Originally Posted by
Traffic_Is_Er_Was
I was told by (I would think) a reliable source that on one international route, if the passenger spends no other money than the actual ticket, ie no ancilliaries at all, then JQ make a low single digit cent profit on the seat. If all the passengers on board do this, JQ make $3.25 for the leg.
This point is very important.
Most airline cost is fixed (or sunk) thus low fare airlines need that ancillary revenue as the ticket price "the bait" does not cover the entire cost.
In ancillary revenue terms, Jetstar in 2016 (latest data on hand) made USD $26 per passenger. Annually that was USD $600,000,000.00
Qantas too make ancillary revenue from mostly Frequent Flyer, which naturally is almost dependent upon the International business.
Small movements in a Low Fare Airline CASK kill margin, with fuel being able to wipe them out entirely.
Thus if Qantas persist with a dual brand 'strategy' to focus on the demand elastic low fare airline at the expense of the parent is foolish.
Re-equipping the QF International operation with fuel efficient aircraft is low hanging fruit that even Little Napoleon ought be able to reach.