Breaking the Qantas Monopoly on Commonwealth Travel

[Wirraway]

virginblue.com.au

Breaking the Qantas Monopoly on Commonwealth Travel

Despite lengthy discussions between Virgin Blue and the Commonwealth Government about breaking the Qantas monopoly on public service travel, an independent report to the Prime Minister's Department has confirmed that public servants have shunned best value for taxpayers' money fares offered by Virgin Blue on major routes, such as Sydney to Melbourne and Sydney to Brisbane. It confirmed that less than one per cent of public service travel is on Virgin Blue. "That is a scandal when Virgin Blue has around 30% of the domestic aviation market, including substantial corporate traffic which should have the same needs and expectations as the Commonwealth, " said David Huttner, Head of Strategy and Communication.

This week's Cabinet decision to make minor changes to the status quo ignores the fact that it continues to protect the perks of 20% of the market requiring business class travel and lounges, at the expense of meeting the requirements of 80% of Commonwealth travel in economy class. "Even though the Government plans to continue to look at this issue, it has just written a further blank cheque for Qantas," said David Huttner.

Because of the failure by government to redress that monopoly, Virgin Blue has decided to suspend one of its two services from Canberra to Sydney each day and re-deploy it to routes supported by people, including Commonwealth employees not on official business, such as Brisbane and Melbourne. If the Commonwealth Gobernment moves to scrap that monopoly, then Virgin Blue will restore that service.

"Despite the Government's failure to address that situation, Virgin Blue has decided to increase its flights to and from Canberra to better meet the needs of the tourism, small business and private sector flyers who are supporting the low fare airline, " he said.

Canberra-Sydney services are now focused on a Canberra originating aircraft every morning with an evening return. The schedule gives ACT residents a full day in Sydney, while the evening return from Sydney offers tourists a quick weekend getaway to the Australian capital, as well as the Snowy Mountains. This also gives the people of Canberra more convenient connections to Brisbane, Alice Springs, the Gold and Sunshine Coasts, Cairns and Perth.

David Huttner added “It is ironic that the people of Canberra are supporting us so well that we have been able to announce today’s additional services, yet the Government seems unable to make use of the same good value. The suggestion that a few public servants have been compelled to try another airline when flying to Sydney, does not cover the fact that when we offered fares as low as $49 the planes did often fill up, yet there was virtually no-one onboard whose ticket was paid for from the public purse. Clearly that demonstrated that something is fundamentally flawed in the way the Government conducts its business”

He continued, “ We have made it clear to the government that the minimal reforms thus far do not represent value for taxpayers' money and will not lead to a sustainable market for government travel, be it with us or any other airline. We look forward to the Government introducing substantial reforms to its travel management practices so as to ensure taxpayers get a better deal.”

Despite having carrying less than 1% of Commonwealth Government traffic the low fare airline will soon be offering over 25% of the total capacity into the nation’s capital.

The additional flights to Brisbane, Melbourne and the Gold Coast will mean the airline will now be “over-nighting” two aircraft and two crews in Canberra for the first time, ensuring on-time morning departures throughout the year.

===========================================

[bitter balance]

Wouldn't that have something to do with Business Class? A realistic comparison may be the number of tickets purchased on QF economy compared to VB.

[Southern handler]

Canberra gov travel, QF business class and frequency vs DJ and ZL. QF 22( about ) flights a day CBR SYD (about 15 Dash and 6 or so 734). 11 CBR MEL (9 734 2 DH8). Im a QF bloke and no surprise DJ taking pax on a lot of routes (cant wait for JetStar), but come on an decent club and frequency and on a business route take the cake.\


aways have fun

[pullock]

I am so SICK of Virgin representatives winging to get media attention in order to promote their market desires.

Virgin market their product to the low cost travelers, and that is what they attract - and quite effectively so.

Government travel has always been a premium market for the entire travel industry, and always will be. If you say that it shouldn't be so then you never traveled for business - you can't pay your staff big bucks and ask them to travel or rat - class. There are standards of accommodation meals and travel that are expected in business. For example, nobody would expect an employee to catch a bus to a business meeting or conference or to stay in a tent or caravan park once they arrived at their destination - the same applies to air travel.

Virgin aiming for a low cost market then complaining that the premium market isn't attracted to your product is just PATHETIC.

My advice to Virgin or anyone else for that matter, is to change your product and marketing to attract the market rather than insulting the same market by complaining that they aren’t using it!!

