PDA

View Full Version : JQ N.Z regional market?


gate4
17th Apr 2013, 06:07
Don't Quite understand what Jetstar are up to? :hmm:

Jetstar eyes move into regions - Business - NZ Herald News (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10877929)

Competition among airlines on the main trunk route is set to increase, despite the cancellation of 300 Jetstar flights over May and June.

The cut-price airline said most of the axed flights were on the Auckland-Wellington route, due to low seasonal demand.

Jetstar cuts 300 flights in May and June due to... | Stuff.co.nz (http://www.stuff.co.nz/business/industries/8562210/Jetstar-cans-flights-due-to-poor-demand)

Ollie Onion
17th Apr 2013, 07:13
They do cancel flights on a regular basis if the forward bookings aren't great. This was bound to happen as they have absolutely 'loaded' that AKL - WLG route with frequency. The massive positive of them doing it has been the price war between Jetstar and Air New Zealand.

As for the regions, I think that is a bit of wishful thinking. There are regular stories in the papers about how Air New Zealand is price gouging on these routes, like this one:

High-Price Flights To Regional Centres Clip Travellers'... | Stuff.co.nz (http://www.stuff.co.nz/travel/new-zealand/8547435/High-price-flights-curb-travellers)

It is good publicity for Jetstar say they are looking at the regions, it is a bit of a soft spot for Air NZ as the general opinion is they charge way to much, Jetstar obviously thinks that if they could 'dent' this business it may limit Air New Zealands' ability to run the main trunk services at a loss to match Jetstars low fares. I don't for a minute think though that Jetstar is a serious regional competitor. There are not many regional airports that could take an A320 let alone fill one. Turboprops certainly don't fit the model, although I wouldn't put it past the Qantas 'group' to deploy a couple of turbo props in NZ. The Jetstar NZ model has shown that you could take a couple of Qlink Dash 8s, base them in NZ with Australian crews and operate on their OZ AOC and hey presto an instant airline that you can use to drive Air NZ's regional fares down whilst maintaining the ability to pull out overnight if required.

slamer.
17th Apr 2013, 08:52
Jetstar cancels flights as domestic demand sags

10:45 AM Wednesday Apr 17, 2013

http://media.nzherald.co.nz/webcontent/image/jpg/201316/SCCZEN_A_100609NZHGBJETSTAR7_460x230.jpg


Jetstar has cancelled hundreds of domestic flights because of sagging demand on main trunk routes over May and June.
A Jetstar spokesman said schedule "optimisation" was done from time to time.
"It's a low season over that period so we're probably doing more than normal. It's business as usual, it doesn't signify anything."
The airline has been flying domestic routes here since 2009 and late last year significantly boosted capacity seats with the addition of a ninth aircraft.
The spokesman said the cancellations were concentrated on the Auckland-Wellington route where it has most services and most passengers could be rebooked on alternate flights "within hours."
"Optimisation means you take a look at market demand and how many flights you've got and you change your schedule accordingly - all airlines do it."He said the airline would not cancel flights for commercial reasons in less than a seven-day period. "You don't do that because it stuffs everybody up but looking further out decisions are made ensuring the majority can be put on to other flights within a matter of hours.
" While around 300 services had been dropped over the two months, the spokesman said there were 2600 domestic flights over that period.
Most of the cancellations were on the Auckland-Wellington route where it has most of its services. "It has to be taken in context - we put 600,000 new seats into the market last year which is a big increase."
The airline - which is investigating flying regional routes - also flies transtasman services.

framer
17th Apr 2013, 09:05
Is the real reason because they cannot crew them or has that issue been solved?

NewZealand2
19th Apr 2013, 00:21
Crewing flights is not an issue at the moment. Some AKL-WLG/WLG-AKL flights have been operating with as low as 30 pax though...

big buddah
19th Apr 2013, 03:07
Wow I bet Jetstar are losing a fistful of cash in NZ?
Didn't PB lose $19m on the last year they did domestic and that was 4 aircraft? on domestic and full bums on seats??

pigdriver
19th Apr 2013, 03:34
Jetstar are doing pretty well from what I have heard.9 or so jets now with more to come... Can hardly compare Jetstar to pacbro... I reckon a dozen dash 8-400's over there in orange would be great! Finally might get some reasonable prices to the regional centres. Am sick of getting screwed by Air NZ !!
Bring on the competition, all kiwis would benefit.

empacher48
19th Apr 2013, 07:36
I do seem to remember a few years ago when the former GM of Mt Cook went to Pac Blue, there was talk of turboprops joining that fleet. A few months later they were out of the market.

