Originally Posted by fedsec
Originally Posted by romulus
Fedsec - perhaps reread what I wrote regarding Hyundai/Mercedes then. You are talking about buying (permanently owning) a vehicle, not renting a seat and that vehicle is used repeatedly by the family unit (be that unit a single right up to whatever size family fits).
Romulus the Hyundai/Mercedes debate matters not if it is about buying a car or renting an airline seat. It begs the question - will a consumer pay extra for better quality? People still buy Mercedes and people still chose to fly on airlines that charge extra in fact I say that more Australians would be prepared to pay slightly more to fly Qantas than Jetstar. I've used one example where the airlines are in direct competition to demonstrate that.
If that's your level of analysis then there's not much point arguing. If you can't tell the difference between the conditions attached to buying a car vs renting an airline seat then you need a reality check.
Originally Posted by fedsec
Originally Posted by romulus
Those people still fly. Except instead of flying with you they fly with your competition. So your competitor picks up the people filling the cheap seats (unless they are also running at very high load factors) and that's the double whammy - you are spreading your essentially fixed costs across less people, whereas your competitor is now picking up more.
Really? Did you go to the same school as Aviation expert Geoffrey Thomas? A lot of things may sound good in theory but in practice they often work differently.
Awesome argument. Straight to the fallacy of ad hominem attacks. Clearly it must be hitting home.
I realise the point I made is a key element you don't want to deal with because, quite simply, you have too many people maintaining the number of aircraft Qantas have. It is that simple.
You may like to believe you can just keep adding $10 to a ticket and nothing will change but you're wrong. As I pointed out previously and you chose not to respond to why not add $50 or $100 if you believe price is so irrelevant?
But then, that doesn't fit with you "just put your prices up and all will be sweet" theory.
Originally Posted by fedsec
Originally Posted by romulus
And then we get to your load factor argument. And that argument actually runs COUNTER to your own theory. QF Sept loads to/from Japan for QF are 84% vs Jetstar at 67% which on the surface would say you are correct.
But here's the fundamental question - where did the Jetstar 67% come from? Jetstar hasn't been around that long, yet they're running 2/3 full based on lower service and lower fares. Those people have CLEARLY chosen to purchase on lower fares. Sure people PREFER to fly full service but out of your argument a very significant number of people have chosen exactly the opposite of what you have stated will happen.
Nothing runs counter to my theory. The 67% of people flying Jetstar didn't come out of thin air. They were taken from the pax who used to fly Qantas, not because they choose to purchase a lower fare, it's because Qantas stopped flying many of the routes and reduced frequency on Narita services leaving the travelers with no other choice (apart from JAL who benefited from the exercise).
Really?
What are the total numbers of people flying?
How many seats in total to and from Australia?
When I do a check of Sydney-Narita I don't just find Jetstar and JAL, I find Scoot, Virgin, Singapore, Garuda, Korean, Asiana and China Eastern as well (and that's just on the first screen).
If everyone was paying more for a premium service then with all those options available why does ANYONE fly Jetstar?
Gven your analysis of the Japan routes, and given the fact that Qantas mainline still flies that route, why isn't, on the basis of your argument, mainline running at 100% of capacity? If your theory holds then people would not fly Jetstar unless there was no alternative, but given the numbers you posted not only is there an alternative but there is a Qantas mainline alternative. Which is not taken.
Furthermore with your numbers JQ are running 113 flts @67%, Qantas are running 30 @84%. Who is carrying more passengers?
30 747-400 @ 84% of approx 360 pax is 9,072 passengers (out of 10,800 available seats).
113 A330 @ 67% of 230 pax is 17,413 passengers.
And given there are daily mainline services are you really sure you want to try and claim that all people want the full service carrier at a premium? Why are there approx 1,700 empty mainline seats on the numbers you provided?
The answer is simple - people have more choice. They can now choose lower cost carriers. There is a plethora of airlines now running the route. Your figures for 05 and 06 show
191 flts @ 76% x 360 pax = 52,257 passengers.
Compared to a combined total of just under 26,500 per month now.
Do you think that tells us something about the competition (refer Webjet list previously provided).
And what were ticket prices like in 2005/6?
What were other costs like?
The market has been splintered by competition, and that competition has driven prices down for the end consumer. Prices have risen inexorably. You can deny it all you like and lobby for a return to closed skies but that is simply living in the past. For Qantas to be competitive they need to leverage their domestic brand and provide value driven services, and that means they have to drive efficiencies. I realise you don't like it but the simple fact is that the general public don't want to subsidise featherbedded industries like vehicle manufacture, fruit canners or airlines any longer. The rest of the population has had to adapt and get more efficient or be outsourced so they are asking why they should pay more just to keep industries profitable.