If you follow Webbers logic of increasing profits by reducing capacity then both carriers should get rid of all the aeroplanes and they will make a squillion!
The issue is bigger than just capacity, or seat mile costs, or any other single item.
Neither operator (VA or QF) is profitable, they would make more money liquidating all the assets and having two blokes sitting in a room investing the money in an online savings account.
In my opinion, one of the big issues is competing KPi's
Each area of the respective businesses has management with KPi's upon which their performance is judged and bonuses (for some senior management) paid.
This has the effect of focusing managerial attention on meeting the KPI's in order to retain their own jobs and maximise their income.
It is a only happy coincidence if the decisions made in order to achieve those KPI's actually benefits the company as a whole.
This is because most business areas have competing priorities.
Let's look at crewing/ops and flight ops. Crewing want to optimise the things they want to minimise (drafts, overtime, open time, sick leave etc). Flight ops might want to reduce leave liability, head count, fuel burn, etc. commercial want to maximise revenue per seat.
So commercial shift a flight 3 days before it is operated from a 767 to a 737 (insert applicable big aeroplane to applicable smaller aeroplane). This might maximise the revenue per seat but effectively wastes a big aeroplane crew and calls out a small aeroplane crew - all increasing drafts/overtime etc.
This means crewing need to carry reserve (if that is how it is managed in that business) or pay someone overtime or a day off payment to crew the flight on the smaller aircraft.
This means that flight ops can't reduce head count because they need the heads to cover the reserve coverage. They can't give out leave because they need the crews available to cover the potential flying.
In the meantime the big aeroplane crews are no longer operating so their time is lost unless something else can be found for them.
It might have cost 500k to save 150k. A false economy in anyone's book.
All of these things come from competing KPI's.
This isn't unique to Australian airlines or businesses, but it is a direct result of accountants running businesses who focus on small areas rather than the big picture.
I long for the day when boards recognise that they need leaders who know their business and who are rewarded for how the business as a whole performs, not just their little patch. I fear I will be waiting a loooong time.
