Geoffrey and the jets

[Wirraway]

Wed "The Australian"

Geoffrey and the jets
Michael West
April 07, 2004

WHEN federal Tourism Minister Joe Hockey launches the $600 million Rebrand Australia campaign to entice millions of tourists to our sun-drenched shores, he'll be mindful of one problem: how do they all get here? The aeroplanes are full.

Aviation policy and tourism policy, it seems, are out of sync.

Yes, the aviation market is going gangbusters. Governments everywhere - even the US in an election year and the EEC - have resumed talks on extra capacity.

The good news for Qantas shareholders is that the Government here will have nothing of it. Apparently it still buys the line that the Mangy Old Roo might perish any day, a victim of SARS and terrorism - and competition.

As the Roo struggles to stave off bankruptcy this year with a record $1 billion profit, the mighty Open Skies policy has left regional and rural tourism operators doing it tough. Premier hotels are running in the 50s and 60s in occupancy rates.

As United Airlines crawls out of Chapter 11 in the US, if they want to package the Great Barrier Reef into a holiday the Roo will slug them $US500 to Cairns and back - one-third of the total package.

And that's just the US, another wasted northern summer inbound tourism season.

Again, great news for Qantas shareholders who profit to the tune of $100 million from the Los Angeles route alone. And a slick lobbying effort from Qantas, as always.

Despite dilution from share issues and the ever present threat of calamity in aviation, the stock looks to be good value. At some stage the old fleet will have to be upgraded - analysts reckon the cost at $7 billion - but management will want to hold that off for a year or so while driving its strategy of a tightly protected market delivering chock-a-block yields.

Then there's the news yesterday of Qantas's Singapore start-up. There is no big capital cost upfront and it will be some time before this, and the domestic discounter GeoffStar, work out, or not.

In the meantime, the initiative gives the Roo leverage over Singapore Airlines and a presence where the Roo has been lacking - Asia.

Moreover, it thwarts Virgin Blue.

But it's a crowded old market up there, full of conflicts and very absorbing of management time.


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[Chocks Away]

A can'o'worms this one... topic could go down many paths here.

I'll get in quick by saying "giddey-up":ok: to our toweled cousins in the sands (EK, Gulf & soon Qatar), for charging down here, increasing seats and giving an option through to th E.U. , some flights (new A340) shave 2 hours off the time! ... while being renowned for top service. This extra capacity (I hear!?) has been swallowed up rapidly by demand.

EK also evaluating an Auckland base/hub (contrary to memos), to attack the Pacific Basin through to USA... finally some extra seats out of Oz, to the U.S.:E ...not to mention their massive increase in seats and freight to/from N.Z.

There is a point whereby if you DON'T supply what the travelling public are after, they will go elsewhere...

Canadian (Air Canada) a case in point, increasing their Pacific flights over the Northern Winter to meet demand from skiers.

Sadly QF are extremely slow in responding to market trends ( I know what many of you will say here, re "slow and steady" etc , save your breath- as I said this topic could go many directions) .

Australian Aviations' QF article 2 (3?)editions ago opened up many glaring options which QF haven't taken, Internationally. Some of them they are only just doing now.

I've had my say anyway but it's going to be interesting with Backpacker Express and Leisurejet soon to launch. :} \

Keep the Blue up

[Taildragger67]

Since when did logic play a part in aviation?!

There are loads of routes where someone is making a big, uncontested buck & there's room for another.

Putting a 767 from CNS through HNL then onto DFW would provide a) a one-stop service from AA's main hub; b) (if connected with the QF3/4) a one-stop from SYD to DFW. Maybe also extend the QF3/4 up to YVR and suddenly you've got Canada, too.

The Aussie $$$ has been strengthening against the CAD for the last three years and recent trips reveal the slopes packed with Aussies. You can't buy a beer or lift ticket in some places without thinking you're in Thredbo (but the snow's a tad better... ). But - only AC - which HAS find ways to make a buck to stay alive - is milking this.

Then there's Dubai... this would open another route to London at minimal cost - either by putting (say) a 744 right through, or by getting BA to put a 744 onto one of their three daily LHR-DXB services and connecting on a code-share. Conversely, if the Rat didn't want to take on EK on EK's own ground, a similar deal through BAH or AUH would be feasible (the former allowing regional transfers on GF). And if extra slots aren't available to LHR, then PUT IT INTO GATWICK!! North Terminal is a faaaaar nicer passenger experience than that pit near Hounslow. Heck, same goes for Stansted.

It's also more than a bit surprising that there isnt apparently more demand for a service into Dublin now & then. Again, a place CRAWLING with Aussies and it's not as if there's a shortage of Paddies heading down under.

And Cape Town. No offence meant to my Gauteng friends, but Jo'burg's not the most picturesque of destinations. Good airport with connections to southern Africa, but as a city... how about taking one of the QF63/64s off & putting into CPT a couple of times a week instead? Or (maybe and) pop one into Mauritius now & then...

