What of the next 18 months for Australian Aviation ?

[Java]

Thought this would be an interesting topic to look at, to get your thoughts and views on. Get those crystal balls out and see what you think will happen.

(Disclaimer: I don't nor have worked for any major airlines only charter companies.)


Here are my thoughts on a possible scenario.

1. QF will keep trying to grow as much as possible, though keeping an eye on a potential third airline.
2. Australian Airlines will eventually be seen flying around Australia on Domestic routes.
3. Virgin Blue will reduce their expansion plans, and wait and see the outcome of a third airline.
4. SIA will come in as a backer of a new third airline.

Result and Outcome:

At the end of the day the two strongest airlines, You would guess one will be QF and the other is anybodies guess. Whose gonna have the deeper pockets.


This thread is not to pi$$ anyone off, only to discuss a pretty interesting situation. You thought the last 2 years were interesting, I bet the next 2 are even more interesting.

cheers

Java

[Dehavillanddriver]

QANTAS will continue to expand through Australian Airlines and Impulse etc. The mainline operation won't in my opinion grow all that much - the growth brought about by the introduction of the 800's will be discounted by the farming out of the older 300's to either NZ or a contract operator to do the marginal routes.

Heard a rumour yesterday that QF had ordered A320's but think the source is getting confused between 320's and 330's - though they did insist it was both....

Virgin will continue to expand into markets that would not be considered traditional jet routes but still make money out of those routes. The sydney terminal will eventually resolve itself once the shareholders of the various companies that own SACL jump up and down about getting no rent for the ex AN terminal.

Virgin will evolve to become less no frills but still low cost - a kind of hybrid - not a full service airline like QF but not a cheapie like Ryanair..more of a Jetblue in the US type operator.

SIA will decide that there really isn't too much to be gained by competing directly against either Virgin or QF. QF have the market share to beat them stupid and the Virgin demographic isn't what they need to make the required return on investment.

The regionals will be turbulent - with the final outcome yet to be seen in my humble opinion. A regional with no oncarriage is a regional with a limited future. The future of Alliance, REX etc will be interesting to watch - I hope they can do it right and not hurt the loyal employees that have stuck with them thus far.

So in conclusion - who knows! The future is anyones guess - I never thought AN would fall over - but now that it has all bets are off and here is hoping we can all emerge out the other end more or less intact!

[sprucegoose]

Life just goes on........

[Bevan666]

The great pilot shortage hoves into view over the eastern horizon....

[gaunty]

Bevan666

That will happen as sure as night follows day regardless, of who gets up whom.

[Ramboflyer]

The 3rd Airline will begin small and with boosted capacity from oncarriage.
It will eventually match Qantas domestically and will either destroy VB or take it under its wing as per IMpulse/QF.
QF will have to reduce its fleet size as time goes by so look for lots of red tails in the Dessert, 737-300/400 767-200 747-200/300 etc....
In 10 years i can see 2 major Airlines both International and both as good as each other although QF had better start getting its act together soon.

[Torres]

It would indeed be a bold soothsayer who would attempt future predictions in the Australian aviation industry, however I believe I can predict with some accuracy that, despite CASA, the Australian aviation industry will survive. :eek:

[50 Cal]

O.k here's my prediction....

QF will struggle to keep it's costs down and hence will try to reduce it's cost structure by reducing wages or restructuring their workforce. This will cause widespread disharmony amongst the troops and strike action will occur.

Then to top it off QF will sell their regionals for a quick buck [whilst their still profitable] and let ****** or someone similar run as QF regional.......

Virgin will grow very strong [ no I don't work for them ] and have a marked impact on Qantas. Terminal problems will be sorted out and a new third carrier may appear!!!!

Then the new carrier may join with VB and take on QF......OPPS I hate to say it....QF goes bust, then is ressurected by industry and government under a new low cost structure and the rest I have no idea.

Just my thoughts. :p :p :p

[Ramboflyer]

QF will increase the size of Impulse and offer mainline F/os the commands to get there pays lowered ,otherwise they may never get a command as it shrinks to the competition.:rolleyes:

[Aussiebert]

this is pure speculation of course:

Qantas will see strike action in at least 1 place, but probobly 2, brought about by a reduction in types (offloading the 767 to australian and phasing out the 737 classics)

Australian Airlines expands heavily with exqantas 767s and starts a 'feeder service' within australia (or trys to)

Commondant Fells of the ACC will step in and basically set a price for syndey terminal gates... which no one will publicly like but everyone will accept as relativly fair

