Trans Tasman.Who is making Money?
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Trans Tasman.Who is making Money?
It amuses me that every operater on the Trans Tasman route says they are losing money yet the saturation of the routes continues.
Between Qantas , Jetconnect , Air New Zealand, Freedom , Emirates , Aerolineas, Singapore etc.
Is anyone making money......?
What are the load factors like ?
Between Qantas , Jetconnect , Air New Zealand, Freedom , Emirates , Aerolineas, Singapore etc.
Is anyone making money......?
What are the load factors like ?
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Well, if you believe those at Pac Blue, oh yes, of course, they are rolling in the cash and cleaning up on the Tasman. Reality is, they are not, and to emphasise it, they are moving most of their operations to Auckland from Christchurch and Wellington, to try and add another spin to it.
QF have the best LF's on the routes between Oz and NZ, the 767 out of CHC and AKL is always full, the Air NZ A320's are spasmodic to say the least, the Pac Blue aircraft are not near what QF and Freedom loads are and that is FACT, and Freedom, well, they do alright for themselves and good on them.
My opinion, Pac Blue were relying on the QF and AirNZ merger going through, it has not, so they are having to eat humble pie. Pac Blue want to play with the big boys, but can't offer the service, so they bleat as a result.
Prediction, I believe you will see A380's on the trans Tasman, but who will it be? Emirates or QF?
QF have the best LF's on the routes between Oz and NZ, the 767 out of CHC and AKL is always full, the Air NZ A320's are spasmodic to say the least, the Pac Blue aircraft are not near what QF and Freedom loads are and that is FACT, and Freedom, well, they do alright for themselves and good on them.
My opinion, Pac Blue were relying on the QF and AirNZ merger going through, it has not, so they are having to eat humble pie. Pac Blue want to play with the big boys, but can't offer the service, so they bleat as a result.
Prediction, I believe you will see A380's on the trans Tasman, but who will it be? Emirates or QF?
Last edited by Pete Conrad; 24th Feb 2005 at 16:13.
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Pete - the PB aircraft could possibly be the first in the fleet to get the Foxtel inflight entertainment which would be an added bonus straight away.
Also the tech crewand cc are kiwis so its probably not as expensive to run as VB, and may be carrying enough of Patrick's freight to cover costs.
Lastly I am amazed that anyone is making money on this route with the fares the way they are. QF have to overnight plenty of crew in Auckland so this would be an added cost for them, and I assume Emirates would be in the same boat? These extra costs on already slim pickings would probably even out the balance sheet with companies with NZ based crew.
Also the tech crewand cc are kiwis so its probably not as expensive to run as VB, and may be carrying enough of Patrick's freight to cover costs.
Lastly I am amazed that anyone is making money on this route with the fares the way they are. QF have to overnight plenty of crew in Auckland so this would be an added cost for them, and I assume Emirates would be in the same boat? These extra costs on already slim pickings would probably even out the balance sheet with companies with NZ based crew.
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wirgin, have you travelled Emirates from Sydney or Brisbane to Auckland? I have, and trust me, Pac Blues "new" Foxtell in those aeroplanes will not beat Emirates choice of over 600 movies and songs from their in-flight seat back entertainment system in cattle class. Not to mention the meals on Emirates, oh and if you also want to thow in another, the fares Emirates offer are better, oh and another, no twit Flight Attendants, the list goes on.
Add to that, Emirates Sky Cargo in NZ as well, so no, your two points of Pac Blue being on a winner are wrong.
I didn't say anyone was making a decent quid on those routes, but I get a bit fed up with the Virgin bullsh1t artists telling everyone how good they are doing, when clearly, they aint. And if they want to get serious and play with the QF's, Emirates, AirNZ's of this world, then stop squealing, stop demanding airport space wherever you go, build your own faciliities and offer a better product.
QF Jetconnect crew are NZ based, so their cost base is low as well. Pac Blue overnight people in Australia, and as far as I'm still aware, in Wellington as well.
No one is ever going to make alot of cash on the Tasman, but the smart operators, not the half baked operators will do ok.
Add to that, Emirates Sky Cargo in NZ as well, so no, your two points of Pac Blue being on a winner are wrong.
I didn't say anyone was making a decent quid on those routes, but I get a bit fed up with the Virgin bullsh1t artists telling everyone how good they are doing, when clearly, they aint. And if they want to get serious and play with the QF's, Emirates, AirNZ's of this world, then stop squealing, stop demanding airport space wherever you go, build your own faciliities and offer a better product.
QF Jetconnect crew are NZ based, so their cost base is low as well. Pac Blue overnight people in Australia, and as far as I'm still aware, in Wellington as well.
No one is ever going to make alot of cash on the Tasman, but the smart operators, not the half baked operators will do ok.
Last edited by Pete Conrad; 24th Feb 2005 at 20:15.
