The Australian Domestic Market 2011
I agree gobbledock. I just can't see the logic. I mean the margins are thin. I would think Virgin would be looking to decrease the complexities of the fleet, not increase it?
Mind you nothing would surprise me after the last 10 years we've been through.
Mind you nothing would surprise me after the last 10 years we've been through.
Interesting thread, and some interesting points, my view?
QANTAS: International will continue to flounder with the influx of ME airlines and cheap low cost international airlines. The international arm of the airline is becoming stale, basically through the inept management style in place. Domestic? Game on with VB, although the dispatch rate of the 767 and 734 (which will start to be withdrawn) will become a problem and an advantage for VB. Huge loss of buisness patronage? Not yet, just a gradual decrease of market share, but eventually a large share will go to VB. Eventually be enough for the board to start asking questions in regard to the companies present directions. Might see a lot of money being thrown QANTAS domestics way towards the end of the year, but unfortunately a bit late.
Virgin Blue: Exciting year. New look, engaged staff. No regional turboprop just yet, too much on their plate this year, and although they have a big war chest, JB won't risk it all at once. Main thing VB need to do is distance themselves from the bearded one, he will do more damage than good in attracting the buisness clients. JB management style and knowledge of the industry will make it a good year for VB.
Jetstar: Industrial problems and a media nightmare. More rapid expansion for dubious gain in a declining lesuire market will put a huge drain on QANTAS in a time when they are being attacked on both high and low yeild market. With little employee loyalty manpower will become a problem, and this will lead to moe operational problems. European flying will begin but will become a huge problem with Asian full service carriers providing better value at the same price. All in all a huge headache for the Qantas group.
Tiger: A hard one! With a leisure market under strain and a huge excess of seats in Australia, this could be a hard year for Tiger.
Qlink: same as usual, with limited expansion in WA
REX: New type announced, same as Qlink, quiet year of consolidation.
The rest? It all depends on the economy.......could be a year of hurt for some smaller Airlines.
I think a really interesting year!
QANTAS: International will continue to flounder with the influx of ME airlines and cheap low cost international airlines. The international arm of the airline is becoming stale, basically through the inept management style in place. Domestic? Game on with VB, although the dispatch rate of the 767 and 734 (which will start to be withdrawn) will become a problem and an advantage for VB. Huge loss of buisness patronage? Not yet, just a gradual decrease of market share, but eventually a large share will go to VB. Eventually be enough for the board to start asking questions in regard to the companies present directions. Might see a lot of money being thrown QANTAS domestics way towards the end of the year, but unfortunately a bit late.
Virgin Blue: Exciting year. New look, engaged staff. No regional turboprop just yet, too much on their plate this year, and although they have a big war chest, JB won't risk it all at once. Main thing VB need to do is distance themselves from the bearded one, he will do more damage than good in attracting the buisness clients. JB management style and knowledge of the industry will make it a good year for VB.
Jetstar: Industrial problems and a media nightmare. More rapid expansion for dubious gain in a declining lesuire market will put a huge drain on QANTAS in a time when they are being attacked on both high and low yeild market. With little employee loyalty manpower will become a problem, and this will lead to moe operational problems. European flying will begin but will become a huge problem with Asian full service carriers providing better value at the same price. All in all a huge headache for the Qantas group.
Tiger: A hard one! With a leisure market under strain and a huge excess of seats in Australia, this could be a hard year for Tiger.
Qlink: same as usual, with limited expansion in WA
REX: New type announced, same as Qlink, quiet year of consolidation.
The rest? It all depends on the economy.......could be a year of hurt for some smaller Airlines.
I think a really interesting year!
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Great thread. Great to play crystal ball and maybe revisit it in a years time. I sometimes go back and have a read of the GFC threads (sad I know).
There will be no need for them to offer much at all KRUSTY. Young mates who have changed sides would be quickly giving their mates the update on what the company is like to work for. What the sims are like, what the culture is like. And on this, REX hasn't a hope in hell. Money is one thing, culture is another and its is 10 times more powerful. The whole Virgin fleet will merge under one brand and I suspect young up and commers will see the opportunity to get a foot in the door with the potential to fly a 777, 330, 737 or Ejet one day down the track. Lots of choice for lifestyle/stages. The rostering is also a strong point that others don't have. Much like QF you cannot beat a major for choice and options.
They're already tied up and directing people off F50's directly onto 73's to the east coast. I can't see REX or XR becoming the turbo prop arm. They'll buy new aircraft and start from scratch. One thing is for sure. If the regionals have trouble finding pilots now wait till VB get a turbo prop. The big factor of course will be not if they do it but how they do it. If they do it ala Qlink which is separate recruitment for QF then it probably wont attract as many. If they do it under one banner with progression onto different types this could attract many applicants. Who knows even a cadetship onto the turboprop arm?
