Bye Bye Qantas Hello Jetstar
Agree with Elzilcho,
The smart Airlines dont run a seperate LCC, and incur all the duplication.
EG Cathay Pacific have long said they will not run an LCC, they regard the back end of their A330s as their low cost airline!
Likewise the big American carriers have tried the seperate LCC model, eg United with TED, Delta with Song, and wound them up, now they operate just the mailine operation, the domestic USA version of which is like a low cost anyway.
SAS also tried the seperate LCC, Snowflake, wound that up, and they now run their domestic and regional operations as a dual full service/LCC on the one Aircraft.
They have Economy plus for full flexible Economy fares, and these passengers get all the normal frills.
The back end is called Economy, you get one freee checked bag and free tea and coffee, but pay for anything else.
The big advantage for all these airlines, is that as well as no duplication in management,Aocs, Aircraft types, they can run more frequency under their own brand in any market they serve, than if they were operating 2 brands in the one market!
So for example if Qantas restricted Jetstar to leisure routes, and took them off the primary routes, the Qantas group could then increase frequency on these routes, to better compete with Virgin Australia.
Jetstar operate 3 times daily Melbourne to Perth, those 3 A320 flights could be replaced by 2 Qantas A330s or 3 737s daily, maintaining the Qantas Group capacity on that route, but giving the high yielding passengers more Qantas frequency!
The smart Airlines dont run a seperate LCC, and incur all the duplication.
EG Cathay Pacific have long said they will not run an LCC, they regard the back end of their A330s as their low cost airline!
Likewise the big American carriers have tried the seperate LCC model, eg United with TED, Delta with Song, and wound them up, now they operate just the mailine operation, the domestic USA version of which is like a low cost anyway.
SAS also tried the seperate LCC, Snowflake, wound that up, and they now run their domestic and regional operations as a dual full service/LCC on the one Aircraft.
They have Economy plus for full flexible Economy fares, and these passengers get all the normal frills.
The back end is called Economy, you get one freee checked bag and free tea and coffee, but pay for anything else.
The big advantage for all these airlines, is that as well as no duplication in management,Aocs, Aircraft types, they can run more frequency under their own brand in any market they serve, than if they were operating 2 brands in the one market!
So for example if Qantas restricted Jetstar to leisure routes, and took them off the primary routes, the Qantas group could then increase frequency on these routes, to better compete with Virgin Australia.
Jetstar operate 3 times daily Melbourne to Perth, those 3 A320 flights could be replaced by 2 Qantas A330s or 3 737s daily, maintaining the Qantas Group capacity on that route, but giving the high yielding passengers more Qantas frequency!
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Thank you for the compliment wasathangi. I didn't realise my comments were in any way excessively articulate!
Off to work you go. I'll enjoy my self funded retirement!
Off to work you go. I'll enjoy my self funded retirement!
wasathangi
Yes the posts were in reverse order and I think it is obvious that is the case. I did it that way on purpose to make it easier to follow the post trail.
Read my post carefully again and hopefully you will understand what I wrote.
However since your powers of comprehension seem to be impaired I'll re post in a different manner anyway. It has nothing to do with who mentioned Air NZ first.
Your wrote:
Air Ace wrote in response:
making the point that full service carriers are making money so it's not all about not being able to compete against the LCC business model
You replied:
Your attempt to justify your point of view is is incorrect.
Air Ace pointed out Air NZ was operating in a market much smaller than 2 mill.
I made the comment that Air New Zealand didn't have a LCC arm.
You responded:
No one was saying the airlines weren't different, just that they were full service airlines making money when Qantas wasn't.
Yes Air New Zealand might be different to those other airlines Air Ace referred to, it like Qantas is located at the end of a route (the end of the earth for those coming from the US or Europe) with a small domestic population. By your own admission making it harder to make a profit.
Air New Zealand like Qantas has LCC domestic competition and LCC competition on international routes including capacity dumping from one Middle East airline on the Tasman. Yet unlike Qantas, Air NZ has been able to make a profit. One major difference is Air New Zealand doesn't have a bastard child cannibalising it's routes.
Yes the posts were in reverse order and I think it is obvious that is the case. I did it that way on purpose to make it easier to follow the post trail.
