Ozjet is an airline!
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elektra with respect 1984 was a looooooong time ago and I think you wold find most observers of and participants in the industry will agree that the long term washup is a complete disaster.
And in any event despite what our friend would have us believe, the only things demographic we have in common with our US cousins is McDonalds and Coca Cola.
And we don't even need to start on the AT&T breakup into the Baby Bells and the deregulation of utilities to see that there are just some things that need to have some form of overall government "protection" for good of the common wealth.
Tell me what is good about needing up to three different telecom provider accounts to ring from Perth to Sydney.
In Australia, the airlines just happen to be one of them.
I dont give a rats bottom what they do in the US and Europe.
I have not seen ONE example of the headlong rush of Govt, both State and Federal to liberalise/deregulate, that has not seen the export of Australian jobs capital and profit overseas.
Try just for example Western Power in Western Australia not being able to provide the base load for a hot summers day AND the Government threatening to sue any organisation ($100,000 a time and Western Power customers to boot) who ran their air conditioners or machinery.
They then turned around and spent several gazillion million dollars hiring/buying DIESEL peak load gennies and still can't gaurantee that this year it will not be repeated.
They'd sold OUR farm just like they did OUR Qantas/Australian and OUR Telecom.
What's this got to do with airlines, the US and Europe have a very sophisticated road and rail network as an alternative. And the Atlantic has several ships a day between.
We are totally reliant on air services to be competitive in the world, it's part of the national estate.
The ONLY people who have made any money out of the aviation infrastructure is the Govt when they sold off anything not nailed down and Maquarie Bank who organised it.
The Sydney toll roads are a monster debacle and guess who pays for it in the end and guess where all the money goes.
Ex NSW Main Roads chief on the ABC the other day, says NSW citizens are now paying interest on interest with no end in sight and 5 to 10 times as much for their "private roads" than if they had been built by Govt, and there is a real chance the NSW Govt might just have to buy them back, because the citizenry cant afford the tolls.
And in any event despite what our friend would have us believe, the only things demographic we have in common with our US cousins is McDonalds and Coca Cola.
And we don't even need to start on the AT&T breakup into the Baby Bells and the deregulation of utilities to see that there are just some things that need to have some form of overall government "protection" for good of the common wealth.
Tell me what is good about needing up to three different telecom provider accounts to ring from Perth to Sydney.
In Australia, the airlines just happen to be one of them.
I dont give a rats bottom what they do in the US and Europe.
I have not seen ONE example of the headlong rush of Govt, both State and Federal to liberalise/deregulate, that has not seen the export of Australian jobs capital and profit overseas.
Try just for example Western Power in Western Australia not being able to provide the base load for a hot summers day AND the Government threatening to sue any organisation ($100,000 a time and Western Power customers to boot) who ran their air conditioners or machinery.
They then turned around and spent several gazillion million dollars hiring/buying DIESEL peak load gennies and still can't gaurantee that this year it will not be repeated. They'd sold OUR farm just like they did OUR Qantas/Australian and OUR Telecom.
What's this got to do with airlines, the US and Europe have a very sophisticated road and rail network as an alternative. And the Atlantic has several ships a day between.
We are totally reliant on air services to be competitive in the world, it's part of the national estate.
The ONLY people who have made any money out of the aviation infrastructure is the Govt when they sold off anything not nailed down and Maquarie Bank who organised it.
The Sydney toll roads are a monster debacle and guess who pays for it in the end and guess where all the money goes.
Ex NSW Main Roads chief on the ABC the other day, says NSW citizens are now paying interest on interest with no end in sight and 5 to 10 times as much for their "private roads" than if they had been built by Govt, and there is a real chance the NSW Govt might just have to buy them back, because the citizenry cant afford the tolls.
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Gaunty,
All good points, especially the telecom issue. What a real disaster!
Yet I doubt many would say that Southwest and Jet Blue are disasters. Lumbering great dinosaurs like USAir, PanAm, Eastern United, Delta etc etc (and their bloated pension schemes) were only ever propped up by the CAB and "cost-plus" airfares and are now propped up courtesy of the banks and the ever dwindling shareholders funds, a situation which cannot last much longer.
Its not a case opf black or white, regulation or no regulation. If the industry is not effectively contestable...due to infrastructure constraints or monoploly power or economic regulation...the consumers and jobs suffer. It is that simple. The fact that governments have stuffed up both the infrastructure and monopoly issues doesn't mean it can't be done.