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Latest load factors
It's difficult to know who is making money on the Tasman, as it's difficult to determine break even seat factors by route. Usually airlines publish an overall brteak-even seat factor but these are obviously available in-house.
Those who are 'pure' Tasman operators (QF, NZ, SJ, DJ) would find it more difficultb as they would have to apply full costs to their operations. The bottom feeders like Thai and Emirates may show a profit simply by seeking to recover the operational (out of pocket) costs incurred between Aus and NZ. Their real profit would be on operations between their "home base" (read UK/Europe) and Australia, and as they incur standing charges whether or not the aeroplanes, they may as well inflict some buggery into the market by 0operating end sectors and cost them marginally. Who knows what they do?
The latest numbers published by the Aus govt are for November 2003. Here is a list of declared seat factors (transit punters on Emirates, Garuda, RBA and Thai are excluded)
To Aus Ex Aus
Air NZ 71.19% 74.00%
Emirates 32.70% 35.10%
Freedom 66.00% 67.80%
Garuda 18.70% 15.80%
Pacific Blue 44.90% 51.30%
Qantas 78.40% 82.30%
Royal Brunei 28.80% 28.80%
Thai Inter 29.90% 25.30%
Aeroilineas Argentinas and Lan Chile are not shown as their data does not separte trans Tasman loads from South American loads.
(Sorry. But I have tried to format to make the data easier to read but I just can't do it - I'm not a nerd!_.
Those who are 'pure' Tasman operators (QF, NZ, SJ, DJ) would find it more difficultb as they would have to apply full costs to their operations. The bottom feeders like Thai and Emirates may show a profit simply by seeking to recover the operational (out of pocket) costs incurred between Aus and NZ. Their real profit would be on operations between their "home base" (read UK/Europe) and Australia, and as they incur standing charges whether or not the aeroplanes, they may as well inflict some buggery into the market by 0operating end sectors and cost them marginally. Who knows what they do?
The latest numbers published by the Aus govt are for November 2003. Here is a list of declared seat factors (transit punters on Emirates, Garuda, RBA and Thai are excluded)
To Aus Ex Aus
Air NZ 71.19% 74.00%
Emirates 32.70% 35.10%
Freedom 66.00% 67.80%
Garuda 18.70% 15.80%
Pacific Blue 44.90% 51.30%
Qantas 78.40% 82.30%
Royal Brunei 28.80% 28.80%
Thai Inter 29.90% 25.30%
Aeroilineas Argentinas and Lan Chile are not shown as their data does not separte trans Tasman loads from South American loads.
(Sorry. But I have tried to format to make the data easier to read but I just can't do it - I'm not a nerd!_.
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It´s obviously not a representation across the board, but I flew EK MEL-AKL last week and the 777-300 was full to the rafters. Also, for my long-awaited first RPT flight on EK, I was disappointed. My experience AKL-LAX on Air NZ was far, far more pleasant, despite the long flight and no personal IFE!
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I have only experienced 3 rides on EK, and all in J class. One paid for, and one sort of via a managers retreat (read pissup with Boeing 777 Medivac afterward). 4 nights on Pacific Sky is baaaaaad for the liver.
Personally, I found the flights faultless apart from Rammadan induced lack of food disorientation on a SIN MEL leg, and that only applied to one side of the J Class section as the other side was operated by 2 Pommy ladies.
I found the 777 totally enjoyable and solid feeling, the catering excellent and the crew attitude generally happy and very friendly.
On some routes, they are killing a bug with a nuclear weapon using an A345 on trans Tasman, but obviously the dollars are there for cargo. It is also very nice to pull 9% commission on EK rather than 5% on NZ (a few extra bucks are picked up on flown revenue overrides, so NZ is a definite option still) and 1% (thanks for that Geoff you dropkick) on QF, and know your passenger will be treated well during their shark patrol service. Also nice to know you can book them on a big solid modern aeroplane, not a superannuated biscuit bomber from Jetconnect.
Despite selling lots of NZ over the years, I have yet to experience their service level and/or equipment. I have had no negative feedback from those that I have booked with them, apart from a brain fart when the lovely and extremely efficient Mrs Sue from Air NZ Melbourne was away on extended leave due to tragic circumstances.
The guts of this is that we have no damned idea where to turn these days, but how anyone makes money on the Tasman is a complete mystery to me. Maybe the deepest pockets will prevail. I think we know who has them too.
Best all.
EWL
Personally, I found the flights faultless apart from Rammadan induced lack of food disorientation on a SIN MEL leg, and that only applied to one side of the J Class section as the other side was operated by 2 Pommy ladies.
I found the 777 totally enjoyable and solid feeling, the catering excellent and the crew attitude generally happy and very friendly.
