Qantas takes on Tiger by flying Jetstar to Singapore

[lowerlobe]

Qantas takes on Tiger by flying Jetstar to Singapore


August 3, 2007

QANTAS has moved to counter the twin-Singaporean attack on its domestic and international network by switching its low-cost offshoot Jetstar on to a key route between Cairns, Darwin and Singapore in an effort to hinder the launch of Tiger Airways.

Jetstar will take over the route from its ailing sister carrier, Jetstar Asia, on February 1, just two months after Tiger, which is 49 per cent-owned by Singapore Airlines, launches its first Australian domestic service between Melbourne and Darwin.

The no-frills Tiger service will also offer on-flights to Singapore out of Darwin, giving it an opportunity to snare international travellers looking for cheap deals into Australia through the biggest aviation hub in the region.

With the high-cost Qantas unable to match Tiger's $499 return airfare from Melbourne to Singapore and Jetstar's recently-launched international network focused on Thailand, Vietnam, Indonesia and Japan, the new domestic entrant had a relatively free run to and from its home base.

The under-performing Jetstar Asia - jointly owned by Qantas and Singaporean Investors - was considered by industry watchers to be of little threat to Tiger despite its presence on the route since last October.

Yesterday's decision to replace it with the stronger Qantas offshoot underlined the parent group's intention to meet the challenge full-on.

Jetstar will increase the number of flights on the route from five a week to a daily service and will use an additional A320 Airbus to the one already used by its Asian-based sister company.

The extra plane will help it to provide a daily Cairns-Darwin return service as well as the extra onward leg to Singapore.

Just as importantly, it will allow Jetstar to match Tiger's planned service out of Melbourne and through to Asia without the need of involving another, albeit co-owned, airline.

A Jetstar spokeswoman said upgrading the service out of Cairns was part of a long-term plan which predated Tiger's decision to set up in Australia.

Jetstar also announced that it would replace the existing six-times-a-week Qantas service between Cairns and the Japanese city of Nagoya.

Qantas's aim to blunt the threat posed by Tiger came as Singapore Airlines yesterday announced a 69 per cent jump in operating profits for the first quarter of its current financial year to $463 million.

[Tropicalchief]

What Cairns does not need is Jetstar operating to Singapore via Darwin. What Cairns does need is more full service carriers like Singapore Airlines, Malaysia and Thai Airways flying directly into and out of Cairns to their respective hubs in Asia and connecting with their flights to Europe, Asia or the USA.
Qantas has effectively abandoned Cairns as an international gateway and replacing its services to Nagoya and Osaka with Jetstar will not lure Japanese visitors because Jetstar is a second rate option and the Japanese wont buy it.
Just as an example CX flies into and out of Cairns six times a week, Qantas none. Want to fly Perth to Bangkok on QF first proceed to Sydney and catch the one service a day from Australia to Thailand, cost $1900 flight time 18 hours. Of course Thai flies three times a week directly cost $900, flight time 7hours.
Thai schedules SYD three times a day, MEL twice a day, BNE twice a day,
PER three times a week. Qantas schedules from Australia to Bangkok once a day from Sydney.
Cathay schedules from Adelaide/Cairns to Hongkong, six times a week Qantas none.
It is apparent that Qantas no longer serves the needs of the Australian travelling public and it is time for other full service carriers to take up the slack both domestically and internationally. Jetstar is a dog.

[rammel]

Slighty off topic, but the Thai PER-BKK flight is at 90% + load factor most flights. So it seems it is most likely a nice little earner for Thai.

I find it ironic that a lot of the flights QF says are unprofitable (supposedly) other airlines seem to be operating on those routes with near capacity on most flights.

These airlines don't use B747's as the backbone of their fleet either, they have a mix of B777 or A330 and use them on the routes they were designed for. So PER-BKK is most likely unprofitable if you only use a B744 on it, but an A330 is mostly making money.

[TMAK]

Rammel, you have a good point with regards to the 747. QF for some reason, whilst developing a healthy business over the past 10 years, missed a great opportunity with the 777 in particular. They have the 330, of which proved somewhat unreliable at times and half of which have been temporarily offloaded onto JQ. But the 330 is certainly very efficient when it is running!