The truth is that it is only newcomers (or the threat of them) that change the industry for the better. Keeping things the way they were in the name of stability or maintaining current salary levels is a fine high-minded goal...but it does involve a net transfer of income from consumers (and potential employees) to those currently employed by the "Legacy" carriers. The fact that this subsidy is not readily visible doesn't mean it's not there.
Right now if you and I had the money (and were perhaps foolish enough) we could invest $100 million and start a factory exporting boots, or engines or indeed almost anything else to the US. What we CANNOT do is lease a couple of B777LRs and try our luck on the SYD-LAX route. Exactly in whose interest is that?
All good points, especially the telecom issue. What a real disaster!
Yet I doubt many would say that Southwest and Jet Blue are disasters. Lumbering great dinosaurs like USAir, PanAm, Eastern United, Delta etc etc (and their bloated pension schemes) were only ever propped up by the CAB and "cost-plus" airfares and are now propped up courtesy of the banks and the ever dwindling shareholders funds, a situation which cannot last much longer.
Its not a case opf black or white, regulation or no regulation. If the industry is not effectively contestable...due to infrastructure constraints or monoploly power or economic regulation...the consumers and jobs suffer. It is that simple. The fact that governments have stuffed up both the infrastructure and monopoly issues doesn't mean it can't be done.
The truth is that it is only newcomers (or the threat of them) that change the industry for the better. Keeping things the way they were in the name of stability or maintaining current salary levels is a fine high-minded goal...but it does involve a net transfer of income from consumers (and potential employees) to those currently employed by the "Legacy" carriers. The fact that this subsidy is not readily visible doesn't mean it's not there.
Right now if you and I had the money (and were perhaps foolish enough) we could invest $100 million and start a factory exporting boots, or engines or indeed almost anything else to the US. What we CANNOT do is lease a couple of B777LRs and try our luck on the SYD-LAX route. Exactly in whose interest is that?
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Hi Waav8r,I totally agree with you, but will change my name as soon as I have had my check as CM, which will be next week on the promo flying; and maybe even change it on November 29. Do you have any suggestions????
I am leaning towards finally_off_the_ground... but I'm not too sure yet.
Looking forward to November 29.
Still On the Ground...
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Back to ozjet. Plan A - convert serious sums of cash amassed over the last 20 years in to a dream and watch it all go up in smoke as kero converts to noise on empty planes. Every successful aviation entrepreneur needs to do this at least once just for the experience of being stony broke. Builds character, especially in displaced employees who are then forced to go on to do things they would never have dreamed of.
Plan B - cash and dream bit as above, but find that of 14 million people living on the SE seaboard, there are just enough who will pay for kero and don't care as long as the noise is no worse than the neighbours harley, which is legal, right? Guvmint don't care about noise either, as they can tax it. Despite kero consumption and noise tax, airline breaks even. Pilots come and go, using it as a stepping stone to better things. Everybody is having fun, nobody getting rich, nodody on the dole. Owner doesn't care he's not getting rich as it's considered cool to have an airline and just how much money does one person need anyway?
Plan C - two years into plan B, along comes stage 4 noise rules, surprise surprise. No choice now, have to re-equip, but not enough money in it to justify going to the banks. But, being just a teensy weeny bit pissed off with the loss of at least some revenue, qantas or virgin figure another jetstar or njs type deal would not be a bad idea. So, flog old planes off to indonesia, lease newer ones at mates rates via customer airline. Or sell aoc as going concern to highest bidder, retire to spain, write memoirs.
Plan B - cash and dream bit as above, but find that of 14 million people living on the SE seaboard, there are just enough who will pay for kero and don't care as long as the noise is no worse than the neighbours harley, which is legal, right? Guvmint don't care about noise either, as they can tax it. Despite kero consumption and noise tax, airline breaks even. Pilots come and go, using it as a stepping stone to better things. Everybody is having fun, nobody getting rich, nodody on the dole. Owner doesn't care he's not getting rich as it's considered cool to have an airline and just how much money does one person need anyway?
Plan C - two years into plan B, along comes stage 4 noise rules, surprise surprise. No choice now, have to re-equip, but not enough money in it to justify going to the banks. But, being just a teensy weeny bit pissed off with the loss of at least some revenue, qantas or virgin figure another jetstar or njs type deal would not be a bad idea. So, flog old planes off to indonesia, lease newer ones at mates rates via customer airline. Or sell aoc as going concern to highest bidder, retire to spain, write memoirs.