Give the business/government travel market credit for being able to see through your sensationalist marketing ploys like this one, then one day they may take you seriously.

[Metro Boy]

It doesn't surprise me they don't travel with Virgin. I crewed one flight and the the flight attendants decided to do inflight aerobics with a few (unfunny) jokes thrown in. I was utterly embarressed.

[Gunnadothat]

It seems hardly surprising though that there was an article in a recent morning paper which said that while management were flying QF, the trend was for the underlings was that they were put on DJ.

A case of "do as I pay, not as I do" ;)

[Don Esson]

Will these 'Johhnny come latelies' from Virgin Blue ever stop whingeing, whining and blaming everyone but themselves for any perceived lack of success? Has it ever crossed their rather feeble and narrow minds that the Canberra market simply does not like its product? It is essentially a high income and very discerning market with probably the highest level of disposable (discretionary )income of any city in Australia. The same would apply to business travellers to/from Canberra. That said, why would anyone of their number want to travel on a back-packer style of operation? Not that there's anything inherently wrong with back-packers: it's just that their expectations and needs differ.

[Spodman]

Couldn't give a rat's what color the tail is, don't eat the crap in a cardboard box some provide and don't drink while flying on business.

I'm always booked on Qantas (cattle class) and they won't let me in the Golden Shower lounge, so receive no benefit from not saving THE INDUSTRY money by flying by the lowest ticket price.

Frequent flyer points are an issue also.

Keep "winging" for a fair go VOZ & KDA.

On the other hand, I see in another thread Jetstar will be using a 30" seat pitch. I hunch my 196cm like a cripple with 32", so there's a limit here...

[Wirraway]

http://www.vpmag.com/yssy/viewtopic.php?t=5508

Interesting post over on Sydney Airport Message board on the
same subject:


Hello to all.
This particular thread has prompted me to register so as to post a reply.

My current employment position places me as a regular customer of government financed and arranged travel, and as such a customer I have come to see that the contract for government travel as worded is somewhat missleading.

I personally have tried to arrange flights with DJ on five seperate occassions, checking timings and fares carefully. Each time DJ offered fares of over $100 one way less, however, each time I was advised that my travel was to be arranged with QF.

It was all made clear for me after investigating through my senior management that in actual fact government travel, in particular, Defence Dept travel is done through a company called Qantas defence travel. This company whilst owned by QANTAS is not actually Qantas Airways. There 'mandate' is that they are to provide travel according to customers schedule requirements whilst ensuring that wherever possible that the best fare of the day is utilised. Not stating that it must be with QF or any particular airline. Why then the poor use of Rex or DJ?

Other perculiarities come into play here. The airfares that we all look at online are not the fares charged to government depts. For instance, the Dept of Defence has a contract with Qantas that means that irrespective of when the airfare is booked, be it two hours prior to travel or six months prior, the same fare is paid!
However the fare charged is significantly lower than that available to the public for last minute travel, and as so much governmetn travel is late notification this is a big win for government financiers.

But this does not exclude that despite these big savings often DJ or Rex fares can still be much cheaper but are still not utilised.
A clinical point in case is the Melbourne to Newcastle route now flown by DJ direct. I was intended to travel from Melb to Newcastle, my travel was arranged through Qantas defence travel who booked me firstly Mel to Syd, I then had several hours wait for a flight to Newcastle. This meant that defence would have had to pay not only a meal allowance to me but additionally a dinner allowance. This amounts to nearly $50. This is on top of the QF airfare of over $1000 (one way). Even allowing a 50% discount for the contract were still at $550- ( one way).

I was able to locate a DJ fare on the same day for $79 and would not require a meal allowance to be paid at all due to the flights timings.
But this was to no avail, the Qantas defence travel operator ended up saying that she was unable to place me on a DJ flight! So in the end, all the facade and pretence comes back to who's paying the wages of a so called independent company......

I have very few qualms with Qantas any more, though I don't use them for any leisure or private busines travel. But I am a tax payer, and I do get annoyed that my taxes are needlessly wasted on over inflated airfares. Dept of defence exerts a lot of controls over its personnel in many ways, making people travel a little earlier in the morning or in the middle of the day will not put their personnel out too much if it can mean saving the Dept a few million dollars a year.