Read my post carefully again and hopefully you will understand what I wrote.
However since your powers of comprehension seem to be impaired I'll re post in a different manner anyway. It has nothing to do with who mentioned Air NZ first.
Your wrote:
LCC's are nothing new. Have a look around the world. We are one of the last countries to implement this. Nothing to do with Ansett.
QANTAS is what it is today, old school business model/ great airline still by far however the market it operates in, QANTAS can't compete against the LCC business model.
People today just want a seat and get to their destination on the domestic scene.
Just like the train and bus....Gone are the days where the upper middle class and above used the airline network. IT is now available for everyone.
QANTAS is what it is today, old school business model/ great airline still by far however the market it operates in, QANTAS can't compete against the LCC business model.
People today just want a seat and get to their destination on the domestic scene.
Just like the train and bus....Gone are the days where the upper middle class and above used the airline network. IT is now available for everyone.
If you are correct, I wonder how Air New Zealand, Singapore Airlines and the Middle East carriers make a profit as full service international airlines competing against LCCs and Qantas makes a profit domestically?
You replied:
Air Ace....You obviously have your head buried in the sand. Every Major you mentioned has a LCC branch/section. Also are located in HIGHER POPULATED AREAS AND SHORTER ROUTES TO OTHER HIGHLY POPULATED COUNTRIES Not a country with only 22 million..Geez, should I go on
Air Ace pointed out Air NZ was operating in a market much smaller than 2 mill.
I made the comment that Air New Zealand didn't have a LCC arm.
You responded:
I am just stating the reality....ANZ is a different ball game all together.
Yes Air New Zealand might be different to those other airlines Air Ace referred to, it like Qantas is located at the end of a route (the end of the earth for those coming from the US or Europe) with a small domestic population. By your own admission making it harder to make a profit.
Air New Zealand like Qantas has LCC domestic competition and LCC competition on international routes including capacity dumping from one Middle East airline on the Tasman. Yet unlike Qantas, Air NZ has been able to make a profit. One major difference is Air New Zealand doesn't have a bastard child cannibalising it's routes.
How Airlines Spend Your Airfare - WSJ
According to the above article wages make up about 20% of an airlines costs? I think the 4% is accurate if you are talking just Pilot wages. The cost argument is a valid one, if you could say trim 5% off your wage bill you could potentially double profit for a given revenue.
According to the above article wages make up about 20% of an airlines costs? I think the 4% is accurate if you are talking just Pilot wages. The cost argument is a valid one, if you could say trim 5% off your wage bill you could potentially double profit for a given revenue.
What a load of bollocks this thread has been.
1. Employee costs are typically around a third of the total. Fuel is roughly another third, and the galaxy of minor items rounds out the other third. Give or take, depending on fuel price de jour, which is the real elephant in the room.
2. Employee costs are a function of legacy awards, which is not a pejorative phrase, by the way, and longevity of the business. LCC start-ups always age into a facsimile of what they once mocked. Just like my first wife. What was her name again?
3. There is nothing that our (what is the opposite of "learned"?) friend can say to twist the truth to suit: the part of the world which has money does not want to fly on a LCC, carry a Target bag or wear Adidas trousers. The part of the world that does is only occasionally relevant, and only sometimes cashed-up. Right now it is dwindling. The part of the world with money is the part that pays the bills, and is, generally speaking, more fun to take champagne baths with. Wheeee!
4. In a true LCC model, there is no natural floor to wages. If JQ was sold, or Tiger, the first thing on the agenda would be to ream out those pesky T & Cs of the staff. That means you, wasabi. Or whatever the hell your Qantas Angel screen name is.
5. Name me two LCCs that the above-average* punter would aspire to fly on again. One is Southwest, which perversely does not hate its staff. The other is a mythical being, like a unicorn.
6* above average was intentional. It means, by definition, the 3.7 Billion people who would prefer not to, thanks just the same, fly on your pathetic flying money-grab that is JQ, Ryan, etc.
7. My legacy brain can only fulminate for so long without a mandated drinking session. The rest of you can talk amongst yourselves for awhile and conjure up the other dozen reasons why I should be paid even more, and my LCC colleagues** should fund it.
