Merged: Ozjet to cease RPT operations.

[ozangel]

Heard just now from a friend at ozjet,

they were called about 7pm and advised that RPT ops would be ceasing, ozjet to remain soley as a charter operation.

Spose to be a press release at 8pm so watch the late news...

Hoping my source isnt pulling my leg, no reason to doubt tho - anyway, if true, best of luck to everyone there, you gave it you best shot!

Their website is no longer accepting bookings, not even for tomorrow. The feeling I got was tonight is the last night of ops.

[Pass-A-Frozo]

Ozjet Airlines suspends flights
From: AAP
March 12, 2006
BUSINESS class airline OzJet, Australia's newest domestic passenger carrier, has suspended its scheduled flights between Melbourne and Sydney.

OzJet chairman Paul Stoddart said in a statement tonight the decision to immediately stop flying scheduled services was made with great regret.
"Unfortunately, for whatever reasons, we have not had the support we needed to operate in that environment against big, established carriers," Mr Stoddart said.

"It's very, very disappointing, particularly, I'm sure, for those people who had started travelling regularly with us between Melbourne and Sydney and many of our very diligent and loyal employees.

"Sad to say, there have not been enough of those regular customers.

"We will now concentrate, with a reduced workforce, on charter operations.

"No paying passenger booked on OzJet will be unduly disadvantaged - they can either receive a refund from OzJet or transfer without any additional cost to Qantas, which has kindly offered to assist in transporting people who have booked and paid for tickets with OzJet."

[vee1-rotate]

They had the right idea...they had a good setup (wasn't a fan of the medievil 732's though)...but their marketing was atrocious...and I do believe its one of the major contributing factors...

Good work for giving it a try....:ok:

[Pass-A-Frozo]

Did they have a Qantas Club equivilent? I know one factor on me deciding whether or not to use them on the (now not) planned Syd-Per route was the fact I have QF Club membership.

I'm not sure the regular QF flyers who were gold FF members (with associated free QF Club membership) would have been interested in missing out on that.

[gameboy1971]

The idea may have worked if they had entered service the week after Ansett went under. In todays market they don't have enough frequency, lounges, Freq flyer, marketing, etc to survive in a more discerning business market. They also launched at the wrong time of year - just in time for the lull between Feb and June. Was just a matter of time. Sorry to those involved.

[HAMO]

The idea may have worked if they had entered service the week after Ansett went under. In todays market they don't have enough frequency, lounges, Freq flyer, marketing, etc to survive in a more discerning business market. They also launched at the wrong time of year - just in time for the lull between Feb and June. Was just a matter of time. Sorry to those involved.

Gameboy

1. They launched before Xmas last year
2. The "lull between Feb and June " ... dont know what industry you referring to, but in domestic travel, Feb is when all the corporates get back to business after the Xmas/January school holidays

Be interested to hear what Eastwest Loco has to say about their attempt and demise at getting a foot in the AUS domestic scene .. Ron, where are you?

[Raider1]

Hitorically business travel doesn't really pic up fully untill mid March. Guess the last 3 months was just too hard.
So sorry for the staff that had their hopes on success

[Keg]

What a shame, I'd heard some decent reports about their service and was hoping that they'd make a go of it! So sorry to those who are now struggling. :(

[Eastwest Loco]

Right here Hamo

Yet another tragedy for the industry as a whole.

Ozjet had the right product. The passengers my office booked with them were hooked first flight. The big marketing problem they faced was how to best impact their target market. Finding that market at a reasonable price is the trick, and a damned hard trick to master at that without a near bottomless advertising budget.

Hamo is correct - the black hole for corporate traffic is late November through early February and this certainly didnt help.

Other startup problems are going up against full frequency when yours must have gaps until demand decrees otherwise.

I know for a fact that Matty and all the O7 crew lacked nothing at all in the amount of time and effort they poured into making it work. It is a major credit to them.

Hopefully the charter operation will bear fruit and keep as many of their people on the ground and in the air employed as is practicable.

A sad day indeed.

EWL

ps: O7 inventory has been "zeroed" on all services from tomorrow in Sabre which is the host system. No rebookings have come through to accommodate ticketed passengers as yet, so I have rebooked mine in anticipation of document interchange. Unticketeds I have just rebooked onto closest QF flight.

[Fred Basset]

They folded quicker than I thought.

Starting services in December and January wasn't their best move and the fact that fuel was hovering about the USD$60 mark wouldn't have help.

Good luck to those who have got to find a new job.

[WangFunk]

Well, after recently comming back from overseas after quite some time, it was quite a novelty to see the new airlines 737 in the parking bay at Sydney airport. I did hope for good things for Ozjet. Maybe its just cause im sick of
Qantas having the monopoly here in Australia for way to long.

[wing surfer]

looks like another kill for the major(s)

compass
compass II
TAA
kiwi air
ansett NZ
Ansett Australia

and after an short Battle

Oz-Jet

and maybe Australian Airlines (II)

sorry if i have forgoten any but this is just an example

[Eastwest Loco]

I guess you can add:

East West Airlines :{
Bizjets
Butler Air Transport
MMA

One can go right back to ANA/Holymans etc.

The only true constant is change.

EWL

[Skydrol_ise]

AIR QUEENSLAND or BPA as they used to be known

[Danny Crane]

Should we not forget Impulse as well.

I an very sad that OZjet failed, as I too am sick of travelling with QF.

I think the mistake that they made was attempting the well travelled and well failed SYD-MEL market as their first sector - where is the benefit of business class on such a short sector ? thereafter the poor marketing, and god who designed that website ?

Really I wanted to fly OZjet but they just didn't operate services to anywhere that I fly to!!

I am very sad that Ozjet weren't able to show QF that people are sick of QF's crap.

Denny Crane

[Capn Bloggs]

Ansett Australia

"A kill for the majors"?! Fratricide, perhaps?

[Wirraway]

Mon "The Australian"

OzJet flights grounded after three months
Steve Creedy and Elizabeth Gosch
March 13, 2006

BUSINESS class airline OzJet has axed its domestic service just three months after launching a bold push to take well-heeled customers away from Qantas and Virgin Blue.

The airline said last night it was cancelling services between Sydney and Melbourne and would not proceed with planned flights to Perth, unveiled last month.

OzJet chief executive Hans van Pelt said about 70 of the airline's 100 employees would lose their jobs as a result of the decision.

OzJet, founded by Australian Formula 1 investor Paul Stoddart, plans to keep at least two aircraft operating in Australia and to pursue charter work.

Mr van Pelt said OzJet customers who had already travelled one leg of a journey would be transferred without extra cost to Qantas flights between now and March 24.

Those who had not started their journey would get a full refund or could get a Qantas seat at the same price if they contacted the airline by the end of the week.

Mr van Pelt said OzJet had not attracted enough customers to make the service viable.

"It just comes down to could we get the numbers to make it work," Mr van Pelt said.

"And the reality is we just can't see where it's coming from and for whatever reason we can't get the support to operate in this environment.

"We just can't go on losing money. It's fair to say we gave it a go and it's become clear we weren't going to achieve it in the immediate future."

OzJet has brought four aircraft into Australia, and Mr van Pelt said the company was working through its future.

He said some staff would become redundant but the airline would honour all its commitments.

"But the reality is we will probably downscale to a minimum of two aircraft and about 30 per cent of the staff," he said.

OzJet hit turbulence as recently as last week when it announced the delay of its proposed Perth services because of lack of support for a proposed red-eye flight.

The aviation industry had been highly sceptical of the start-up's chance of survival, particularly when it chose to begin operations over Christmas, a traditionally quiet period for business travel.

Mr van Pelt said the decision to axe the airline services had been a tough one.

"It's disappointing, what else can you say," he said. "It's with great regret that we have to do it, and it's just really unfortunate.

OzJet chairman Paul Stoddart said the airline had been unable to compete against Australia's other established carriers.

"Unfortunately, for whatever reasons, we have not had the support we needed to operate in that environment against big established carriers," Mr Stoddart said in a statement.

"It's very, very disappointing, particularly, I'm sure, for those people who had started travelling regularly with us between Melbourne and Sydney and many of our very diligent and loyal employees. Sad to say, there have not been enough of the regular customers."

