Freighters for Virgin
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Freighters for Virgin
Toll's Little set for air freight war
Geoff Easdown
October 27, 2006 12:00am
VIRGIN Blue is under orders to get ready for a freight war against Qantas and Australia Post.
Controlling shareholder Toll Holdings has told the airline to investigate the possibility of adding specially designed cargo planes to its existing all passenger fleet of Boeing 737 aircraft.
Paul Little, chief executive of Toll, said yesterday the instruction was given because Toll could not uplift freight on Virgin aircraft.
"At present all of our air freight business goes to the Qantas joint venture and we would much prefer that to go to Virgin," he said.
Mr Little outlined the air cargo plan to reporters after addressing shareholders earlier at Toll's annual meeting where he reported that revenue and earnings since June were ahead of the company's own forecast.
Toll shares rallied to a new high of $15.77 after the update, slipping to $15.59 to end the day 21 higher.
The decision to look at adding freighters to the 50-plane Virgin fleet comes at the same time that Qantas and Australia Post have upgraded their existing air freight business.
The partners are adding three newly converted Beoing 737 freighters to their Australian Air Express business which will be flown by 40 newly recruited pilots.
Toll's custom would seed a competitive freight operation for Virgin.
Yesterday Mr Little said: "The current (Virgin Blue) fleet is not ideal for air freight.
"We're talking to Virgin Blue management about more specialist planes and opportunities," Mr Little said.
Body: Among the types of planes the airline had been asked to investigate were quick-change models.
These dual role models can operate with passengers during the day and carry freight at night.
Toll, however, has yet to decide whether it will retain its 63 per cent stake in Virgin Blue, one of the spoils of its $6 billion takeover in May of Patrick Corporation.
Since the takeover Virgin Blue has contributed $700,000 in after tax profit to Toll's bottom line, Mr Little advised shareholders in his speech yesterday.
Mr Little made it clear that Virgin Blue was not about to join the $1.5 billion worth of assets Toll will sell in the coming months to comply with orders relating to the Patrick takeover made by the Australian Competition and Consumer Commission.
Referring to both the freight plan and Virgin's already announced desire to operate direct flights to Los Angeles, Mr Little said there would be no point selling the airline if that sort of value was to be created at a later date.
Addressing other shareholders issues, Mr Little said Toll had a shortlist of six potential buyers for the 50 per cent stake in the rail freight business, Pacific National.
PacNat, part of the asset package now up for auction, had attracted 45 separate bids from overseas and local interests, Mr Little said, adding that directors hoped to announce a buyer before Christmas.
He also said Toll was looking at a number of possible bolt-on acquisitions in China, to help compliment Toll's plan for a direct Asia-Australia freight link.
Mr Little said earnings had improved across all Australian divisions.
The only disappointment was that grain volumes handled by Pacific National had continued to fall due to the drought.
Geoff Easdown
October 27, 2006 12:00am
VIRGIN Blue is under orders to get ready for a freight war against Qantas and Australia Post.
Controlling shareholder Toll Holdings has told the airline to investigate the possibility of adding specially designed cargo planes to its existing all passenger fleet of Boeing 737 aircraft.
Paul Little, chief executive of Toll, said yesterday the instruction was given because Toll could not uplift freight on Virgin aircraft.
"At present all of our air freight business goes to the Qantas joint venture and we would much prefer that to go to Virgin," he said.
Mr Little outlined the air cargo plan to reporters after addressing shareholders earlier at Toll's annual meeting where he reported that revenue and earnings since June were ahead of the company's own forecast.
Toll shares rallied to a new high of $15.77 after the update, slipping to $15.59 to end the day 21 higher.
The decision to look at adding freighters to the 50-plane Virgin fleet comes at the same time that Qantas and Australia Post have upgraded their existing air freight business.
The partners are adding three newly converted Beoing 737 freighters to their Australian Air Express business which will be flown by 40 newly recruited pilots.
Toll's custom would seed a competitive freight operation for Virgin.
Yesterday Mr Little said: "The current (Virgin Blue) fleet is not ideal for air freight.
"We're talking to Virgin Blue management about more specialist planes and opportunities," Mr Little said.
Body: Among the types of planes the airline had been asked to investigate were quick-change models.
These dual role models can operate with passengers during the day and carry freight at night.
Toll, however, has yet to decide whether it will retain its 63 per cent stake in Virgin Blue, one of the spoils of its $6 billion takeover in May of Patrick Corporation.
Since the takeover Virgin Blue has contributed $700,000 in after tax profit to Toll's bottom line, Mr Little advised shareholders in his speech yesterday.
Mr Little made it clear that Virgin Blue was not about to join the $1.5 billion worth of assets Toll will sell in the coming months to comply with orders relating to the Patrick takeover made by the Australian Competition and Consumer Commission.
Referring to both the freight plan and Virgin's already announced desire to operate direct flights to Los Angeles, Mr Little said there would be no point selling the airline if that sort of value was to be created at a later date.
Addressing other shareholders issues, Mr Little said Toll had a shortlist of six potential buyers for the 50 per cent stake in the rail freight business, Pacific National.
PacNat, part of the asset package now up for auction, had attracted 45 separate bids from overseas and local interests, Mr Little said, adding that directors hoped to announce a buyer before Christmas.
He also said Toll was looking at a number of possible bolt-on acquisitions in China, to help compliment Toll's plan for a direct Asia-Australia freight link.
Mr Little said earnings had improved across all Australian divisions.
The only disappointment was that grain volumes handled by Pacific National had continued to fall due to the drought.
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Has Boeing done a QC version of the 737NG yet? VB/Toll would have to find older 737-300/400s, which would be orphans in the main fleet.
Didn't TAA move freight at night by putting shelves on top of seats in regular 727s?
Didn't TAA move freight at night by putting shelves on top of seats in regular 727s?
And seat packs Alan. Ansett used to move the air mail and air freight by road - until one of their semis rolled over on the Princess Highway, spreading air mail envelopes for all to see..........
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They're all wasting their time.
"No money in freight!"......At least that's what I've heard over and over again from the "experts"
for the last forty years or so. 
Oh, I know.............someone at the top thought of it this time!!!!!
"No money in freight!"......At least that's what I've heard over and over again from the "experts"
for the last forty years or so. Oh, I know.............someone at the top thought of it this time!!!!!
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hahahahaha
after being involved in the freight game, and have family members in the game, the general catchphrase is "no one has ever gone broke in freight!"
wonder who these "experts" really are?
come to think of it, when patrick took control of VB, i remember mentioning something along the lines of them beginning a freight operation to complete the freight equation of Air/Rail/Road/Sea
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PAX and FREIGHT
I could be very wrong, but was the model for VB the operation of Southwest in the USA.
Now I am out on a limbe here too, but one of their crew specifically made a point of saying even when PAX numbers are low, their freight contracts keep the flights viable.
now if this is the case it might be why Southwest are one of the few US carriers that do alright in tight times. Maybe other things like fuel heding etc too, but they may have a good system going.
I am outa here now.....exhausted my vast knowlege of freight ops.
J
Now I am out on a limbe here too, but one of their crew specifically made a point of saying even when PAX numbers are low, their freight contracts keep the flights viable.
now if this is the case it might be why Southwest are one of the few US carriers that do alright in tight times. Maybe other things like fuel heding etc too, but they may have a good system going.
I am outa here now.....exhausted my vast knowlege of freight ops.
J
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Having been involved in both freight only and normal pax/freight operations for over 40 years, in general there is much more money to be made from freight than pax.
Also of course there are added benefits, like you don't have to provide the general freight (not counting animals) with attendants to look after them, feed them, or even be nice to them.
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Maybe they could get some of the retired Qantas 300's and have a big door put on by Forestaff/Qantas/Israeli consortium. They'll get them delivered by Dec 2026 judging by the way that little disaster is going.
Qantas do not do any domestic freight operations - the contract that QF has with Australia Post means that the cargo hold capacity on all QF domestic flights is "owned" by Australian Air Express (apart from the space required for pax baggage and occasionally for aircraft spare parts). If QF wants to send anything by air they have to pay market rates at AAE.
Referring to the use of QANTAS 737 cargo holds as being under contract.
Its common knowledge within the industry QANTAS when they need freight capacity they use their 767's. Also my source in QANTAS states they are currently using the 767 fleet to fill in for the Aust air express contract because they cant fulfill their requirements.
