Wirraway
13th Sep 2002, 17:15
Sat "Weekend Australian" 14/9/02
After Ansett: flyers bumped and baffled
By Steve Creedy and Matthew Denholm
14sep02
SINCE Ansett collapsed a year ago, discount air fares have risen as much as 15 per cent, Qantas is routinely overbooking flights by up to 60 passengers and it is almost impossible to get cheap seats on peak-hour services in the two-airline market.
While Qantas claims it rarely has to "bump" overbooked passengers, the airline is flying planes fuller and making bigger profits per domestic passenger, and readily admits that passengers these days hardly ever find cheap seats on peak-hour flights.
The Australian Consumers Association says it has experienced increasing numbers of complaints about the lack of cheap fares on Qantas, as well as about lower service standards and passengers being forced on to inconvenient flights because seats are unavailable.
Qantas sources have told The Weekend Australian the airline is using a "flow forward system" -- it earmarks passengers and shifts those who arrive early to different flights -- to help ease the overbooking problem. But, they say, that system comes unstuck if a plane breaks down, leaving the airline with nowhere to to shift passengers.
"What they used to do when things went bad, they would move them over to Ansett, but there's no capacity to move them anywhere," a source said. "And that's what's causing people angst at the airport."
Virgin Blue, which has replaced the defunct Ansett as Qantas's main competitor, also claims to be flying full during peak periods and admits to managing seat availability to maximise profits. But it claims its system does not oversell seats.
Virgin continues to offer cheaper deals across the range of fares than its big rival.
An investigation by The Weekend Australian into airline competitiveness since the Ansett collapse shows that passengers trying to weave their way through the airline managers' strategies to maximise their profits face 11 different types of fare from Qantas and seven from Virgin.
Both airlines operate strategies aimed at making every flight as profitable as possible -- and all passengers pay as much as they are prepared to. But Qantas denies allegations that include it cancelling flights judged to be uneconomical.
Qantas executive general manager for sales and marketing, John Borghetti, said the airline might occasionally consolidate "one or two" of its 2600 weekly flights to save costs, but most were cancelled because of crewing or mechanical problems.
"There are genuine reasons, when you run an operation, that these things happen," he said. "But to ... say Qantas consolidates flights when the loads are low, that's not correct."
Figures released yesterday by the Bureau of Transport and Regional Economics show discount tickets for the latest June quarter cost 7.7 per cent more in real terms than in the June quarter last year.
But business class and full economy fares were slightly lower over the same period. An American Express index for the third quarter puts the increase since mid-2001 at 15.2 per cent. The index includes GST but not other charges, such as airport levies and the $10 Ansett tax that have inflated advertised prices since June 30.
Amex's vice-president of corporate travel for Australia and New Zealand, Kyle Davis, also said Qantas and Virgin used yield management -- juggling the mix of fares on different flights to increase higher-priced seats -- to push up fares.
Qantas agrees it uses yield management to maximise revenue but says it has increased the total number and proportion of deep discount seats it puts on market, as well as widening their availability since the collapse of Ansett.
Executives say the lowest fares currently advertised are equivalent to those available in 2001 once taxes, levies and charges are stripped out.
About a third of the airline's seats -- up from 29.5 per cent before Ansett's downfall -- are available at its three lowest fares and to 165 destinations, rather than the 22 available in 2001.
"But if you're flying Melbourne-Sydney, 5pm on a Friday, you are never going to get -- or very rarely are you going to get -- an internet-only fare because that is peak business travel period," Mr Borghetti said.
He said the airline oversold seats in order to compensate for people who booked flights but failed to show up. Flights could be oversold by "50 or 60 seats" during peak periods such as Christmas on some routes, but only occasionally did one or two people get bumped.
========================================
Sat "Sydney Morning Herald" 14/9/02
A happy result ... Ansett, passengers and jobless workers aside
Analysis by Brad Norington
September 14 2002
A year after the event, the collapse of Ansett was a disguised blessing for Australia's aviation industry.
In the most brutal way, Ansett's demise meant that the rest of the industry could survive, even prosper, in the face of a worldwide downturn as people were reluctant to fly after the September 11 terrorists attacks.
Grounding Ansett immediately removed about 37 per cent of seat capacity from the domestic market.
The administrators put in charge of Ansett had planes back in the air within weeks. But their so-called "Ansett Mark II" operation was always more a token gesture to attract a possible buyer interested in a going concern. It operated barely 10 aircraft on main trunk routes and struggled to get passengers.
By February this year the principals of the Tesna syndicate, Solomon Lew and Lindsay Fox, had changed their minds about buying Ansett. They realised that flying again, even in a limited form with 20 planes and 3000 of the 15,000 original staff, was too risky.
And so Qantas's industry dominance was complete. Even now it services about 80 per cent of the market, flying business and tourist customers. Virgin Blue is doing well as a niche player with room to grow.
Consumers have not been so lucky. Essentially, fares have risen to what they were before no-frills airlines like Virgin and Impulse entered the game. Qantas is obviously so comfortable that it can afford to turn away people in peak times.
Services to regional areas have also suffered. With the merger of airlines such as Hazelton and Kendell, there are fewer flights for people in remote areas. If the market were left to its own - with no government intervention - some areas would not be serviced at all.
As for Ansett employees, they have now received about 50 per cent of what they are owed in entitlements under a scheme introduced by the Howard Government.
After all Ansett assets are sold they will be lucky to receive just over 60¢ in the dollar. For many who remain jobless, the ordeal is not over.