There is a theme amongst some that VB in particular should stay with just a 73 and that getting other types weakens their position. This is a pretty bizarre idea. Do they let Qlink and J* 330's have cash cows to themselves? Sure the Ejets and a 777 with Cessna 210 size cargo doors wasn't the smartest of ideas. Neither was that stupid QF copy paint scheme. (rumoured to be the scheme of choice for the group)
Choosing the correct aircraft for the route is probably the way to go. The Ejet wasn't the right type but an ATR might be. Perhaps the turboprops wont happen in 11 but maybe in 12? The question you have to ask is this:
If JB could snap his fingers and replace all Ejets with a fleet of ATRs would he? I suspect he would.
I'm sure REX is very profitable and so is Qlink and this is why ATRs might just turn up in V colours one day.
Of course it could all change depending on what the VB EBA reveals. It could go back to 30 emirates interviews/departures a month or it could be THE job to have in Australian aviation. Time will tell.
like stand outside the REX carpark and sign up all the experienced crew on 20% increase in salary and eventual progression to jet jobs!
Virgin and Skywest will tie up and Skywest will be virgins turboprop arm.
There is a theme amongst some that VB in particular should stay with just a 73 and that getting other types weakens their position. This is a pretty bizarre idea. Do they let Qlink and J* 330's have cash cows to themselves? Sure the Ejets and a 777 with Cessna 210 size cargo doors wasn't the smartest of ideas. Neither was that stupid QF copy paint scheme. (rumoured to be the scheme of choice for the group)
Choosing the correct aircraft for the route is probably the way to go. The Ejet wasn't the right type but an ATR might be. Perhaps the turboprops wont happen in 11 but maybe in 12? The question you have to ask is this:
If JB could snap his fingers and replace all Ejets with a fleet of ATRs would he? I suspect he would.
I'm sure REX is very profitable and so is Qlink and this is why ATRs might just turn up in V colours one day.
Of course it could all change depending on what the VB EBA reveals. It could go back to 30 emirates interviews/departures a month or it could be THE job to have in Australian aviation. Time will tell.
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All,
I injected a dose or reality with a few comments concerning DJ and turboprops. See the thread entitled New SE Aust Airline starting on page 5 of GA and Questions for any one interested.
The Oracle
I injected a dose or reality with a few comments concerning DJ and turboprops. See the thread entitled New SE Aust Airline starting on page 5 of GA and Questions for any one interested.
The Oracle
Gidday ORACLE et'al.
I must admit when I first noticed the thread on New SE Aust Airline my eyes glazed over, mainly because it was done to death about a year ago, and lets face it, we all know the situation here, or more to the point we all should.
I've revisited the thread and as usual your in depth analysis and years of practicle knowledge in this area do the subject much more justice than I could ever do. I tried to extract some sort of usefull debate from F111 a few posts ago, but honestly if what you had to say to him in December didn't sink in, I don't know what would.
Don't get me wrong F111, I'm not trying to be negative, or disparage you, but you should re-read ORACLE'S post, and refer to his sage advice when Virgin's foray into regional turbo-prop operations is still-born, or heaven forbid, they actually embark upon such a folly!
I must admit when I first noticed the thread on New SE Aust Airline my eyes glazed over, mainly because it was done to death about a year ago, and lets face it, we all know the situation here, or more to the point we all should.
I've revisited the thread and as usual your in depth analysis and years of practicle knowledge in this area do the subject much more justice than I could ever do. I tried to extract some sort of usefull debate from F111 a few posts ago, but honestly if what you had to say to him in December didn't sink in, I don't know what would.
Don't get me wrong F111, I'm not trying to be negative, or disparage you, but you should re-read ORACLE'S post, and refer to his sage advice when Virgin's foray into regional turbo-prop operations is still-born, or heaven forbid, they actually embark upon such a folly!
Last edited by KRUSTY 34; 4th Jan 2011 at 07:50.
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I do wonder with all these Virgin expansion plans if they will not spend too much money too quickly.
There is not that much spare cash floating around in the airline industry and these things do cost a lot (V-Aus, dumping Ejets, new A330's, new business class, presumably new club lounges, new uniforms, new names, new paintjobs, new inflight service, turboprops to new markets?, alliances, expensive managers from other airlines (QF), etc the list goes on).
It takes time to produce a new product and even longer to get a return on a new product.
How much money do Virgin currently make?
How much cash do they have on reserve?
The best thing going for Virgin's future is Qantas's lack of focus on the high yielding market.
As a QF employee I wish VB the best in their premium focus as I believe it is a positive for Qantas mainline product to have a viable competitor.