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Some people’s desire to take joy in the prospect of failure, even lust after it…frightens me.
Everything we fly, the aircraft, the engines, the airlines, the air-routes, came because someone put on their rose coloured glasses for just long enough to say “why not”.
I’ve been a captain for 20 years and every time I see a slush covered runway, and a 15 hour flight ahead, with crummy en-route alternates to some over-stretched and under equipped US mega-hub….I can think of 20 reasons not to go. Yet, balancing it all, I go. I just don’t see unending cynicism as being part of the required mindset for an airline pilot.
I’m glad, some days, that PPrune didn’t exist when Reg Ansett was getting started, or Hudson Fysh at Qantas, or Lester Brain at TAA, or the guys who started ETOPS with the 757s…or the folks who put together the first Airbus A300 (against the “might” of Boeing, Douglas and Lockheed) ……they’d have NEVER started. And at what cost?
Mr. Stoddart may well be a rich egotistical knave, but if rejecting such folk was ever made a retrospective filter in our industry there’d be few airlines, few airlines and, dare I say it, few pilots!
Everything we fly, the aircraft, the engines, the airlines, the air-routes, came because someone put on their rose coloured glasses for just long enough to say “why not”.
I’ve been a captain for 20 years and every time I see a slush covered runway, and a 15 hour flight ahead, with crummy en-route alternates to some over-stretched and under equipped US mega-hub….I can think of 20 reasons not to go. Yet, balancing it all, I go. I just don’t see unending cynicism as being part of the required mindset for an airline pilot.
I’m glad, some days, that PPrune didn’t exist when Reg Ansett was getting started, or Hudson Fysh at Qantas, or Lester Brain at TAA, or the guys who started ETOPS with the 757s…or the folks who put together the first Airbus A300 (against the “might” of Boeing, Douglas and Lockheed) ……they’d have NEVER started. And at what cost?
Mr. Stoddart may well be a rich egotistical knave, but if rejecting such folk was ever made a retrospective filter in our industry there’d be few airlines, few airlines and, dare I say it, few pilots!
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Electra, Well Said! I am so glad that someone said it. I am sooooooooooo sick and tired of people having a go at Ozjet! Trying to predict how many years or indeed months it will last! I bet that not one of these "fortune tellers" predicted the collapse of Ansett, or the success of Virgin Blue. Yes; we all know about the noise and age of the aircraft, and yes, we are all aware that it is a start up airline and that there are no reward systems yet in place... but honestly guys, Rome was not built in a day, and Virgin just announced up ITS plans for a reward system just a few days ago - but that didn't seem to stop anyone from travelling on Virgin until then!
I just would like to see more people trying to encourage the success of Ozjet as Australia's fourth carrier rather than constantly put it down. As Electra said, thankgod you lot weren't around when anyone came up with the concept for a new airline! You've got to be in it to win it! Come on guys, lets be more Australian about the whole thing. Give Ozjet a fair go!
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Electra, outstanding comments from somebody that has obviously been around a while and not just a flash in the pan.
There will always be the vocal few that spruik off and sling mud from afar, but one can guarantee that those few would never put their HARD EARNED(?) up in the pursuit of a vision. It's far tooooo easy to mock and throw abuse while riding on the coat tails of others.
Very UNAustralian.
BTW the only ones to benefit from B777LR SYD-LAX would be the engine manufacturer and Boeing as correct me if I'm wrong ETOPS would be a major hurdle on that one.
There will always be the vocal few that spruik off and sling mud from afar, but one can guarantee that those few would never put their HARD EARNED(?) up in the pursuit of a vision. It's far tooooo easy to mock and throw abuse while riding on the coat tails of others.
Very UNAustralian.
BTW the only ones to benefit from B777LR SYD-LAX would be the engine manufacturer and Boeing as correct me if I'm wrong ETOPS would be a major hurdle on that one.
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Normasars,
I am not sure what it has to do with the topic but SYD/LAX will be a A380 route, not a 777-200LR type. Regarding ETOPS, there would be no problem, 767s can do the route @180mins [empty] while 777 is over 200 mins.
I am not sure what it has to do with the topic but SYD/LAX will be a A380 route, not a 777-200LR type. Regarding ETOPS, there would be no problem, 767s can do the route @180mins [empty] while 777 is over 200 mins.
