Why the demise of QF29 HKG-LHR?

[ILikeToGetAround]

Hi all,

I've recently started a blog to properly examine some of Qantas' recent network planning decisions (I'm a part time transport planner and a QAN shareholder) and am hoping for some info on why Qantas pulled HKG-LHR. It's one part of the August announcement that just doesn't seem to add up.

From what I can see, Qantas has daily A330s feeding Hong Kong from Perth, Sydney, Brisbane and Melbourne on the Australia end, and BA on the London end, and yet they claim that the flight was unprofitable.

- How does Air NZ make the route work no feed at either the Hong Kong or London ends (albeit with a 777)? Perhaps this is a good example of how Qantas should have moved away from the '747/A380 or nothing' approach to long haul.

- Did they time the Australian feeder flights to connect properly? From what I can see, only Melbourne and Sydney (some days) seem to connect to the flight. Brisbane and Perth have long layovers in the Australian bound direct, which may have artificially weakened the potential of the route. Has this always been the case, or was QF29 properly feed for most of its life?

- Was the route artificially weakened (relative to SIN-LHR) by the weaker on-board product of the 747?

- Given the heavy feed of Qantas flights into Singapore, could Beijing have worked as an A330 tag rather than being axed outright? The Jetstar SIN-PEK timings seem commercially unattractive and a fantastic way to waste a brand new widebody.

In case anybody is interested, this is the blog which anybody is welcome to tear to shreds : I like to get around | Ramblings on the Australian air industry

Thanks a lot

PS First post here but long-time reader

[Evanelpus]

I smell another round of QF bashing here.

Should we not be getting a little fed up with all of this?

[1a sound asleep]

These routes would have got the A380 but now that the last deliveries have been postponed (*read ear marked for Jetstar), it leaves a hole in the fleet. At present BKK and HKG routes to LHR are on 744 fleet. As these continue to be retired there will be no a/c left for the routes.

The majority of QF traffic on the routes is through traffic which can be fed into other carriers networks for great efficency . This means less capital outlay for QF and that money can be (supposedly) used for other routes/ventures that make more profit.

Its true that SIN-LHR is more profitable than BKK or HKG. But I think of recent times that's because premium pax are chasing the A380 routes and not the clapped out 744 services. As for HKG that has a lot of competition on the LHR route.

ANZ has less competition to AKL and this is their only prime Asian route to LHR. Remember ANZ doesnt fly to LKR via SIN or BKK.

In reality QF has too many services heading to LHR and not enough to the other 101 places pax want to go to. This is why Emirates (the world most uncomfortable Y class airline) is growing so fast with a huge range of one stop destinations.

Now I am not saying I agree with all the above. just trying the objective reply

[Sunfish]

evanelpus:

I smell another round of QF bashing here.

Should we not be getting a little fed up with all of this?

Obviously not a thinking person.

Since we now operate in a globalised economy, it is critically important for Australian businesses to have cheap, fast and frequent links to the rest of the world - its a competition thing.

A moribund national carrier like Qantas exposes Australia to the risk of not being able to ensure that international airfares are competitive. We had the same problem in the shipping industry some years ago and could do nothing about it.

[Evanelpus]

Obviously not a thinking person

Cruel.

I obviously was thinking because I thought you Aussies were bashing your national airline again!

[1a sound asleep]

Since we now operate in a globalised economy, it is critically important for Australian businesses to have cheap, fast and frequent links to the rest of the world - its a competition thing

I blame it all on the likes of Emirates. Qantas simply cant compete with EK's lower operating costs. Simple.

Who's going to want to fly QF to the likes of Paris, Rome, Milan, Amsterdam, Manchester (and another 35 destinations) and transit the likes of LHR and a minimum of 3 flights, longer travel time, miserable baggage allowances.
OR
Cheaper and 1 stop service on Emirates (30kg baggage in Y) and a faster journey time. People wonder why EK is growing so fast

I dont like Emirates but they have eaten a huge % of QF's market. Its just the fact even if QF wont admit it.

I wont even start on the likes of AirASiaX. Another one eating away at QF's Y market and putting further pressure on fares.

QFSYD-LHR 1970's $1950 return
QF SYD-LHR 2011 $1950 return

The figures just dont ad up. Either fares have to go up (they cant due to competition) or Qantas has to reduce costs

I might ad the Qantas has been slowly shrinking for years. Back in 1980 these were Qantas services from Australia

Australasia :

Auckland
Brisbane
Christchurch
Darwin
Melbourne
Perth
Sydney
Wellington

Far East :

Bangkok
Denpasar
Hong Kong
Jakarta
Kuala Lumpur
Manila
Port Moresby
Singapore
Tokyo

South Asia :

Bahrain
Bombay
Damascus

Europe :

Amsterdam
Athens
Belgrade
Frankfurt
London
Paris
Rome

Pacific :

Honolulu
Los Angeles
Nadi
Noumea
San Francisco
Vancouver

Qantas 2020??????????????????? Will it exist?