This is creating further problems because the QANTAS 767 fleet is one of the few fleets that don’t have a surplus of crews.
A first tier manager directly under Dixon was instructed last week the 767 was too short of crews to handle the unplanned additional flights for Aus express, his reply went along the lines of he didn’t care they were going to do it anyway.
Its common knowledge within the industry QANTAS when they need freight capacity they use their 767's. Also my source in QANTAS states they are currently using the 767 fleet to fill in for the Aust air express contract because they cant fulfill their requirements.
This is creating further problems because the QANTAS 767 fleet is one of the few fleets that don’t have a surplus of crews.
A first tier manager directly under Dixon was instructed last week the 767 was too short of crews to handle the unplanned additional flights for Aus express, his reply went along the lines of he didn’t care they were going to do it anyway.
Also my source in QANTAS states they are currently using the 767 fleet to fill in for the Aust air express contract because they cant fulfill their requirements.
Find that hard to believe.
JETEX has just sold one of their 727's, left the country very recently, as QF had no requirements for it.
the serviceablity of the remaining 727's and 146's has exceeded contract requirements.
SO I reckon its because QF has stuffed up on the intro of the 737's, (have they repaired that gaping hole yet) and don't want to extend another lease rather than they are not meeting contract requirements. More B/S from QF, I suggest.
RENURPP not sure what your trying to say, So I spell it out IF AUST AIR EXPRESS are having to get QANTAS mainline to fly freight in the middle of the night between MEL and BNE using 767's with standby crews then they are not covering the contract.
I personally have no idea who's fault it is or isn’t or why QANTAS are being forced to fly the legs.
But they are, simple as that, you can believe or not.
I personally have no idea who's fault it is or isn’t or why QANTAS are being forced to fly the legs.
But they are, simple as that, you can believe or not.
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QF 76's are doing the flying because AAE are now down one 727F (as previously mentioned) and their first 737F has yet to be delivered (also previously mentioned)... Nothing to do with AAE not being able to fulfill their contractual agreements. Just Avalon putting holes in aircraft, thats all.
OH my god...its like hitting your head against a wall.
IF AAE are getting QANTAS to fly certain runs because of ( who cares what reason ) they are not covering the contract....its not difficult.
I am sure you are right and the reasons AAE cant do the work at the moment is a simply one and probaly will be fixed soon ,but in the meantime QANTAS is being wet leased to cover the work .
I am sure AAE would not be paying for QANTAS 767's to run up and down in the middle of the night if they didn’t have to.
Why are you guys so defensive to say AAE is meeting all contractual obligations then admitting AAE doesn’t have the aircraft at the moment for what ever reason .
PS If you get upset with QANTAS doing the work I can have 5 320's here by next month to cover the freight for you, and they will be cheaper than QANTAS.
IF AAE are getting QANTAS to fly certain runs because of ( who cares what reason ) they are not covering the contract....its not difficult.
I am sure you are right and the reasons AAE cant do the work at the moment is a simply one and probaly will be fixed soon ,but in the meantime QANTAS is being wet leased to cover the work .
I am sure AAE would not be paying for QANTAS 767's to run up and down in the middle of the night if they didn’t have to.
Why are you guys so defensive to say AAE is meeting all contractual obligations then admitting AAE doesn’t have the aircraft at the moment for what ever reason .
PS If you get upset with QANTAS doing the work I can have 5 320's here by next month to cover the freight for you, and they will be cheaper than QANTAS.
Why are you guys so defensive to say AAE is meeting all contractual obligations
AAe are the company that have contractors working for them. Qantas are the contractor as well as part owner. So how can they AAe not be meeting their cntractual obligations???
I suspect its Qantas that is not able to meet their contractual obligations due to the late arrival of their 737's, hence they (Qantas) have to provide some means (767's) or expensive penalties will be paid to AAE by Qantas.
I have no doubt that they use 767's. Just suggesting its QF that is not meeting their cointractual obligation NOT AAE.
Last edited by RENURPP; 28th Oct 2006 at 22:24.
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Word out on the tarmac is Toll could be looking at the ex FedEx 727s. With 727 crews getting retrenched from AAe in the next 6 months, they would have no problems crewing them.
Interesting times ahead I reckon
Interesting times ahead I reckon