Tropical chief, it is important to keep in mind that the people serving you on those 'full service' Asian airlines are earning about one third the legal Australian minimum wage, as are the people working at their airports, cleaning and repairing their aircraft. Why do you think SQ keeps buy new aircraft? Those carriers you mention did fly to CNS (until 2000-02), but none made money in order to justify continuing. There is not the market in CNS. Traffic is all one way, then tourists either arrive or depart from a main center. These carriers also have additional benefits of being able to hub from all over the world (good geographic location) into Oz, including big markets in Europe and Asia. Even with poor wages, lower costs, newer more efficient aircraft and hub ability, they still couldnt make it work! So how would we expect QF to make it work with higher paid staff and old 767 aircraft make it profitable?? Remember with CX the route is shared with BNE and its a joint route with their alliance partner...Cathay! You dont normally compete one on one with your alliance partners on such a route.

If we consider the Wester Carriers...how many fly to Australia? BA low frequency to main centres, UA twice a day only and thats about it. How many mainline USA carriers operate long haul Int flights from a city of 150,000 people?

As for JQ not everyone will want to travel on a low cost airline for sure, but its one's own choice. Yes the Japanese are quite brand orientated, but as far as second rate goes, Im not so sure. Certainly you only get what you pay for, but JQ were just named (Skytrax) best cabin crew service in Aust/NZ of all airlines here.

Are the loads light on JQ that you say they wont take it up??
Good luck with flights into and out of CNS.

[B A Lert]

This article is a lot of twaddle as the takeover of Sin/Darwin/Cairns by the Australian branch will do nothing to change things except drive up the cost as surely the costs at Jetstar Asia are lower than the Australian version?

Jetstar will increase the number of flights on the route from five a week to a daily service and will use an additional A320 Airbus to the one already used by its Asian-based sister company.

The extra plane will help it to provide a daily Cairns-Darwin return service as well as the extra onward leg to Singapore.


They already operate between Darwin and Cairns so what else is new? Will they be operating an extra service of a morning instead of sitting the aircraft on the ground at Cairns? Additional capacity may allow them to sell Darwin/Cairns as capacity will be increased which will help eliminate the need to protect seats between these two cities for the long-haul punters.

Just as importantly, it will allow Jetstar to match Tiger's planned service out of Melbourne and through to Asia without the need of involving another, albeit co-owned, airline.

Garbage. The existing Darwin to Singapore is already branded as "JQ" so what additional fracilities will the change bring?

A Jetstar spokeswoman said upgrading the service out of Cairns was part of a long-term plan which predated Tiger's decision to set up in Australia.

More garbage, or is the Jetstar spinner saying that the Jetstar Asia offering is a bigger load of **** than that offered by Jetstar Australia even though Jetstar Asia operate the flight to the specifications of Jetstar Australia? After all it is currently a wet lease operation.

When will the media start to look at corporate media releases critically instead of just repeating them verbatim and thus mislead the poublic, albeit unintentionally? One day the crap that is turned out by Jetstar will embarrass and bite someone of the backside big-time.

[apacau]

I guess they weighed the additional costs associated with operating a JQ aircraft (rather than 3K) on the route against the extra revenue expected from being able to sell seats CNS-DRW. And the latter won.

Ou of interest, could the service (operated by a VH- registered JQ aircraft) still be crewed by 3K staff?

[ebt]

BA Lert, you make some incorrect assumptions there. One of the major problems on the 3K service is that the aircraft have a tighter pitch than the JQ aircraft (29" compared to 30"). A number of pax have complained about this and so it has been a priority to replace the 3K service with JQ. Also, the CNS-DRW service is operated but JQ cannot sell this as a standalone sector. That was the deal when CASA approved the wet-lease service.

The article is a bit misleading really because of the way it is presented as being a competitive response to TR. It's really just in-sourcing the operation of the service to provide a better product to passengers.

[Tropicalchief]

With respect, I work at Cairns airport and I know how much the people who work there are paid, and I work for a company that pays a lot more than the rest. The problem is that the fees for airlines to use the facilities are the second most expensive in the world.

The CX flights to HKG are chock-a-block. They are not code shared. QF are handling agents only. Jetstar Asia flights are minimallly booked and generally with people from Europe who have been duped into believing they were travelling on QF services.

My concern is that residents of Cairns and potential international visitors do not have direct access to a competitive airline industry. The traffic is there. Qantas does not want it so the market should be opened up to other airlines free of charge. It should be remembered that the Cairns Port Authority is a statutory authority, owned by the QLD goverment, and last year made a profit of $50,000,000 on a vastly under-utilised facility.