In my view, it should purely be about the bottom line of cost, it is the Australian publics hard earned money, not the governments, that appears to have been lost sight of. Lounges and Business class are not essential, we did without them for many many years, and still did our jobs brilliantly, they can not be considered an essential now. If you travel for govenrment business, and travel over a normal meal time, you have to be paid an allowance to cover the cost of purchasing a 'substantial' meal. So saying you have to have Q Club membership or access so that you get a good feed is a double dip. Q club memberships or allowances, I know which is more profitable at anything up to an allowance of $30 for a missed meal.

I've never met anyone in defence or allied areas that has been flown anywhere with DJ or Rex.

Phew! The fingers are cramping.

Please note this is not a SLAM at the airlines, but at the Government regulation of it's blind contracts.
I say that if it flies then it's good! But the hip pocket does have to come in to it.

===========================================
ABC News Online
Sunday, December 14, 2003. 3:11pm (AEDT)

Govt travel preferences 'reducing' route competition

The Federal Government is being urged to put more effort in to encouraging public servants to travel on small airlines, after Virgin Blue dropped one of its flights between Sydney and Canberra.

Just last week the Government claimed it had exceeded its target of directing 10 per cent of travel between Sydney and Canberra to smaller airlines.

But Virgin Blue is blaming the lack of public service travellers for a decision to reduce its twice daily flights on that route to one.

The ACT Chief Minister, Jon Stanhope, says moving to one flight will reduce the competition in the market.

Mr Stanhope says the Commonwealth public service is the biggest purchaser of air tickets and more needs to be done to help small airlines.

"I'd call on the Commonwealth Government to show some real leadership," Mr Stanhope said.

"Over the last two weeks I've flown REx and I've flown Virgin so the ACT public service is doing what we can, but we're of course not in the same league as the Commonwealth."

========================================

[alangirvan]

It is disappointing to lose one of Canberra's two daily services to Sydney, but two flights a day was never competitive on a short leg like that. The flights between CBR and MEL/BNE seem to be timed to be more convenient for people flying into Canberra for a meeting, though if Virgin are going to overnight in Canberra that will be a big improvement.

Rex have noticed an improvement in their loads out of Canberra - they offer a good frequency. They have a nice lounge. Their Saabs are fine for a short trip.

The 737NGs are like using a sledgehammer to crack a nut on Canberra to Sydney

[Keg]

'Defence' Travel is very different to 'Government' travel witih Defence signing their own contracts for the services they utilise. The price they pay would be no where near the 'rack rate' that you find off a website somewhere and most defence fares are at a substantial discount to a 'normal' fare. They are also mostly fully changeable, etc, etc, etc.

[DutchRoll]

My prior experience with Defence was always that they fly their people with whoever holds the travel contract at the time. Some years ago AN had the contract, and I distinctly remember only being booked QF if no AN flights were available. The last few years, QF has been the preferred defence travel airline.

Furthermore, all this rubbish about the playing field being skewed in QFs favour is irritating. I wonder if QF will get the same governmental startup assistance and CASA operating exemptions for JetStar as Virgin did. Doubt it, somehow.

I have to hand it to Virgin though, they are becoming experts at crying poor and getting people to feel sorry for them. I guess it's all part of the game.

[Aussierotor]

Maybe the government are sticking to a long time Aussie icon.
Large companies have contracts with a particular airline ,hotel group and rent-a-cars ,so whats the big deal-----thats life

[Raider1]

The way that the media reports DJ's whinges without checking out the facts really annoys me.
DJ is NOT reducing Canberra services. Rather they are increasing them substantially.
Sure they have dropped 1 Sydney service (2 were probably never going to work because the discount market drives). BUT what they have done is that from Feb they will overnight 2 jets in Canberra allowing for early morning departures (0645) to both Mel and Syd.
The new schedule has:
3 a day to MEL (up from 2)
3 a day to BNE (up from 2)
3 a week to OOL (up from 1):D

[apacau]

Hear, hear Raider 1

Lose 1 flight, gain three and all the media can speak about is the 1 lost flight.

Just to clarify your post, Melbourne actually goes up to 3.5 per day - when the plane isn't going to OOL, it is operating a late night 4th service to Melbourne it seems (Thu, Fri, Sun - peak days)

And the early departures will mean fewer fog issues which is more good news.

[Southern handler]

media focusing on 1 flight, thats the media but I think Virgin gave them a pretty good helping hand on this one.

