QF-JStar Japan performance comparison
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QF-JStar Japan performance comparison
Once you know where the figures are, the spin evaporates. To any Jetstar crew reading this, it is not about you. It is about the lies and the wrecking of mainline careers by the people above you.
It is difficult to compare apples with apples when you rely on Company press releases. Even the figures that QF release to the ASX, which supposedly pass the "reasonable person" test, are found to be padded where it suits. Enormously padded.
One area where it is possible to compare apples with apples is in the official BITRE statistics. Japan is the obvious candidate for comparison as both airlines operate there.
The statistics from the last two years call into question many things. But I'll let you decide for yourself.
In the 2008 calendar year:
QF, including Australian airlines, operated 2740 flights to and from Japan, carrying 527095 Pax at an average monthly Load Factor of 76.3%
JQ operated 1532 flights to and from Japan carrying 360547 Pax at an average monthly Load factor of 69.1%
In the 2009 Calendar year:
QF mainline operated 964 flights to and from Japan carrying 207995 Pax at an average Load factor of 78.6%.
JQ operated 1949 flights to and from Japan, carrying 433827 passengers at an average monthly load factor of 73.7%
Questions for the Board:
a. Has Jetstar grown, or shrunk this market?
b.Why do you persist with Jetstar in this market when the load factors point to a preference for mainline?
You claim a 30% cost margin in favour of Jetstar. When are you going to release to the ASX the true figures regarding the subsidisation of Jetstar, as required by the ASX "reasonable person" test?
It is difficult to compare apples with apples when you rely on Company press releases. Even the figures that QF release to the ASX, which supposedly pass the "reasonable person" test, are found to be padded where it suits. Enormously padded.
One area where it is possible to compare apples with apples is in the official BITRE statistics. Japan is the obvious candidate for comparison as both airlines operate there.
The statistics from the last two years call into question many things. But I'll let you decide for yourself.
In the 2008 calendar year:
QF, including Australian airlines, operated 2740 flights to and from Japan, carrying 527095 Pax at an average monthly Load Factor of 76.3%
JQ operated 1532 flights to and from Japan carrying 360547 Pax at an average monthly Load factor of 69.1%
In the 2009 Calendar year:
QF mainline operated 964 flights to and from Japan carrying 207995 Pax at an average Load factor of 78.6%.
JQ operated 1949 flights to and from Japan, carrying 433827 passengers at an average monthly load factor of 73.7%
Questions for the Board:
a. Has Jetstar grown, or shrunk this market?
b.Why do you persist with Jetstar in this market when the load factors point to a preference for mainline?
You claim a 30% cost margin in favour of Jetstar. When are you going to release to the ASX the true figures regarding the subsidisation of Jetstar, as required by the ASX "reasonable person" test?
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From discussions with airport managers, passengers and Japanese tour group operators - most Japanese pax do not like Jstar - its just that QANTAS management is forcing pax onto Jstar by reducing the alternative options (its really quite ironic that Jstar say its all about choice when in reality it is the opposite).
Premium pax are pissed off. Japanese pax are pissed off. QF staff are pissed off.....who is the winner? Jetstars figures? Well as we have seen (Capt Kremin) even they are rubbery at best.
Its amazing how an iconic brand as QF can go from one of trusted safety - a rock solid brand - to now - a distrusted brand where of all things (if nothing else at QF) the MAIN thing - SAFETY is questioned, and without a doubt has been compromised by greedy people.
Premium pax are pissed off. Japanese pax are pissed off. QF staff are pissed off.....who is the winner? Jetstars figures? Well as we have seen (Capt Kremin) even they are rubbery at best.
Its amazing how an iconic brand as QF can go from one of trusted safety - a rock solid brand - to now - a distrusted brand where of all things (if nothing else at QF) the MAIN thing - SAFETY is questioned, and without a doubt has been compromised by greedy people.
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Capt kremin,
How dare you let the facts get in the way of a beautiful charade!
The cost difference you refer to (30%) has been spun for years, and it is the biggest lie of all.
45 to 55% of the expenditure of an airline is directly related to fuel and aircraft, which clearly are the same whether you are an LCC or legacy.
Another 10 - 15% is marketing, computers, property etc. again, this is presumably the same on a like for like basis
Another 10% or so covers all sorts of other things, some of which an LCC may not have, but that is a choice that even a legacy could make if they thought that they were better off without these extras. For example, Qantas could save 3% tomorrow by not giving away free food, if they choose to keep the free food (presumably because they think overall it increases profit) it is hardly fair to use these items to crow about how Jetstar is cheaper. It is a choice management could make at anytime. For example why not have the last 4 rows on QF with no catering, no magazine, no headsets? Sub-Economy.
