The original point of JQ was to annoy DJ and allow QF to concentrate on it's main money making product. Immediatley prior to JQ, QF started to experiment with all-economy QF domestic services. It didn't work. So they reconfigured QF back to two-class and set up JQ.
This annoyed DJ because they had to stay low-fare and low-product and couldn't compete with both JQ and QF mainline.
Then, the point of JQ Asia was to annoy Singair and Tiger. Then, the point of Tiger Australia was to counter-annoy JQ and QF in an equally childish response. Not really intended to make money, just annoy.
These annoying airlines are designed to keep the majors and their competitors from making the big money that proper airlines make. Yes it's cyclical, but there's big money there for those who do it right.
It's a bit like having a Kmart and a BiLo to distract the BigW and Franklins customers to make sure your Myer stores maintain market share. Now that's possibly a bad analogy because that company has gone where it's gone, but rest assured, BiLo was never it's saviour. It was there to annoy.
Now, all this was all kind-of working, and pre-GFC the QF operation was looking pretty good. But somewhere along the way someone got sidetracked.
In the couple of years pre-GFC, QF Mainline made 2 billion dollars profit in 2 years. They did it with Australian pilots and Engineers on current EBAs. In fact, they made so much money they had to pay an extra special dividend so as not to be embarrassed by how much money they had in the bank. This is more money than JQ could possibly make in 10 or 20 years even with the creative accounting bolstering their supposed profit.
That someone got lost in the plot and is obviously still sidetracked.
There are billion dollar profits ahead, if the right product is invested in and pursued and managed properly. There are plenty of first class airlines looking after their staff and their product who are testament to that. Qantas can still do that, and JQ will still serve it's annoying purpose, but it will never replace the money making machine.
Management permitting.
Last edited by HF3000; 9th Jun 2011 at 10:22.