On some routes, they are killing a bug with a nuclear weapon using an A345 on trans Tasman, but obviously the dollars are there for cargo. It is also very nice to pull 9% commission on EK rather than 5% on NZ (a few extra bucks are picked up on flown revenue overrides, so NZ is a definite option still) and 1% (thanks for that Geoff you dropkick) on QF, and know your passenger will be treated well during their shark patrol service. Also nice to know you can book them on a big solid modern aeroplane, not a superannuated biscuit bomber from Jetconnect.
Despite selling lots of NZ over the years, I have yet to experience their service level and/or equipment. I have had no negative feedback from those that I have booked with them, apart from a brain fart when the lovely and extremely efficient Mrs Sue from Air NZ Melbourne was away on extended leave due to tragic circumstances.
The guts of this is that we have no damned idea where to turn these days, but how anyone makes money on the Tasman is a complete mystery to me. Maybe the deepest pockets will prevail. I think we know who has them too.
Best all.
EWL
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EWL
Flew NZ MEL-AKL_MEL J class in December. Picked them because their timing best suited my need to be on ground four full days and get a decent nights sleep the the evening of arrival.
Fare was significantly lower than my agent offered on QF J class and better (for me) schedule.
Equipment was a slightly tired looking 744 but everything worked, although disappointed no laptop power outlet in seat.
Return flight was best as they put us in the first class section in the nose, old P class seats and the cabin staff treated us like we'd paid for first class.
They had the first class section closed on the way to AKL, pity, they should put J class pax in there to give them a taste of the greater space and maybe they would attract more J's to upgrade to F/P in the future. Always good policy to give free upgrades when the seat is going begging, in my opinion.
VHCU
Flew NZ MEL-AKL_MEL J class in December. Picked them because their timing best suited my need to be on ground four full days and get a decent nights sleep the the evening of arrival.
Fare was significantly lower than my agent offered on QF J class and better (for me) schedule.
Equipment was a slightly tired looking 744 but everything worked, although disappointed no laptop power outlet in seat.
Return flight was best as they put us in the first class section in the nose, old P class seats and the cabin staff treated us like we'd paid for first class.
They had the first class section closed on the way to AKL, pity, they should put J class pax in there to give them a taste of the greater space and maybe they would attract more J's to upgrade to F/P in the future. Always good policy to give free upgrades when the seat is going begging, in my opinion.
VHCU
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Thanks VHCU for the input.
One of my staff has done an educational to WLG courtesy of NZ, and the lovely Sue Burgess (NZ MEL Sales) who would have to be the best Airline Rep I have ever encountered, and a good mate too.
My staff member was lucky enough to score J both ways, and was most impressed.
I am just sorry that we lost the NZ14/15 services SYD LAX nonstop, as that threw another viable alternative into the mix on one of the most expensive per air mile sectors we sell, particularly in J/F classes.
Best regards
EWL
One of my staff has done an educational to WLG courtesy of NZ, and the lovely Sue Burgess (NZ MEL Sales) who would have to be the best Airline Rep I have ever encountered, and a good mate too.
My staff member was lucky enough to score J both ways, and was most impressed.
I am just sorry that we lost the NZ14/15 services SYD LAX nonstop, as that threw another viable alternative into the mix on one of the most expensive per air mile sectors we sell, particularly in J/F classes.
Best regards
EWL
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Back to the original question - who is making money?
There was a Ralph Norris moanathon in last weeks NZ herald - apparently Emirates have eaten heavily into both ANZ's and QF's freight business, with the move to the A320 also hampering their freight loadings for ANZ. So Emirates will be happy having few PAX as it equals more freight dollars.
There was a Ralph Norris moanathon in last weeks NZ herald - apparently Emirates have eaten heavily into both ANZ's and QF's freight business, with the move to the A320 also hampering their freight loadings for ANZ. So Emirates will be happy having few PAX as it equals more freight dollars.
Nunc est bibendum
So Emirates will be happy having few PAX as it equals more freight dollars.
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Jet Man,
You can argue with the Australian Govt stats office if you wish but I don't, and, for better or worse, we have to believe what they publish. For Nov 2004, they reported that Pacific Blue operated 118 trips each way between Australia and NewZealand. Whose equipment was used I know not, nor do I care. Are you suggesting that the offical Aust govt data is incorrect?
Keg,
What you have written is also a variety of crap, although diluted. Operations on the Tasman would be limited by ZFW limits and as such cargo weight carried would not ordinarily be limited. BUT......there is also a limit due to volume. This means that the fewer passengers carried, there is more room available under the floor, as there would be space unoccupied by the SLF baggage. Whether they make more money from a pallet of cargo than they do about 25 punters (presumably very low yield), goodness only knows, but it would be an interesting equation. I suspect not.
