next virgin blue ?

[BNEA320]

timing is now perfect for another new lower cost player to enter the Australian market . could someone like lion air now ove into space being abandoned by qf both international ly & domestically ? for domestic all they would have to do would be tink up with a nzl or oz carrier & call it whatever maybe not lion air. they could call it Australian & be more Australian than 1/2 pregnant qf.

[neville_nobody]

Never going to happen until we build more airports

[BNEA320]

could call fill the ever growing qantas void . must be a few airlines in Asia thinking qf is stuffed & could move into a lucrative space easily with a few Australians apparently running the show. just like branson pre ansett collapse .

[Anthill]

Both major carriers announce a loss and you say that another low cost airline should enter the market? Pure genius!

:8

[BNEA320]

no a lower cost, not low cost. not hard to be lower cost than qf & va .

5000 taking a 100% pay cut at qf in 1st cull alone .

there's a much bigger game in play here.

[BNEA320]

around 2000 many qf + an staff laughed at branson. ok in retrospect his timing was perfect.

so we now know the 1st cull alone at qf is 5000, what about next announcement ?

qf cannot give everything to jq. va Will laugh all the way to the bank !

[porch monkey]

Sure, let Lion in. The we'll have the first jet fatal. Get it out of the way, and the present incumbents won't have to worry about being first. Win/Win, eh? You seem to be equating 5000 job losses with drastically cut routes, etc. Won't happen. Many of those job cuts will be taken up by contractors, ie, outsourcing. The domestic side won't be changing much and if you think either VA(Tiger) or QF(Jetstar) will just hand **** over to an outside competitor, then you're more delusional than Joyce is.

[VH-FTS]

Time and time again BNEA320, you show you really have no idea.

[BNEA320]

let's face it qf Will keep shrinking & va Will keep growing .

qf Will hold onto golden triangle as long as possible + per. only difference between an & qf is qf Will die slowly . va Will grow fat & LAZY LIKE QF has . history repeating

[BNEA320]

qf cutbacks don't solve huge problem of very overpaid staff . cannot see qf staff willing to multi task

[porch monkey]

"Cannot see"....... And that , grasshopper, is why you fail. You surely cannot.

[Transition Layer]

I've just figured it out...BNEA320 is actually everyone's favourite "aviation expert" Geoffrey Thomas.

The attacks on 'overpaid' QF staff and general level of stupidity in everything that is written point to one man...GT!

[KABOY]

Suggest you look at Alan Kohlers report on the Airline duopolpy and see how much money is on the table for profit.

QF and VA have flooded the market with so much capacity there is nothing left to profit from. Any airline, low cost or not will head for the door when they see the money being tipped in to maintain market share. It was openly believed that VA would have hit the wall if it didn't receive the capital raising from its three single biggest shareholders. That money was essential to purchasing a low cost competitor to meet the Jetstar threat at the leisure end of the market.

If another Low cost carrier stepped into the Australian market, which airline do you think they will be cheaper than? Any route they try and establish themselves on will only be met with competition from TT and JQ.

How much lower will their cost be than the established low cost incumbents?

[Toruk Macto]

If the taxi trip costs more to the airport than the airfare then better to buy your kids a taxi license instead of a pilots license . . Taxi drivers will be on more money and better business .

[The The]

qf cutbacks don't solve huge problem of very overpaid staff . cannot see qf staff willing to multi task

Pilots? Borghetti himself has said the cost of QF v DJ shorthaul 737 pilots is less than 5%. One side forced to take a few pay freezes whilst the other gets a few pay rises. Won't take long even the playing field on that front.

Engineers? According to ALEA, Virgin pay rates higher.

Cabin Crew? What reduced pay scale are they up to now for QF? More casuals on the way?

Ground services? QF already outsourcing to lowest bidder

Management? Now there's one.

[Judd]

could someone like lion air now ove into space being abandoned by qf both international ly & domestically


You must surely jest. That operator has an appalling accident record.:ugh:

[Break Right]

Correct me if I'm wrong but didn't both VA and QF domestic make a profit. VA about $25M and QF $57M. This is the main section of the company that the rest revolves around. The losses came from all the other sections of the company.

[BPA]

In 14 years the following airlines have tried and failed on their own;

Impulse: needed QF to save them and turn them into Jetstar
Tiger:needed VA to save them and rebranded as Tigerair
Ozjet: failed
Skyairworld: failed
Strategic/ Air Australia: failed

[ABusboy]

Guess you started following airlines after the Ansett collapse,
Not to mention Compass MK1&2

[BPA]

Been involved in Airlines way prior to the Ansett collapse. My post was about NEW start up jet operations since 2000 that failed. It wasn't a list containing All the airlines that have failed in Australia.

[XPT]

any airline with lots of aircraft could do this. Makes perfect sense.

A full service carrier, but with lower costs than QF & VA.

All the airline would need to do, is partner with some existing small Australian or New Zealand carrier & upgrade the AOC to include B737's or A320's or both & then be patient. It could fly international to start with, to various Australian ports.

It could call it self Australian.

As QF retreats to golden triangle & "gives" routes to JQ, the new airline could pounce, before VA fills the void.

Not many business people want to fly JQ, unless QF messes with JQ business model & turns it into another VA, which could be the big plan all along.

[neville_nobody]

A new low cost entrant cannot happen here until we get airports. You have zero cost advantage in this country because of this. LCC's pay the same price for everything as everybody else. They start off with a low cost staff but this eventually disappears.

Just have a look at the regional airline model in the USA it has completely imploded. People don't fly for free forever and so once the wages start going up the whole model doesn't work. There could be a mass shut down of the regional airlines in the US very shortly.

You need to operate to smaller airports where it is cheaper and there is less congestion. This is exactly what Easyjet/Ryanair/Southwest do and they have low cost models and pay reasonable to unbelievable salaries in the case of Southwest.

Until we get secondary airports in Sydney/Melbourne/Brisbane/Perth the LCC model is a non starter, and in reality any other sort of model for that matter.

Interesting that the government funds the roads system in this country yet when it comes to aviation, it's all to hard. Kinda funny really that they will go and build thousands of kilometres of tar ripping up the country side no problem, but to build a 3000m runway and a few buildings is nigh impossible.

Bizarre thinking in so-called rich country really.

[Anthill]

Speaking of nostalgia, remember KIWI that Ewen Wilson started up? operating low cost international operations with leased B727s and then B757s?

[XPT]

what's the difference with AN demise (& Virgin growth) & QF shrinking fast.

AN happened overnight, QF taking a bit longer, that's all.

A lower cost full service airline can work here, as passengers leave QF for VA.

Not advocating another Tiger, just an airline, with significantly lower costs than QF.

[Snakecharma]

I can't believe you people advocating that another "low cost" operator start up.

Where does the low cost come from?

No airline can change the laws of physics so fuel costs are similar regardless of who the operator is or whether they profess to be a low cost operator or not.

Leasing charges are dearer for new start operators because of the risk element

Air Nav changes are the same regardless of style of operation

So there are some of your big ticket costs.

So where does the lower costs come from? The staff!

Low cost operators operate on a low margin, high volume charging scheme in order to survive. This means they need to get bums on seats. Yield management is really basic, If the seats are empty then charge less, some cash is better than none.

The punters come to expect that it is reasonable to pay more for a half hour trip in a clapped out falcon taxi driven by a bloke making 10 bucks an hour than for the hour and a half flight in a $70 million dollar jet crewed and supported by multiple skilled people.

This drives the expectation of lower fares and feeds the cycle where no one can actually make a dollar out of aviation.

We are our own worst enemies..

[Jack Ranga]

How much of Virgin's loss was due to CAPEX?

[Rabbitwear]

There is no way EK would buy QF in its present form. They may however acquire the Australian Airlines name from QF , take over the leases of the b737s and build an airline on their terms.

[coaldemon]

Emirates business plan is not about buying old Airlines or starting new Airlines. :rolleyes:

[moa999]

Jack Ranga,

Suggest you look at some financing texts.

Capex is an Investing item which impacts Cash Flow, it does not hit the P&L.
In later years Depreciation from Capex, and say Maintenance Expenses will hit the P&L and in the case of Aircraft in 20 years or so they will be worth next to nothing and you have to spend Capex all over again.

So in summary Virgin's loss had nothing to do with Capex.

That said it did have positive Operating Cash Flow, though overall Cash Flow was negative thanks to Investments (ie Tiger and Virgin Regional)

[Jack Ranga]

Moa999, I'm not interested in looking at financial texts ;) that's why I asked the question!

Let me phrase it better: The money virgin has spent on building new & renovating lounges. Outfitting their aircraft with business class & wifi, all of those capital improvements to the business. Did that have an impact on their profit? Or is the answer the same??

[Worrals in the wilds]

Never going to happen until we build more airports Exactly. You can't park the fleet in your backyard. QF aren't abandoning space, even if they're playing around with routes.