I believe the B777-200LR will have 240 minute ETOPS approval on entry into service. With this there is nowhere on the planet the plane cann't reach flying in a straight line.
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The Age this morning:
History suggests Paul Stoddart is used to competing on just a wing and a prayer, writes Ian Porter.
FIRST Paul Stoddart once bought Minardi, the world's least successful formula one team. Now he plans to enter the Australian commercial aviation market, where the corporate graveyard is bulging with companies unable to handle the pace of the opposition.
And if OzJet — the new business-class airline — flies in a business sense, Australian investors may get a chance to own some shares in a public float that could be less than three years away.
Stoddart may not have a death wish, but he certainly likes to take on a challenge. And he is not afraid to put his money where his mouth is.
Minardi was the poorest-performing team in F1, but Stoddart's stint as owner was a success. At the back end of the grid, you don't measure success in wins and championships. Stoddart's feat was to keep the team alive when others were failing all around.
What's more, he says he made "quite a healthy profit" when he sold out of Minardi on October 31, and the sales proceeds form a large part of the $100 million he can draw on to get OzJet into the air.
As with his Minardi experience, Stoddart does not expect to win the airline race outright. Staying alive and achieving modest goals would fulfil his OzJet plan.
The new airline has $40 million in issued capital and Stoddart does not intend, or expect, to call on his "fighting fund" because he believes Qantas directors and management are "too sensible and too responsible" to come after OzJet with loss-leader pricing.
"The management know me well enough to know that there's no winners in a situation like that," Stoddart said from England on Friday.
He agrees that aggressive pricing by Qantas was what undid Compass, Compass Mark II and Ansett, but he argues that there are several critical differences between the situation then and the one OzJet will face when it launches its first flight on November 29.
"Things have changed since September 11, 2001, and the demise of Ansett," he said. "Virgin Blue and Jetstar have filled the low-cost hole, but not the business class hole."
OzJet will not take a big part of the Melbourne-Sydney market, which is one of the world's five busiest air routes. The initial schedule of eight flights a day between Melbourne and Sydney will represent around 1.8 per cent of the total market or 10 per cent of the business market — but that estimate is flexible.
Stoddart believes OzJet could expand that business class market because its fares will be within reach of people such as public servants and other business travellers whose employers send them economy.
The plan is to put 60 large leather seats into Boeing 737 planes, which usually carry 130 people, and let passengers carry on three pieces of hand luggage. Fewer passengers and carry-on baggage mean faster loading and disembarkation.
OzJet will also offer meals served on china crockery, and all for a return fare of $650. That's equivalent to the Qantas fully flexible economy air fare.
The Qantas return business class fare to Sydney has recently been cut from $1150 to $811 and Stoddart is banking on Qantas not being able to go much lower. "If Qantas dropped its business class fare to match us, then they'd have to price below their own full flexible economy price of $671, so what are they going to do with that price? Lower it to Jetstar prices?
"Then what are they going to do with Jetstar ? It could start a downward spiral and there are no winners out of that."
If that were to happen, OzJet would not be the sitting duck that Compass was because OzJet owns its own planes and will not have massive monthly lease payments to make. "If we are having a hard time, we can just adjust our schedules and contain our overheads."
Besides which, Qantas would not be able to offer the same sort of room or time savings even if it did match OzJet prices, he said.
"In any kind of a price war, we will stand our ground and appeal to the public to support us because they're not stupid," Stoddart said.
"They'll realise that, if we're gone the prices will go back up, and then some, to make up whatever they lost defending their market."
Stoddart owns the European Aviation group in Britain, which operates a large aviation spare parts and engineering business as well as charter flights. European Aviation has fitted out OzJet's 737s with their unique all business class interiors.
Despite the Australian graveyard of aviation operators, it was a simple decision to start an airline in Australia, he said.
"European has 300 competitors in Europe. There's a new airline opening almost every day," Stoddart said. "At full strength we are only going to have 10 737s, so we're not going to be this massive threat to Virgin Blue and Qantas.
"This is a nice market, the kind of market we can service and service well without getting such a foothold in market share that we are a threat to our competitors."
MELBOURNE-SYDNEY BUSINESS CLASS RETURN TICKET
OzJet $650
Virgin Blue $530
Qantas $811-$1133
Standard business class fare. Prices calculated on leaving in the morning and returning the following night.
History suggests Paul Stoddart is used to competing on just a wing and a prayer, writes Ian Porter.