You can argue with the Australian Govt stats office if you wish but I don't, and, for better or worse, we have to believe what they publish. For Nov 2004, they reported that Pacific Blue operated 118 trips each way between Australia and NewZealand. Whose equipment was used I know not, nor do I care. Are you suggesting that the offical Aust govt data is incorrect?
Keg,
What you have written is also a variety of crap, although diluted. Operations on the Tasman would be limited by ZFW limits and as such cargo weight carried would not ordinarily be limited. BUT......there is also a limit due to volume. This means that the fewer passengers carried, there is more room available under the floor, as there would be space unoccupied by the SLF baggage. Whether they make more money from a pallet of cargo than they do about 25 punters (presumably very low yield), goodness only knows, but it would be an interesting equation. I suspect not.
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Keg et. al. - it was not me who stated the bit about the freight issue, it was the stats quoted, something like 50% down for ANZ and 30% for QF. However you look at it, if you lost half of your freight revenue to a competitor you'd be pi55ed off. Presumably business plans factored in anticipated freight loadings. Emirates have been accused of seriously undecutting to get big contracts, and there ability to use SIN as a hub, means they have not only taken trans tasman freight, but also long haul stuff.
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Anti Skid
The long haul stuff is where the big dollars are - rates worked in FCU's (freight construction units) based on the US dollar as are passenger fare NUCs (neutral units of currency) also based on the USD.
If EK for instance carries a 100 kg consignment AKL DXB where it is transhipped to NBO on KQ then they receive a percentage of the overall haulage mileage proportionate directly to the mileage they flew. These are big bucks too. All are layed out clearly by IATA in a voluminous tome which used to be used to calculate the rates. I am sure it is all now computerised.
The 100% EK freight is where they could discount, but into their home market, why would they more than 10% at most as SQ is the only other carrier covering the same port pair with a one airline service? Ooops - MH can do that too, but limited and with the dangers associated in an aeroplane change en route - you know - breakfast in Auckland lunch in Singapore, dinner in Dubai - crayfish in Bangkok. That sort of thing.
Long haul = big bucks indeed, and the ability not to have to share the revenue due to an expanding market and port coverage.
Please also remember that QF and AN operated wide bodied equipment as belly load only freighters back of the clock, and may still do so. Freight pays. If you write off the rear locker of an A345 to freight, you would still have enough space for SLF bags even with a full load in the forward and bulk holds. As for bulky freight, volumetric charges are applied and you still get the revenue without the weight - win/win situation at 250kg allotted per cubic metre, even if the consignment is feathers.
That's my 2 bobs worth.
Best regards
EWL
The long haul stuff is where the big dollars are - rates worked in FCU's (freight construction units) based on the US dollar as are passenger fare NUCs (neutral units of currency) also based on the USD.
If EK for instance carries a 100 kg consignment AKL DXB where it is transhipped to NBO on KQ then they receive a percentage of the overall haulage mileage proportionate directly to the mileage they flew. These are big bucks too. All are layed out clearly by IATA in a voluminous tome which used to be used to calculate the rates. I am sure it is all now computerised.
The 100% EK freight is where they could discount, but into their home market, why would they more than 10% at most as SQ is the only other carrier covering the same port pair with a one airline service? Ooops - MH can do that too, but limited and with the dangers associated in an aeroplane change en route - you know - breakfast in Auckland lunch in Singapore, dinner in Dubai - crayfish in Bangkok. That sort of thing.
Long haul = big bucks indeed, and the ability not to have to share the revenue due to an expanding market and port coverage.
Please also remember that QF and AN operated wide bodied equipment as belly load only freighters back of the clock, and may still do so. Freight pays. If you write off the rear locker of an A345 to freight, you would still have enough space for SLF bags even with a full load in the forward and bulk holds. As for bulky freight, volumetric charges are applied and you still get the revenue without the weight - win/win situation at 250kg allotted per cubic metre, even if the consignment is feathers.
That's my 2 bobs worth.
Best regards
EWL
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Don Esson
Yes, if your original post is accurate I am suggesting that the official figures are incorrect. Pacific Blue was not operating in Nov 2003 - it started in Jan 2004!!!!!!!!!!!!!
Actually my post was a jab at your probable typo! Not to be taken too seriously.
To be honest I read an article in the paper (not official I know) that out Pacific Blue's load factors at the top (big Q second) for Sept 04. It probably varies each month as companies run special fares. It is informative to look at the passenger yield rather than load factors.
Yes, if your original post is accurate I am suggesting that the official figures are incorrect. Pacific Blue was not operating in Nov 2003 - it started in Jan 2004!!!!!!!!!!!!!
Actually my post was a jab at your probable typo! Not to be taken too seriously.
To be honest I read an article in the paper (not official I know) that out Pacific Blue's load factors at the top (big Q second) for Sept 04. It probably varies each month as companies run special fares. It is informative to look at the passenger yield rather than load factors.