Maldives... currently have to go through SIN or CMB or DXB or some combination thereof. The place is still full of Aussies, wondering why they had to contribute to Lee Kuan-Yew Airlines rather than the one they own shares in.

European connections. I, for one, do not want to traipse up to London & muck about in Europe's skankiest airport, feeling like s*@t after a 24-hour flight, only to then go BACKWARDS for a couple more hours to get to my final destination. No, I'll sit it out in one of Asia's flash ports then go direct to the finish. Maybe have a shower while I wait. Solution? Either, direct codes shares (eg. have a thrice-weekly to MAD, code-shared with IB who currently have their BKK service code-shared on ba - figure that one) or make a bit more of the existing oneworld relationships (eg. makes more sense to go to ARN via HEL then it does through LHR).

Maybe the airlines aren't all to blame, possibly a bit more push for inbound tourism from some areas might help. Let's hope Joe's push works.

Here endeth the lesson.

[Buster Hyman]

Well, I think the current duopoly is doing nicely...for themselves at the moment. Why would they want to increase capacity & risk a drop in load factors?

An Aussie airline should gear itself to the needs of the Aussie traveller. Just because there's a tourism push OS, doesn't mean that QF or DJ should bring on the extra capacity. There is an inherent danger in hedging your profits on the overseas tourist. Ansett International learned this the very hard way. Most of us saw it coming, but what would people who worked in International handling know about it?:rolleyes: :mad:

[Cactus Jack]

Be nice to see us go back to Rome, where we pulled out of last year, and Athens, which has been a while now.

These destinations were dropped by QF management, because we never "made money" on those routes. So the illogical response was to drop the route, rather than restructure the pricing or scheduling to suit.

Ahhh, to be sipping Chianti in Piaza Navona watching the pretty Italian girls again.....

[Agent Mulder]

I am led to believe that the financials used by QF to assess the viability of this LCC were found to have been incorrect. Perhaps a journo or financial analyst can dig a bit deeper. Geoffrey Thomas or Ian Myles where are you!

I believe Dixon is making a big mistake here. Imagine getting in to bed with your major competitor SQ in a joint venture.

Of course, SQ are not involved you say. Who is Temasek and what % of SQ do they own?

A good way to ruin the QF brand in Asia is to enable your enemy to do it. This will go bad and Qantas will end up with mud on its face, Temasek (SQ) will pick up the pieces and be the heroes.

Mr Dixon, try and get one LCC going at a time. You haven't flown one Jetstar aircraft yet, and don't know what damage that will do to the Qantas Brand let alone what SQ can do to it. The Chinese must be laughing their arses off.

P.S. Stop listening to Oldmeadow.

[International Trader]

Cactus Jack

Currently doing that run to FCO for another operator.
Thanks to QF pulling out business is better, ensuring it continues.

"La dolce vita" continues just fine and the women are just as pretty.

Bye the way, Chianti is for tourists.
Those in the know drink Graves or Pinot Grigio

[Blastoid]

Intersting thought ****su ... are there ETOPS issues associated with a 767 flying on your suggested route? Don't know too much about the geography of the route required to fly it but I can't recall any twins off the top of my head that fly the pacific route (unless via Asia). Any thoughts?

[Cactus Jack]

I'm truly jealous, IT. Good luck to you, mate. Have one for me!

[Ralph the Bong]

120 mins. etops, Tonka. ANZ run their B767s on 180 mins etops, so I have heard.

[Keg]

Hey?

QF GE 767s are 180 minute ETOPS. We did SYD-HNL without too many dramas. Alas, I didn't do it often enough. It was a crappy night home but the two days before were worth it!

[Cactus Jack]

Mmmmmm, now there's another good spot. Mai Tai's on the twilight cruise off Waikiki!

We gotta get off this thread, I cant stop daydreaming!

[Animalclub]

If memory serves me... Air Niugini opened the CNS HNL route via POM with F28/B707 services... which made QF operate out of CNS to LAX well before they wanted to.

When PX pulled off the route QF sort of lost interest.

Similarly PX started a TSV SIN service which was followed by QF. Again as soon as PX pulled of the run QF lost interest... and moved their pax via CNS.

In both cases QF maintained that it was not viable.

Not true.

[justanotheraviator]

In the not too distant past QF B767GE operated CNS-HNL-SFO/LAX on a regular basis. QF has 180min ETOPS on GE aircraft and operated PW on 120min ETOPS on Long Haul routes as well.

[ftrplt]

AO is 120 mins ETOPS.

[Taildragger67]

Agent Mulder,

Temasek own just shy of 57% of SIA.

Temasek is 100% owned by the Singapore Government. One of its deputy chairmen is permanent secretary at the Ministry of Finance. Another happens to be Chairman of (gasp!) Singapore Airlines.

So Qantas is getting into a joint venture with the owner (and chairman) of its major competitor.

Oh yes, that's right, SIA are setting up Tiger Air and have been in talks with the principals of AirAsia. So Temasek will have direct and indirect interests in at least two regional LCCs.

History might judge it to be a stratgic masterstroke by Geoffrey...