Ground services? QF already outsourcing to lowest bidderIf I had entrepreneurial dreams (which I don't) I'd enter that market rather than start a new airline. Far lower set up costs and more flexibility wrt staff and contracts. Mind you, I'd be dubious about it; the old adage about making a small fortune in aviation applies. The road to bankruptcy and/or nipping off overseas in a big hurry (leaving lots of unpaid bills :ooh:) is littered with people who thought they could start up an Australian airline, and more than a few would-be GHS magnates.
Interesting that the government funds the roads system in this country yet when it comes to aviation, it's all to hard. Kinda funny really that they will go and build thousands of kilometres of tar ripping up the country side no problem, but to build a 3000m runway and a few buildings is nigh impossible.One of the political problems is that it takes a decade or so to build an airport from scratch. Roads can be done much more quickly, so the political party in power has a chance of reaping the benefit before the next election. A government that decides to build an airport will probably be in opposition by the time it's actually up and running, so the net political gain is less than zero; they cop all the negatives and none of the positives.

Anyway, if you want to start an airline go ahead; just expect a bit of sniggering and strictly cash terms from your service providers. Many people in aviation have now been bitten by enough start up carriers to be really, really dubious.

[XPT]

Don't think a low cost was suggested, but lower cost, full service than QF & VA which wouldn't be hard with lower wages.

SYD has said recently plenty of capacity (as they push against another airport)

QF continues to shrink.

BNE has more capacity (they are trying to push anything under 50 seats out of BNE)

MEL ?

There's also another airport in Melbourne capable of taking passenger jets. MEB.

From memory VA started with only 2 x 733's & on one route BNE/SYD.

[Tankengine]

It is really easy to set up a new airline.
Absolute fortunes to be made.
You could even call it Compass 111. :E:ugh::rolleyes:

[XPT]

best way to go

you don't set up a new airline from scratch you find an existing airline that's not making any money & take them over & upgrade their AOC to larger aircraft.

Rex is still making money, so why can't others.

Think outside the box.

The customer experience at big airports is getting worse & worse. MEB would work.

Less hassle & closer to Melbourne CBD.

Question is how to make it work at BNE & SYD. Use jet bases instead of the existing terminals, which have turned into a retail frenzy. (who wants to go shopping at an airport?)

When lived in LA, would only use bloody awful LAX as a last resort. Would fly out of Burbank whenever I could.

Yes LAX has more flights, but could often find one around time wanted to travel going where I wanted to go.

How many commercial jet sized airports in LA basin ?

LAX
Burbank
Ontario
Long Beach
John Wayne
San Diego

applying the "southwest effect" 2 hour rule.

[Anthill]

Retail concessions seem to work, XPT. SAC gets about 55% of total revenue from ground side activities, the rest from aircraft handling charges. Westfield group played a huge role in the development and design of the terminal space at Sydney. Notice how you go from security/customs and straight into the 'mall'? Yes, people who are expert in consumer psychology designed the layout to extract the maximum $$$$s from the punters before they set foot on an aeroplane.

[Worrals in the wilds]

Use jet bases instead of the existing terminals
Unfortunately the security requirments hamstring this. It's very expensive to set up the necessary screening equipment and hire contractors to run it, and that's assuming OTS and the airport will give you the approval.

You also have issues with transporting your passengers to and from the jetbase, as airport public transport and parking facilities are concentrated at the terminals. You can run a bus service, but that adds to the cost. You can have your own carpark but that's more land to rent and another thing to administer and staff. It might be possible, but IMO not at all cost effective.

How many commercial jet sized airports in LA basin ?
And how many people live in that area? Probably more than live in the whole of Australia.

[Jack Ranga]

XPT, you need to read some financial texts :E

Also, where is the 'Burbank' or 'John Wayne' airports in NSW or VIC or QLD that these cash cow new airlines operate out of?

[blackburn]

XPT

Pardon my ignorance as a Melbourne resident - where or what is MEB?

[VH-ABC]

Essendon mate. I live on the Gold Coast, but they have the internet here as a substitute for local knowledge.

[Jack Ranga]

YMEN could take a 737 or 320 could it? lol, it would need serious infrastructure upgrades & who would pay for that? Jetstar can't make AV work so there's something wrong with this so called low cost model? What would that be??

[Capt Claret]

YMEN could take a 737 or 320 could it?

Seeing as it used to take 727-200 it's hard to consider that it couldn't take 737/A320.

[Jack Ranga]

I'm talking about the 1970's facilities not the runways, been there lately?

[Worrals in the wilds]

Does it currently operate RPT flights? Do they have the necessary security and passenger handling facilities? I'm not familiar with the airport, but their website suggests that they don't.