So really it just leaves the remaining 20 to 25% of cost to play with - Staff related costs.
Even if Jetstar staff work for FREE then the cost difference between it and mainline is not 30%.
More rubbery figures!
By my calculations, on a like for like basis the cost difference is around 8% (a long way from 30%).
Lies, lies and more lies, but why should we be surprised! QF are apparently using Enron as the role model for accounting and reporting standards.
Ben Sandilands should spend some real time and blow this whole thing wide open.
How dare you let the facts get in the way of a beautiful charade!
The cost difference you refer to (30%) has been spun for years, and it is the biggest lie of all.
45 to 55% of the expenditure of an airline is directly related to fuel and aircraft, which clearly are the same whether you are an LCC or legacy.
Another 10 - 15% is marketing, computers, property etc. again, this is presumably the same on a like for like basis
Another 10% or so covers all sorts of other things, some of which an LCC may not have, but that is a choice that even a legacy could make if they thought that they were better off without these extras. For example, Qantas could save 3% tomorrow by not giving away free food, if they choose to keep the free food (presumably because they think overall it increases profit) it is hardly fair to use these items to crow about how Jetstar is cheaper. It is a choice management could make at anytime. For example why not have the last 4 rows on QF with no catering, no magazine, no headsets? Sub-Economy.
So really it just leaves the remaining 20 to 25% of cost to play with - Staff related costs.
Even if Jetstar staff work for FREE then the cost difference between it and mainline is not 30%.
More rubbery figures!
By my calculations, on a like for like basis the cost difference is around 8% (a long way from 30%).
Lies, lies and more lies, but why should we be surprised! QF are apparently using Enron as the role model for accounting and reporting standards.
Ben Sandilands should spend some real time and blow this whole thing wide open.
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Not to mention the fact that the fares are supposed to be cheaper in the effort to attract pax.
At its peak, Qf/ AO used to run 54 flights a week to Japan from Cairns. Now = 0.
At its peak, Qf/ AO used to run 54 flights a week to Japan from Cairns. Now = 0.
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And there is a large proportion of that market now going to SIA, they have been running a sale in Japan for the last year or so that beats Jet* flights to Australia, and even though the flight is longer obviously sweetening the deal with a stay in Singapore included, plus they get fed and a decent IFE as well.
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SQ and CX have benefited greatly from the QF policy re Japan.
Also, it has to be remembered that QF have ensured JQ operates the newest and cheapest equipment, much to the detriment of the average fleet age in QF.
I wonder how the figures would look if QF had kept the A330's and given JQ the 767's.
Also, it has to be remembered that QF have ensured JQ operates the newest and cheapest equipment, much to the detriment of the average fleet age in QF.
I wonder how the figures would look if QF had kept the A330's and given JQ the 767's.
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Bazz,
According to the AO supporters, the whole AO operation was the best one that god ever gave wings to. Surely then, the aircraft type must have had a huge part to play in that 'success'. And taking that line further, the trusty B767 would have been equally successful in the JQ fleet... If, however, as you imply, it would not have been successful at JQ, then why was AO the success that it clearly was (to everyone except those who see the figures and make the decisions)?
And let's not forget that 4/7 of the JQ A330 fleet are not 'spring chickens' anymore. If it were a priority that JQ operate only the most efficient aircraft, then EBA to EBD would be back at mainline, having been replaced by the newest A332s.
Captain K
Nice try, but rubbery figures at best. Firstly, here's a link to the IASC website. Determinations and Decisions
I'd suggest anyone interested look at determination [2008] IASC 212 for some interesting stats regarding the serious drop in pax numbers by end of March 2008 (while QF still had 29 Japan return trips/week and JQ had 15). This in and of itself might indicate why QF had decided to leave the market by then and why the pax figures for 2009 are so much lower.
Then there's a nasty error in your figures which I will (in a great moment of benevolence) put down to cut-and-paste of dodgy data - it wouldn't be by design, surely? 360547 pax carried by JQ during 1532 flights equates to 235.4 pax per flight. Each aircraft is configured for 303 pax, therefore the average load factor is 77.7%, not 69.1%. The subsequent year's load factor is within about 5% of '08's (77.7%-73.7% = 4%. 4% is a 5.15% of 77.7%), a figure well within expectations taking into account annual variation and 'the downturn'.
