I have always believed that numbers matter. I know their limitations and I know that costs and profits can be shifted within a multi-enterprise group. But in the end numbers do tell a story and it worth investing some time in analysis vs emotion.
I really don’t have the time now, nor access to all the data that some of Jetstar’s and Qantas’ critics apparently have.
But as a useful research project, as distinct from just posting anger on Prune….here’s some thoughts.
Have a look for each of the last five years at:
1. The amount of total airline-business related revenue (nominal and real) generated per Qantas mainline employee
2. The total airline-business related costs (nominal and real) generated per Qantas employee
3. The number of seats in the air, flying hours, ASK and RPK per Qantas mainline employee
4. The average domestic passenger yield (nominal and real)
5. Then derive or estimate the same figures for JQ and
VB
6. With the JQ figures you can probably have a rough guess at the Tiger figures
You’ll need to look at QF and
VB’s (or
VB various owners over the years) annual reports and also at research done by some of the better analysts. Have a look too at any published stuff on Easyjet and Ryanair too. This will take some time but now you will have numbers that will give the ability to look at what the Qantas mainline operation would be like if JQ was on the outside of the Group, alongside
VB and Tiger, or what if there was no JQ and
VB and Tiger were bigger by a Jetstar sized market amount. You should also now see the size and performance of the Qantas group with and without JQ.
The key is whether it was worth QF using its considerable strengths (those things some call subsidies) to ensure it has a piece of the action, covering its back with JQ….or whether it was ever possible to stay out of the low yield blood-bath and try and internally quarantine its own traffic. If, in the end, mainline could protect its traffic and yields, then the "do nothing" strategy might well have been the right one. If it couldn't.....draw your own conclusions.
When you’ve had a go at this, publish the figures on the web somewhere, maybe on Prune…so there’s some analysis behind the emotion. You will find it worthwhile. Might help me decide whether or not to sell the QF shares that are part of my retirement funding.