They can’t cede their 35% Corporate Market share if they go back to 2001, because they will go back to 5%, and are fighting against Jetstar. They did not have a competitor with 60 aircraft back then, because that was them.
The corp revenue is key going forward. It’s also a key driver in Velocity, and it’s 200m earnings.
Its just unnecessary overheads that exist that is the issue, the Airbus and it’s SH International network. It’s no trade secret that he is aware of this, and it’s certainly no secret that in his first year his intentions are clearly on this.
Three crew bases will pull enormous cost out. Kiwi flying will be obviously cut or to a basic point to point. I wouldn’t bother with Japan but the partnership could remain. Tiger is clearly done, so more cost gone. ATR program gone. All contracts and leases have just been negotiated. Forget Bali. Forget Pacific Islands. That’s a large chunk of expenditure gone.
The MAX order is clearly going to be shelved until late this decade.
737 can do Canberra. Inefficient, yes, but still ahead once the ATR overheads removed.
*60-70 737s
*4/5 Triples
Dive into their past results, you can really see the issues lie around International and a Fleet complexity.