need to be an additional cash injection by the end of this calendar year. JL is not keen to pour more money into the hole so there appears to be a Mexican standoff. I do agree with the conclusion that if there is no further investment, the business is headed for insolvency.
Since when does Qantas care about Shareholders?
Qantas wouldn't last 5 minutes in China. Eaten alive.
Qantas wouldn't last 5 minutes in China. Eaten alive.
As an observer from afar why is Jetstar loosing so much money? Most flights I've done with them pretty full, in last 18 months.
Similar locos Ryanair and Easyjet in Europe make a big profit, with similar low fares.
Is it just high Oz crew costs etc. or poor utilisation.?
Easyjet and FR pilots good salary just under BA rates, and probably work less hours than BA.(BA Airbus shorthaul pilots 85/90 hrs per month)
Cabin crew low pay, but no shortage of recruits. (3 cc on Airbus 4 on FR 737)
Similar locos Ryanair and Easyjet in Europe make a big profit, with similar low fares.
Is it just high Oz crew costs etc. or poor utilisation.?
Easyjet and FR pilots good salary just under BA rates, and probably work less hours than BA.(BA Airbus shorthaul pilots 85/90 hrs per month)
Cabin crew low pay, but no shortage of recruits. (3 cc on Airbus 4 on FR 737)