[dizzylizzy]

BNE & PER -> HKG flights were retimed about 18months ago? in order to connect with the 29/30... which made sense... but the sectors from BNE & PER->HKG aren't daily. It is a real shame to see the end of 29/30 but commercially QF was competing a non lie flat J bed, vile Y/c with appalling IFE with something of the likes of CX 747/340/777. Even with the BA JSA service on this route the timings still aren't the best and the stop over is at least 3-5hours. Maybe if QF had a 777 fleet and could switch between type depending on pax load this may have been a profitable route?

[Mud Skipper]

Funny thing is I often operate these legs and the loads 95% of trips is very good with staff often missing out. Perhaps the yield is not so good I don't know but until load drops below 80% then I would have thought you keep squeezing to make a dollar.

I question if we are pulling out of these routes to make it more publicly/politically acceptable to transfer the slots to J* (Call it what ever) after BA have leased the slots off us for a year or so and the new Asian operation is up and running.
LHR slots don't fall off trees, we will be gifting these to the new operation just like we have given away so many other routes.

Bit of smoke and mirrors but nothing new with our current management.

[flying_a_nix_box]

To me the 29/30 is the best way to/from Melbourne to/from London. As a QF SLF I'm not impressed with it being dropped.

[cribble]

Ben Sandilands has blogged on this issue at some length. Interesting reading at Plane Talking

[ozbiggles]

And just when I was getting to like BS writings I read his stuff on air marshals lower down the page.
Some pretty dumb stuff there.

[Jack Ranga]

Try going to Vietnam with Qantas..............

Try going to New Zealand with Qantas, and anywhere other than Aukland.......

Then, heaven forbid, try doing it business class

What a disgrace this airline management is. You would have to have had the plot in the first place to lose it.

They have gifted Emirates, Singair, Air New Zealand and others quite a good patch, imbeciles.

[skybed]

Look at the bigger picture

More concerns for QF staff

--------------------------------------------------------------------------------

QF seeks rights variations
QANTAS is requesting changes to capacity determinations on a number of international routes, seeking variations which will enable the capacity to also be used “by any wholly-owned subsidiary” of the carrier. The International Air Services Commission yesterday published the requests, relating to the renewal of determinations which expire during 2012.
Affected routes include flights to Germany, Hong Kong, Thailand, and the Philippines, with Qantas in each case requesting renewals of current capacity allocations but with the modifications asking for the ability to operate using an offshoot airline. The move is intriguing given the previously announced plans for QF’s new Asian-based premium
airline, along with the expected rapid expansion of Jetstar International once it begins toreceive its long-awaited 787s.

By downgrading the QF 29 to an A333 (even the QF29 is full almost every day) it's long term goal is to palm at least half the flights of to J*. CX has triple daily and having spoken to a few mates who use the QF 29 on a regular bases they wont fly on an A333,let alone J*.
so here again we give the business away.
the same happens to BKK. which business person wants a 4+hour transit to fly to LHR on BA. all setup for J* in the future.
13 or 14 A380 and 9 747 and some 333/332 , thats all that is going to be left of QF in 3-5 years.

[peuce]

Just thinking ....

Which airline will take responsibility for passengers when, for whatever reason, BA can't provide the onwards leg from these Asian hubs?

Will QF put us up in a plush HK hotel when we get stranded there?

[QueenBuzzzzz]

I thought Qantas were putting the finishing touches on the new First Class lounge in HKG.... has anyone heard any differently? Who will be using the lounge?

[ohallen]

Maybe it is a ploy to build a new home for BB???

From what is on offer, he will be the only one who will want to use it.

[skybed]

peuce

you be staying at redstar hotel before being put on a redstar or jetstar flight

[Stalins ugly Brother]

I blame it all on the likes of Emirates. Qantas simply cant compete with EK's lower operating costs. Simple.

Qantas cannot blame anyone else for its situation other than the money grabbing executives we have had to endure over the last 10 years.

We had the domestic market fall in our lap in 2001, yet we squandered that advantage. We had the likes of SARS have crippling effects on our asian competitors, presenting a major opportunity to purchase 777s at hugely discounted prices, and yet another opportunity squandered.

