Qantas may franchise Jetstar.

[wessex19]

According to Sky News at 10 am today, Qantas is considering franchising the Jetstar brand throughout Asia. Sky News reports this would involve independent carriers purchasing the Jetstar brand name with technical and operational support coming from Qantas. Anyone anyone????:suspect:

[Cactus Jak]

copying the Air Asia model.

[lowerlobe]

"Qantas is considering franchising the Jetstar brand throughout Asia"...

Does that mean that Darth wants to become Ronald McDarth?

[Capt Kremin]

lol LL..............

[Howard Hughes]

Does that mean that Darth wants to become Ronald McDarth?More like 'The Scamburglar'!;)

[And5678]

Can you imagine the Happy Meals at the board meetings...

The Colonel ' "I got a tank, large fries and a cheque!"

Darth - "Oh look, I got a Terminator doll, fries and a $60M cheque"

Madge - "Mine's empty... what the f***!"

[Howard Hughes]

Can you imagine the Happy Meals at the board meetings...
Excuse me miss, I seem to be missing my Beluga caviar...;)

[Buster Hyman]

Bugger! I knew I should've copyrighted "Jim's Airline"!

[roamingwolf]

or Boys and Girls it could be like another popular little business and GD's name for it might by Jetstarbucks..:E

[Lowkoon]

Wow! What a franchise oppurtunity! Put me down for none! Im sure I can find a lot more fun ways to loose 200 mil a year!!! :}

[Choi oi]

Bet you, first cab off the rank is Pacific Airlines, ...

"Jetstar Vietnam" ,

[muttly's pigeon]

Isint the purpose of any franchise to take a successfull buisness model which requires (and allows for) little to no entreprunerial input, with a view that 'running' a buisness in the confines of a small box one cannot fail (McDonalds the classic example).
The product of the franchise is really not important but the model surrounding the buisness is.

Now correct me if im wrong but the Jetstar buisness model has proven to be somewhat of a failure. Franchising may work for the likes of South West or Easyjet but from what little I admittedly know about it, the Jetstar model has too many faults.

[lowerlobe]

If Jetstar Asia is an example of his franchise I wouldn't be too interested.

[ebt]

Isint the purpose of any franchise to take a successfull buisness model which requires (and allows for) little to no entreprunerial input, with a view that 'running' a buisness in the confines of a small box one cannot fail (McDonalds the classic example).
The product of the franchise is really not important but the model surrounding the buisness is.

Now correct me if im wrong but the Jetstar buisness model has proven to be somewhat of a failure. Franchising may work for the likes of South West or Easyjet but from what little I admittedly know about it, the Jetstar model has too many faults.

Sorry, but I can't see how the business model has proven a failure or has too many faults. It's not radically different from any other LCC. JQ has been profitable since its inception. 3K on the other hand has been a failure mostly because they couldn't get the traffic rights they needed, and the problem that SIN just isn't a great place for LCCs to get a start.

The model will become a bit like Air Asia who have bought into AWAIR in Indonesia and Thai Air Asia with minority stakes in those carriers and rebranding them as Air Asia. If they could, QF would buy all of 3K or any other SE Asian operator, but of course they can't keep their traffic rights.

[What The]

JQ has been profitable since its inception

Only because an enormous amount of cost was carried by the PARENT ENTITY. Under a franchise arrangement it is highly unlikely that that support would be available.

3K on the other hand has been a failure mostly because they couldn't get the traffic rights they needed, and the problem that SIN just isn't a great place for LCCs to get a start.


Welcome to the business environment of Asia. Do you think Ryanair, Easyjet or Southwest would react differently in trying to protect their patch. The Jetstar model will face enormous challenges on the cultural issues alone when trying to start in ANY country. It is perceived as the arrogant Qantas bastard child of its arrogant CEO. Welcome to the world where the Government is on the other side for a change. :D

[ebt]

What The, on what basis do you say that Jetstar is perceived as an arrogant brand? Qantas is well respected in Asia and Jetstar is gaining brand equity especially since the launch of long haul. It's this strong reputation which is why the Vietnamese government chose QF rather than Temasek as the main strategic investor for Pacific Airlines. Remember also that the Singaporean government is the second biggest investor in 3K through Temasek, so I fail to see how the government is on the other side.

[What The]

Are you serious?

Temasek is the largest shareholder in SQ. Fancy also having a controlling interest in their competitor. Sometimes you gotta spend money to make money.

[Angle of Attack]

What are you people thinking?? Jet* is profitable, except for the Asia thing which sort of lost ****loads of cash, but remeber Jet* brand made $40 million profit! minus the International startup costs which prob are more than that but hey we rock! We are low cost and since 3 years ago we have only leeched a little money from QF! And all our good pilots are leaving ! haha! Bring it on more, more bring it on you guys! Bring on the LCC bring on the jobs the only remaining variable is pilots acceptance of conditions, be strong guys! You do NOT need to pay for crappy endorsements when there almost no one left.

