Jetstar to overtake Qantas says Bruce
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Jetstar to overtake Qantas says Bruce
Sky's the limit for new aviation star in Asia | Herald Sun
WHEN Bruce Buchanan enthuses over Asia's incredible travelling expansion, the Jetstar boss speaks with the rapidity of a man flat out staying in front of aviation's most exciting market race.
Buchanan leads the world's fastest growing low-fare airline group, staying ahead of a North Asian market expansion of about 20 per cent a year fuelled by China's and South Korea's massive rising middle classes.
And he speaks with the authority of the increasing autonomy of the international Jetstar Group - which he sees inevitably overtaking the size of its parent, Qantas - and a confident directness on the local rivals Virgin Australia and the beleaguered Tiger.
He also warned the combative pilots union of "dire consequences" if it tries to press Qantas long-haul wage levels on to Jetstar.
Buchanan believes Australians who still think of Jetstar as primarily their locally-based low-cost carrier do not realise it will soon offer 60 destinations, half from the Singapore base of its Jetstar Asia sister.
"We've carried 20 million passengers in the past year after seven years of operation - the big low-cost carriers like Air Asia, Ryan Air in Europe, South West in the US, none of them reached that milestone so quickly. We're the fastest growing airline in the history of aviation," he said.
Last week Buchanan unveiled a $500 million investment in new aircraft which will take the Singapore base to four wide-bodied Airbus A330s and 17 A320s, new routes to Beijing, Ningbo and Hanoi and extra flights to Hong Kong, Taipei, Ho Chi Minh City, Kuala Lumpur, Bali and Jakarta.
The Asian business has tripled in three years.
"We're going to see a 4-5 times multiple for low-cost carriers in North Asia by the end of this decade," he said.
"I think there will be new Jetstar airlines which will appear in other parts of the world as well."
Buchanan "absolutely" believes Jetstar will become bigger than Qantas.
He thinks Jetstar and its main competitor Air Asia have already reached a size where economies of scale will make it tough for nationally-based airlines which used to have captive audiences to catch up.
Buchanan is comfortable with carrying the profit load on behalf of struggling Qantas, which he sees as temporary due to the business market strength of Qantas.
But he sees Jetstar revenue as growing faster than that of Qantas.
He believes some Qantas long-haul pilot salaries are "exorbitant' by international standards and said he would not tolerate any pay deal which would see Jetstar pilots paid the highest Qantas wages.
"If they try to impose those sorts of conditions, the dire consequences this will actually cause . . . we won't put the Qantas code share on our flights if that actually was to get up," Buchanan said.
"We're happy to get rid of it, no skin off our nose."
Buchanan said Jetstar only had a small proportional revenue on code-share connections to Qantas long-haul flights.
"We'd take the Qantas code off and you know what that will do?" he said.
"It's going to put you (pilots) in a worse situation, because they won't have the passenger traffic to continue to justify flying as many aircraft. So you'll wind up in this ridiculous situation where you cause your own demise even faster."
JETSTAR BROADENS HORIZONS
Passengers (2009-10) ............ 20 million
Destinations .............................. 58
Asian fleet ................................... 21 aircraft (by December)
North Asia growth ...................... Ahead of 17% annual projection
Employees .................................. 7000
Buchanan leads the world's fastest growing low-fare airline group, staying ahead of a North Asian market expansion of about 20 per cent a year fuelled by China's and South Korea's massive rising middle classes.
And he speaks with the authority of the increasing autonomy of the international Jetstar Group - which he sees inevitably overtaking the size of its parent, Qantas - and a confident directness on the local rivals Virgin Australia and the beleaguered Tiger.
He also warned the combative pilots union of "dire consequences" if it tries to press Qantas long-haul wage levels on to Jetstar.
Buchanan believes Australians who still think of Jetstar as primarily their locally-based low-cost carrier do not realise it will soon offer 60 destinations, half from the Singapore base of its Jetstar Asia sister.
"We've carried 20 million passengers in the past year after seven years of operation - the big low-cost carriers like Air Asia, Ryan Air in Europe, South West in the US, none of them reached that milestone so quickly. We're the fastest growing airline in the history of aviation," he said.
Last week Buchanan unveiled a $500 million investment in new aircraft which will take the Singapore base to four wide-bodied Airbus A330s and 17 A320s, new routes to Beijing, Ningbo and Hanoi and extra flights to Hong Kong, Taipei, Ho Chi Minh City, Kuala Lumpur, Bali and Jakarta.
The Asian business has tripled in three years.
"We're going to see a 4-5 times multiple for low-cost carriers in North Asia by the end of this decade," he said.
"I think there will be new Jetstar airlines which will appear in other parts of the world as well."
Buchanan "absolutely" believes Jetstar will become bigger than Qantas.
He thinks Jetstar and its main competitor Air Asia have already reached a size where economies of scale will make it tough for nationally-based airlines which used to have captive audiences to catch up.
Buchanan is comfortable with carrying the profit load on behalf of struggling Qantas, which he sees as temporary due to the business market strength of Qantas.
But he sees Jetstar revenue as growing faster than that of Qantas.
He believes some Qantas long-haul pilot salaries are "exorbitant' by international standards and said he would not tolerate any pay deal which would see Jetstar pilots paid the highest Qantas wages.
"If they try to impose those sorts of conditions, the dire consequences this will actually cause . . . we won't put the Qantas code share on our flights if that actually was to get up," Buchanan said.
"We're happy to get rid of it, no skin off our nose."
Buchanan said Jetstar only had a small proportional revenue on code-share connections to Qantas long-haul flights.
"We'd take the Qantas code off and you know what that will do?" he said.
"It's going to put you (pilots) in a worse situation, because they won't have the passenger traffic to continue to justify flying as many aircraft. So you'll wind up in this ridiculous situation where you cause your own demise even faster."
JETSTAR BROADENS HORIZONS
Passengers (2009-10) ............ 20 million
Destinations .............................. 58
Asian fleet ................................... 21 aircraft (by December)
North Asia growth ...................... Ahead of 17% annual projection
Employees .................................. 7000
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Rhymes
What rhymes with Bruce and goes quack quack...?
58 Destinations.....?
Jetstar Asia Airways destinations - Wikipedia, the free encyclopedia
58 Destinations.....?
Jetstar Asia Airways destinations - Wikipedia, the free encyclopedia
The insight that this statement by BB gives is compelling:
In his eyes, we were always going to lose our jobs. I've known for a long time that either we go or AJ & BB go - it's a battle to the final knockout blow. 
"It's going to put you (pilots) in a worse situation, because they won't have the passenger traffic to continue to justify flying as many aircraft. So you'll wind up in this ridiculous situation where you cause your own demise even faster."
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There you have it in a nutshell. The Kamikaze style management team.
If that's not justification enough for a board to sack it's management team, then tell me what is??
If that's not justification enough for a board to sack it's management team, then tell me what is??
If that's the case then the management must go.
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we won't put the Qantas code share on our flights
"We'd take the Qantas code off and you know what that will do?"
1) It will stop the situation were people buy a Qantas ticket and end up on a Jetstar aeroplane. There is story upon story of some seriously pi%%ed off passengers put in this situation, of course that is a problem for Qantas not Jetstar, so Bruce doesn't care.
2) It will reduce your revenue from this dodgy practice. It will improve the Qantas image and reputation by finally stoping this stupid underhanded method of selling a "QF" flight and stop the gifting of passengers to our competition. How many of the Qantas passengers that end up on a Jetstar flight say "never again". A lot.
3) The cannibalisation (that was never supposed to happen) might be arrested. Qantas (the airline that used to regularly make between $600 to $1400 Million) might actually get back some of its own flying and stop deceiving people into flying on your bastard child.
4) The golden opportunity for dodgy revenue transfer will be severely reduced, suddenly you might have to justify your own existence.
No, Bruce, the QF code share on your flights is all one way as far as benefits go. It is all good for Jetstar and all bad for QF.
If you look at the dynamics of the reverse where the JQ code is on QF flights it is not surprising that again all the benefits are for Jetstar.
The whole operation is a parasite.
Last edited by speeeedy; 18th Jul 2011 at 01:56.
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Jetstar should be very grateful to the government of Singapore for bending over backwards to facilitate its expansion ex SIN.
Basically QF gave their Singaporean proxy, Dennis Choo, a few million dollars to "purchase" 51% of Jetstar Asia from the founding shareholders. In effect, QF finances and controls 100% of Jetstar Asia.
In doing so, 3K is treated as a Singaporean carrier with a Singapore AOC, and fights with the SIA Group for air traffic rights - rights that SIA lobbied for decades to be opened to Singaporean carriers (which up till recently meant SIA and its family of airlines).
Since the government of Singapore has always told SIA that traffic through Changi far outweighs like-for-like rights for SIA, foreign carriers have been given liberal rights to fly into and out of Singapore, without similar rights being given to SIA in other countries.
For hubbing in Singapore, 3K/JQ receive generous landing, terminal use and office rebates, as well as an advertising budget to help them publicise new flights, from Changi Airport. JQ also committed to create 150 jobs in Singapore for every A330 based here.
Today, CAAS in air traffic rights negotiations, fights and lobbies for Jetstar Asia as a Singaporean carrier.
Some examples - SIA cut Haneda to 1x daily from 2x. If they did not reinstate the second daily, they would have lost the rights and invited to reapply with 3K.
SIA was probably thinking of cutting Athens. If they cut it after 30 years of serving the city, they would be invited to reapply together with 3K.
3K as a Singaporean carrier can fly any number of times to and through the UK airports (1st to 9th freedoms! Yes, 3K can start a UK-based airline and fly any number of times to the USA as this is allowed under the Singapore-UK ASA)
SIA's marketshare in Changi has fallen from 50% in 2004 to 35% today. Of course, I wouldn't completely blame it on unbridled liberalisation of our airspace. SIA was too stuck in its past glory to even contemplate competing with the myriad of LCCs that flooded Changi in the last years.
So how should each party feel?
1. SQ - SQ would be pissed, but hey they had many years of warnings that the national interest was greater than their interests, and so long as jobs and pax throughput were created in SIN, the government wouldn't bend over backwards to help them.
2. Singapore government - A big win for Singapore because of jobs created and pax funnelled through the Singapore hub, with huge flow-on effects on the economy
3. QF Group - Laughing because there is a supportive government in a developed foreign country willing to facilitate their worldwide expansion, including giving them scarce air traffic rights which would normally not be available to Aussie carriers
Basically QF gave their Singaporean proxy, Dennis Choo, a few million dollars to "purchase" 51% of Jetstar Asia from the founding shareholders. In effect, QF finances and controls 100% of Jetstar Asia.
In doing so, 3K is treated as a Singaporean carrier with a Singapore AOC, and fights with the SIA Group for air traffic rights - rights that SIA lobbied for decades to be opened to Singaporean carriers (which up till recently meant SIA and its family of airlines).
Since the government of Singapore has always told SIA that traffic through Changi far outweighs like-for-like rights for SIA, foreign carriers have been given liberal rights to fly into and out of Singapore, without similar rights being given to SIA in other countries.
For hubbing in Singapore, 3K/JQ receive generous landing, terminal use and office rebates, as well as an advertising budget to help them publicise new flights, from Changi Airport. JQ also committed to create 150 jobs in Singapore for every A330 based here.
Today, CAAS in air traffic rights negotiations, fights and lobbies for Jetstar Asia as a Singaporean carrier.
Some examples - SIA cut Haneda to 1x daily from 2x. If they did not reinstate the second daily, they would have lost the rights and invited to reapply with 3K.
SIA was probably thinking of cutting Athens. If they cut it after 30 years of serving the city, they would be invited to reapply together with 3K.
3K as a Singaporean carrier can fly any number of times to and through the UK airports (1st to 9th freedoms! Yes, 3K can start a UK-based airline and fly any number of times to the USA as this is allowed under the Singapore-UK ASA)
SIA's marketshare in Changi has fallen from 50% in 2004 to 35% today. Of course, I wouldn't completely blame it on unbridled liberalisation of our airspace. SIA was too stuck in its past glory to even contemplate competing with the myriad of LCCs that flooded Changi in the last years.
So how should each party feel?
1. SQ - SQ would be pissed, but hey they had many years of warnings that the national interest was greater than their interests, and so long as jobs and pax throughput were created in SIN, the government wouldn't bend over backwards to help them.
2. Singapore government - A big win for Singapore because of jobs created and pax funnelled through the Singapore hub, with huge flow-on effects on the economy
3. QF Group - Laughing because there is a supportive government in a developed foreign country willing to facilitate their worldwide expansion, including giving them scarce air traffic rights which would normally not be available to Aussie carriers
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A lot of extract narrative - but Bruce needs to remember that the JQ empire only has 1 route approval. The remainder are capacity variants courtesy of Q.
The joys of 5th and 6th freedoms and other bilateral backdoors may not be so easily accessed under the JQ franchise flag - ESP given the fragmenting of Asian politics.
He's just an overpaid muppet
AT
The joys of 5th and 6th freedoms and other bilateral backdoors may not be so easily accessed under the JQ franchise flag - ESP given the fragmenting of Asian politics.
He's just an overpaid muppet
AT
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SingAir Through Rights
So does this give singAir a good shot at rights through Sydney to the States?
Perhaps a Sing Air/Qantas tie up/merger ?
That would be formidable.
Perhaps a Sing Air/Qantas tie up/merger ?
That would be formidable.
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Packrat - The ACCC won't allow SQ Group and QF Group to tie up in any form. Together both airlines account for 40% of international traffic into Australia. If you take away Australia-NZ and Australia-USA, (anything west of Australia), I'm sure SQ and QF plus their associate airlines account for 50-60% of seat capacity.
Why would SQ want to purchase QF anyway? What does QF have to offer SQ which SQ doesn't already have? Although SQ is sitting on $7 bil of cash and doing nothing with it but giving their shareholders 14% dividend yields - they could almost afford to buy QF over twice over. Anyway that's another story for another time.
SQ isn't interested in SYD-LAX anymore. They lobbied for years for the route, talking up its profitability. As such Virgin and DL jumped on the bandwagon, and now profits have been eroded on that rote, and SQ doesn't want to fly it anymore.