After Ansett: flyers bumped and baffled
By Steve Creedy and Matthew Denholm
14sep02
SINCE Ansett collapsed a year ago, discount air fares have risen as much as 15 per cent, Qantas is routinely overbooking flights by up to 60 passengers and it is almost impossible to get cheap seats on peak-hour services in the two-airline market.
While Qantas claims it rarely has to "bump" overbooked passengers, the airline is flying planes fuller and making bigger profits per domestic passenger, and readily admits that passengers these days hardly ever find cheap seats on peak-hour flights.
The Australian Consumers Association says it has experienced increasing numbers of complaints about the lack of cheap fares on Qantas, as well as about lower service standards and passengers being forced on to inconvenient flights because seats are unavailable.
Qantas sources have told The Weekend Australian the airline is using a "flow forward system" -- it earmarks passengers and shifts those who arrive early to different flights -- to help ease the overbooking problem. But, they say, that system comes unstuck if a plane breaks down, leaving the airline with nowhere to to shift passengers.
"What they used to do when things went bad, they would move them over to Ansett, but there's no capacity to move them anywhere," a source said. "And that's what's causing people angst at the airport."
Virgin Blue, which has replaced the defunct Ansett as Qantas's main competitor, also claims to be flying full during peak periods and admits to managing seat availability to maximise profits. But it claims its system does not oversell seats.
Virgin continues to offer cheaper deals across the range of fares than its big rival.
An investigation by The Weekend Australian into airline competitiveness since the Ansett collapse shows that passengers trying to weave their way through the airline managers' strategies to maximise their profits face 11 different types of fare from Qantas and seven from Virgin.
Both airlines operate strategies aimed at making every flight as profitable as possible -- and all passengers pay as much as they are prepared to. But Qantas denies allegations that include it cancelling flights judged to be uneconomical.
Qantas executive general manager for sales and marketing, John Borghetti, said the airline might occasionally consolidate "one or two" of its 2600 weekly flights to save costs, but most were cancelled because of crewing or mechanical problems.
"There are genuine reasons, when you run an operation, that these things happen," he said. "But to ... say Qantas consolidates flights when the loads are low, that's not correct."
Figures released yesterday by the Bureau of Transport and Regional Economics show discount tickets for the latest June quarter cost 7.7 per cent more in real terms than in the June quarter last year.
But business class and full economy fares were slightly lower over the same period. An American Express index for the third quarter puts the increase since mid-2001 at 15.2 per cent. The index includes GST but not other charges, such as airport levies and the $10 Ansett tax that have inflated advertised prices since June 30.
Amex's vice-president of corporate travel for Australia and New Zealand, Kyle Davis, also said Qantas and Virgin used yield management -- juggling the mix of fares on different flights to increase higher-priced seats -- to push up fares.
Qantas agrees it uses yield management to maximise revenue but says it has increased the total number and proportion of deep discount seats it puts on market, as well as widening their availability since the collapse of Ansett.
Executives say the lowest fares currently advertised are equivalent to those available in 2001 once taxes, levies and charges are stripped out.
About a third of the airline's seats -- up from 29.5 per cent before Ansett's downfall -- are available at its three lowest fares and to 165 destinations, rather than the 22 available in 2001.
"But if you're flying Melbourne-Sydney, 5pm on a Friday, you are never going to get -- or very rarely are you going to get -- an internet-only fare because that is peak business travel period," Mr Borghetti said.
He said the airline oversold seats in order to compensate for people who booked flights but failed to show up. Flights could be oversold by "50 or 60 seats" during peak periods such as Christmas on some routes, but only occasionally did one or two people get bumped.
========================================
Sat "Sydney Morning Herald" 14/9/02
A happy result ... Ansett, passengers and jobless workers aside
Analysis by Brad Norington
September 14 2002
A year after the event, the collapse of Ansett was a disguised blessing for Australia's aviation industry.
In the most brutal way, Ansett's demise meant that the rest of the industry could survive, even prosper, in the face of a worldwide downturn as people were reluctant to fly after the September 11 terrorists attacks.
Grounding Ansett immediately removed about 37 per cent of seat capacity from the domestic market.
The administrators put in charge of Ansett had planes back in the air within weeks. But their so-called "Ansett Mark II" operation was always more a token gesture to attract a possible buyer interested in a going concern. It operated barely 10 aircraft on main trunk routes and struggled to get passengers.
By February this year the principals of the Tesna syndicate, Solomon Lew and Lindsay Fox, had changed their minds about buying Ansett. They realised that flying again, even in a limited form with 20 planes and 3000 of the 15,000 original staff, was too risky.
And so Qantas's industry dominance was complete. Even now it services about 80 per cent of the market, flying business and tourist customers. Virgin Blue is doing well as a niche player with room to grow.
Consumers have not been so lucky. Essentially, fares have risen to what they were before no-frills airlines like Virgin and Impulse entered the game. Qantas is obviously so comfortable that it can afford to turn away people in peak times.
Services to regional areas have also suffered. With the merger of airlines such as Hazelton and Kendell, there are fewer flights for people in remote areas. If the market were left to its own - with no government intervention - some areas would not be serviced at all.
As for Ansett employees, they have now received about 50 per cent of what they are owed in entitlements under a scheme introduced by the Howard Government.
After all Ansett assets are sold they will be lucky to receive just over 60¢ in the dollar. For many who remain jobless, the ordeal is not over.