I would suggest that the absence of foreign carriers into and out of Cairns is due to QF objecting to the competition and nothing else.

[Going Boeing]

Having Jetstar operate the CNS-DRW-SIN service is causing major problems for QF pax. I was stopped in the SIN terminal last week by a female pax (of German origin) and she said that she had just arrived off the Jetstar flight from Cairns and she had been told at check-in in Cairns that she could not be booked through to Frankfurt on QF5 as the Jetstar Reservation system was incompatible (with just about every other airline) and that she would have to re-check in SIN. She thought that she was flying on a QF service ex CNS and as Tropicalchief said "Jetstar Asia flights are minimallly booked and generally with people from Europe who have been duped into believing they were travelling on QF services".
She went to the transfer desk but was very concerned about whether her bag would be transferred considering the minimalist service that Jetstar provides. She was also quite tall and did not enjoy the cramped seating conditions on the Jetstar Asia aircraft.
Qantas is doing an injustice to European visitors to Northern Australia by not providing a full service operation from CNS and DRW to SIN.

[ditzyboy]

Going Boeing -
The information I found is bags are tagged the whole way through for QF codeshare customers through SIN. FF Points are earned in the top five fare brackets for codeshare customers YBHKW (Qantas marketed operated by Jetstar)...

The seat pitch is a bit rough when you consider most codeshare pax would be connecting to or from another flight as part of a long journey. It isn't just the CNS/DRW-SIN on its own.

What Cairns does need is more full service carriers like Singapore Airlines, Malaysia and Thai Airways
All the above are yet to return to Cairns after some (in some case many) years. They all have massive markets to offer customers ex their hubs yet still deem CNS unviable. Qantas has a much higher cost base and fewer connection opportunities to offer ex-SIN making its ability to earn money even more limited. What Qantas need is some appropriately configured 73Hs (or 739ERs) for such markets (CNS/DRW-SIN, PER-BKK etc), in my opnion.

[Krakatoa]

After being squeezed into a 320 for an overnight flight the final indignity is to be pushed out at Darwin at 4am for an hour.
Thank God for CX who has remained loyal to Cairns for fifteen years and still offers us an escape route to Europe and Asia.

[lowerlobe]

Why do I get the feeling that swapping Jetstar Asia with jetstar Oz is a bit like plugging a hole in a dam wall with your finger only to find another hole.

You run out of fingers but there are still leaks.

Replacing one Jetstar aircraft with another is not really going to fix anything.

At the end of the day ,if you want to maintain market share or increase it you have to give the market what IT wants not what you think it wants or deserves.

[Animalclub]

I feel that you are neglecting the first international airline to operate into CNS... PX.
They were offered the top billing on the first sign at the International Terminal when it first opened, but deferred to QF.
PX offered the first flights to USA and caused QF to operate out of CNS a good few years before they wanted to... and saved a good few hours of flying for passengers in the North Queensland area travelling to MNL, and HKG way before CX. "Why fly south to go north?"

[VeeoneCUT]

The QF to JQ Asia to JQ Aus is all part of the transition plan for transferring flights to a lower costbase company.

Case in Point
Last October the CNS DRW SIN was operated on a QF tail B767, by Feb this year it was operated by Jetstar Asia on an all QF flight number, and comp meals and drinks onboard no less. For all intents and purposes this was a QF flight. If you looked to book this flight on Jetstar you wouldn't find it in the reservation system. Feb 2008 JQ Australia will take over this route from JetstarAsia QF - the transition complete. Expensive QF crew and operation replaced with crazy clarke's, and nobody really noticed. As far as the news releases you'd think they were doing something new.

I paid full fare (rare event) on this flight after hitting SIN from HEL (Helsinki) it was a hideous flight to connect to, 4.5 hrs SIN/DRW the 1 hr ground time then another 2 hrs bolt upright middle seat in the middle. Being herded off in DRW to have my duty free booze confiscated! which was bought on the Finnair (oneworld) flight into SIN, i'd never even left the departure lounge getting off the "secure" aircraft in DRW pax are screened into the departure lounge - figure that out. Nearly all the Europeans had something confiscated - Welcome to Australia.

[resboy]

confiscation of duty free has what to do with jetstar, finnair or any other airline for that matter?

[call button]

And security at Frankfurt airport is confiscating something like 1500 litres of alcohol per day.

[Skystar320]

1,500 litres a day.......... Man and I cant drink :ugh::ugh::ugh: