Qantas tie up with Malaysian Airlines from 1st April

[Skystar320]

Jetstar Asia is profitable, Tiger isn't.

FFS - Do your homework! Tiger IS profitable asa group.

http://www.tigerairways.com/news/Annual_Report_2011.pdf

[DrPepz]

Well, their 2011 annual report would have reflected their 2010 performance From their latest quarterly announcement, they have made 3 consecutive quarters of losses, PLUS Tiger Singapore is loss making too:

Singapore's Tiger Air reports Q3 loss on Australia, fuel costs | Reuters

SINGAPORE | Mon Jan 30, 2012 6:50am EST
Jan 30 (Reuters) - Singapore's low cost carrier Tiger Airways Holdings Ltd reported its third consecutive quarterly loss and warned of a possible "significant" annual loss mainly due to problems with its Australian operation and soaring fuel prices.

Asian low-cost carriers have benefited from strong demand, but rising input costs, intense competition and a spate of natural disasters in the region has hit some airlines.

Tiger Air, which is about a third owned by Singapore Airlines Ltd, posted a net loss of S$17.4 million ($13.9 million) for October-December compared with a profit of S$22.5 million a year ago.

"The group expects to report a significant net loss for the financial year largely as a result of the Civil Aviation Safety Authority suspension in Australia, the under-utilisation of the group's aircraft fleet and exposire to high and volatile jet fuel prices," Tiger Air said in a statement on Monday.

Shares in Tiger Air plunged more than 60 percent last year. Tiger competes with Indonesia's Lion Air, Malaysia's AirAsia Bhd as well as Australia's JetStar, the budget carrier arm of Qantas Airways Ltd.

Tiger Air's Oct-Dec revenue was flat at S$168.4 million. Last year, Australia's aviation regulator imposed a five-week flight ban on Tiger Air's operation in Australia due to safety issue.

Tiger Air's Australian operations booked an operating loss of S$8.6 million compared with a profit of S$5.9 million a year ago, while its Singapore operations reported an operating loss of S$4.8 million compared to a profit of S$19.4 million.

($1 = 1.2534 Singapore dollars) (Reporting by Harry Suhartono; Editing by Anshuman Daga)

[TIMA9X]

Thanks DrPepz for your contribution to this thread you make some great points, I am sure everyone on here are grateful...

Back at post 29 you posted a story that stood out in my mind,

As for launching the start-up in Kuala Lumpur, Qantas does not seem to be interested. Mr Mohamed Yunus Charlie Charrington, director of the air transport division at Malaysia's Department of Civil Aviation, told The Straits Times recently that the Australian carrier has not been in touch with his office.

He said: 'We have not had any discussions with Qantas on this issue. Not even a phone call.'

My contacts in Asia believe this situation true as well, some saying Joyce was never really serious about the MH deal but needed to announce something to win support from government, the media and the "big end of town" here in Australia as a leverage to bolster his fight against the unions who opposed job losses last year... other words, turn Q mainline working conditions into a Jetstar situation... lifting the share price at the same time...

[DrPepz]

CAAS ain't giving out more AOCs. If QF didn't muse to the media about their longhaul plans for Jetstar, they wouldn't have made SQ wake up and start their own longhaul LCC, thus snapping up what is possibly the last AOC CAAS will ever issue for a long, long, long time.

If QF wanted to they could convert the Valuair AOC into their Red Q or whatever on earth it is they wanted. Why they haven't thought of that is quite laughable.

I don't think any other country is waiting to give QF an AOC for their capital light venture. Maybe Laos!

Oh anyone see that 3K is down to 4 weekly to Auckland from end March?

By the way, I am a big user of 3K to KUL from SIN. Typically the base fare is 0 or $10, and the rest is just taxes to Changi Airport and KLIA. Even if booked 2 days out. SGD58 return. How on earth do they make money on that?!

[TIMA9X]

If QF wanted to they could convert the Valuair AOC into their Red Q or whatever on earth it is they wanted. Why they haven't thought of that is quite laughable.

Jee Pepz, don't give em any ideas, they will claim they thought of it...... Dr Pepz for CEO at Qantas...

meanwhile up in your neck of the woods I noted this little story

Singapore Airlines offers no-pay leave to pilots

Singapore Airlines has offered no-pay leave to its pilots for as long as two years amid a slowdown in its business.
The move comes just weeks after the carrier reported a 53% drop in net profit during the last three month of 2011 compared to a year earlier.
The carrier said that its growth had been slower-than-expected, resulting in a "surplus pilot situation".


The pilots who opt for the scheme will be allowed to work for other carriers during the period.