The Melbourne-based airline struggled from the start, delaying its launch last year from July to October and then to November because it took longer than expected to obtain approval to operate from the Civil Aviation Safety Authority.

OzJet then cut prices and revised its schedule just a week after launching and struggled to attract customers, with reports some flights were carrying just three passengers.

However, in February Mr Stoddart said things were looking up, with the airline's load factors hitting 50 per cent.

"The bookings over the last couple of weeks have really, really picked up," he told the Nine Network.

Yesterday he said "no paying passenger booked on OzJet" would be disadvantaged from the cancellation of the service.

"They can either receive a refund from OzJet or transfer without any additional cost to Qantas, which has kindly offered to assist in transporting people who have booked and paid for tickets with OzJet," he said.

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

[rescue 1]

Better to have loved and lost, and not loved at all...

At least Ozjet had the guts to get out there and try!

[Wizofoz]

A good many European Aviation people are still owed money after being made redundent by Mister Stoddard.

Make sure you get what you're entitled to before he leaves town...

[Buster the Bear]

It would appear that OzJet are no longer flying!

http://www.smh.com.au/news/business/ozjet-grounded-after-failing-to-take-off/2006/03/12/1142098351858.html

[TSR2]

It will be interesting to see how long Mr Stoddarts latest venture lasts with MD-82's.

Hope all you Ozjet guys get every cent you are owed and best wishes for the future.

[carpe_jugulum]

If they are serious about pursuing charter, perhaps they should look closely at Norfolk Island - CHTR on behalf of QF - they could make a go of it - not all business class seats of course.

The locals and tourists there need some stability of service, considering the short shrift they have had over the last few years.

Give it a go OJ.

[Iron Bar]

There has got to be more to this. I do not believe PS would waste this amount of money on what was an obvious lemon.

-The type of aircraft operated.

-The start date, could not have picked a worse time of year.

-The schedule and frequency, or lack there of.

-Woeful promotion and website.

-Suicidal discounting and two for one offers.

Is it possible the whole airline was designed to fail??????


What does he have now?

-High capacity RPT AOC and an airline as a going concern with established infrastructure a workforce and most importantly Sy slots and gate access. (Very salable asset, far too valuable for just flying a few charters) Note the timing, within days of Qf making Australian aviation jobs front page news and promoting the need for foreign investment and "engagement". New IR laws about to become effective and Singair recently excluded from Pacific.

How plausible does "Large foreign investment/buyout revives airline and saves Aussie jobs" sound???

Was OZ Jet a Trojan horse????????

[DutchRoll]

Maybe the truth of the matter is simply that his business sense is not all that it's cracked up to be. He seems to have made several fundamental misjudgements about the oz airline market, and has lost millions as a result.

The proof is there for all to see.

[Escape_Slide]

Well, it seems after Legal Counsel was poo-poohed so much for (her) spot on analysis of Ozjet. the day of reckoning has arrived.
Congratulations, Legal Counsel, if you are still reading pprune, you just earned your MBA in airline analysis!!!
:ok:

[king oath]

How do you make a small fortune out of aviation????????

Answer:...............

[BusyB]

After seeing the continuing mistreatment of EAC staff by PS I am surprised anyone expected anything else. I hope the staff get what they are owed promptly without having to take legal action.

[Elroy Jettson]

Anyone remember that remark Stodard made to Dixon, something like, "You will be buying me out in a year!" I guess Geoff can keep his silver for the parking meters.

Not sure that PS would have lost a cent personally, his assets will be well protected, dont you worry about that! Haven't we learnt anything from Ansett, Compass, Onetel, HIH etc, the employees suffer most of all. My thoughts are with the staff. Good luck all. Wishing you all a speedy career recovery!

[sinala1]

I am surprised at the lack of coverage in the mainstream media - small articles in the paper, and no mention of it on this evenings news in Brisbane on channels 9 or 10 (not that I saw anyway)

Lets hope that those affected will find gainful employment quickly :(

[Pass-A-Frozo]

For those online now... OZJET shutting down ops is about to be on ABC Lateline..