QF's figures are pretty accurate if you use an average aircraft configuration of 250 seats (considering the mix of B767s, A332s and A333s).
Overhead Panel et al,
If the decision-makers were to listen to (in)accurate anecdotal feedback, the Cityflyer service would have been long dead and buried! When was the last time you listened to the grumblings from the J class suits as another flight is delayed by anything more than about 15 seconds? I too have asked many pax/staff/managers about their impressions of the JQ Japanese product; they mostly say that it's quite acceptable and that the experience is not unpleasant. So who do we believe? I'd guess that if people were unhappy, then JQ wouldn't continue to see 3/4 load factors year-on-year. The argument that there's no one else for them to fly on is weak - a mate of mine flew to NRT late last year. The cheapest ticket was SIA, and he loved it! Sure it took longer, but it shows there's still choice for punters.
I heard/you heard/they heard is irrelevant. Seats on bums is the only language in this game. When the global financial turnaround is a certainty, you QFers might find that assets move around again so that returns to the group are always maximised.
According to the AO supporters, the whole AO operation was the best one that god ever gave wings to. Surely then, the aircraft type must have had a huge part to play in that 'success'. And taking that line further, the trusty B767 would have been equally successful in the JQ fleet... If, however, as you imply, it would not have been successful at JQ, then why was AO the success that it clearly was (to everyone except those who see the figures and make the decisions)?
And let's not forget that 4/7 of the JQ A330 fleet are not 'spring chickens' anymore. If it were a priority that JQ operate only the most efficient aircraft, then EBA to EBD would be back at mainline, having been replaced by the newest A332s.
Captain K
Nice try, but rubbery figures at best. Firstly, here's a link to the IASC website. Determinations and Decisions
I'd suggest anyone interested look at determination [2008] IASC 212 for some interesting stats regarding the serious drop in pax numbers by end of March 2008 (while QF still had 29 Japan return trips/week and JQ had 15). This in and of itself might indicate why QF had decided to leave the market by then and why the pax figures for 2009 are so much lower.
Then there's a nasty error in your figures which I will (in a great moment of benevolence) put down to cut-and-paste of dodgy data - it wouldn't be by design, surely? 360547 pax carried by JQ during 1532 flights equates to 235.4 pax per flight. Each aircraft is configured for 303 pax, therefore the average load factor is 77.7%, not 69.1%. The subsequent year's load factor is within about 5% of '08's (77.7%-73.7% = 4%. 4% is a 5.15% of 77.7%), a figure well within expectations taking into account annual variation and 'the downturn'.
QF's figures are pretty accurate if you use an average aircraft configuration of 250 seats (considering the mix of B767s, A332s and A333s).
Overhead Panel et al,
If the decision-makers were to listen to (in)accurate anecdotal feedback, the Cityflyer service would have been long dead and buried! When was the last time you listened to the grumblings from the J class suits as another flight is delayed by anything more than about 15 seconds? I too have asked many pax/staff/managers about their impressions of the JQ Japanese product; they mostly say that it's quite acceptable and that the experience is not unpleasant. So who do we believe? I'd guess that if people were unhappy, then JQ wouldn't continue to see 3/4 load factors year-on-year. The argument that there's no one else for them to fly on is weak - a mate of mine flew to NRT late last year. The cheapest ticket was SIA, and he loved it! Sure it took longer, but it shows there's still choice for punters.
I heard/you heard/they heard is irrelevant. Seats on bums is the only language in this game. When the global financial turnaround is a certainty, you QFers might find that assets move around again so that returns to the group are always maximised.
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Seats on bums is the only language in this game
Qantas on these routes gets and has got more bums on seats and at a higher revenue - FACT
The board does have questions to answer here - no doubt about it.
BTW Kremins figures discuss average monthly load factors, whilst the pax and flight numbers are over the whole year. This easily explains the difference - so probably no benevolence needed on your part.
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If the decision-makers were to listen to (in)accurate anecdotal feedback
Where there is smoke there is fire comes to mind.
Whilst I don't disagree that bums on seats is vastly important - both for revenue/yield - if its bums on seats that never return cause they have had an ordinary experience or forced to fly with them - then the long term future maybe bleak - and for most employees (as opposed to short term management pay/remuneration) it is the long term that counts.
As another thread alludes to and I think whether intentionally or not in your post RAD_ALT - the arrogance of QF and the immediate dismissal of any negative publicity is something QF needs to address. To merely say it is anecdotal and therefore not factual is somewhat damning. This is a systemic problem.
How has QF got to this point where everyone else's surveys are wrong? Why is is only the surveys QF (do they sponsor them perhaps?) does well in do they accept as gospell ?
My musings aside - I have another bit of anecdotal evidence to be dismissed. QFs negative publicity comes largely as a result of how its media department is run. The arrogance (there is that word again) displayed by the PR/media department is mind boggling. The natural reaction from the press when they deal with them is quite simply "we will only publish negative stories".
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Rad Alt, the first 330's are among the cheapest as they were compensation for the 380 delays. The newer ones are being paid for at more like market rates. The routes Jetstar fly could all have been done by the 767, however, it would increase their costs compared to the 330. The one goal of management is to ensure JQ keeps its low cost base, even if it results in an increased cost to mainline.
In the AO days, there were fewer 330's. The 767's cost a lot more to maintain given the fact the majority are closer to 20 years of age. Have you been in many lately - they are getting unreliable, showing their age, and are not popular with the business class punters.
As to whether AO was a raging success or not, it was obviously not financially worth it, as it was replaced again with QF mainline. I was not up there so I have no in depth knowledge of the Cairns market.
Also, why do we have a JQ CEO who gets judged by the performance of JQ, and a QF CEO who gets rewarded based on the performance of the group, not just QF. Therefore there is nobody with an interest in Mainline, just executives driven by the success of JQ.
An interesting snippet was that all other LCC's created by legacy entities have failed prior to JQ. This case is probably going to be the first whereby the legacy carrier ends up dead and buried because of their own LCC. The competition are loving the way QF and JQ are more focused on competing with each other rather than those they should.
In the AO days, there were fewer 330's. The 767's cost a lot more to maintain given the fact the majority are closer to 20 years of age. Have you been in many lately - they are getting unreliable, showing their age, and are not popular with the business class punters.
As to whether AO was a raging success or not, it was obviously not financially worth it, as it was replaced again with QF mainline. I was not up there so I have no in depth knowledge of the Cairns market.
Also, why do we have a JQ CEO who gets judged by the performance of JQ, and a QF CEO who gets rewarded based on the performance of the group, not just QF. Therefore there is nobody with an interest in Mainline, just executives driven by the success of JQ.
An interesting snippet was that all other LCC's created by legacy entities have failed prior to JQ. This case is probably going to be the first whereby the legacy carrier ends up dead and buried because of their own LCC. The competition are loving the way QF and JQ are more focused on competing with each other rather than those they should.
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The Load Factors are indeed the average of the monthly inbound/outbound Load factors.
Anyone can access the BITRE figures and check them.
For two months of each of those years, JQ had a higher LF than QF. QF has maintained an average LF advantage of JQ, on figures for the entire two years of 6.1%.
In the Jan 2010 figures it was almost a 13% difference. It would be interesting to see the difference in yield, but I suspect that is Commercial-in-Confidence.
Anyone can access the BITRE figures and check them.
For two months of each of those years, JQ had a higher LF than QF. QF has maintained an average LF advantage of JQ, on figures for the entire two years of 6.1%.
In the Jan 2010 figures it was almost a 13% difference. It would be interesting to see the difference in yield, but I suspect that is Commercial-in-Confidence.
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Fuel
The whole JQ/QF Japan discussion comes down to $$$. It is cheaper to use JQ on the route based on the airlines overall cost structure.Passenger service and customer satisfaction is not a considation,never has been and never will be.
Break even costs are when fuel is around $100.00 per barrel (approximately,as prices tend to fluctuate like Alan's OTP performance bonus).As soon as the fuel cost exceeds this figure,JQ will (and have previously) dropped routes and/or the amount of sectors flown.It is a fairly simple formula for the group,any thing under $100.00 per barrel = cucumber sandwiches,Beluga caviar and a bottle of Chateau Lafite 1787
for Team BCG !!
So raise your glasses....
Break even costs are when fuel is around $100.00 per barrel (approximately,as prices tend to fluctuate like Alan's OTP performance bonus).As soon as the fuel cost exceeds this figure,JQ will (and have previously) dropped routes and/or the amount of sectors flown.It is a fairly simple formula for the group,any thing under $100.00 per barrel = cucumber sandwiches,Beluga caviar and a bottle of Chateau Lafite 1787
for Team BCG !!
So raise your glasses....
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According to Crikey
Good try Bazza 
Jetstar pays its way
Jetstar spokesperson Simon Westaway writes: Re. "Pilots: time for Qantas to come clean on propping up Jetstar" . It would be fair to say the pilot union should probably stick to the flight paths and not with thumbing their way through the financial accounts without a better interpretation of what they see within them.