Now Jetstar NZ are getting the former GM of Air Nelson, noises are being made again.

But remind me, how many competitors have come up against Air New Zealand and lost in the domestic market?

But hey, good luck to Jetstar going to Kerikeri, Taupo, Westport and Masterton and making a profit. Oh wait, I don't think they'll be on the list.

27/09
19th Apr 2013, 10:28
I reckon a dozen dash 8-400's over there in orange would be great! Finally might get some reasonable prices to the regional centres.

I don't think Dash 400's and reasonable prices to regional centres go in the same sentence at least not in NZ. The sector lengths aren't long enough.

Unless Jetstar start up with Turbo Props over here the only regional places that are likely to see any silver and orange livery are RO, HN and maybe PM. Even then unlikely in my book.

The Kelpie
19th Apr 2013, 11:57
Not my usual style but gonna start a rumour:

A number of QLinks Q400's repainted in silver and sent across to NZ to tap the regional market.

Qantaslink to expand and add further routes between major centres. Add some further A319's that the group has options for and becomes the new 'low cost' qantas domestic.

Qantas domestic no longer needed.

Transition Complete!!

More to Follow

The Kelpie

waren9
19th Apr 2013, 12:06
It'd be a significant change to the business direction to add turboprops. The sums have been done on those big Dash 8s before by that ex Air Nelson GM and they weren't chosen then either.

Still, if you cant fill your 9 jets by cherry picking main trunk routes, I'd say they've probably got more pressing issues just at the moment.

Kiwiconehead
19th Apr 2013, 12:39
Turbo props and Low cost are mutually exclusive terms.

Low cost is 188 bums in an A320

Ollie Onion
19th Apr 2013, 22:49
Jetstar will NEVER operate turbo props, doesn't fit the model. The QANTAS group 'may' consider a turboprop operation in NZ as a spoiler to Air New Zealand's dominance in this market. The opportunity is there thanks to the ANZA privileges.

Why not have a couple of Qlink Dash 8's operate here under their AOC with 'cheap' NZ crew.

T-Vasis
19th Apr 2013, 23:46
Jetstar continues to grow New Zealand.

It wouldn't if the return was not sufficient to do so.

Quite simple really.

Margins are probably quite thin - but sufficient.

waren9
20th Apr 2013, 00:08
Hall apparently admitted NZ was not profitable during the NZ pilots negotiations.

Anyone know that to be true?

Mstr Caution
20th Apr 2013, 01:00
Kelpie.

The rumour doing the rounds this week is A319's & dropping "Link" from the aircraft branding.

Also utilising gates 1 thru 3 in Sydney for "Q.links" operations.

The Kelpie
20th Apr 2013, 01:21
Kelpie.

The rumour doing the rounds this week is A319's & dropping "Link" from the aircraft branding.

Also utilising gates 1 thru 3 in Sydney for "Q.links" operations.

That's what I heard too!!

Plenty of traineeship recruitment. I wonder how long domestic guys have got left before the old 'link' and it's much lower crewing cost EBA becomes the new domestic? The countdown will begin when we start seeing the gifting of routes from domestic in a similar way to what they did with JQ.

Transition complete.

More to Follow

The Kelpie

Going Nowhere
20th Apr 2013, 04:07
Gates 1 to 3 is happening, works apparently already underway for a lounge of some description. Trials also underway for use of the jetway at gate 9 using some type of 'gangway' to the aircraft.

A319's was Febs rumour, wasn't it?

In other news, Porter in Canada have purchased the C Series, they also operate Q400's.