(that, and Simon Crean trying to take off in Beazley's commonwealth car :eek: )

[Wirraway]

Tue "The Australian"

Another crash landing
The forced landing of Ozjet has cost its founder millions and shown that Australia will remain an airline duopoly for the time being, writes Steve Creedy
March 14, 2006

WHEN Ozjet founder Paul Stoddart flew into Melbourne late last week to look at the company's books, he quickly realised that his pet enterprise was bleeding to death.

The time had come to stop the rot. He had no choice but to shut down the business class airline's services between Sydney and Melbourne. "The operating losses on a bad week were a million dollars and on a good week they were three-quarters of a million dollars," Stoddart says. "That's the kind of money it was blowing."

As word went out on Sunday and Stoddart began fielding calls, he sat absorbed in his other great passion, Formula One racing televised from Bahrain.

Most people had given the start-up six months before it failed, depending on the depth of Stoddart's pockets. But virtually no one outside the airline was convinced its all-business class format would find the niche it was so desperately seeking or that it could break the Qantas-Virgin Blue stranglehold on the market.

Ultimately, the travelling public agreed. Australian travellers ignored the start-up to the extent the experiment has cost Stoddart, 50, an eight-figure sum before he ended it.

Up to 70 per cent of the airline's 100-strong work force will lose their jobs as it moves into its new charter role with just two aircraft.

The warnings came as early as last July when Singapore Airlines chief executive Chew Choon Seng said the carrier's study of the Australian domestic market had shown it could support only two domestic airlines and the regional carriers.

Most experts agree that the Qantas decision to set up low-cost offshoot Jetstar has made it even harder for another carrier to enter the market. To do so would mean competing for market share against two robust carriers, Virgin and Jetstar, with low operating costs.

"I think that's really made this market virtually impregnable now for the two carriers," Centre for Asia-Pacific Aviation executive chairman Peter Harbison says.

Ozjet's executives, however, believed they could tap into a niche market by luring 1 per cent or 2 per cent of well-heeled travellers to defect from the established airlines. They would do this by offering business class service at full economy prices.

The new airline would use ageing 737-200 aircraft configured to offer 60 comfortable business class seats with a 20kg cabin luggage allowance that would allow travellers to avoid wasting time checking in and picking up their baggage. It chose Australia's busiest route and the third busiest in the world, Melbourne-Sydney, to launch its inaugural service. It was immediately at a disadvantage; pitting eight return services a day against half-hourly peak departures by Qantas and Virgin.

Delays in regulatory approvals also meant it had to launch in late November as the industry entered the quietest time of the year for business travel. By mid-December, Ozjet was cutting services after flying with as few as three people on its planes and was cutting prices to attract travellers.

Ozjet executives say they went into the Christmas launch with their eyes open and expected to lose money during the break. They used the period to iron out bugs in the system and prepare for the return in business traffic after the Australia Day long weekend.

Stoddart says historical and other data showed a huge 65 per cent surge in business traffic after Australia Day. "And for us that just didn't happen," he says. "We were carrying the same passengers in February, and projected through March that we were carrying, as we were in January."

The airline's decision to cut fares also bumped up its break-even load factor, the level at which it fills enough seats to cover costs. The original break-even of 50 per cent had been set with one-way fares of $325.

Stoddart says the airline's decision to lower fares pushed the break-even to 75 per cent to 80 per cent. "And we were only seeing, at best, the sort of mid-30s," he says.

So what went wrong? Stoddart rules out the anti-competitive practices blamed for the demise of previous entrants such as Compass.

"I have to be honest, we didn't find problems with the environment," he says. "We didn't have problems with Civil Aviation Safety Authority, they were fantastic, and we were very proud of getting our approval on the first go. We certainly had no problems with Sydney and Melbourne airports, and I'm certain we wouldn't have had with any other of the airports.

"And Qantas - all right [Qantas chief executive] Geoff [Dixon] and I go back a while - but we had no real problems with Qantas and none with Virgin.

"It failed because it simply was getting 25per cent of the revenue that was predicted and it just wasn't getting the bums on seats."

Stoddart points to two factors that contributed to the airline's problems.