Why would SQ want to purchase QF anyway? What does QF have to offer SQ which SQ doesn't already have? Although SQ is sitting on $7 bil of cash and doing nothing with it but giving their shareholders 14% dividend yields - they could almost afford to buy QF over twice over. Anyway that's another story for another time.
SQ isn't interested in SYD-LAX anymore. They lobbied for years for the route, talking up its profitability. As such Virgin and DL jumped on the bandwagon, and now profits have been eroded on that rote, and SQ doesn't want to fly it anymore.
I cant see any where in Bruce the goose's interview those magic words return on capital or profit. Where are they? What happened to them? Hang on i think i know, they have never made any. What a tool, tell the Australian public about the great service to Bejing with the day in Singapore.
Articles such as this puff piece are a regular occurrence.
You might also want to read about Asian Tiger economies and the Celtic tiger economy to find out what eventually happens.
One thing is for sure. Jetstar will not be allowed to bring any profits home and distribute them to shareholders.
You might also want to read about Asian Tiger economies and the Celtic tiger economy to find out what eventually happens.
One thing is for sure. Jetstar will not be allowed to bring any profits home and distribute them to shareholders.
He believes some Qantas long-haul pilot salaries are "exorbitant' by international standards and said he would not tolerate any pay deal which would see Jetstar pilots paid the highest Qantas wages.
On a slightly different tack, how do the salary package deals for the likes of Bruce and Alan compare with other airline CEO's. This may make enlightening reading, even to the point a billboard "Qantas CEO salary, XX airline CEO salary, which ones over paid?"
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Under section 249D a relatively small number of shareholders can requisition an extraordinary general meeting (EGM) to raise questions of corporate responsibility in relation to a broad range of issues including labour practices, executive remuneration and environmental standards. No other country employs a numerical test for calling company meetings.(6) The Government and business groups have argued that the provision is open to abuse by 'vigilante' groups with political agendas.(7) Large companies can be forced to incur considerable costs in notifying members of an EGM. It is also argued that such meetings distract management from its core responsibilities.
How many shares do staff hold??
Last edited by Ngineer; 18th Jul 2011 at 07:24.
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Grunt, grunt 
Sorry. Couldn't resist.
Isn't it Qantas International that's struggling, not the Qantas Group? I doubt the average reader would realise that, which is presumably the intention. The Herald Sun should be ashamed about publishing such rampant advertorial material. I guess it's easier than hacking phones for some real stories.
Sorry. Couldn't resist.
Buchanan is comfortable with carrying the profit load on behalf of struggling Qantas, which he sees...
a chance
From the article...
Ah so by saying 'if' he has now conceded that management at the QF Group think that there is a chance our scope clause might get up-and we haven't even started PIA.
That's PROGRESS
Stick with it and remain united and we will see the back to this filth.
"If they try to impose those sorts of conditions, the dire consequences this will actually cause . . . we won't put the Qantas code share on our flights if that actually was to get up," Buchanan said.
That's PROGRESS
Stick with it and remain united and we will see the back to this filth.
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I wish the media and some others would look at some very basic maths when it comes to Qantas bleating about what it would do to them if Jetstar pilots salaries were raised to the same level as Qantas pilots - the following is a very simplified expose - even if Jetstar pilot salaries were raised by a massive 50% ( which is a rough estimate of taking an A320 pilots salary to a Qantas 737 salary ), and based on 750 hours per year, the extra cost to the company on a Sydney - Melbourne ticket would be roughly $1.50 - the airlines have just announced that due to the carbon tax, domestic airfares would rise by $3.50 for the average sector - am I missing something here?
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From Half-Year Report ended 31 December 2010
Segment Performance
Whats that AJ
cough cough BS BS BS
So in just over 6 months International has fallen off a cliff and unprofitable? (aka not returning capital haha)
Yeah right, just saw pigs fly past my window.
This is totally unethical behavior unfitting for an Airlines Boss.
Is their anyone that works in the upper echelons that is actually able to tell the truth without the spin?
Segment Performance
Mr Joyce said all operating segments of the Qantas Group were profitable for the first half-year ended 31 December 2010,delivering significant EBIT growth.
“Qantas Airlines produced a strong revenue performance across both its international and domestic operations, with underlaying EBIT of $165 million up 175 per cent on prior year first half.” Mr Joyce said.
“Qantas Airlines produced a strong revenue performance across both its international and domestic operations, with underlaying EBIT of $165 million up 175 per cent on prior year first half.” Mr Joyce said.
cough cough BS BS BS
So in just over 6 months International has fallen off a cliff and unprofitable? (aka not returning capital haha)
Yeah right, just saw pigs fly past my window.
This is totally unethical behavior unfitting for an Airlines Boss.
Is their anyone that works in the upper echelons that is actually able to tell the truth without the spin?