If not, would they want to go there? Has anyone asked them? They may be happy doing their thing wrt corporate jets and GA :cool:. Moving to RPT jet ops opens up a huge, expensive can of legislative worms, not to mention requirements for automated baggage handling systems, GHS contractors/equipment, check in and parking.

If an established operator like Virgin or Qantas turned up with a plan then maybe they would, but otherwise they'd have to invest a large amount of money on infrastructure upgrades (and a masssive amount of time complying with the legislative requirements) on a promise from an untested new airline.

Many people and organizations who spent money on stuff based on promises from untested new RPT airlines are still paying off the bills :ouch:, so I wouldn't blame Essendon for being a bit cautious. :suspect:

[Mstr Caution]

Isn't that like Darwin?

JQ planned to use Darwin as the launching pad for services to Asia.

Opened a base only to close it down.

Wanted all the infrastructure in place but didn't want to pay for it.

[XPT]

doesn't have to mean 737 or 320. Could use smaller jets.

[XPT]

think Alliance currently operate F70's & F100's in & out of MEB.

Why would they need automated baggage systems ?

Most business types have no checked baggage & that's where the $$$ are.

There's no money in leisure pax. Leisure pax just fill up the aircraft.

[BNEA320]

under 20,000 kgs MTOW don't need to worry about security.

That covers plenty of aircraft types, inc 36 seater jets.

Also very quick to get on & off a 36 seater & at MEB no queues for everything.

[Worrals in the wilds]

You do if it's an RPT operation. The 20,000 kg waiver only applies to charter operations.
From the regulations;

4.02 Meaning of screened air service
(1) An aircraft must be a cleared aircraft before departure if it is operating a regular public transport operation or an open charter operation with a maximum weight of at least 20 000 kg.
Aviation Transport Security Regulations 2005 (http://www.comlaw.gov.au/Details/F2013C00204/Html/Text#_Toc353975269)
Most business types have no checked baggage & that's where the $$$ are.
In my experience they like to have the option available, even if they don't always use it.

[BNEA320]

so under 20k no security .

so u can carry luggage . pax can carry it to aircraft

[XPT]

yeh Worrals in the wilds did you fail english comprehension at school ?

4.02 1) ....... maximum weight of at least 20 000 kg.

So under 20k no b/s security required - one massive saving

[The Big E]

Emirates business plan is not about buying old Airlines or starting new Airlines.

Why buy a dead horse, when you have the 'where with all' to simply move in and do it your own way, with a fleet of your own choice. No brainer really.

[The Big E]

Isn't that like Darwin?

Just ask Alan, as he thought that he had figured it all out. Just like the mess
he has been making of QF since he has had his current job.

[The Big E]

Did that have an impact on their profit?

In a word YES. Someone has to pay the bill, and generally they who place the Technical Directive also place an obligation on their employer or owner to pay.

[The Big E]

That covers plenty of aircraft types, inc 36 seater jets.


If you do the math for short haul stuff, there is no way that 36 seater Jets can compete with turboprops. Just look at why ATRs are creaming the rest.

[Worrals in the wilds]

yeh Worrals in the wilds did you fail english comprehension at school ?

(1) An aircraft must be a cleared aircraft before departure if it is operating a regular public transport operation or an open charter operation with a maximum weight of at least 20 000 kg.
The OR is the key. If it is an RPT OR over 20 000kg it requires screening.

[Check_Thrust]

Worrals,
I think the backlash against you is a bit harsh as I can understand your interpretation of the rules due to its often poor wording. However there are several unscreened RPT flights operated everyday across the country in aircraft ranging from C208s to Dash 8s and the like.

[Metro man]

Why bother with forming an airline ? Just sell the muffins instead.;)

[Worrals in the wilds]

Check Thrust; thanks and interesting. Do you refer to regional/remote services?

My understanding was that all RPT flights now required screening and that several regional ports had to spend considerable money to comply, even though their RPT service was only a twice weekly Metro or Dash 8.
Maybe there is room to move if the Minister gives his authority? Or maybe (and more likely :hmm:) the regulation is not fully enforced, particularly in regional areas?

I'm assuming they fit the definition below and openly sell tickets to the public for a fixed schedule, not just a few covert tickets for the spare seats on what's officially a FIFO charter :suspect:. I'm sure you're aware of the definition but I'm not so sure about some of our fellow contributors. :}

regular public transport operation means an operation of an aircraft for the purposes of the carriage of people, or both people and goods, of an air service that:
(a) is provided for a fee payable by persons using the service; and
(b) is available to the general public on a regular basis; and
(c) is conducted in accordance with fixed schedules to or from fixed terminals over specific routes.
ATSR 1.03
Why bother with forming an airline ? Just sell the muffins instead.;)Agreed.