"In going for business customers, we didn't have a frequent flyer program which, it became clear, was incredibly important," he says. "And we certainly didn't have the Australia-wide network."

He also acknowledges that launching on the highly competitive Sydney-Melbourne route, with its short flying time and half-hourly peak departures by Qantas and Virgin, also appears to have been a mistake. "Obviously we did have good support from a loyal bunch of people, but I don't think people necessarily felt the need to move to Ozjet because of the services we were offering," Stoddart says.

Harbison agrees. "I didn't see how it could work because we have a price-sensitive market and price dominates on sectors of an hour," he says. "People just aren't that fussed about comfort and Australia's not really that big on prestige and being seen to be travelling business class. If they can save 50 per cent on the fare, they'll save 50 per cent on the fare."

How much Ozjet will cost Stoddart in total remains to be seen. The former Minardi Formula One team boss estimated in 2004 that it would cost him $70 million to set up the airline and said last August that 75 per cent of that money had already been spent.

Add to that losses of $750,000 to $1 million a week during the 15-week life of the carrier and it's easy to see why the losses are hurting.

"If I've got any regrets about this it's because I spent most of the last year when this was happening ... with Minardi and was seeing management reports and listening to people who were highly optimistic about what potential loads were going to be," he says.

"Indeed, I was told repeatedly that our biggest problem coming into this was that we didn't have enough seats in the market and we were not going to have the capacity for the demand. Quite the opposite was true."

Stoddart now has the unpleasant job of making redundant much of Ozjet's work force, but it is not the first time he has faced the situation. In 2002, he had moved to sell European Aviation Air Charters, the air charter company he started in Europe using aircraft and spares bought from the RAAF. In 2004, he stepped back in to save the company, but had to sack 585 staff.

Last year, he told reporters he had subsequently hired back more than 300 staff and the company was trading profitably.

He is confident the Australian charter operations will also work, probably with one aircraft converted back to a 100-plus seater and keeping the other with existing configuration. In addition to traditional charter work with mining companies, it will seek to attract entertainers, sporting teams and businesses wanting to take staff to conventions.

But having been bruised by Ozjet, he is not going to fall for the same trap twice and says the charter operation will be lean and mean and grow only through hard work.

"This is a market I've personally been in for 13 years so it's not new to me," he says. "You're very much controller of your own destiny because you're only flying when you have the demand.

"Because we own the assets and we don't have massive overheads we can take a soft start to it and I have to say I've been rather encouraged this morning.

"Thanks to Qantas we've had no passenger issues whatsoever that I'm aware of - and certainly I've been monitoring the call centre myself this morning - and all we have had is people making inquiries for charter."

While Ozjet is another lesson to people besotted with starting a domestic airline in Australia, it will probably be only a matter of time before another attempt is made.

CAPA's Harbison says the chances of success remain small. "It's fairly telling to say that there have been 55 years of aviation in Australia where there's never been more than two airlines that have been able to keep a hold on the market on a national scale," he says.

Stoddart isn't about to disagree.

"Would I recommend anybody else try it? Not particularly," he says. "It has certainly proven to me that Australia is a duopoly and it always has been."

Steve Creedy is The Australian's aviation writer.

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

[king oath]

Mr Stoddart might like to buy some shares in the Australian Wheat Board also.

[BelfastChild]

There are only 2 reasons why you would want to start another domestic airline in Australia:

1. You have no understanding of the Australian aviation scene, ie you stupid
2. You understand the Australian aviation scene but think you can succeed where others have failed, ie you are stupid

Actually, there's only one reason........

[Frank Burden]

How about charter flights to Fiji or Bali? Unfortunately, wrong end of season to grab the footy team end of year jaunt (= pi$$ up). Good luck to the guys and gals. :ok:

[Flight666]

How about charter flights to Fiji or Bali? Unfortunately, wrong end of season to grab the footy team end of year jaunt (= pi$$ up). Good luck to the guys and gals. :ok:



How on earth do you think the swans get to Melbourne to play at the MCG....

By bus...?

I'm sure contracts are in place with QF or DJ, but the opportunities are there.

