Originally Posted by
Al E. Vator
Good grief, so many self-appointed experts (like Poppa Jo) making inaccurate/uninformed statements about matters they can have no accurate knowledge of such as load factors and revenue and presenting these as if they are facts from an aviation oracle.
Citing all the Tigers and Compasses etc is pointless. EVERY major airline in Australia other than Qantas has gone bust. Virgin, Ansett etc. Similarly the self appointed experts were adamant that Jetstar was a temporary gimmick. It’s all been here on PPRUNE over the years.
Suffice to say, anyone can make basic statements about economic viability but without an accurate understanding of revenues and expenses, you’re just another mouth.
I agree there, reading the balance sheets mean nothing unless you know what the long term strategy is, are they willing to take a hit to stay in the game until somebody else falls over, tomorrow, next week, in ten years time. No one here knows how long 777/PAG/Bain are willing to sustain losses, if they will provide more capital, will they take more control of operations, what is the goal? Compare that to J* that makes measly profits from LFs above 90%, mainly because for a LCC they still have part QF cost factors and not that cheap fares when you add all the fluff on. I'd say (at a complete guess) that VA and Rex are probably aiming for a break even AVERAGE LF somewhere in the 80% range.
Not sure what Bonza are profiting, however they are generating revenue off what must be a fairly low cost base compared to VA and QF.
VA should have gone broke way back prior to 2010, they were propped up by continual injections from shareholders and promises of something better in the long run. The problem VA had for the long run was too many shareholders, which stymied direction and concise planning. Now all three of the none QF airline groups are backed by single entities, with who knows what plans they have for the long run. The only certainty is that there is not enough assets in any of them to warrant takeover and breakup, so the aim in the long run must be for something viable and sale-able but at what cost, and what timing, who knows.
PS, it's been said time and time again, Load factors mean nothing without knowing the yield. Rex has made most of its regional profit on around 60% LF for years. Which means some flights full others single digit loads. It's the yield on the full flights that really tells the story, and the other not so full, closer to empty are catchment on frequency to keep things turning over, maintain utilization.
BTW QF and VA are cancelling flights for yield management, so all is not rosy full flights on scheduled departures at either of the larger groups. It's just that they have the frequency to do such things.