Qantas Failing in Japan

[Green.Dog]

Once Japan was a cash cow for Qantas.
Not any more.
Losses on the route have led QF to consider withdrawing altogether and running JetStar only into the Land of The Rising Sun.
Qantas have managed Japan badly over the last decade....Little or no advertising...The AO experiment..third rate unreliable equipment(the Classics) and Jet Star into Osaka and Nagoya.
The LCC model into Japan just doesnt work.
Put JetStar into Tokyo and pax loads will fall even further.
Japan is Australias third largest trading partner.Pulling out of there will have an enormously negative impact on the business traveller.
The Qantas network continues to shrink under Dixon.
How many destinations are left?...Eleven

[employes perspective]

looks like Qantas is also about to pull out of sydney,dam those Engineers:ok:

[tartare]

There's more to this than just QF and Dixon.
Japan is a dog for NZ too; has been for nearly a decade and I suspect for many other carriers.
Reality is, compared to 70's, 80,s and early 90's the Japanese economy has tanked - and they just aren't spending.
Discretionary items like travel are hit hard.
The days of Japan being a cash cow are gone for good.
Play the long term game... keep building China, get ready for India and when the 787 arrives, the whole industry gets turned upside down.

[A. Le Rhone]

Right...and there's no business in Paris, Rome, Frankfurt, Amsterdam, Manchester, Vancouver.:rolleyes:

[lowerlobe]

The Aussie dollar is too strong for the Japanese.
The exchange rate with our dollar against the Yen has certainly risen and would not be helping Japanese tourism into Australia.

However,at the same time the Yen/US dollar rate has always been high....and it has never stopped the Japanese from visiting Hawaii.

The Aust and US dollars are closer today than they have been for a long time.So why are the Japanese still visiting the US but at the same time losing interest in Australia.....

In a word 'Marketing'.....but I can't see the strategy of replacing a legacy carrier with a LCC helping to show the Japanese that they are a valued customer.

As has been said before....image or perception is all important.

[Rich-Fine-Green]

There are a number of reasons Japanese numbers are falling.

- Other Markets (Hawaii, Singapore, Hong Kong) all adjust to suit the Japanese style of shopping, golf, eating, touring, short stays etc. Australia and NZ offer the one product to all comers.

- Aust. and NZ do not market to the Japanese in a way that encourages them to visit more than once. Other countries somehow get the Japanese back several times - repeat visitors.

- Lack of competition. For years the route was JAL & Qantas. Air fares were always high and still are compared to other destinations.

- QF do SFA marketing as a brand, Japanese are brand focused. Virgin brands do very well in Japan. If DJ went to Japan i'm sure the image alone would kick QF Butt.

- Cost. The Yen vs. AUD$ has always gone up and down. However, Australian and NZ hotels, meals and general spending is more expensive than other destinations. But Cost is not the main reason for falling numbers.

[r3please]

I think you will find a Branson owned aircraft going into Japan sometime in the near future. With a big 'V' on the tail ;)

[qf86]

I'm based in Japan right now and Qantas is doing a ton of advertising here. There are Qantas billboard trucks running around and entire trains have been decked out with Qantas advertising. Looks like they are really trying to drum up some business.

The economy is definitely slowing down, spending is way down and money doesn't grow off the trees like it used to several years ago... The exchange rate is also really bad, I'm moving back to oz soon and really not looking forward to exchanging my savings!

I definitely agree with everyones comments on Jetstar not working in Japan, service is a huge part of the Japanese culture and people just expect more. The whole idea of an LCC is completely foreign, there aren't even any domestic LCCs.

I'm not exactly sure about this but I presume most of Jetstars sales are online. Here in Japan the majority of people still go to the travel agents, so unless they really push it the Japanese will tend to stick to the more traditional legacy carriers.

I also find that fares are a little expensive relatively. I had some friends looking to go on vacation, they looked at airfares and it was cheaper to fly to the states than it was to oz. And when I go to book tickets from Japan, Qantas is always the most expensive option by far, sometimes double the lowest fare.

[surfside6]

For what is essentially a duopoly between JAL and QF there is something very wrong if they are not making a decent profit.
When it comes to being both innovative and creative regarding improving yields Qantas management comes up empty.

[Eastwest Loco]

surfside -

Most of our Japan corporate traffic goes over SIN or KUL on a cost based choice.