The assertions made by AIPA around aspects of Jetstar's operations or financial allocations are incorrect.
Jetstar plain and simply pays its way.
Jetstar spokesperson Simon Westaway writes: Re. "Pilots: time for Qantas to come clean on propping up Jetstar" . It would be fair to say the pilot union should probably stick to the flight paths and not with thumbing their way through the financial accounts without a better interpretation of what they see within them.
The assertions made by AIPA around aspects of Jetstar's operations or financial allocations are incorrect.
Jetstar plain and simply pays its way.
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Strange indeed. Is in total conflict with he following public statement:
· The president of the Australian and International Pilots Association, Barry Jackson, this morning said: "It is time for management to explain why if it's so successful Jetstar needs to be propped up by Qantas paying for its gates at major airports here and abroad, paying for significant training costs and paying for its participation in an expensive spare parts pooling arrangement with other A330 operators...."When the public are fed lines about how much more profitable Jetstar is than main line, can we please see this figures stripped of the hundreds of millions of dollars of asset transfers."
Someone is vilifying someone here.
· The president of the Australian and International Pilots Association, Barry Jackson, this morning said: "It is time for management to explain why if it's so successful Jetstar needs to be propped up by Qantas paying for its gates at major airports here and abroad, paying for significant training costs and paying for its participation in an expensive spare parts pooling arrangement with other A330 operators...."When the public are fed lines about how much more profitable Jetstar is than main line, can we please see this figures stripped of the hundreds of millions of dollars of asset transfers."
Someone is vilifying someone here.
What about the other rumour that on some of the CNS-NRT flights (and maybe others) the cargo section of the Jetstar A330s is mainly empty but as the Airport Manager said - 'thats ok because Qantas rents the cargo space of the aircraft from Jetstar, therefore we make money'.
Bizarre but I have heard this from more than one source. There are plenty of different ways for Jetstar to hide getting money from QF. Simon Westaway has addressed the A330 engineering expenses but what about the thousands of other ways Jetstar uses Qantas money to prop up there business where a true new low cost carrier to the market wouldn't have. It gate space at terminals, training facilities, gifted aircraft and routes, just to name a few of the top of my head. I cannot believe now that Qf and Jetstar are now directly competing against each other on the MEL-SYD route. Its hilarious. Oh well
Bizarre but I have heard this from more than one source. There are plenty of different ways for Jetstar to hide getting money from QF. Simon Westaway has addressed the A330 engineering expenses but what about the thousands of other ways Jetstar uses Qantas money to prop up there business where a true new low cost carrier to the market wouldn't have. It gate space at terminals, training facilities, gifted aircraft and routes, just to name a few of the top of my head. I cannot believe now that Qf and Jetstar are now directly competing against each other on the MEL-SYD route. Its hilarious. Oh well
Perhaps one could ask Mr Westaway how much Jetstar paid qantas for the use of the 330 sim in Jetstar Internationals start up phase through to the end of year one? All whilst 'the expensive' qantas mainline pilots were being flown around to different parts of the world to complete their simulator cyclic requirements on third party simulators.
Just the facts would be great!
Just the facts would be great!
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QF has one 330 service per day to NRT, while JQ has how many? Yet from what I hear, QF engineers are based in the QF crew hotel, on QF allowances, while the majority of the work they do up there is looking after the JQ aircraft (up to 3 per night reportedly) while there is only 1 QF aircraft.
Any QF engineers able to elaborate on this???
Any QF engineers able to elaborate on this???
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http://travelbulletin.com.au/pdfs/in...nsideOct09.pdf
Seeing Bruce Buchanan is part of the Qantas Executive Team, I assume J* reimburse QF for the cost of their CEO. Being seperate companies & all.
Seeing Bruce Buchanan is part of the Qantas Executive Team, I assume J* reimburse QF for the cost of their CEO. Being seperate companies & all.
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Exactly as you have implied Bazz, it is ALL at QF expense.
To take this one further, there is also the provision of maintenance at some Australian ports of JQ planes by QF engineers. Servicing and ground equipment loaned, at a cost we're told, yet no one I know can show the invoicing to JQ.
To take this one further, there is also the provision of maintenance at some Australian ports of JQ planes by QF engineers. Servicing and ground equipment loaned, at a cost we're told, yet no one I know can show the invoicing to JQ.
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I believe this was all predicted to happen 20 years ago, only way you had any chance of slowing the dismantling of QF mainline was a united front. The senior blokes at the time said no and now they are retired and happy after getting what they wanted. So what to do now!