8** yeah, right.
1. Employee costs are typically around a third of the total. Fuel is roughly another third, and the galaxy of minor items rounds out the other third. Give or take, depending on fuel price de jour, which is the real elephant in the room.
2. Employee costs are a function of legacy awards, which is not a pejorative phrase, by the way, and longevity of the business. LCC start-ups always age into a facsimile of what they once mocked. Just like my first wife. What was her name again?
3. There is nothing that our (what is the opposite of "learned"?) friend can say to twist the truth to suit: the part of the world which has money does not want to fly on a LCC, carry a Target bag or wear Adidas trousers. The part of the world that does is only occasionally relevant, and only sometimes cashed-up. Right now it is dwindling. The part of the world with money is the part that pays the bills, and is, generally speaking, more fun to take champagne baths with. Wheeee!
4. In a true LCC model, there is no natural floor to wages. If JQ was sold, or Tiger, the first thing on the agenda would be to ream out those pesky T & Cs of the staff. That means you, wasabi. Or whatever the hell your Qantas Angel screen name is.
5. Name me two LCCs that the above-average* punter would aspire to fly on again. One is Southwest, which perversely does not hate its staff. The other is a mythical being, like a unicorn.
6* above average was intentional. It means, by definition, the 3.7 Billion people who would prefer not to, thanks just the same, fly on your pathetic flying money-grab that is JQ, Ryan, etc.
7. My legacy brain can only fulminate for so long without a mandated drinking session. The rest of you can talk amongst yourselves for awhile and conjure up the other dozen reasons why I should be paid even more, and my LCC colleagues** should fund it.
8** yeah, right.
Last edited by Australopithecus; 23rd Aug 2014 at 05:24. Reason: Grammar. The old-fashioned kind, with punctuation and everythang.
Oh, by the way...
The actual enemy of the traditional, full-service carriers is not the LCC horde, as I perhaps encouraged you to conclude above.
The actual enemy is the private jet. Prior to the hordes of Gulfstream this and Global thats, the wealthy had no choice but to buy first class tickets, and they in turn supported the economy cabin enough to drive down the Y prices into the realm of the reluctant tourist.
The exit of the significantly wealthy from the public transport nature of the airline business has stripped it of convenient patrons. What is left are the J class punters flying on employer's direction on employer's money. They do not in themselves contribute enough to underwrite the traditional Y class aspirational customer. The aspirational customer is, more and more, a bargain hunter. The rest of the world has bled him dry far more than the previous generation, so he has to endure **** in order to take his kids skiing in St Moritz. It ain't fair.
If you follow the LCC raison d'être logic to its logical conclusion there will eventually be no customer base for any but the Gulfstream. Everyone else will be too busy eking out a grubby existence to fly anywhere.
The actual enemy is the private jet. Prior to the hordes of Gulfstream this and Global thats, the wealthy had no choice but to buy first class tickets, and they in turn supported the economy cabin enough to drive down the Y prices into the realm of the reluctant tourist.
The exit of the significantly wealthy from the public transport nature of the airline business has stripped it of convenient patrons. What is left are the J class punters flying on employer's direction on employer's money. They do not in themselves contribute enough to underwrite the traditional Y class aspirational customer. The aspirational customer is, more and more, a bargain hunter. The rest of the world has bled him dry far more than the previous generation, so he has to endure **** in order to take his kids skiing in St Moritz. It ain't fair.
If you follow the LCC raison d'être logic to its logical conclusion there will eventually be no customer base for any but the Gulfstream. Everyone else will be too busy eking out a grubby existence to fly anywhere.
According to the above article wages make up about 20% of an airlines costs?
Why is it so?
Because every unskilled labourer in this country is choosing to exercise their right to have a flat screen TV, V8 ute and a smart phone and uses unions to ensure that assumed birthright is at least keeping up with inflation, plus a bit.
Add to that Work Cover, superannuation, Long Service leave Holiday Loadings, public Holidays, 36 hr weeks, redundancy provisions, sick leave, carers leave, personal leave, smoking breaks, f@ck me its a wonder anything gets done.