Guess where the new management have been recently observing their operation? :E

Ollie Onion
20th Apr 2013, 04:19
According to an acquaintance who was at the meeting with David Hall, it was stated that the downturn after the Christchurch Earthquakes meant that the business was only 'breaking even' and he thought that would be the case for the next couple of years until passenger loads recovered, he also said the margins were 'very thin' in NZ.

JANZ staff were told that in its first year of operation domestically in NZ there was a small (six figure) profit made. Problem is that with the way it is all setup between Qantas / Jetstar / Jetstar NZ we will never truely know the viability of each business, we have to trust in what we are told (Big Ask). Either way, considering the Qantas New Zealand brand was losing between $10 - 20 million per year (allegedly) on the domestic operation then I think a break even with Jetstar would be considered a win for the group.

jarden
20th Apr 2013, 17:07
Jetstar will be looking deep into what Air NZ charge on regional routes and how much they can undercut them by.
NZ charge $700+ return for an AKL-IVC connection. They could jump in and run a non stop operation (like they did by starting WLG-ZQN) and charge $120 each way and really start off a price war they will do their market research and see where they can make the best return. The travelling public will flock to JQ if they get to fly in a 320 over a more expensive NZ turboprop service. Plenty of opportunities going in regional markets, the larger cities that have long enough runways for 320s are TRG, HLZ, PMR, NPE, ROT and IVC.
They just need to link the dots...

waren9
20th Apr 2013, 23:50
Theres no doubt that Jetstar have shown they can grow the market where they fly to with the $59 passengers, but those ones don't pay the bills and you need more than a middle of the day flight to some of those smaller centres to attract the 9-5 corporate crowd.

27/09
21st Apr 2013, 02:52
Jarden
Jetstar will be looking deep into what Air NZ charge on regional routes and how much they can undercut them by.
NZ charge $700+ return for an AKL-IVC connection. They could jump in and run a non stop operation (like they did by starting WLG-ZQN) and charge $120 each way and really start off a price war they will do their market research and see where they can make the best return. The travelling public will flock to JQ if they get to fly in a 320 over a more expensive NZ turboprop service. Plenty of opportunities going in regional markets, the larger cities that have long enough runways for 320s are TRG, HLZ, PMR, NPE, ROT and IVC.
They just need to link the dots...

Lets link the dots.

NZ is a long narrow country with a population of about 4.5 million people, smaller than most decent size overseas cities. 33% of this population live in the Auckland region and 76% in the North Island.

Where are you going to operate a A320 to or from the likes of TG HN NP RO NV? There isn't the population to sustain A320 aircraft on these destinations.

Air NZ don't even run a direct flight AA to NV so I can't see it making sense for Jetstar to do it no matter the price especially in an A320.

An AA - NV return is 4 sectors with Air NZ. I just looked on their website and there are return fares for under $400 depending on when you want to travel.

Plenty of opportunities to run the A320s in the regional markets. Really? I don't think so unless you don't intend to make any money.

jarden
21st Apr 2013, 04:00
^^ Easy they could fly Auckland- Napier then Napier to Christchurch they already are in talks with Hawkes bay airport. Christchurch to Hamilton is another even Christchurch to Tauranga. Wellington to Dunedin is a route they could go for as well. Still no options you think?

Regarding population. Jetstar already serve small centres in Australia e.g. Ballina and Proserpine So don't say NZ cities are too small for them to go after. Some are similar to Darwin and Mackay in population terms.

Hamilton is 202.000
Tauranga is 130 000
Napier/Hastings is 125 000
Palmerston North is 85 000

empacher48
21st Apr 2013, 05:28
Regarding population. Jetstar already serve small centres in Australia e.g. Ballina and Proserpine So don't say NZ cities are too small for them to go after. Some are similar to Darwin and Mackay in population terms.

Hamilton is 202.000
Tauranga is 130 000
Napier/Hastings is 125 000
Palmerston North is 85 000

Yes, although the population numbers may look close to what destinations they fly to in Australia, but what you don't see is that Hamilton and Tauranga are about 1 to 1 and a half hours from Auckland by car.

So the flights from Hamilton and Tauranga will have to be at least the same price for flights from Auckland for the leisure traveller to use them, otherwise it becomes cheaper in the passengers mind to travel to Auckland to fly.