At CBR front count and club checkin's it is not unusual to get people fronting up to checkin for their Rex flight with QF Itinerary, thats just the ones that we see that did not realise they were booked on Rex, no doubt there would be a lot more. As for DJ who knows lets face it 2 flight versus Rex 7 (I think) makes the difference.

[HotDog]

I'm sure this flight won't carry any parlamentarians either.:E

Raucous backpackers in full flight


NICK SQUIRES in Sydney





--------------------------------------------------------------------------------

A new airline catering specifically for British backpackers travelling to Australia will launch next year, complete with an in-flight pub, karaoke and singing competitions.
The low-cost airline, BackpackersXpress, will operate three times a week between Manchester and Melbourne, via Delhi and Bangkok, allowing travellers to break their journey in India and Thailand.


Its two 747 jumbo jets will have their engines painted to resemble giant cans of Fosters and Victoria Bitter beer. The planes' tail fins will be adorned with giant yellow smiley faces - the symbol of the acid-fuelled dance party scene which swept Britain in the late 1980s.

Raucous behaviour will not just be tolerated but positively encouraged when the airline starts flying in June, and noise complaints from non-backpacker passengers will be ignored. There will be just one class of ticket - economy - with seats in the first-and business-class sections making way for a mile-high pub.

"Everyone is welcome to fly with us but if they are not backpackers we will warn them that the flights will be noisier and a lot more fun than anything they have expected before," said Glenn Millen, the Brisbane-based entrepreneur behind the idea.

He dismissed suggestions that he was courting disaster by matching backpackers, booze and air travel. "If things get out of hand then the bar will be closed. But in my experience backpackers coming to Australia just want to have fun and don't normally get into a lot of trouble. They are rarely involved in punch-ups," Mr Millen said.

Return airfares will cost about £600 (HK$8,135) and tickets will not expire after 12 months as with traditional tickets.

[Wirraway]

Tues "Canberra Times"

Rex wants ACCC action
December 16th, 2003

Regional air operator Rex has asked the Australian Competition and Consumer Commission to investigate the Government's use of the Qantas Business Travel for booking air travel for public servants and politicians. The news came as the airline said it was cutting down its Canberra-Sydney flights by one a day to six return flights, saying there was not enough business at present to justify the seventh. Rex director Bob Winnel, who chairs the airline's government liaison committee, said while there had been a dramatic improvement in Rex's share of the crucial Canberra-Sydney route, only 32 per cent of its business on the route was from government, while of the total Canberra-Sydney business 50 per cent was government.

Mr Winnel praised Finance Minister Nick Minchin's efforts to make sure smaller airlines get a bigger slice of the travel cake and said politicians and senior public servants had certainly led by example in increasing their travel with the airline. But he slammed the Department of Defence which he said was by far the smallest user relatively speaking. And the company still believed it was an outright conflict of interest for Qantas to be acting as a travel manager to allocate business between competing airlines.

''We've given lots of examples, which we have put before the ACCC - we believe it is an innate conflict of interest in being airline and travel manager allocating business or advising on it and the ACCC is looking at it.'' While he welcomed the report on Government travel by former Finance deputy Len Early that was issued last week, Mr Winnel said, ''We are disappointed that the issue has not been addressed in a more forthright manner, though they are going to look at how it is managed. We think it is so blatantly a conflict of interest that we would have expected a stronger response - [Qantas] should be able to do one or other, but not both.''

He said the airline believed there was still too little accountability in the way individual public servants could make their own choice of bookings, but he understood the Government was going to look more closely at that. He welcomed the greater central role for the Department of Finance and Administration and hoped there would be more of it. ''A positive thing that has come out of Len Early report is that there is a much greater supervisory role for Finance, because government policy, when it is being interpreted and implemented by a central agency, can be much more effective than when it is being implemented by dozens of agencies.

The problems that remain are much better able to be dealt with because Finance has provided a positive direction for the Public Service since we raised the matter in August.''