Whether those "entitlements" are right or wrong is irrelevant, our competitors don't have them, therefore their cost base is lower therefore Qantas is not competitive and is unlikely to ever be again, on the international stage.
Last edited by virginexcess; 23rd Aug 2014 at 07:08.
Full service airlines can try low cost fares with restricted economy tickets to fill up the back end. I recently enjoyed a weekend away on a legacy airline for a comparable fare to a low cost once baggage and extras were added in.
The ticket was non refundable, non changeable, accrued fewer miles, had min/max stay requirements and the only seats that could be reserved were at the rear of the aircraft, some airlines go further with reduced baggage allowance and no meal.
The price was half the normal, not the highest economy fare. Quite a comfortable journey on a wide body with good seat pitch, decent catering and IFE compared to being sardine canned into a narrow body and bringing my own sandwiches.
The cabin was full both ways but I wonder what the yield was like if most people had bought the cheap tickets, bearing in mind the cost base of the airline was at legacy level.
The ticket was non refundable, non changeable, accrued fewer miles, had min/max stay requirements and the only seats that could be reserved were at the rear of the aircraft, some airlines go further with reduced baggage allowance and no meal.
The price was half the normal, not the highest economy fare. Quite a comfortable journey on a wide body with good seat pitch, decent catering and IFE compared to being sardine canned into a narrow body and bringing my own sandwiches.
The cabin was full both ways but I wonder what the yield was like if most people had bought the cheap tickets, bearing in mind the cost base of the airline was at legacy level.
Virgin...You might examine landing charges. It cost almost 3 times as much to turn around a B747 in Sydney than in Singapore and twice as much as Hong Kong. Brisbane is not far behind! 
Ask how much Emirates and Etihad cost to land in their home port and the answer will be very low($0).
Ask how much Emirates and Etihad cost to land in their home port and the answer will be very low($0).
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The day China Eastern announced they planned to launch their LCC "China United" was the day AJ & JH should have realised JQ HKG will never fly.
Perhaps they do realise that (privately) hence the sale of more A320's.
Perhaps they do realise that (privately) hence the sale of more A320's.
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Sorry about the thread drift:
Tigerair!
Having been a long time QF Platinum FF, there was a definite "not happy Jan" moment when my company booked me on Tigerair a few months back, but bugger me, the flight was on time, nice clean new aircraft, and great friendly happy cabin crew... and only $49 (plus an extra $14 to get a better seat)!
Flights since have been the same all good and nothing over $119.
I don't know what they are up to, but credit where credit is due, they certainly appear to have lifted their game.
Back to the thread...
It is interesting to compare Qantas with the American legacy carriers, that were forced into painful restructuring... their staff knew what the alternative was after the once mighty Pan Am disappeared, so mostly (even if begrudgingly) staff got with the programs... they were also forced to pull some capacity out of the market.
In the case of Qantas the changes have been too little, too late, and taken too long... ripping a Band Aid off slowly hurts!
Also the two brand strategy I don't think was a bad thing, but both brands needed sound strategies... containing Virgin was not strategy!!... the QF brand strategy defending 65% 'line in the sand", compared to say ANZ's focus on product with a close eye on costs, was insane.
ANZ is also keenly aware of its importance to its nation's economy... and it shows (as do EY, EK, SQ, CX, even take a look at how FJ has turned around). Somewhere along the way QF has lost sight of this.
Qantas' future? Bring on Chapter 11!!! [Oh wait that is America!]
5. Name me two LCCs that the above-average* punter would aspire to fly on again. One is Southwest, which perversely does not hate its staff. The other is a mythical being, like a unicorn.
Having been a long time QF Platinum FF, there was a definite "not happy Jan" moment when my company booked me on Tigerair a few months back, but bugger me, the flight was on time, nice clean new aircraft, and great friendly happy cabin crew... and only $49 (plus an extra $14 to get a better seat)!
Flights since have been the same all good and nothing over $119.
I don't know what they are up to, but credit where credit is due, they certainly appear to have lifted their game.
Back to the thread...
It is interesting to compare Qantas with the American legacy carriers, that were forced into painful restructuring... their staff knew what the alternative was after the once mighty Pan Am disappeared, so mostly (even if begrudgingly) staff got with the programs... they were also forced to pull some capacity out of the market.