But first Jetstar may want to increase services to and from Dunedin, AirNZ have three to four Auckland direct Dunedin services a day, vs one from Jetstar. Plus a multitude of connections for people through both Christchurch and Auckland.

waren9
21st Apr 2013, 05:30
The two markets are not analogous.

Chris2303
21st Apr 2013, 05:47
JQ no longer fly WLG-ZQN.

Ollie Onion
21st Apr 2013, 05:56
Actually they still fly WLG - ZQN 5 times a week.

Kiwiconehead
21st Apr 2013, 07:29
Regarding population. Jetstar already serve small centres in Australia e.g. Ballina and Proserpine

Ballina (Byron Bay) and Proserpine (Whitsunday Coast Airport) are gateways to renowned tourist destinations, and the cities at the other end of those legs are Sydney (4.6mil), Melbourne(4.1mil) and Brisbane (2.1mil).

I grew up in the Hamiltron - it isn't that exciting................................. neither is the Mount!

jarden
21st Apr 2013, 07:35
but what you don't see is that Hamilton and Tauranga are about 1 to 1 and a half hours from Auckland by car.

Yes Hamilton is. Tauranga no its over 3 hours. If you look back to my post I mentioned the posability of Tauranga and Hamilton to Christchurch. Not those 2 cities to Auckland which are really too short for 320 flights.
Wellington linked to these 2 ciites could also work for them and to Dunedin.

27/09
22nd Apr 2013, 00:52
Easy they could fly Auckland- Napier then Napier to Christchurch they already are in talks with Hawkes bay airport.

The reality is more like Hawkes Bay airport (and others) are chasing the likes of Jetstar, Jetstar aren't chasing them. I'd say the thought of and invitation to go to some of theses places is probably more of a distraction rather than a reality for Jetstar.

The only way many of theses regional airports will get the likes of Jetstar, if ever, is to offer big incentives. These rarely work as they found out in HN with Virgin. The irony is they offer incentives to get a new player to provide cheaper prices while all the time never offering any help to the incumbent to help them provide cheaper flights.

Christchurch to Hamilton is another even Christchurch to Tauranga. Wellington to Dunedin is a route they could go for as well. Still no options you think?

Have you checked to see how many flights a day there are between TG and CH and HN and CH? Probably hardly worth an A320.

It all comes back to the population base and the need for people to travel from/to theses places. Also regularity of service is important several flights a day is preferable to one flight a day.

jarden
22nd Apr 2013, 02:01
Currently NZ run a daily TRG-CHC and 2 daily HLZ-CHC so not much of a market at the moment. As pointed out by another member Jetstar where they enter new markets they tend to grow the size of the market which would be the case for WLG - ZQN among others.
They are limiting themselves with only one daily AKL- DUD should offer two IMO. The competition there has helped boost the airports annual PAX.
Be interesting to see what routes get the competition.

Sqwark2000
22nd Apr 2013, 13:33
And who is going to pay for the AvSec setup at these regional airports for their 1, maybe 2 flights a day..... not Jetstar, that's for sure.

27/09
23rd Apr 2013, 09:23
And who is going to pay for the AvSec setup at these regional airports for their 1, maybe 2 flights a day..... not Jetstar, that's for sure.

The thought of this cost probably hasn't occurred to the regional airport authorities either.

cavemanzk
25th Apr 2013, 01:07
If Jetstar does start regional services it is unlikely to have a major effect on NZ traffic, it would more likely create a new market of travelers out of Regional Airports.

Jetstar regional would struggle to attracted the business market, as with an A320 they couldn't over the same frequency of turboprops. With JQ we would be likely to see services to smaller center either daily or a couple times a week.

Where as NZ using problems is able to provide multiplier services a day, which attracts the business market.

jarden
27th Apr 2013, 05:52
Where as NZ using problems is able to provide multiplier services a day, which attracts the business market


I think the word problems is ment to be turboprops, which makes sense in the sentence. Yes Air NZ has got the frequency into many regional cities that Jetstar will find hard to duplicate unless they go and compete with turboprops as well.