The Jap fares are a pain in the butt and overly restrictive.

China however is QF 1st choice and meetings set to use the nonstop PEK services. Fares are reasonable.

QF is still trying to milk a yen that is near the 100 level against the former Pacific Peso, and the sons of the rising sun are just going to haul their skinny clenched butts into HNL.

This is a market I would consider would find it hard to accept JQ as they are value for money with quality service oriented. LCC's as qf86 rightly said are riding the divine wind.

Japanese traffic is of little value overall to Australia apart from salaries. they come here, are on organised tours, stay at Japanese owned properties, are directed to Japanese owned outlets but at least do visit local attractions, albeit at monstrously inflated prepaid prices.

More frequency into PEK makes more sense for my Corporate dudes. They are pumping up and over HKG if they cannot roll on MON WED FRI departures.

There may be something quite accurate in what R-F-Green says too. These local predators who direct the Japanese clientelle into their own stores and rip the living suitcase out of them may not be allowed to operate in the other destinations of choice.

Maybe we have killed the market and overpriced it by apathy and lack of action.

Nothing new there.

Best all

EWL

[Bad Hat Harry]

Can you clarify the first sentence of your last post?
Japanese businessmen fly to Oz via KUL or SIN.
They suffer a stopover in order to save money...Is that correct?
I dont know what restrictions are in place but what about using NRT as hub to Europe?

[stiffwing]

Jetstar want to relinquish the Cns-Osaka and Cns-Ngo back to Qantas mainline (767's) from sept '08 and have made representation to QF flight ops to see whether it can be done.
Mainline crewing and aircraft capacity will make this difficult.
The JTB are putting pax ex Ngo and Osaka on the bullet train to Tokyo and then Nrt-Australia rather than booking them on Jetstar direct.
Jetstar regularly have < 100 POB southbound.:ugh:
AO and QF had, at one stage, 2 767 services a day Cns-Ngo, sometimes both full., approx 500 pax.

[Eastwest Loco]

Hi Harry

To clarify, a lot of QF/QF codeshare flights out of Japan go via somewhere and all the QF metal leaves back of the clock, hence there are a lot of one stop services to MEL ADL etc and even one of the SYD services with the 763 in 1 stop (CNS) so therefore using SQ or MH with a decent transit time in SIN or KUL is no imposition. The fares are generally much better too.

Where JQ has been slipped in under the cover of darkness, the legacy carriers are in general a similar price or cheaper. This naturally does not include the specials from time to time, but includes all the normal goodies.

The same is true in many cases ex Australia. Marketing position + sucker behind keyboard who knows EVERYTHING cos Magda said so = bum in seat when the Thai flight MEL BKK was the same price and they would have fed and watered the punter.

Derek

The more you pump LCC's into premium destinations, the more you erode the upper end of your market, so CNS may be suffering a little of this.

It was definitely the case with MCY, with many of the boutique shops and upper end restaurants having to reinvent theselves or close when the top end went elswhere and the shallow end of the gene pool started lobbing in.

That's the way she goes!!!

Best all

EWL

[Captain Sherm]

Qantas is a business and I don't think the entire executive management is gripped by some form of long term collective hysterical blindness. (well we can argue about that later). But if there was money in selling a high class (and probably relatively high cost) product in Japan, and only by doing that, wouldn't they do it? After all they don't have a price only product on CityFlyer do they?

Can't be just the age of the aircraft.....JQ's 330s are near new. And for years....maybe even today....Honolulu Airport was full of older 747 classics, 767s and DC-10s from Japan. Didn't seem to me to put the Japanese tourists off.

We...the Prune community....seem to always label GD as "self interested". If there was more money (and more bonuses) in cranking up the JQ product to be a full service, or replacing it with QF's "full service" wouldn't he do it?

If bemused be the word...then I am bemused

[jet.jackson]

You overestimate the ability of QF management to...well...manage
In my time I have had contact with most of Qantas senior management.....Borghetti is a neighbour...none of them posesses a particulalry scintillating intellect.Dixon doesnt even have a basic MBA.
They have been extremely lucky.Ansett fell over...the Howard government particulalrly compliant and it took Virgin a while to get on its feet.
Delays in aircraft delivery have kept capacity tight and yield high
To paraphrase...a drovers dog could have run QF over the lasr ten years and made a tidy profit.
Not bemused and not amused

[QFinsider]

This was spoken of in June 2007 when I started a thread on J* int.

Information at hand detailed the poor performance of J* international.
Unfortunately we will never see the figures as to the contribution margin of J*.

One wonders why today as then, they persist with an inferior product that is totally relaint on volume to make up for yield.............:ugh:

[rammel]

This topic got me thinking as to why QF would be struggling, with only two airlines on the routes.

One thing I could think of is that it is mainly a business and tourism customers, and not too many visiting friends and relatives. Where I work is quite large and has a number of people from different cultures. The main ones would be Chinese (both from China and Chinese/Singaporean), Indian and then the Aussies with a European background. Out of about 700 people there are only 3 Japanese.

I don't have immigration figures, but if this is indicative of the rest of the population this could be one of the reasons why Japan is a difficult market. Business travel is pretty constant and tourism can be fickle, but the visting friends and relatives seems to be a small pool of people to rely on to travel.

These are just my thoughts on one of the reasons. Of course you have also got QF trying to milk the most cash possible, by offering next to nothing.

[jet.jackson]

Apart from skiing Japan has never really been considered by Australians as a holiday destination.
The place has ton of stuff to see and posesses a very rich history and culture.Japan has never really marketed itself as a tourist destination.
Rather than relying just on Japanese coming to Australia...what about encouraging Australians to visit Japan?
The Yen/A$ is the best its been for almost 20 years.Japan has become incredibly cheap for Australians to shop...Computers,cameras,clothes,childrens clothes and accessories.
Its a much better destination than BKK or SIN or HKG .

[TyreCreep]

They could try code-sharing with BA out of NRT to LHR maybe? It's getting terribly boring going via BKK or SIN to LHR all the time.

[Rich-Fine-Green]

TC:

They could try code-sharing with BA out of NRT to LHR maybe? It's getting terribly boring going via BKK or SIN to LHR all the time.

I've often wondered why QF didn't code share via NRT....

The last two times i've used FF points to LHR the flights have been via NRT.

But cold hard $$ can't buy a code share via NRT.

[Mike773]

I've often wondered why QF didn't code share via NRT
Probably because they're not allowed to. You can't just plonk your code on any flight you want. Air Services Agreements would probably prohibit this. (Emphasis on the probably as I haven't researched this, but I doubt Japan and Australia would have negotiated reciprocal 5th freedom rights)

Under oneworld all flights by alliance members are pro-rated equally, so actually QF could use JL or BA on the NRT-LHR route at the same cost without having to put their code on it at all.

[jet.jackson]

Maybe QF management havent asked about a code share.
They are not terribly bright

[Rich-Fine-Green]

Mike 773:

I've often wondered why QF didn't code share via NRT

That was my point!.

Why does QF FF awards flights allow bookings via NRT but you can't actually pay $ for the same route?. Last year I entered SY-LHR on-line and twice I got routed via NRT. I didn't book the flights as seperate one-way FF flights.

Whether you use $ or FF points the ticket is 'paid for' one way or another and reciprical rights etc. should apply.

I think it's more the case it was cheaper for QF to 'buy' my BA seat ex-NRT than use up valuable Kangaroo Route seats.

[Rich-Fine-Green]

Jetstar reroutes to Gold Coast.

May 20, 2008 - The Australian.

JETSTAR has booted Brisbane off its destination list for flights to and from Japan, in favour of the Gold Coast.

The budget airliner announced it would begin daily long-haul international flights between Osaka, Japan's second biggest city, and the Gold Coast from October 1 to cater for an expected rise in demand.

But the move comes at a cost for Brisbane, which will no longer be part of Jetstar's Japan route.

Since March 2007, Japanese customers have been able to fly return to the Gold Coast via Brisbane.

Strong trade industry support in Japan and Australia led to the change, said Jetstar spokesman Simon Westaway.

"The reason we've done this is very straightforward – it's market driven," he said.

"Over 75 per cent of the Japanese customers who fly on this route, their end destination is the Gold Coast."

Mr Westaway said fares had not been confirmed, but indicated the new route would be heavily marketed in Japan.

Ticket sales for the new flights will start on May 22, pending regulatory approval.

[flyer_18-737]

Do you guys think that they will have a launch sale??

[jet.jackson]

Are we talking sea going launches?

[spangled1]

i assume this will be an A330 service. OOL doesn''t at this stage have any A330 LAME''s and if it''s going to be daily i reckon they would need at least 6 trained LAME's. the logistics seem difficult already considering the LAME''s PIA and also the fact that the JQ A330's are heading for the hanger come september. JQ have already asked QF to cover CNS NGO while there fleet goes for C checks. Can anyone enlighten me on this topic with more facts?

[flyer_18-737]

So are their A330's getting checked then, where abouts??

And yes, its a A330 service

[surfside6]

Finally someone has done what should have been years ago...direct flights linking Japan with Gold Coast.
But why Osaka.?
Why doesnt QF give up on CNS and fly directly to OOL?
You cant swim at any of the beaches in CNS due to the nasties.
You CAN swim at Waikiki.
There are a couple of large shopping malls on the Gold Coast.
There is one mall in CNS and its rubbish
HNL has Ala Moana and Pearl City.
CNS has a very very wet season
The Gold Coast has one
HNL doesnt have a wet season as such
Why isnt Western Australia promoted more to the Japanese?
The West Australian Coastline is breath taking and you can swim there.
The Margaret River area is marvellous.
For too long Australia has been one dimensional to the Japanese.
Someone might even see some reason to have direct flights from Japan to Uluru.
The Japanese and their travel agents are very savvy travellers.
For God Sake can someone, anyone try to make Australia more interesting to them.?
The Japanes love food and itss presentation
We have some of the highest quality produce in the world..some of the best restaurants and chefs......so what about wine and food tours?
Get some Japanese travel shows down here and show them what we've got.
Australian Airlines and the Peak Tourist bodies are run by one dimensional people with zero imagination.
Thats why tourism to this counrty is declining.
It has little to do with the exchange range.Look at HNL ...the exchange rate has never been favourable.
There 5 flights a day into HNL from Japan...full and Jumbos to boot
Lets get sophisticated...Australia is far more than Kangaroos and Koalas.

[Keg]

surfside6 makes some good points however...

The West Australian Coastline is breath taking and you can swim there.
The Margaret River area is marvellous.

I'm not sure that swimming near Margaret River is a great idea....

In July, a male, 29, died after he was attacked by a shark near Western Australia's Margaret River.

Still, I suppose the chances are better with a shark than they are with a croc or a box jellyfish! :eek: :ok:

[blackguard]

You must be having a slow day Keg Old Son.
SS6 post is pretty much on the money.
It didnt seem that he was suggesting anyone should swim at Margaret River.
WA has a very big and long coastline with plenty of safe places to swim and surf.
Margaret River is more reknowned for its wine.
Japanese TV is full of food,wine and travel shows.How many have been invited down to Australia to do an expose on just how good this place is to eat.
Koalas and Kangaroos are very 80s

[Keg]

.....need to work harder on funny asides. Some just don't get them. :E

Must find other half to my 'wit'. :ugh: :( :ok:

[DutchRoll]

Don't worry Keg, I got it! ;)

I wonder if they're thinking that Jetstar-only to Japan will be as good as the splendidly successful Jetstar to HNL services?

[lowerlobe]

Has anyone noticed how little advertising there is for Qantas these days compared to Jetstar?

I think direct flights from Japan to the Gold Coast is a very good idea.

Typically the Japanese have very little time to spend and go home for a rest afterwards.If they fly direct to the Gold Coast and not waste time on bus travel from Brisbane it would appeal to them (and their travel agents).

The Gold Coast has beaches,a casino,theme parks,scenery,accommodation,shopping and even whale watching from Byron :E

SS6 is right and it's about time people who are paid a huge amount of money start earning it by promoting Australia instead of the usual cost cutting to enhance their bonus driven mentality.

[airtags]

rule 1 - know your market

rule 2 - travel agents in the Japanese market are the biggest segment and therefore under current commercial conditions are the 'biggest customer'

rule 3 - agents are that and therefore agent commissions are kind of an important consideration for would be airlines, wholesalers and venues.

rule 4 - don't tell your (potentially) biggest customers to get stuffed and that you know their market better than they do.

Tix go on sale today ....I don't imagine it will be a sell out concert - but if it works, then OOL might be a nice gig for a few 330 LAMEs

AT

[flyer_18-737]

Fares are online $1053 return Jetsaver! RIP OFF

[Keg]

Actually, I reckon $1K return for an eight hour each way journey with everything included (meals, drinks, etc) is not an unreasonable price.

I find it surreal that many today think that a $100 airfare from MEL-SYD is expensive but they think nothing of paying $80 for a cab ride from the airport to Parramatta! :rolleyes: :ugh:

[Ace Wasabe]

The axe will more than likely fall on Japan under the current review of international route profitablity.
It will be Jet* or transits in SIN or KL if you want a holiday in the land of the rising sun.
The QF network will shrink to about 8 or 9 destinations serviced by mainline.
The worlds smallest but most profitable airline.
In 5 0r 6 years time QF will be a freight company with a small off shoot carrying passengers to JNB LHR and LAX.

[Poto]

In 5 0r 6 years time QF will be a freight company with a small off shoot carrying passengers to JNB LHR and LAX.

Probably true, depends on when GOD f*cks off:{

[cokecropduster]

Jet Star are now going to take over the Per-Nrt Flights with the annoucement of a PER Base..... The end is nigh for Qantas in Japan.

[SamAustralia]

Just my 2cent worth here..

Have been to Japan and did study Japanese and know a bit about Japanese culture since I lived went out with Japanese for around 8 years now...

Many friends or people I meet who came from Japan to Perth I do ask them how did you come here, the answer is 90% Singapore airline..

I was in the plane from Perth to Narita 2 years ago, Cabin crew went and put their pillow on couple of 4 empty seats and when passenger came and try to sleep they ask them to leave just to see cabin crew sleep there after that, I am not talking about the normal area where cabin crew sleep I am talking about random empty 4 seats!!

Japanese think Qantas treat passenger like friends which is a BIG NO NO in japan.. Customer is GOD in Japan...

Unless Qantas employee people who have been to Japan and lived there for at least 2 years, QF will find itself far away from the word Competing in Japan.


What QF lacks is, CUSTOMER SERVICE CULTURE... specially when it comes to Asian countries..

[blackguard]

Most if not all flights from Australia to Japan have at least two Japanese speakers.There is also a Tokyo base with 9 Japanese nationals who fly between Oz and Japan.
Those people are super customer oriented.If any of the Gaijin crew did anything to upset a Japanese passenger the Japanese Crew would certainly tell them.
Jet * service is cheap crap...how do you think that will go over in Japan?
So far it hasnt been successful.
Your comments reek of racist rubbish.
I have on both JAL and ANA...let me tell you Gaijin comes second.
Doesnt bother me .....its just the way it is.
Anatawa Baka Desu!!!

[Devil Dog]

The failure of the Japanese market for QANTAS stems from the disrespect and contempt displayed to the Japanese passengers,firstly the introduction of AO and finally JS. Disgraceful

[flyer_18-737]

When are all these Toyko flights starting on sale, I guess a mass "Toyko Takeoff" Sale will commence soon:)

[Bad Hat Harry]

Arriving into Osaka on the way to visit friends I was told by a JAL flight attendant (female) to remain seated until all the Japanese passengers had disembarked.
The point being there is good and bad Cabin Crew no matter which airline you travel with.
The effect of this experience on my trip and my view of JAL...zero
Had a great trip and love JAL.
BTW...if the crew want to use a few spare seats for rest purposes...who cares?
There is always some selfish turkey(passenger) who wants to hog 4 seats for themselves

[Transition Layer]

I find it surreal that many today think that a $100 airfare from MEL-SYD is expensive but they think nothing of paying $80 for a cab ride from the airport to Parramatta!

Ah yes, but as Jetstar will tell you, when you fly "you now have a choice". I guess that doesn't apply in the highly regulated cab industry.

Now actually there's an idea, Jetstar Cabs. Cheap fares but you pay for the extras. Aircon, fuel, oil, tyres and anything else they can think of. The Jetstar pilots will be climbing over each other to take a transfer for a potential pay rise and quick command of an shiny new BF Falcon!

[midsection]

What will happen to QFs CNS base:eek:

[QF skywalker]

CNS BASE -:

Tech Crew base to close DEC 08.

Cabin Crew base to have major reduction in numbers (again) via LWOP, more part-time, pushing crew to resign and take fast track interview for QCCA.