Virgin will make a surprising fleet stratagy choice, involving more than 1 type (A319/A321 type mix or maybe adding the 717or 757) in order to expand services, increase load factors but keep down the number of gates they need OR take on freedom air using a publicity campain aimed at hurting ANZ. or both

a 3rd domestic airline will try to sneak in by disguising itself as a feeder airline. It will make use of aircraft sitting in deserts right now to do so

Qantaslink/Impulse and all the others will be converted into 2 operations, a 717 only operation and a dash 8 only operation. 717 ops will expand significantly into old 737 routes following a major 717 purchase to expand impulse into newfound virgin routes (eg coffs)

At least one revamped regional will tie into a feeder deal with virgin and essential become virgin regional in the process

A new freight operation will start up, probobly based in qld or melb using state government 'support', using BAE146s or something similar. A virgin tie in will follow eventually.

There will be another midair at a GAAP zone

Overall i am expecting things to stay pretty glossy for Virgin Blue and troubled time for qantas. Nothing against Qantas i just think that the competitivness of Virgin will cause scares. The regionals are going to lose a lot of money, and the real winner will be the charter/LCRPTs operaters

[Java]

Aussiebert

Nice post, I only see two problems.
1. There being way too much capacity with your outcome.
2. Vigin Blue are alot more vunerable than you think. If SIA come in, I don't think they are going to be too concerned what damage they do to Virgin, and secondly I think SIA have deeper pockets than anyone who is play in the asia-pacific region.

Only my view though.

cheers

Java

[longjohn]

Gee, who do I work for and who do we compete against. Who do I aspire to work for and who has rejected me. Oh, and who made me redundant.

Now wheres that Christmas wishlist again..............

[talespin]

This is what I see in my cracked crystal ball:

DJ switches to A320/321's, partly under pressure from half-owner Patrick to carry (more) freight and partly due to an offer it can't refuse from Airbus (still a little annoyed at Tesna).

SQ kicks off a MEL-SYD-BNE domestic operation before Xmas to get two-way feed going for its (and Star partners') international services. A320's selected. Scores a decent chunk of the ex AN SYD terminal, QF gets the rest. DJ looks on enviously from its shed.

Fierce competition threatens but doesn't eventuate - QF and SQ focus on the higher yield market, and plenty of cheap seats for the riff raff on QF CityFlyer widebodies and Virgin wagons.

QF grabs 25% of NZ, DJ launches trans Tasman flights but shies away from NZ domestic.

QF continues to finely segment the domestic market (with Airconnex and NJS trying to outdo each other on the secondary jet routes and curry favour with the Board as supreme regional operator). Australian Airlines does well but not spectacularly, nice little earner.

BA finally can't help itself and sells off its 21% in QF to SQ and takes the cash. QF ditches oneworld and jumps over to Star. All trans Pacific traffic is now carried on Star carriers - QF, UA (slimmer since its successful reorg under Chapter 11), and NZ. SQ eventually folds its Aus domestic into QF, and the charade ends. SQ/QF/NZ are up against DJ.

Meanwhile, Branson - whose main game was always to kick off his franchise down under with a bit of a bang - has sold off his share to Patrick, who is left to fly his billboards in the shadow of the local Star combine.

Well, I said it was cracked.

PS: Dick Smith chokes on his namesake crackers while pontificating with his mouth full.

[Arctaurus]

Talespin

You should keep a copy of your post. Looking back on it in a couple of years may well prove you have super natural powers.

[Flighteeeee]

Your all wrong........

I'm doing my endorsement in the new scram jet. I'll enjoy 2-3hr sectors to NY, home by 1700, tea by 1800, root at around 1930. This high paced lifestyle will last about 5-10 years before my body falls apart.:D :D :D

Rooting is dangerous:D :D :D

[*Lancer*]

When will people learn that this country simply cannot support 3 individual, full-scale domestic airlines?

If SQ start here in their own right and none of the others are able to ally - then one will go.

It's happened 4 times in the last 10 years.

Do we need to see the same heartache over again?

[Piz Buin]

Air New Zealand will buy Qantas & Virgin :D :D :D :D

[fruitloop]

How many were around in say 85??
Correct me if you must but wern't there 5 majors
1.Qantas
2.Ansett
3.East-west
4.Air NSW
5.T.A.A.

I appologize for not mentioning the "minors"but the list is "Ginormous"

Have the "big boys"just got too big ??

(btw tailspin "want to sell the cracked crystal ??"

[outback aviator]

Sorry to say that I was around in '85 and I wish to point out a few pertinent facts.
1.Qantas, in 85 was a purely international carrier with no domestic flights.
2.Ansett was a major domestic carrier.
3.East West was a domestic carrier, but given its fleet size and no. of flights it could hardly be regarded as a major.
4.Air NSW was totally owned by Ansett.
5.TAA was a major domestic carrier.