There is not that much spare cash floating around in the airline industry and these things do cost a lot (V-Aus, dumping Ejets, new A330's, new business class, presumably new club lounges, new uniforms, new names, new paintjobs, new inflight service, turboprops to new markets?, alliances, expensive managers from other airlines (QF), etc the list goes on).
It takes time to produce a new product and even longer to get a return on a new product.
How much money do Virgin currently make?
How much cash do they have on reserve?
The best thing going for Virgin's future is Qantas's lack of focus on the high yielding market.
As a QF employee I wish VB the best in their premium focus as I believe it is a positive for Qantas mainline product to have a viable competitor.
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Krusty etc, the big boss (JB) has told crew Virgin will be operating turboprops, with his last conversation about them taking place during early December. At one of the roadshows he was asked about Qlinks dominance of regional Australia and if he has plans to do something about it. His reply was yes he has a plan and it would be known to all sometime between 1 Jan 2011 and 31 Dec 2011.
Don't expect any announcement within the 1st quarter of this year, as the focus is getting the A330 into service, introducing the new product and uniforms.
Remember he knows how much profit Qlink adds to the Qantas bottom line and just like his plans to grab more of the business market, he knows he dosen't require 50% of the market to make money, 20 - 30% is all that's required.
REX could have been the operator, but the owners want it all their way ie a total buy out. The bearded one learnt from his last purchase of an airline, they come with to much baggage and vowed never to buy another airline. Plus the cost of purchasing another airline could be used to fund other aircraft.
Regarding finding crews and how much to pay them, if the apply the 20% number they used to come up with the Ejet pay scale then Captains would be paid around $112000 plus allowances and getting 14 - 15 days per month with progression onto a jet within 3 years, so I'm sure they will have no problem finding crews.
Markets at a guess would be;
NSW: AY, PMQ, CH( replacing ejets), DU, TW and WG
QLD: BUD, EMD, GLA and perhaps HVB
SA: PLC
VIC: MIA
TAS: DPO
Don't expect any announcement within the 1st quarter of this year, as the focus is getting the A330 into service, introducing the new product and uniforms.
Remember he knows how much profit Qlink adds to the Qantas bottom line and just like his plans to grab more of the business market, he knows he dosen't require 50% of the market to make money, 20 - 30% is all that's required.
REX could have been the operator, but the owners want it all their way ie a total buy out. The bearded one learnt from his last purchase of an airline, they come with to much baggage and vowed never to buy another airline. Plus the cost of purchasing another airline could be used to fund other aircraft.
Regarding finding crews and how much to pay them, if the apply the 20% number they used to come up with the Ejet pay scale then Captains would be paid around $112000 plus allowances and getting 14 - 15 days per month with progression onto a jet within 3 years, so I'm sure they will have no problem finding crews.
Markets at a guess would be;
NSW: AY, PMQ, CH( replacing ejets), DU, TW and WG
QLD: BUD, EMD, GLA and perhaps HVB
SA: PLC
VIC: MIA
TAS: DPO
Thanks for the detailed reply F111, what I was fishing for from the beginning. Going to be an interesting 12-24 months if JB goes ahead with what he has said.
As for the pay, conditions, and progression, are those numbers being bandied about at the roadshows, or is it speculation at this stage? I ask because IMHO that is pretty close to what would be required for people to jump ship in significant enough numbers.
Needless to say Virgin can try to recruit people from wherever they like, but in the upcoming battle (and it will be a battle), the abilty for all sides to maintain schedule (amongst other things) may very well be crucial to the final outcome.
We'll stay tuned.
As for the pay, conditions, and progression, are those numbers being bandied about at the roadshows, or is it speculation at this stage? I ask because IMHO that is pretty close to what would be required for people to jump ship in significant enough numbers.
Needless to say Virgin can try to recruit people from wherever they like, but in the upcoming battle (and it will be a battle), the abilty for all sides to maintain schedule (amongst other things) may very well be crucial to the final outcome.
We'll stay tuned.
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No specifics at the roadshows the 20% is based on the Ejet crews getting that much less than the 737. Even if they offered around $100K for Captains I'm sure they would have no problems finding pilots.
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Hullo Porch,
How nice that you remember my earlier comments on the future of DJ. Those comments focussed squarely on the colllective ineptitude of the previous CEO, his 'team' the original Board and how they had taken a business that had listed on the ASX at over $2.00 and creatively reduced its share value to less than 0.17 cents near the lowest point.
Notwithstanding the abilities of Mr JB and his positive impact, DJ remains a 'virtual' airline with debt well in excess of any equity and this is reflected in both DJ's dreadful share price and its current poor profitability. While the inter-line agreements with Ethhad, ANZ and Delta (if it proceeds) will certainly help to create 'mass', market conditions remain tough and it seems for DJ particularly that cash is very tight.