======================================

[apacau]

This post from the YSSY board (thread since removed) is interesting when put alongside the claims re Department of Defence in the Canberra Times Article:

Quote:

This particular thread has prompted me to register so as to post a reply.
My current employment position places me as a regular customer of government financed and arranged travel, and as such a customer I have come to see that the contract for government travel as worded is somewhat missleading.
I personally have tried to arrange flights with DJ on five seperate occassions, checking timings and fares carefully. Each time DJ offered fares of over $100 one way less, however, each time I was advised that my travel was to be arranged with QF.
It was all made clear for me after investigating through my senior management that in actual fact government travel, in particular, Defence Dept travel is done through a company called Qantas defence travel. This company whilst owned by QANTAS is not actually Qantas Airways. There 'mandate' is that they are to provide travel according to customers schedule requirements whilst ensuring that wherever possible that the best fare of the day is utilised. Not stating that it must be with QF or any particular airline. Why then the poor use of Rex or DJ?
Other perculiarities come into play here. The airfares that we all look at online are not the fares charged to government depts. For instance, the Dept of Defence has a contract with Qantas that means that irrespective of when the airfare is booked, be it two hours prior to travel or six months prior, the same fare is paid!
However the fare charged is significantly lower than that available to the public for last minute travel, and as so much governmetn travel is late notification this is a big win for government financiers.
But this does not exclude that despite these big savings often DJ or Rex fares can still be much cheaper but are still not utilised.
A clinical point in case is the Melbourne to Newcastle route now flown by DJ direct. I was intended to travel from Melb to Newcastle, my travel was arranged through Qantas defence travel who booked me firstly Mel to Syd, I then had several hours wait for a flight to Newcastle. This meant that defence would have had to pay not only a meal allowance to me but additionally a dinner allowance. This amounts to nearly $50. This is on top of the QF airfare of over $1000 (one way). Even allowing a 50% discount for the contract were still at $550- ( one way).
I was able to locate a DJ fare on the same day for $79 and would not require a meal allowance to be paid at all due to the flights timings.
But this was to no avail, the Qantas defence travel operator ended up saying that she was unable to place me on a DJ flight! So in the end, all the facade and pretence comes back to who's paying the wages of a so called independent company......
I have very few qualms with Qantas any more, though I don't use them for any leisure or private busines travel. But I am a tax payer, and I do get annoyed that my taxes are needlessly wasted on over inflated airfares. Dept of defence exerts a lot of controls over its personnel in many ways, making people travel a little earlier in the morning or in the middle of the day will not put their personnel out too much if it can mean saving the Dept a few million dollars a year.
In my view, it should purely be about the bottom line of cost, it is the Australian publics hard earned money, not the governments, that appears to have been lost sight of. Lounges and Business class are not essential, we did without them for many many years, and still did our jobs brilliantly, they can not be considered an essential now. If you travel for govenrment business, and travel over a normal meal time, you have to be paid an allowance to cover the cost of purchasing a 'substantial' meal. So saying you have to have Q Club membership or access so that you get a good feed is a double dip. Q club memberships or allowances, I know which is more profitable at anything up to an allowance of $30 for a missed meal.
I've never met anyone in defence or allied areas that has been flown anywhere with DJ or Rex.

[Keg]

I've flown with REX on a Defence fare and I know others who have- but only on routes where there is no Qantas or Qantaslink flights.

On top of that, Defence signed a contract with a QF owned company to supply travel. I'm not sure how the ACCC can get involved in that. I assume that REX could have tendered for the contract just as Qantas and Ansett did when the contract was signed years ago. in fact, about a decade ago, Ansett HAD the contract and all defence personnel flew with AN or their subsidiaries.

[EPIRB]

Well I guess if I was a public servant and had a choice between a turboprop, an airline that has no inflight meals (unless I was prepared to pay) or a full service airline where I could watch the latest news, I think I know which one I would fly.

[snarek]

EPIRB

Add to that lounges (that's where you get breakfast for a 6:10 departure when you live in Murrumbateman!).

Seatsize is also an issue, I need to work while I travel.

I tried Rex once, got stuffed around at check-in in Melb and had to sit in a plastic seat. I think I saved a whole $12!!!

It ain't worth it, rather than whinging they need to provide a service people doing a 16 hour day CBR-MEL-CBR will chose to buy.

AK

[Big Hairy Potatoes]

The bottom line here is that the Government is spending yours and my money irresponsibly.
Look at it this way.
If I owned a business and didn't shop around for the cheapest flight I would go out of business.
We pay these fat cats sh#tloads to waffle on in the chambers and then pay through the nose for them to fly business class earning FF points while sitting in a lounge drinking free piss.
I think it is disgusting that this happens while normal joe blow can't even get a tooth pulled, get a bed in a public hospital or get accommodation with government assisstance.
The Government is there for the people, elected by the people. I think we have every right to ask and demand that they spend our money wisely.

Let go of my arm, I don't want to get of the soap box!!