Jetstar aims for top in budget war

[Wirraway]

Mon "Sydney Morning Herald"

Jetstar aims for top in budget war
By Scott Rochfort
December 20, 2004

Fourteen months after Qantas handed him the task of stemming Virgin Blue's burgeoning share of the domestic aviation market, Jetstar chief executive Alan Joyce says his airline will soon claim the crown as Australia's lowest-cost carrier.

With Jetstar poised to take delivery of its sixth Airbus 320 this week, Mr Joyce told the Herald the airline was on track to deliver its first profit as well as meet targets set by Qantas chief executive Geoff Dixon in December last year.

Mr Joyce said Jetstar had so far only chewed up $22 million of the $100 million originally set aside for its start-up. Of that, $15 million has been spent on advertising.

Where British Airways, KLM, Continental, Delta and Air Canada had failed in setting up low-cost subsidiaries before it, Mr Joyce reckons Qantas and Jetstar's success has been due to its drive to undermine Virgin Blue's cost base.

"If you go into it with these high cost levels you are going to run into trouble," he said.

Despite the rise in fuel costs, Mr Joyce said Jetstar was already well below the cost base of 8.25c per ASK (available seat kilometre) it set itself a year ago. He said Jetstar could even beat the 7.6c per ASK target set for when it has a sole model fleet of 23 Airbus 320s by mid-2006.

"We're going to beat that. Once we start bringing the A320s in that's our efficiency kick," Mr Joyce said. Last month Virgin Blue chief executive Brett Godfrey reported his airline had managed to cut its cost base by 17 per cent to 7.26c per ASK, or 12 per cent lower than Jetstar's.

But Mr Joyce contends Virgin's lower costs were helped by its average sector length being 20 per cent longer than Jetstar's. Jetstar believes this gap will close when it embarks on longer flights, such as its launch of services between Brisbane and Launceston today, expansion to Adelaide in February and a possible move to Perth later in the year.

With Jetstar's move to Perth largely predicated on the airline winning a contract to operate aircraft on behalf of QantasLink, Mr Joyce denied his airline was part of a wider Qantas play aimed at undermining its heavily unionised workforce.

Despite Qantas's sustainable future program aiming to cut $1.5 billion of costs over three years, with about 30 per cent coming from boosting labour "productivity", Mr Joyce said: "Most of the benefits that we've got are related to the fundamental ways the airline is operated.

"So, I'm not sure how people claim that this is a labour play."

As well as Jetstar's strong emphasis on turning around planes quickly - allowing it to use its aircraft more efficiently and with less fuel burned - Mr Joyce said Jetstar had managed to save costs by not using standby aircraft.

By building an airline out of the shell of the former Impulse Airlines that Qantas acquired in 2001, Mr Joyce also noted Jetstar's streamlined workforce at its Melbourne headquarters and the fact that is has far fewer full-time employees per airline than Qantas.

Jetstar noted it had "a bit over" 1000 employees for its fleet of 14 115-seat Boeing 717s and six 177-seat A320s. This compares to Virgin's 3582 employees at the end of November for its fleet of 50 177-seat and 180-seat Boeing 737s.

Mr Joyce reckons the advantages for Jetstar will increase as it builds its fleet.

But Mr Godfrey said he was sceptical of Mr Joyce's comments on becoming the cheapest run airline. "If he still believes in Santa he has a chance," he said.

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[jakethemuss]

Gloating about who has the lowest cost model (read how cheaply they can pay their staff!)!

If you guys and girls out there can't see that this is the most significant slap in the face from a CEO of either airline that there has ever been then I have absolutely no doubt that the race to the bottom will continue in earnest.

My airline runs cheaper than your airline. You have got to be kidding!

EBA time will be very interesting for these two carriers as the emphasis will be on maintaining the cheapest position. Christ, I don’t envy either group of pilots.

Tired of rosters that make you so weary you often catch yourself having those little micro sleeps?

Tired of crew meals (I use the term loosely) that put your colleagues in hospital with food poisoning so severe it is being investigated by the health department?

Tired of being told it is all about “the culture” only to find that culture doesn’t pay the mortgage or the school fees?

Tired of being led up the garden path with promises that it will all be addressed in the next EBA, only to find that come EBA time suddenly despite a record profit the airline is in “serious financial trouble and the outlook is bleak”?

All so that the Leprechaun and Kojak can bank HUGE bonuses out of the salaries that should be going to YOUR FAMILY and YOUR LIFESTYLE.

It will never get any better unless YOU do something about it. Have some pride in your hard earned qualifications and experience and demand a little bit of the respect that you afford the employer.

Otherwise, the race to the bottom continues. On your mark, get set, GO!
:yuk: :confused:

[Douglas Mcdonnell]

Jake, you are very close to the mark. The exodus is near. To me this has a distinctly late eighties feel.

DM

[itchybum]

Tired of rosters that make you so weary you often catch yourself having those little micro sleeps?

Tired of crew meals (I use the term loosely) that put your colleagues in hospital with food poisoning so severe it is being investigated by the health department?

Tired of being told it is all about “the culture” only to find that culture doesn’t pay the mortgage or the school fees?

Tired of being led up the garden path with promises that it will all be addressed in the next EBA, only to find that come EBA time suddenly despite a record profit the airline is in “serious financial trouble and the outlook is bleak”? The exodus is near. To me this has a distinctly late eighties feel. Do you mean a criss-crossing flow of pilots going to/from Australia and Middle Eastern airlines such as Emirates? Check the ME forum for a view on how things are elsewhere. Many people looking at moving into the job you sound almost ready to move on from.

[Douglas Mcdonnell]

Itchy. I didnt see that part in my bleary eyed state. The airline is doing very well. Its people arent however. Sure with over time, ie, more than 85 hours a month you can make good money. The average is about 95hrs a month. This is not sustainable in the long term. The airlines employees are its most vital asset. Unfortunately in the modern day world, its not the people who count. Its the figures. Figures dont happen without people!

DM

[Mr Seatback 2]

Couldn't agree more Jake. Hit the nail on the head.

And that's just the pilots. The Flight Attendants are in the same basket...although, we're not about to take EBA next year lying down (no sir, not by a LONG shot!)

Oh - and the hosties have been hospitalised as well.

$10 says they put up a fight saying "we need to maintain a low cost base"...

Which is why we're spending millions upon millions of dollars on new scarebuses and ads glorifying our 'wide leather seats'. Last I looked, people were more concerned with the pitch than the width (of course, we could really go to town on over length vs. width, but that's another forum...:E )

[dodgybrothers]

I think its a bit pre-emptive to claim to be such a success at such an early stage in the game. Don't get me wrong its damn fine start but where a few LCCs with big daddies have gone wrong is the tail starts to wag the dog.
BA had a similar start to theirs, until the LCC started pinching market share from BA. I'm sure QF won't allow Jetstar to make that mistake but complicating the business and soiling the 'culture' with another full service outfit such as the Qantaslink op? Any Ansett dude will tell you that if you are in the airline business perhaps you should concentrate on your core business because if you don't it only takes your eye off the ball. Jetstar=LCC, success=concentrating on core business.
Good luck to you boys and girls involved hope it all works.

Authur Dodgy

[Wirraway]

Tues "The Australian"

Jetstar broadens ticketing horizons
Steve Creedy, Aviation writer
December 21, 2004

JETSTAR is looking to widen the way it sells fares to give customers booking options beyond the internet, call centres and SMS.

Jetstar spokesman Simon Westaway said yesterday the low-cost carrier was looking at "other distribution outlets" to sell fares.

"I guess what we're trying to do is find touch points our customer base interacts with," Mr Westaway said.

"There are some potential further web-based opportunities for us and there are opportunities through a number of third parties."

Asked whether this included the Asian model of selling tickets through convenience stores, Mr Westaway said: "We're having a look at a few different things.

"I think, though, simplicity is important and Jetstar.com has been our driver of ticket sales and for information ... so we want to be very disciplined to the model and we're not going to do anything too whacky."

The airline is continuing its expansion and yesterday doubled capacity on the Newcastle-Brisbane route to twice daily and launched a direct Launceston-Brisbane flight.

The carrier brought in its fifth 177-seat A320 last week and a sixth arrives this week.

Two additional new A320s will go into service in January and two more arrive from Jetstar Asia in March.

This will allow a new schedule in late March that will make Hamilton Island, where the airline has been criticised by well-heeled residents as too downmarket, the carrier's first all-Airbus port.

"I guess for a product perspective, that's a very strong signal ... that we're putting our best aircraft product on that market," he said.

Mr Westaway said Jetstar was also looking at technology that, from early next year, would allow business travellers to buy an excess baggage allowance and meal vouchers through their web or phone booking.

"We are getting a segment of regular business traffic now - on some routes it's upwards of 20 per cent," he said.

Mr Westaway said the airline had not yet decided on how it would introduce hand-held entertainment units capable of storing films, TV programs and games.

He said the airline was assessing different models and would need to conduct a trial to see how the technology affected its operations, particularly on shorter routes.

The trial would look at how the units could be loaded on and off the plane, handed out and recharged efficiently.

"The integrity of our aircraft turn and the integrity of our cost base is always something we will have an eye to," he said.

He said a hot food service was being trialled and the airline was looking how it could best be introduced.

Jetstar again topped the on-time statistics for the major carriers in October, although overall on-time performance dropped slightly due to volatile weather conditions.

Jetstar's flights arrived within 15 minutes of schedule 86.5 per cent of the time compared with 83.6 per cent by Qantas and an improved 81 per cent at Virgin Blue.

In the regional category, 91.1 per cent of flights at Perth-based airline Skywest arrived on time, compared with 90.1 per cent at Regional Express and 84.6 per cent at Qantaslink.

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

[ditzyboy]

TV's and Hot Meals -WTF??!!

Gate Gourmet can't even organise gloves for the cabin crew that CLEAN the aircraft (poo on seats - you name it!) and the most basic of supplies like cups, ice, napkins and toilet paper. We recently went without gloves for three days and there was one day SYD-based aircraft had no loo paper!!! (Qantas Club in T2 came to the rescue - Thanks.)

Lets get what we do now right before embarking on TV units and Hot Meals! No doubt the complaints and tears will all be left for the cabin crew to deal with. Oh well. Atleast we have the time now. The service takes two minutes - there's NEVER anything in the carts to sell! (Except warm beer and frozen red wine!)

Gate Gourmet and Jetstar Inflight Svcs Management - Couldn't organise a root in a brothel...

[itchybum]

calm down or you'll break a nail....No doubt the complaints and tears will all be left for the cabin crew to deal with. Who else???Couldn't organise a root in a brothel The best thing is for you to transfer over and fix the problems. If you can't transfer, resign; they will see your potential when you point out the faults and fixes in the interview and hire you in a snap.

[ditzyboy]

Itchy -
With the amount of daily assessment forms we are expected to fill out now (cleaning, catering, stock take, feed back, OSCARs), the forums and 'Culture and Engagement' Surverys I have no doubt that Jetstar is armed with more than enough constructive feedback to make positive change. I suspect the problems aren't a money thing. I think it is organisational problems where one arm has no idea who the other arm is and what it is doing!

It would seem everyone in the trenches is hell-bent on making this place a great place to work and a nicer experience for our customers - but that's where the caring ends it would seem.

Oh, and I can assure you hell would freeze over before any of these nails get broken... ;)

I am just completely asstounded that the company wants to make things even more complex when we don't even get right what little we do now. It certainly doesn' inspire much confidence. Why should I believe for a second the TVs will be well managed when Jetstar and GateGourmet can't organise Pringles?!

[Mr.Buzzy]

screw, screw, screw, screw, screw........snap!

bbbzzzzzbbzzzzzbbbzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

[GOTAN2005]

Just another hole in the piece of cheese..........

More flights canx due to techies refusing to work on days off

:sad: :sad: :sad:

[ditzyboy]

Good on them!:ok: There's cabin crew in SYD who hit their max block hours on the 24th... With MANY following over the next couple of days. Flights on 30, 31st are already being combined due to lack of crew.