5. The problem is as simple as it is tragic. The public will not pay what the engineers and pilots deserve. Passengers change airlines for a saving on a foreign LCC of $5. Just look at the numbers. LCCS carry 20% of the traffic into Australia. Qantas is at about 18% and declining.
I assume you're taking the numbers from BITRE's International Airline Activity Report 2010. This is well worth reading for anyone interested in the industry.
http://www.bitre.gov.au/publications...les/1210_M.pdf
There is an excellent pie chart in that report that illustrates the market more accurately than the one statistic you quote (p8). 81.6% of international traffic in/out of Aus is not on LCCs. Carriers like SQ, Air New Zealand, MH and EK are each carrying over 8% of the load. The only LCC to approach those numbers is Jet* with 8.1%; the other LCCs are carrying 6.2% (the two Poo Blues, who will presumably become not-so-LCC Virgin Australia very soon) and Air Asia X with 2.8%. Tiger were too small to be listed as a percentage, but their annual pax total was 8641. These are not big numbers.
CX, Thai and MH are also carrying respectable loads and there are a number of smaller carriers like Royal Brunei who are developing a small but loyal local support base through competitive prices and excellent service.
This has to be biting into Qantas' 18% more than the collective Bogan Airways, although such analysis is beyond the scope of the report. While it's true the Qantas share declined from 2009 the amount (0.9%) is hardly a massive drop. SQ dropped by 1.0% in the same period. ANZ and EK sustained their share, and they are both full service carriers.
I think it's drawing a long bow to infer that the low cost carrier revolution is strangling full service travel in and out of Australia because the figures simply don't reflect that. What I think they do reflect is a number of savvy, well advertised foreign full service carriers that are gradually increasing their Australian market share at Qantas' expense.
Many Australians were traditionally suspicious about flying with foreign carriers. I'm sure everyone here who works in aviation has fielded several phone calls from their older rels booking airline tickets along the lines of 'whether those [insert foreign operator's country, usually Asian] are safe, dear'
. However, as time goes by, firstly Aussies get less parochial and secondly a number of foreign carriers develop reputations for running safe, quality airlines. This decreases the former public bias against foreign carriers and erodes what was formerly Qantas' number one sales strategy... We're AUSSIE and we're SAFE becuase of that.
Qantas is speeding this process up by constantly offshoring stuff, using foreign crew, bitching and sniping about their staff and badly managing the
PR whenever anything goes wrong. Talk to the average non-industry punter and they'll be full of how Qantas isn't SAFE anymore. If Qantas isn't AUSSIE either, then what's the advantage? People will continue to drift to SQ, EK and the like who advertise more effectively and provide a better product. Whether these are safer products is up for debate but as Ekman once said, Perception is reality to the Perceiver.
The LCCs will continue to do well in the backpacker, beach holiday and Kiwi F&R markets (and good luck to them) but IMO it's Singapore, Emirates and Cathay who will poach the Qantas pax, as Qantas management continues to fiddle while their product's reputation burns.
P.S. Thanks for replying to the thread.