A320 for QH Shorthaul?

[Tuck Mach]

It must be time for a new aircraft in the SH fleet, after all the little General apparently loves the A320 'containerised' freight and he has 110 of them for those mythical Asian JQfranchises, that Boston Bruce reckoned would need up to 450 by 2020...:E

So let me see which QF Flight Operations Manager (jockeying for a position) will spread the rumour (never in writing of course) that unless substantial savings are made, QF pilots will lose the flying to .........(insert subsidiary here).......Just like a 787 crew rest that although agreed to in a contract kiddies, ratified by FWA is somehow threatening the 'career' of those left at the once proud Qantas

Straight out of the playbook, and oh so predictable, but the pilots fall for the same three card trick every time...Will they again? HR and IR are taking bets....

The magic eight ball says of course they will!

[Ollie Onion]

Well, let's look at the facts and rumours;
- 110 airframes on order that could replace every A320 in the Jetstar group and still have a surplus of 40 aircraft.
- No deferment or cancellation of any of those orders.
- No 737 orders coming up.
- Some Qantas engineers in Melbourne and Sydney have been endorsed on the A320
- Jetstar Fleet Management told me that they had been told to expect further deferment of the NEO introduction due to the first batch of aircraft going elsewhere.

So read into that what you will.

[maggot]

Makes too much sense to happen

[Willie Nelson]

I think it's likely that QF would operate them but not at a lesser cost per pilot.

[swh]

The compo payments from the baggage handlers have added up to be a lot of money compared to containers.

[Bula]

54 A320NEO, 45 A321NEO.

At the end of the day I think it will come down to A320CEO lease rates. It wouldn't surprise me to see a product improvement using the A321NEO larger frame for premium seating on QF Domestic, while hedging bets on the JQ fleet, palming off the aircraft with the highest lease fees first as they, on average with all other things being equal, would have higher ASK's.

When the price of fuel goes up, they would have hedged their bets, and the CEO's lease rates should reduce further as demand for the NEO's increase world wide. At the moment the NEO premium is probably too high for JQ to offset as the fleet age still has a few years left. However A321NEO for QF Shorthaul to replace aging 737NG's sounds like good sense. But it's a matter of when, not if for fuel prices, and it would be crazy for JQ to have all their eggs in the perverbual A320CEO basket.

Imagine if they averaged down on the fleet, with 50% CEO/NEO combination, it would mean an initial 9%~ ish fuel cost reduction across the network for a 10% increase in fleet leasing fees initially, on a decline as CEO lease rates would continue to be competitive.

[Beer Baron]

Well, let's look at the facts and rumours;
- 110 airframes on order that could replace every A320 in the Jetstar group and still have a surplus of 40 aircraft.
- No deferment or cancellation of any of those orders

Well those are closer to rumours than facts. (Or perhaps we should call them "alternative facts" these days)
-The order is for 99 aircraft, not 110.
-According to the JQ website they have a current group fleet of 107 A320/321's. So there would be no surplus if the entire order were used as replacement airframes. Jetstar Group fleet | Jetstar (http://www.jetstar.com/au/en/about-us/our-fleet)
-The A320 order has been repeatedly deferred. It was deferred in February this year:Qantas to defer A320neo deliveries, reports drop in first half profit | Australian Aviation (http://australianaviation.com.au/2017/02/qantas-to-defer-a320neo-deliveries-reports-drop-first-half-profit/) and in 2014: Jetstar delays Airbus orders until 2022 | afr.com (http://www.afr.com/business/transport/aviation/jetstar-delays-airbus-orders-until-2022-20140707-j04sg)

So I'd say any replacement of the approximately 70 Qantas 737's will be a new order in itself and need not necessarily be linked to the existing JQ order.

To throw another rumour out there though; apparently QF still have cash tied up with Airbus for A380 deposits for the remaining aircraft they have no intention of ever receiving. Moving this money into a QF A320 order could help increase the appeal of the Airbus product over the 737MAX.