FIRST Paul Stoddart once bought Minardi, the world's least successful formula one team. Now he plans to enter the Australian commercial aviation market, where the corporate graveyard is bulging with companies unable to handle the pace of the opposition.
And if OzJet — the new business-class airline — flies in a business sense, Australian investors may get a chance to own some shares in a public float that could be less than three years away.
Stoddart may not have a death wish, but he certainly likes to take on a challenge. And he is not afraid to put his money where his mouth is.
Minardi was the poorest-performing team in F1, but Stoddart's stint as owner was a success. At the back end of the grid, you don't measure success in wins and championships. Stoddart's feat was to keep the team alive when others were failing all around.
What's more, he says he made "quite a healthy profit" when he sold out of Minardi on October 31, and the sales proceeds form a large part of the $100 million he can draw on to get OzJet into the air.
As with his Minardi experience, Stoddart does not expect to win the airline race outright. Staying alive and achieving modest goals would fulfil his OzJet plan.
The new airline has $40 million in issued capital and Stoddart does not intend, or expect, to call on his "fighting fund" because he believes Qantas directors and management are "too sensible and too responsible" to come after OzJet with loss-leader pricing.
"The management know me well enough to know that there's no winners in a situation like that," Stoddart said from England on Friday.
He agrees that aggressive pricing by Qantas was what undid Compass, Compass Mark II and Ansett, but he argues that there are several critical differences between the situation then and the one OzJet will face when it launches its first flight on November 29.
"Things have changed since September 11, 2001, and the demise of Ansett," he said. "Virgin Blue and Jetstar have filled the low-cost hole, but not the business class hole."
OzJet will not take a big part of the Melbourne-Sydney market, which is one of the world's five busiest air routes. The initial schedule of eight flights a day between Melbourne and Sydney will represent around 1.8 per cent of the total market or 10 per cent of the business market — but that estimate is flexible.
Stoddart believes OzJet could expand that business class market because its fares will be within reach of people such as public servants and other business travellers whose employers send them economy.
The plan is to put 60 large leather seats into Boeing 737 planes, which usually carry 130 people, and let passengers carry on three pieces of hand luggage. Fewer passengers and carry-on baggage mean faster loading and disembarkation.
OzJet will also offer meals served on china crockery, and all for a return fare of $650. That's equivalent to the Qantas fully flexible economy air fare.
The Qantas return business class fare to Sydney has recently been cut from $1150 to $811 and Stoddart is banking on Qantas not being able to go much lower. "If Qantas dropped its business class fare to match us, then they'd have to price below their own full flexible economy price of $671, so what are they going to do with that price? Lower it to Jetstar prices?
"Then what are they going to do with Jetstar ? It could start a downward spiral and there are no winners out of that."
If that were to happen, OzJet would not be the sitting duck that Compass was because OzJet owns its own planes and will not have massive monthly lease payments to make. "If we are having a hard time, we can just adjust our schedules and contain our overheads."
Besides which, Qantas would not be able to offer the same sort of room or time savings even if it did match OzJet prices, he said.
"In any kind of a price war, we will stand our ground and appeal to the public to support us because they're not stupid," Stoddart said.
"They'll realise that, if we're gone the prices will go back up, and then some, to make up whatever they lost defending their market."
Stoddart owns the European Aviation group in Britain, which operates a large aviation spare parts and engineering business as well as charter flights. European Aviation has fitted out OzJet's 737s with their unique all business class interiors.
Despite the Australian graveyard of aviation operators, it was a simple decision to start an airline in Australia, he said.
"European has 300 competitors in Europe. There's a new airline opening almost every day," Stoddart said. "At full strength we are only going to have 10 737s, so we're not going to be this massive threat to Virgin Blue and Qantas.
"This is a nice market, the kind of market we can service and service well without getting such a foothold in market share that we are a threat to our competitors."
MELBOURNE-SYDNEY BUSINESS CLASS RETURN TICKET
OzJet $650
Virgin Blue $530
Qantas $811-$1133
Standard business class fare. Prices calculated on leaving in the morning and returning the following night.
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"In any kind of a price war, we will stand our ground and appeal to the public to support us because they're not stupid,"
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my better half went on an agents "Jolly" yesterday out of Sydney down towards Cooma or thereabouts, said the service was great, seats were very comfortable, staff polite and friendly, only small downside was that she could notice slightly higher noise levels inside the aircraft!! Otherwise, she said they put on a great show. Good luck to all involved.