In the case of Qantas the changes have been too little, too late, and taken too long... ripping a Band Aid off slowly hurts!
Also the two brand strategy I don't think was a bad thing, but both brands needed sound strategies... containing Virgin was not strategy!!... the QF brand strategy defending 65% 'line in the sand", compared to say ANZ's focus on product with a close eye on costs, was insane.
ANZ is also keenly aware of its importance to its nation's economy... and it shows (as do EY, EK, SQ, CX, even take a look at how FJ has turned around). Somewhere along the way QF has lost sight of this.
Qantas' future? Bring on Chapter 11!!! [Oh wait that is America!]
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Highwaytohell
It would not surprise me if the Unions were collectively canvassing potential new CEO's with a view to offering increased efficiencies in return for a potential change in "leadership".
The fact they may not be talking to the current CEO is probably a reflection of his previous form regarding prior "negotiations".
It would not surprise me if the Unions were collectively canvassing potential new CEO's with a view to offering increased efficiencies in return for a potential change in "leadership".
The fact they may not be talking to the current CEO is probably a reflection of his previous form regarding prior "negotiations".
Tried back in 2010 or 2011 however the major shareholders stuck with the incumbents. Game set and match.
Correct, we offered them a new Chief executive (American ) with a proven record plus chairman and board. No interest.
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It is a shame to watch up the slow death spiral of Qantas.
Although the management must take some blame, surely the employees have had their snouts in the trough as well?
Folks seemed perfectly happy to accept the LWOP situation, if they could go off an fly someone else's shiny metal. Folks were happy to be cruise pilots, not building any "real" stick time.
And when redundancies are announced there is no suggestion of "hey let's all take a payout so that everyone can stay in a job".
Sadly it's not just AJ who is to blame.
Although the management must take some blame, surely the employees have had their snouts in the trough as well?
Folks seemed perfectly happy to accept the LWOP situation, if they could go off an fly someone else's shiny metal. Folks were happy to be cruise pilots, not building any "real" stick time.
And when redundancies are announced there is no suggestion of "hey let's all take a payout so that everyone can stay in a job".
Sadly it's not just AJ who is to blame.
Virgin...You might examine landing charges. It cost almost 3 times as much to turn around a B747 in Sydney than in Singapore and twice as much as Hong Kong. Brisbane is not far behind! Ask how much Emirates and Etihad cost to land in their home port and the answer will be very low($0).
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Oh dear, Poppy,
Are you really criticising employees for taking LWOP?? It is important to spell out what those letters do stand for especially the 'W'.
Good grief man can't you imagine the disruption to both professional and personal life that such an action involves for what may well be a demotion as you pointed out? What a tough decision to have to make.
The LWOP pay option was put out there to the pilot body, by the company, as a strategy to reduce short to medium term pressure on operations. Some found work places where they were actually appreciated and respected and will be a loss to Qantas.
I think by "hey let's all take a payout so that everyone can stay in a job" you may have meant 'pay cut'?
Sound professional behaviour needs to be always modelled from the top down. Its a bit rich to blame people for not volunteering to take a pay cut while except, for a recent token effort, management have continued ceaselessly and regularly to reward themselves handsomely and amazingly, in inverse proportion to company earnings and way above parity for their peers OS.
LD
Are you really criticising employees for taking LWOP?? It is important to spell out what those letters do stand for especially the 'W'.
Good grief man can't you imagine the disruption to both professional and personal life that such an action involves for what may well be a demotion as you pointed out? What a tough decision to have to make.
The LWOP pay option was put out there to the pilot body, by the company, as a strategy to reduce short to medium term pressure on operations. Some found work places where they were actually appreciated and respected and will be a loss to Qantas.
I think by "hey let's all take a payout so that everyone can stay in a job" you may have meant 'pay cut'?
Sound professional behaviour needs to be always modelled from the top down. Its a bit rich to blame people for not volunteering to take a pay cut while except, for a recent token effort, management have continued ceaselessly and regularly to reward themselves handsomely and amazingly, in inverse proportion to company earnings and way above parity for their peers OS.
LD