[Ollie Onion]

Yes but don't forget that Jetstar Pacific and Jetstar Japan are responsible for their own aircraft orders i.e. they don't take aircraft from that 110 order and order direct from Airbus for themselves.

That deferment you talk about was only a 9 month delay into the 2018 financial year, it will be longer than that until Jetstar sees them.

[standardbrief]

Jitconnect will transition onto the A320 within 2 years, mainline with new midhaul routes to follow on the 321 neo.

Fakenews?.......

[Beer Baron]

Yes but don't forget that Jetstar Pacific and Jetstar Japan are responsible for their own aircraft orders i.e. they don't take aircraft from that 110 order and order direct from Airbus for themselves.
I don't think that is quite correct. Their aircraft do not live on the QF Group books and are said to be owned by JQ Pacific or JQ Japan, but they are sourced from big brother JQ in Australia.
This is a quote form the JQ website again:
Jetstar Japan has finalised arrangements with five lessors that will purchase and lease 24 new Airbus A320 aircraft that Jetstar Japan will receive in the next three years.
All of the aircraft have been sourced through the Qantas Group’s existing fleet orders, allowing access to early delivery slots.
Jetstar Japan completes leasing for 24 aircraft (http://newsroom.jetstar.com/jetstar-japan-completes-leasing-for-24-aircraft)

[Tuck Mach]

All of the aircraft have been sourced through the Qantas Group’s existing fleet orders, allowing access to early delivery slots.That is correct too.
Despite both JQ in Japan and Vietnam being listed as associate entities under AASB128, aircraft are sourced from QF group orders, unless those leases are commercial at market rates, an effective subsidy is paid to the company operating (ie: owned by foreign nationals) made by Qantas shareholders.

JQ HK was also supposed to be the same with Stanley Ho and the JQ HK Board responsible for aircraft, however as the report here

http://www.thb.gov.hk/eng/boards/transport/air/Full%20written%20decision%20(Eng)%2025062015.pdf

stated clearly:

'Summarising the above observations, the Panel is of the view that JHK cannot make its decisions independently from that of the two foreign shareholders.'


JQ Asia is even muddier...:E

[cavemanzk]

JetConnect makes the most sense of the A321NEO, slowly introduce them into Qantas via an backdoor plus less union issues with the NZ based crews.

Then you'll probably find JetConnect will be used for more than just the Tasman , allowing cost cutting.

A321NEO's on the Tasman will make sense, Since NZ will be using them too.

[Tuck Mach]

Jetconnect is exactly that, a Trojan horse.
it was as Leah Drake concluded at a Fair Work hearing 'a sham'.

Then you'll probably find JetConnect will be used for more than just the Tasman , allowing cost cutting.Not quite sure to what costs you refer unless of course you are implying crew terms and conditions? The cost of administration of JC is excessively high but tolerated as it is an IR wedge. Do you work for them perhaps? A small problem becomes the transfer of business case and also the no disadvantage test which provide the rudimentary protections under your FWA. May be worth spending some time on the Act as I am sure IR Qantas lawyers are.


With no lease payments, no fuel expense and CEO Paul Daff admitting that all payments originated in Sydney and even the famed 'capital return' having been sent over by Qantas to be returned by Jetconnect, it is the obvious candidate. It serves no other purpose, but whether the myopically short sighted pilots would do anything isn't known.

A temporary exemption from CASA to operate domestic sectors and there it is, but one suspects politically the tide has turned on foreign workers undercutting Australian FWA abritrated outcomes, so perhaps Qantas will need to wait for another day. A 'trans tasman- labour- exchange model' may not be for either government's stomach.