[muttly's pigeon]

While I sit on the wrong side of the tassie to know too much about jetstar I think it is safe to assume they would not have been able to cut it without the support of Qantas. If a franchise was to be sold then I wouldnt expect any help to be given from Qantas or Jetstar OZ. It would be a case of..... this is how the buisness should run....... follow these guideliness and you wont go wrong (how a franchise more or less is supposed to work). You cant tell me that the existing Jetstar is this independant of its creator, so how will they replicate themselves as an independant operator in Asia.

[QFinsider]

No other airline start up delivers profits or indeed costs of a minimal nature when commencing operations.
It is borrowed infrastructure, personnel, access to fuel, spares, airport slots, parent guaruntees on everything from aircraft to catering that is where an astute analyst would spend time trying to discover the true cost of the J* operation. Qf numbers are cursory, inconclusive and overly brief.

A thorough examination would find all sorts of cost transference issues.
My point with respect to this thread is that the airline is not able to deliver all the alleged benefits of its "low cost model" It is a figment of an aloof and arrogant mangement. It is an industrial tool nothing more. The real question being asked by astute investors, is how come Dixon has directed so much capital at an entity which fails to deliver the so called bonanza of profit he assures us it does?

If it is so profitable, then a full set of accounts audited showing the extent of costs paid to the parent will put paid to my assertion that the model does not work. Of course costs aren't broken down for J* they are part of "group operations"...As a group airline it cannot stand alone and needs the constant support of the parent to survive!

[International Trader]

I just don't understand what "Angle of attack" is trying to say.


I suspect the reference to franchise only extends to the name. A "one world" group of their own, perhaps.
As far as as refined franchise model, neither Jetstar operation would qualify.
The changes in their business plans and the sometimes inept approaches to what one would expect to be well thoughtout and predetermined moves, stand as proof .
A classic example would be Jetstar Asia's decision to choose to fly to Taiwan and miss out on China. Heads should have rolled on that one.
Kind of like McDonalds deciding on a pensioner burger with a free "scratchie" instead of the kiddy meal with a Shrek. One is a reducing market and the other a ticket "Franchise Nirvana".
Suggest many people shooting from the hip with the QF "world's best " attitude.

[Taildragger67]

BA have been franchising their brand for years... take a look at the domestic ops in South Africa, the regional ops in east Africa, GB Airways, Loganair... true they're losing BMed but that's due to a complete takeover of BMed (hence someone else (BMI) seeing value in the enterprise).

Not a new concept.

[lowerlobe]

Taildragger67...
It's true that the marketing concept of a franchise is not a new one and as you said has been around for years.However,when you are going to invest your capital in a franchise the benefit to you is that you are investing in a known product.

You are simply an extension of that chain and people who buy your product know what they are getting.That could mean anything from Donuts to furniture.BA has been around for a long time as has QF but J* has not.

[Taildragger67]

Lowerlobe,

True. A known brand can be important.

That said, it may be a way to grow a name and is often used as such. There are franchising shows around the country every year:
http://infosalons.com.au/infoforum/listings/franch07s/listing.html
... and I've certainly not heard of all of these:
http://infosalons.com.au/infoforum/listings/franch07s/listing.html

In this case, let's consider Indonesia. The Indon authorities, a few years ago, restricted incoming LCC flights on the grounds that locals couldn't compete; since then, a number of local operations have sprung up and there may be some concerns with respect to the local authorities' ability to properly oversee such a fast-growing industry.

So, along comes someone who would like to set up an operation using new aircraft etc. and reckons there's a market to be grabbed if they can promote safety, etc. So they approach an established organisation, which can advise on operations, training & admin, and can help with setting up, maintenance, safety standards, training & procurement, etc. - essentially, the costly backbone - but doesn't want to take on the financial risk itself.

So... the 'established' operation (however it was established itself) gets a presence in the market and can possibly help get its wider operations into the territory, all for little financial outlay and risk, whilst stipulating strong minimum standards and performing audits to confirm these are adhered to.

A franchise agreement...

Suddenly, you have lots of silver and orange airframes, flying around under bilateral agreements and so not requiring any fifth-freedom rights to be secured (important, given the lack of open-skies agreements).

It appears to me to be a lower-risk (at least in financial terms) and more regulator-frienly (in terms of traffic rights) way of getting a network (rather than hub-&-spoke) route system going.

[TANUA]

ebt
Would be interested to know where you got this information about the Vietnamese Government choosing QF over Temasek for PA.
Temasek did DD for over 6 months and walked out. Air Asia also had a good look and left?
I think QF may be the only one in the game and there is a whole lot more to everything in Vietnam than what meets the eye-they will soon discover that.Allowing QF to buy into PA and operate how they like, would be the same as SIA moving into OZ without interference.
Is that a likely scenario-time will tell. :confused: