I'm sick and tired of people throwing profit figures around that they've probably only heard bandied around second-hand. So I decided to have a look at the 2008 annual report and nut out some figures myself.
Firstly, if someone starts out by saying that JQ contributed 10% to the group's income, they're already misrepresenting their own argument - the comparison has to be between Qantas and Jetstar. The rest of the group's income is meaningless to the QF v. JQ debate; it includes (amongst other parts) catering, frequent flyers scheme, etc.
So...
QANTAS (which, by the way, includes mainline, Qlink, engineering and ground services - the latter two of which, in the 2008 year, received income from JQ) had an after tax profit of $653.6M.
Jetstar's was $80.1
That's not 10%, it's 12.3%, or 23% greater than was first suggested.
QANTAS fleet - at the end of the fiscal year - comprised 188 aircraft (I used conservative seat estimates to come up with 35313 seats in the fleet). This gave a profit per seat of $18509.
Jetstar fleet - at the end of the fiscal year - comprised 36 aircraft with an accurate seating availability of 7194 seats. This gave a profit per seat of $11134.
QANTAS revenue was about $12.7B.
Jetstar revenue was about $1.56B, or 12.3% that of mainline.
Now what I think is the important point amonst all this is that the percentage revenue and percentage profit are, effectively, identical.
What makes this important is that during the fiscal year;
Jetstar grew it's narrow-body fleet by 25% - with all the inherent cost in that scope of growth,
Jetstar had no premium passengers to help add to the bottom line,
Jetstar had no third-party income similar to that which was added to QANTAS bottom line from income received by engineering and ground handling,
Jetstar operate almost exclusively in a low-yield/high competitive route environment, whereas QANTAS received income from a percentage of high yield/low competitive sectors flown by international longhaul and Qlink,
With all that in mind, it's clear that if JQ had some of the benefits of QANTAS income, then it follows that it's percentage profit (seeing how it's identical now) would have to be potentially far greater.
That's probably why it's a foregone conclusion that JQ will continue to get more of the 'weaker' mainline flying. It is probably also the reason why it will indeed get some of the 'stronger' mainline flying - to increase it's brand-exposure to all markets.
JQ is already marketing StarClass as it's '...International Business Class...' in the printed media. It wouldn't take much to change the marketing blurb to refer to it as BusinessClass should JQ be given some of the more 'premium-patronised' routes in the future.
Much will change before it all settles down again. I have no doubt at all that QF will still be around. Nor do I doubt that JQ will be a much bigger part of the group at that time. Don't forget that NJS, Eastern, Sunstate and (in the past) Impulse have all flown QF liveried aircraft on behalf of QF. There'll be nothing stopping JQ from doing it in the future if the executive deem it will result in a stronger bottom line in the tougher environment ahead.
Good luck to all.
Capt.Q
Just read your post. Nonsense more than fact. JQ does not rely on QF for things like Reservations, nor for maintenance (the 'temporary' A330 situation aside).
Any parasitic suggestion would be limited to routes. And that is the whole reason for having a LCC; to fly routes that are unprofitable for the mainline element.
It's all sh#ts and giggles to say that international JQ ops are not making money - but I never see any proof. Come up with proof! Oh, my apologies, I know what the reply will be - something along the lines of "...it's not shown as a loss, because QF is propping it up so that it looks like its making a profit...".
I think that there would be several government agencies who would be very interested in that kind of behaviour if it were true.