[MARARA]

QF buys into NZ, NZ introduced into AU domestics on major city pairs allowing QF to have a lo-co in Australia and block any 3rd carrier hoping to fly with Star feed. QFlink is split into NJS, Impulse and Sunstate/Eastern. NJS will operate EMB170/190 inland, Impulse will stay with the 717 and Sunstate/Eastern will stay with the Dash8s. NZ will pick up some of the 717/EMBs for NZ service as QF has left the market to DJ and NZ.

[Aussiebert]

a short note:

The (arguable) fact that australia can't support 3 major domestic carriers doesn't mean it won't happen

[flipside]

I agree with Marara except for the Air New Zealand flying Aust domestic, Impulse or Australian will provide the low cost capacity

[Piz Buin]

MARARA - Pretty good insight, however not NZ in an EMB...too much cross wind ;)

[Java]

So where are we after all of these views and thoughts. In say 18 months time are we going to have another airline come in and have gone under. Are we going to have to see another lot of enthusiastic, committed, hard working, loyal people get royally screwed by this industry, employers and the government.
I want to see this industry prosper, but I am afraid that the next 18 months maybe another awfull repeat of the past 18 mths.
Please someone set me straight and give me hope that there is going to be some form of stability and future for everyone in this industry. I can't see how 3 airlines will work, but I really hope they do.

Cheers

Java

[fruitloop]

How's this for a 'cracked crystal' prediction

"Australian airlines"start flying out of Cairns to asian destinations. (all staff on different pay scales and restricted perks)
Qantas stop all international flights out of Cairns and only fly from capitols.Domestic does the on-carriage from Australian.
"Australian pull out of Cairns"

Any comments !!!:D

[Aussiebert]

and 3rd airline will live or die on the basis of international feed and travell agents support...

if i was implimenting such an airline i would take a different tack, lowish capacity a/c (ie smaller than a 73) and aim to fill as much of the a/c from o/s as possible.

Wopuld counter the discounting that would occer

I'd also do whatever it takes to get the ACCC on my side, simply to be able to minimise the impact of QF and DJ discounting in competition

[Rural]

My two bob's worth.

QF will struggle to keep costs low and will find it difficult to quickly adjust capacity as SQ enters the Oz market.

SQ will target the key 5 markets : MEL / SYD / BNE / ADL / PER, but will probably start with MEL/SYD/BNE.

DJ will struggle, with two major carriers (QF, SQ) providing at least some customer service, professionalism, travel agent distribution and global alliances.

I totally agree with previous comments on this post, that there is only room for 2 majors. OZ aint got enough people.

Regionals:

Regional Express forms commercial alliance with SQ.

QF Link struggles to keep costs low, but it will keep sufficient capacity on markets, due to plenty of cash.

Regional Express looks for equity from SQ to keep up with deep pockets of QF.

The next 4 to 8 months will be interesting.

[U2]

o.k .... third airline enters operations on a niche route using new aircraft, spends big money to get new aircraft for takeover battle. Other airlines continue to follow suite. Then third airline floats to get investment capital. Airlines squash each other. First airline to go bankrupt goes into liquidation and sells off assets cheaply, or liquidator screws investors to keep account. Remaining airlines fill gap and make a gentleman agreement.

In 5 years we will have solved our ageing airlines fleet and screwed investors and gullible public shareholders. We will be back to the old QF/AN duoploy, only with new aircraft.


Now if only we could do the same for G.A!!!!


U2

[grip-pipe]

With three quarters of the population living in Sydney Melbourne and Brisbane that's where the action will be. And that is the simple reason why there is only room for two majors in this country and always has been.

The bush will continue to shrink in terms of communities and wealth and people will continue to drive their cars to the exclusion of air travel (5% fly 80% drive). QF already have the 5% so Virgin are working on getting 5% of the other 80%. Communications technology will continue to make inroads into transport operations of all types, including aviation.

GA will continue to shrink to specialty operators and private flying will be enjoyed by only a very rich few, like now.

When the economic push is for rationalisation and fewer and fewer competitors why would the airline industry be any different. How many banks and brewers were there ten years ago, how many now, you work it out, its quite obvious, oligopolies and monopolies and workers and customers both get screwed, that's the name of the game.

So there will be the usual attempts to go up against those monopolies and the usual busts as they fail. Fuel prices will continue to rise as will the cost of aeroplanes and the choice of aircraft continues to diminish. You will need very deep pockets to survive the next five to ten years or gullible shareholders.

Anyway this crystal ball gazing is only as good as today and tomorrow is another day.

[Buster Hyman]

Patricks will sell to......... ;)