In 2007 we had an executive team, by their own admission "took their eyes off the Ball" for a good 12 months while they prepared the APA takeover and tried to work out which Island in the Caribbean they could buy for themselves! After that debacle unravelled it was blatantly obvious that these clowns didn't want to be at QF anymore and I would say the ball was dropped for a bit longer than admitted until the next snouts appeared.

Today we have a LCC ceo that knows nothing of Australian values and what is required to run a premium Australian airline, and don't forget to mention the Chairman of the board who has absolutely no airline experience and is just a hard nut union buster with very little in the nut.
Things don't need to be this way, just have to look over the back fence to see what has happened with Air NZ and even our front yard to see the engagement at Virgin thanks to JB.

But they (QF executives) have an agenda to circumvent Australian laws, taxes, and the right of the Australian people to have a national carrier (soon be to Virgin), for personal profit.

But they still want government protection or intervention when it suits them ...........

During the last ten years employees have seen routes cut, employees made redundant, LCC continuously set up at Mainlines expense. Where do you think the initial funding for these ventures comes from?? The list goes on and on, yet when it mattered most, no 777s ordered, a fleet replacement program that was planned around aircraft designed with new technologies that had not been tested and that are now heading to J*.
But significantly,no expansion which allowed the door to be opened to our competitors, who came along and provided a service where there wasn't one anymore.

So before you blame anyone for Qantas's dire situation at the moment maybe, just maybe it might be worth looking inhouse first before we blame SQ and EK.

Anything else is just spin.........

[1a sound asleep]

Stalins ugly Brother - There's no question that the rott is at the VERY top. I acknowledge that once the concept of destroying/selling off Qantas was dreamt up, even after it failed, it still seems to be the sole ambition of the board.

Yes they should have bought 777 fleet. Too late now I am afraid.

Yes Jetstar was handed Qanats routes for free. Yes jetstar gets favourable financial treatment on the books. We know that is purely for the sake of breaking the unions. Fact is the are hell bnet on cutting down the unions and bringing them to their knees.

So how can the unions fight? In all honestly I believe this is a no win situation the way it is being fought. I have said it all along and will say it again - BUY THE COMPANY.

Qantas has about 33,000 employees. Market Cap ($M):3,364 Equiv. Shares (M): 2,265. Share price Average $1.50.

Through the union, set up a super fund which invests in qantas, and redirect other super funds into Qantas shares. The entire value of Qantas equates to $101,000 per employee. I know many employees that would be capable of buying that level of shares.

With redirected superannuation I calculate that approximately $30,000 per employee and we would have total control of the company.

AS for SQ and EK. Different animals. SQ competes on service. EK competes because (a) it pays the majority of its staff absolutely peanuts in Dubai Pesos under some of the worst non-union protection (b) EK buys a lot of its fuel and a substantially lower price (c) EK has low interest Government funding/loans (d) IT pays no tax (including income tax/GST/Carbon Tax/payroll tax). Reality is EK is a glossed up LCC. Sat in a EK 777 with 10 across seating?

Qantas will NEVER be able to compete with Emirates. This is not QF's fault.
Qantas must compete by offering a better route network and yes maybe joint ventures are the way to go WITHOUT killing off Australian jobs

Unless everybody buys some Qantas shares (AND TAKES CONTROL) this rott at the top will continue to fester. Each and every Qantas employee could use margin loans to buy $30,000 of QAN shares. This would mean a cash investment of $9000 per head, on average. (Loans available at 70% of share price) With redirection of super funds into QAN shares we would take control

Wake up. I have been preaching this for ages and I wonder if Qantas employees really believe in Qantas and are as passionate as they pretend.
I am advocating investment, not donation. This is a tax effective, deductible investment that will save Qantas and ultimately be a profit making excercise

[ReadMyACARS]

QANTAS had a golden opportunity to operate QF1/2 and QF29/30 with A380's in the near future as aircraft arrived. This would have been the sole A380 flights between LHR and BKK or HKG. By deferring the A380's and cutting the services in half or, probably, giving them to One Star, they have thrown the biggest advantage they would have had on either of those routes. Yes, SLF are chasing A380 flights because even cattle class seats are comfortable, so why would you not try and maximise the advantages against their competitors? Yet another case of the airline shrugging its shoulders, picking up its bat and walking off sulking.To me, this decision more than any other shows up the QF decision making process.

As for the cost differences betweeen airlines, the biggest cost difference in place is in the home base of the airline, EK does not get its fuel and ground services any cheaper in the UK, Europe or the US because it is based in Dubai. They still have to pay market rates all over the world the same as QF does. The biggest impediment to the QF fleet's cost base will be its domestic operations as non-skilled wages in Oz are much higher than in the rest of the world, probibly with the exception of Japan.