The Oracle
How nice that you remember my earlier comments on the future of DJ. Those comments focussed squarely on the colllective ineptitude of the previous CEO, his 'team' the original Board and how they had taken a business that had listed on the ASX at over $2.00 and creatively reduced its share value to less than 0.17 cents near the lowest point.
Notwithstanding the abilities of Mr JB and his positive impact, DJ remains a 'virtual' airline with debt well in excess of any equity and this is reflected in both DJ's dreadful share price and its current poor profitability. While the inter-line agreements with Ethhad, ANZ and Delta (if it proceeds) will certainly help to create 'mass', market conditions remain tough and it seems for DJ particularly that cash is very tight.
The Oracle
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VB Turbo Props
All JB has to do is announce the purchase of Q400's and offer DEC to existing Eastern/Sunstate pilots and its over for Qlink. Same money but better life style would do it!
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newsensation says"
Yes I am sure that would make the 500 Virgin fo's very happy ....
Nice dream for the Qlink boys and girls but will never happen.
All JB has to do is announce the purchase of Q400's and offer DEC to existing Eastern/Sunstate pilots and its over for Qlink. Same money but better life style would do it!
Nice dream for the Qlink boys and girls but will never happen.
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The big questions are:
Will it be separate to vb ala qlink?
Will the ATR/Q400 be in addition to the Ejet or replace them?
Turbo props were mentioned right back when he first started but as F111 says he's concentrating on the 330 first.
Will it be separate to vb ala qlink?
Will the ATR/Q400 be in addition to the Ejet or replace them?
Turbo props were mentioned right back when he first started but as F111 says he's concentrating on the 330 first.
I think I know where your coming from Pammy'.
When/if parts of the E-jet fleet are replaced by the Q400/ATR/Bristol Box-kite or whatever, what will become of the F/O's, especially those at the bottom of the list?
I still look for Commies' under my bed at night as well. Personally I would imagine these people would progress onto the proposed expanding Virgin Jet fleet? All things being equitable. Unless of course you are suggesting that some Current Virgin Jet F/O's would have their noses out of joint because of lost command opportunities onto a Turb-prop!
All crewing issues, that will need to be sorted as just one aspect of what would be a complex and risky excercise.
When/if parts of the E-jet fleet are replaced by the Q400/ATR/Bristol Box-kite or whatever, what will become of the F/O's, especially those at the bottom of the list?
I still look for Commies' under my bed at night as well. Personally I would imagine these people would progress onto the proposed expanding Virgin Jet fleet? All things being equitable. Unless of course you are suggesting that some Current Virgin Jet F/O's would have their noses out of joint because of lost command opportunities onto a Turb-prop!
All crewing issues, that will need to be sorted as just one aspect of what would be a complex and risky excercise.
Just noticed that Embraer has included the EMB-120 at the bottom of its commercial jets list on their new web site.
Is this a tempter for potential customers?
Two years ago embraer suggested they were looking at a new turboprop but hinted more at a re-engine rather than complete redesign.
Maybe there is something behind the scenes which may be announced later in the year. A modern, efficient, re-engined stretched E120 would be very competitive against the Dash and SAAB.
Being already involved with Embraer could VB be the launch customer for a new turboprop?
Is this a tempter for potential customers?
Two years ago embraer suggested they were looking at a new turboprop but hinted more at a re-engine rather than complete redesign.
Maybe there is something behind the scenes which may be announced later in the year. A modern, efficient, re-engined stretched E120 would be very competitive against the Dash and SAAB.
Being already involved with Embraer could VB be the launch customer for a new turboprop?
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I don't think vb will ever buy anything from Embraer ever again.
Suspect the majority wouldn't go back to flying a turbo prop in a pink fit. I also suspect it would be much like the current system: Can get a quick command on Ejet or wait a decade or more for the 73.
If you look at QF they have very experienced FO's that sit and wait. I suppose there is no other option.
Yes I am sure that would make the 500 Virgin fo's very happy ....
If you look at QF they have very experienced FO's that sit and wait. I suppose there is no other option.
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Interesting. I assume thats Sydney.
Do you have estimates on the other bases
I"ll start it:
Brisbane: 100 years..haven't got the key for infinite on my mac
Melbourne:?
Perth:?
Sydney:?
Do you have estimates on the other bases
I"ll start it:
Brisbane: 100 years..haven't got the key for infinite on my mac
Melbourne:?
Perth:?
Sydney:?
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Yes it was only for Sydney, my guess is Brisbane 737 commands still require 7+ years of service and Melbourne 5+. Don't think there will be 737 commands in Brisbane for a while.