[CaptHairDryer]

How on earth do you think the swans get to Melbourne to play at the MCG.... By bus...?

Don't they run along the beach in speedos from MEL-SYD???

[Howard Hughes]

There is no doubt flight666, these aircraft with there large seat pitch and comfy seats would be great for ferrying oversize football, basketball, rugby players etc..:ok:

[Aerobird]

Will this have any effect on European in the UK then?

[Elroy Jettson]

Might be a positive for European, less funds and attention diverted to a loss maker, or it might be a real negative in the form of inheriting a couple of aviation relics that should be rotting gracefully in the Mojave desert or the Smithsonian.

Uneconomical equipment may have worked in the 80s when fuel was cheap, now, it has shown to be suicide. RIP Oz Jet. Again, my sympathy to the workers.

[Escape_Slide]

Why are we bothering with such sympathy for the workers. As I recall they were all told there was a risk in keeping a job at Ozjet. Ozjet is and was a non event in my book. When I went for the interview I checked their credentials and I think I was right not to take up the offer. So don't feel sorry for any of them they were well aware of the coloured and checkered history of those behind it and the way it was being managed. And the warning signs were always there.

:hmm:

[Capt Claret]

Escape Slide,

the epitome of the caring Australian.

[OVERCHINA]

So you are a graduate of Airline CEO school. What a class act you are Escape Slide . :*

[Hugh Jarse]

Clarrie and China: Don't feed the troll :}

[AustinPowers]

Did money change hands under the table in a discreet way ?!?!

Even better, now there's a company with millions of dollars in loss ! for the investors and bean counters to make use of elsewhere

One way or the other the heavy's shall benefit

Austin

[ys120fz]

Escape Slide, you're either a troll, airline management, or simply a bag of $hit!!!

What a disgrace your last couple of posts are.

Taking your position is like saying we all know we are going to die, but show no sympathy to somebody whose mother/father/child has just died.

You are a F$#%&*% disgrace.

[Escape_Slide]

Nah mate, it's sort of like taking a gamble with smoking cigarettes and not expecting to get cancer. Sorry mate, death and dying is a very sensitive issue but you don't mean to die when you smoke. But should we feel sorry if you die from smoking when the warning signs were always there? :}

Anyway, when you gamble, you need to weigh up the stakes that some people will remind you they told you so. Unfortunately, I am one of those.

[onya]

Have some empathy man. They took a risk and it didn't pay off. There are mouths to feed, mortgages to service and kids to school. Get off your high horse. Heaven forbid it ever happen to you. Perhaps that is what is needed to open your eyes. Oh, thats right it never will happen to you cos you're so fcuking smart. :yuk:

[ys120fz]

Escape Slide is a troll. Forget him guys, he's not worth the time.

[ozangel]

Theres no such thing as a startup airline that dosent take some sort of financial risk... Even Qantas once was considered a bizzare never going to work idea. Not defending ozjet here - but have some frikkin compassion.

Do you hang out around newsagents and rub it in everytime someone dosent win on a scratchie or lotto? Please get over yourself. Ive been both a fan and a critic, my loyalties and bitterness aside, some good people lost jobs last week, god forbid it will ever happen to you!

[frangatang]

The man proved he couldnt work in a condom when he had the classic 747 swith EAL in Bournemouth England>It was a shambles,and when the operation went tits up a friend was in LAX.Find your own way home matey!

[Escape_Slide]

Well that's the truth isn't it? You have a mortgage, kids, hire purchase on a car, struggling on centrelink and you go and do something stupid like getting a job with high risk job security. Not a bit sorry.

[Guppy Driver]

Escape Slide - just give it a rest. Back into your cave - now:}

[Escape_Slide]

Eek!:confused:

[MONK]

Hey Escape Slide....

Maybe we shouldn't feel sorry for the soldiers (and their families) who die in Iraq either......they knew the risks before they joined.....:}

Besides....these people don't need sympathy from people like you...

[OVERCHINA]

ESCAPE . Someone was looking for you .They say their village has lost an idiot. Phone Home.
:rolleyes:

[Woomera]

And I think we'll just leave the whole thing right there.

!click!

Woomera