It will be interesting to see if demand continues to slowly decline (placing pressure on yield) which aircraft are flying domestic trunk routes in the near term....:E

Maybe then the pilots left will realise that QF don't care to cease the adversarial IR model and will continue to try to source the lowest paid pilots. Given their administrative headcount to aircraft ratio, something Joyce has grown admirably, killing off any efficiency, someone has to pay for the 'street', the failed JQ Asian 'expansion', EK alliances, Red Q, AOC splits and perhaps the most expensive airline management in the world. It ain't going to be the administrative corporate types...:(

[Bula]

TM,

Don't Aus and NZ have 6th freedom rights, hence no CASA approval required?

[goodonyamate]

jetconnect will be lucky to last another 5 years.

there will be no jetconnect crew operating domestic sectors in aus. Any talk of that is just the wet dream of jetconnect crew (and probably management).

At worst (from a mainline point of view), things will remain as they are.

[Steve Zissou]

"there will be no jetconnect crew operating domestic sectors in aus. Any talk of that is just the wet dream of jetconnect crew...

Mmmm. Give up Tasman returns to fly domestic in Aus? If that constitutes someone's wet dream then I'm guessing they need to see a sex therapist :ugh::bored::oh:

[maggot]

"there will be no jetconnect crew operating domestic sectors in aus. Any talk of that is just the wet dream of jetconnect crew...

Mmmm. Give up Tasman returns to fly domestic in Aus? If that constitutes someone's wet dream then I'm guessing they need to see a sex therapist :ugh::bored::oh:
Yeah my thoughts... wtf!

[Tuck Mach]

Bula,

I think you are referring to the 8th freedom or cabotage, whereby JC could operate domestic sectors in Australia?
Whilst the Single Aviation Market, between Australia and NZ allows it, the FWA prohibits such conduct for the reasons previously stated.

Given Qantas maintains a constant lobbying pressure in Canberra to stop cabotage by other carriers, it would be ironic if they tried to convince FWA that it was a legitimate operation and allow cabotage.

Qantas's stated position in FWA was that it was a separate NZ operation and thus not under jurisdiction of FWA (my paraphrasing)

So although the pilots ought have followed the money on JC in court and not FWA, IMO they tried to find the 'control' of JC in the wrong jurisdiction, they ought have tested it in the court system, whereby the salaries paid from Sydney, the fact the CEO didn't know directors and the 'capital return' had in fact been transferred from Sydney and then sent back, would have clearly evidenced control and therefore jurisdiction.

'Qantas attempting to claim JC is now just another subsidiary to fly domestic sectors, like Cobham for example, would require some doing!

It would require better legal preparation than the pilots demonstrated for the FWA hearing in 2012. The transcript is fascinating reading...

Jetconnect doesn't have a fuel bill, bot bad for a separate airline, which Qantas claimed was at arm's length!

[swh]

Qantas and Jetstar have cartel approval from the ACCC

http://registers.accc.gov.au/content/trimFile.phtml?trimFileTitle=D12+98760.pdf&trimFileFromVersionId=1107134&trimFileName=D12+98760.pdf

https://www.accc.gov.au/media-release/accc-authorises-coordination-between-jetstar-joint-ventures

[Jc31]

What about the replacement for networks tired and aging fleet?

[ElZilcho]

Given Qantas maintains a constant lobbying pressure in Canberra to stop cabotage by other carriers, it would be ironic if they tried to convince FWA that it was a legitimate operation and allow cabotage.

I'm sure Alan's well versed in Cabotage and the Australia New Zealand Closer Economic Relations Trade Agreement. How long have JC and J* been operating in NZ?

If a QANTAS owned subsidiary were to be blocked from Domestic operations in AUS due to being ZK registered then perhaps it's time J* were sent packing from NZ, being an Australian company with VH registered Aircraft.

Don't get me wrong, I'm not in support of QF's destruction of mainline, I just find it ironic that they aggressively defend their home turf from Cabotage while creating J* entities in multiple countries.

[Tuck Mach]

Totally agree El Zilco....

Tangled webs are amusing to watch when they eventually unravel...:E

[Derfred]

Nobody said anything about it due to their being ZK registered.