AUGUST 24th - QANTAS
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Jetstar Costs ?
"You figures may well be correct, just imagine though how much more profit Qantas could be making if they managed to reduce all their costs down to the level of Jetstar."
When is a cost not a cost?
When its a Jestar cost.
When mainline picks up the tab Jetstar effectively has no costs.
All revenue,profit but no costs.
I'd like me some of that.What a great business model
Mainline probably provides the muffins and peanuts gratis to boot.
When is a cost not a cost?
When its a Jestar cost.
When mainline picks up the tab Jetstar effectively has no costs.
All revenue,profit but no costs.
I'd like me some of that.What a great business model
Mainline probably provides the muffins and peanuts gratis to boot.
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It would appear that if QF really wanted the best return on capital, they would pour as much capital as possible into QF domestic to make even better returns.
It could even be argued there is a clear case for Jetstar domestic to be reduced and QF domestic expanded as it makes more money from the available seats it puts into the market.
Likewise, shifting seats from Jetstar to QF domestic is also unlikely to improve the return on each seat sold. Surely there is price discrimination going on to eke out as much from each segment of customer demand as is possible? The people flying Jetstar aren't automatically going to shift to QF domestic - in fact, they're likely to shift to V or T.
I'm not sure what the argument is here? Kill Jetstar and hope QF domestic is able to pick up the pax? Not convinced its going to work.
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Aug 24 Day press print media
An update, Steve Creedy's point of view today, (News Ltd's of course)
Just a small point Steve, I didn't see a 8% bounce today for the shares Steve, was that yesterday when you recorded this possibly?
Below is the Sydney Morning Herald version from Ch 10 news, A very solid performance but we must change...... a proud Australian spirit..... (that doesn't fly to LHR via BKK anymore...)
posted for the record, for this thread
.
Just a small point Steve, I didn't see a 8% bounce today for the shares Steve, was that yesterday when you recorded this possibly?
Below is the Sydney Morning Herald version from Ch 10 news, A very solid performance but we must change...... a proud Australian spirit..... (that doesn't fly to LHR via BKK anymore...)
posted for the record, for this thread
.
Last edited by TIMA9X; 24th Aug 2011 at 06:50.
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watch this space
GAAM, Fly Lease
Now to some fancy flying by a stellar cast of local investors who have been the force behind the country’s second-biggest aircraft leasing business Global Aviation Asset Management and have now managed to sell it to US-listed FLY Leasing for $US1.4 billion. FLY is the former Babcock and Brown aviation leasing business and boasts former B&B execs Trevor Lowensohn and Phil Brown as its advisors. The merry cast at GAAM cashing in on the deal include former Qantas boss Geoff Dixon, his former CFO and former Leighton CFO Peter Gregg, former Allco boss David Coe, John Singleton and private equity investor Mark Carnegie. This team is now looking at multiple investment opportunities and Dixon has told The Australian Financial Review that they are looking to put together a bid to take over the management of the $6 billion portfolio of RBS Aviation Capital, the fourth-largest aviation leasing company in the world.
GAAM, Fly Lease
Now to some fancy flying by a stellar cast of local investors who have been the force behind the country’s second-biggest aircraft leasing business Global Aviation Asset Management and have now managed to sell it to US-listed FLY Leasing for $US1.4 billion. FLY is the former Babcock and Brown aviation leasing business and boasts former B&B execs Trevor Lowensohn and Phil Brown as its advisors. The merry cast at GAAM cashing in on the deal include former Qantas boss Geoff Dixon, his former CFO and former Leighton CFO Peter Gregg, former Allco boss David Coe, John Singleton and private equity investor Mark Carnegie. This team is now looking at multiple investment opportunities and Dixon has told The Australian Financial Review that they are looking to put together a bid to take over the management of the $6 billion portfolio of RBS Aviation Capital, the fourth-largest aviation leasing company in the world.
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Baron,
If you take a look at the relative prices of the two, often there is very little to separate the two airlines. Often QF is cheaper on the same route at the same time!. So I imagine killing jetstar would cause people to go to QF, as it is often just as cheap.
On another note, can someone explain to me how Qantas FF makes a profit? Correct me if I'm wrong but isn't a FF scheme...passnger takes a flight..gets some points....uses them later to buy another flight. Where's the profit? Surely it's a liability?
I'm not sure what the argument is here? Kill Jetstar and hope QF domestic is able to pick up the pax? Not convinced its going to work.
On another note, can someone explain to me how Qantas FF makes a profit? Correct me if I'm wrong but isn't a FF scheme...passnger takes a flight..gets some points....uses them later to buy another flight. Where's the profit? Surely it's a liability?
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So what was the big announcement? I was expecting something huge....thought these boards would have gone off by now if there was.
Seems like same old hum drum again!
Seems like same old hum drum again!
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I don't know too much about Mr Wobbles up above...
but, if he knows as much as he says he does, I would be a bit concerned...
so, over to you Mr Wobbles!
Give us some more!
but, if he knows as much as he says he does, I would be a bit concerned...
so, over to you Mr Wobbles!
Give us some more!
BaronB, from one Baron to another I think the crux of the point that The The is making is where is the investment in the most profitable part of the QF Group??
Internal memo states the international loss was $216 million while total 'Qantas' profit was $228 million, so domestic must account for a $444 million profit. This far exceeds any other section of the business. Jetstar Asia made a paltry $14.3 million profit. Yet Jetstar's further international forays and a new Asia based A320 operation are having billions of dollars of investment capital thrown at them.
What about Qantas Domestic??? Nothing!!
I agree with you, the issue is not about replacing JQ domestic with with QF domestic as they are different products for different markets. However why not invest in the QF domestic product with;
1) Better interiors/service offerings - to fight of the growing Virgin threat, and
2) Rush the 787 in to replace the 767 - which will drive unit costs down with lower fuel and maintenance costs.
Investment that would sustain QF's competitive advantage/market share and increase profit margins.
Internal memo states the international loss was $216 million while total 'Qantas' profit was $228 million, so domestic must account for a $444 million profit. This far exceeds any other section of the business. Jetstar Asia made a paltry $14.3 million profit. Yet Jetstar's further international forays and a new Asia based A320 operation are having billions of dollars of investment capital thrown at them.
What about Qantas Domestic??? Nothing!!
I agree with you, the issue is not about replacing JQ domestic with with QF domestic as they are different products for different markets. However why not invest in the QF domestic product with;
1) Better interiors/service offerings - to fight of the growing Virgin threat, and
2) Rush the 787 in to replace the 767 - which will drive unit costs down with lower fuel and maintenance costs.
Investment that would sustain QF's competitive advantage/market share and increase profit margins.
Originally Posted by ejectx3
Baron,
If you take a look at the relative prices of the two, often there is very little to separate the two airlines. Often QF is cheaper on the same route at the same time!. So I imagine killing jetstar would cause people to go to QF, as it is often just as cheap.
I'm not sure what the argument is here? Kill Jetstar and hope QF domestic is able to pick up the pax? Not convinced its going to work.
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In the breakdown of the profit, I never saw the total for the cargo cartel fines & the compensation payouts to the Vietnamese! Just a cool couple hundred million I assume. Wasn't that what QF International lost?
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eject
FF programs are a great way to bleed revenue out of a business.
Punters earn miles by flying or by buying products from providers who buy points from the supplier to be a partner in a popular program...in this case QF.
QF FF then has to buy seats off QF for redemptions. The price differential is the margin made by the FF program.
So is QF decides to bleed money out of the airline into the FF program it just has to make that margin bigger. And if they wish to favour one part of the airline over another they can price differentially and basically give away seats to the FF program.
It would be interesting to see the numbers.
Certainly AJ would have you believe that the FF program would survive in its current form with a totally degraded QF International.
As to setting up a full service airline in Singapore with A320's...delusional.
FF programs are a great way to bleed revenue out of a business.
Punters earn miles by flying or by buying products from providers who buy points from the supplier to be a partner in a popular program...in this case QF.
QF FF then has to buy seats off QF for redemptions. The price differential is the margin made by the FF program.
So is QF decides to bleed money out of the airline into the FF program it just has to make that margin bigger. And if they wish to favour one part of the airline over another they can price differentially and basically give away seats to the FF program.
It would be interesting to see the numbers.
Certainly AJ would have you believe that the FF program would survive in its current form with a totally degraded QF International.
As to setting up a full service airline in Singapore with A320's...delusional.