[DTS]

Oh dear NADeals!

Timing is not perfect for a low cost player to enter the Aus Market
JQd is losing money
VAd is losing money
Tiger is losing money

The only domestic airline making money is QF and that's a full service airline that is now slowly starting to take back a few JQ routes

I am still waiting for your previous prediction of VA to "go broke"

Funnily enough the real pros SQ, EY, NZ see VA good enough to chuck significant amounts of cash in.

[BNEA320]

ever heard of Rex ?


They're making money.


Most of their ports except SYD, MEL, ADL & DBO - no security(fight at Dubbo, due to QF introducing bigger aircraft)


Someone like them could get a new aircraft type perhaps & aim at the business market from alternative airports like MEB.

[DTS]

Well aware of Rex and this further confirms that there is no need for another airline, let alone a budget airline in Australia. Fiji Airways does well though......


26 FEBRUARY 2014 MEDIA RELEASE
AVIATION IN CRISIS

The Regional Express (Rex) Group today announced it s first half FY1314 results with a Profit Before Tax (PBT) of $5 million on a turnover
of $129.3 million.


Commenting on the results, Rex Chief Operating Officer Garry Filmer said that as foreshadowed in the profit guidance issued on 7 February 2014, the Group’s PBT for the period slumped 59.8% compared to the same period last year due to a continuing weak Australian economy.

[BNEA320]

no one is suggesting a budget airline but rather an airline with much lower costs that maybe only flies trunk routes at busy times . maybe a part time acmi operation that's a separate division of an existing airline. could be set up reasonably quickly as well.

[BNEA320]

no one is suggesting a budget airline but rather an airline with much lower costs that maybe only flies trunk routes at busy times . maybe a part time acmi operation that's a separate division of an existing airline. could be set up reason ably quickly as well

[43Inches]

I am still waiting for your previous prediction of VA to "go broke"

This would be true without;

Funnily enough the real pros SQ, EY, NZ see VA good enough to chuck significant amounts of cash in

SQ, EY, NZ

Are throwing money into VAH to keep it afloat to prevent facing a QF with a domestic monopoly and tie ups with EK.

One just has to look at the profits QF generated in the mid 2000s without significant opposition whilst VA was a very small player. Since that point QF has been pushing J* and Jetconnect into NZ airspace, J* into SQ held territories and the tie ups with EK threaten EY income from this end of the world.

If VAH is let go and does go broke, QF will return to massive profitability very quickly. This combined with tie ups with EK will be a huge problem for SQ and NZ in particular with no domestic feed from Australia. VAH going broke however is extremely unlikely until the shareholders start hitting a financial wall themselves which hardly seems likely.

no one is suggesting a budget airline but rather an airline with much lower costs that maybe only flies trunk routes at busy times .

In order to make money on any of the competitive routes in Australia you will need a certain mass flow and size of operation to keep overheads low. The trunk routes, most importantly the flow into Sydney is saturated at the peak times and slots are impossible. Outside of peak and you are not going to get the premium last few seats sold to make profit from a jet consistantly, 7 days a week, year round. You will also be facing fares from tiger and J* well below profitable unless you are running 50+ jets.

My understanding was that all RPT flights now required screening and that several regional ports had to spend considerable money to comply, even though their RPT service was only a twice weekly Metro or Dash 8.
Maybe there is room to move if the Minister gives his authority? Or maybe (and more likely ) the regulation is not fully enforced, particularly in regional areas?

Not required for aircraft under 20,000kg as previously stated, this is why Rex was in dispute with DBO council regarding paying for screening when it is not required for their operation. The Dash 8 Q400 is well above 20,000kg so attracts the screening requirment, this is why a lot of country ports adopted screening in places where QLink flies to attract the larger aircraft.

[BNEA320]

no one said using mascot .

you could also start with only a few aircraft like virgin did. rex could do it now with virtually no extra aircraft or overheads. might upset their big brother partner though . point is it could be done easily + cheaply

[43Inches]

you could also start with only a few aircraft like virgin did.

I think it's well known that VB would not have gone anywhere without the demise of Ansett and the subsequent void in the market. At present the market is saturated, hence why all players are losing money or very slim profits.

[Worrals in the wilds]

Not required for aircraft under 20,000kg as previously stated, this is why Rex was in dispute with DBO council regarding paying for screening when it is not required for their operation. The Dash 8 Q400 is well above 20,000kg so attracts the screening requirment, this is why a lot of country ports adopted screening in places where QLink flies to attract the larger aircraft.
Cheers, thanks for that. The regulation is not worded precisely.