"This scheme will enable us to address the short-term surplus, while at the same time provide staff with the opportunity to take leave for personal reasons, should they wish to do so," Singapore Airlines said in a statement.
'Very challenging' Airlines across the globe have been facing a tough time as several economic factors have hurt their fortunes.


The debt crisis in the eurozone and a slow economic recovery in the United States has hurt demand in those regions, which are both key markets for Singapore Airlines.
At the same time, volatile fuel prices have also dented the earnings of carriers.
Analysts said these uncertainties had especially hurt premium carriers such as Singapore Airlines.

"The outlook for the firm is very challenging. They are seeing a significant erosion of their margins especially in Europe where things haven't been looking good," Shukor Yusof of Standard & Poor's told the BBC.
"When you reach a position that you have to ask your pilots to take voluntary leave, all the indications are that things are pretty rough.

A bit more positive than what Joyce would offer..

[Going Boeing]

By the way, I am a big user of 3K to KUL from SIN. Typically the base fare is 0 or $10, and the rest is just taxes to Changi Airport and KLIA. Even if booked 2 days out. SGD58 return. How on earth do they make money on that?!

The answer to that is simple:- you send the bills for fuel and engineering to Qantas International (possibly the aircraft leasing costs as well). They cannot make a profit on those fares so there has to be some dodgy accounting done to allow Jetstar Asia to declare that it is profitable.

[busdriver007]

How come Jetstar Asia doesn't operate from the Low-Cost Terminal? Who pays.

[DrPepz]

The Budget Terminal in SIN is located about 2km from the main terminals. No airside transfer is possible. Jetstar Asia depends on a lot of transfer traffic from QF, 3K and other airlines. As such Jetstar Asia has always opted to operate from T1 together with QF, BA and partners.

The Budget Terminal in its current form cannot support airside transfers in any way - even TR's pax have to clear immigration and re-check in for their flights. This does not suit Jetstar's business model.

The new Terminal 4 (which will be some sort of a revamped LCC terminal) will have no aerobridges, and I doubt that Jetstar Asia will operate from there, because they will always operate in the same terminal as QF Group Airlines plus their partners.

[The Bungeyed Bandit]

Thanks Dr Pepz. Still doesn't answer the question who pays.

[clark y]

58 SGD for SIN-KUL-SIN has to be subsidised. A quick look at Jetstar.com shows that it is quite a common airfare, not the exception. Also what I'd like to know- a quick look at the month view for this pairing shows that you could be paying different amounts depending on what currency you chose to pay. i.e. the cheaper/dearer days change depending on whether you pay in AUD or SGD.

[PPRuNeUser0198]

By the way, I am a big user of 3K to KUL from SIN. Typically the base fare is 0 or $10, and the rest is just taxes to Changi Airport and KLIA. Even if booked 2 days out. SGD58 return. How on earth do they make money on that?!

LCC's make their money typically by way of ancillary revenue. Ryan Air is a classic example of an LCC that offers next-to-nix fares to stimulate demand and bring customers to their airline. They then take advantage through various fee and sales opportunities to extract revenue from their customer.

Low cost, but high return. The same would apply for 3K. Low yield on fares but strong returns on ancillary revenue streams.

If you remember last year with Bruce's interview on JQ's performance, he mentioned that on revenue from fares alone, JQ would not have been profitable. AR is what kept JQ in the black.

I think the average is around $20 per passenger in AR these days on most LCC's...

[Taildragger67]

LCC's make their money typically by way of ancillary revenue. Ryan Air is a classic example of an LCC that offers next-to-nix fares to stimulate demand and bring customers to their airline. They then take advantage through various fee and sales opportunities to extract revenue from their customer.

Ryan also manage to get zero landing fee deals at many of the airports they operate to, the local authorities wanting to stimulate their regional economies. Indeed there are cases of local authorities paying Ryan to operate to their little airports (to the extent that some have attracted scrutiny from EU competition authorities).

I can't see either of Changi or KLIA paying Jetstar to show up.

Well, maybe KLIA...

[Capt_SNAFU]

I wonder what AR you get on a 30 minute flight from SIN-KUL? No much I gather. Like asking who would by Ancillary stuff on SYD-CBR? No muffins, no blankets, no bags in the hold. I wonder what they sell? I'm sure they make AR from the longer sectors but not SIN-KUL.

[moa999]

AR includes baggage fees, baggage overweight fees, select seat fees,
so a lot more than just meals and drinks

[DrPepz]

Both KLIA and Changi offer generous incentives to all airlines for starting new routes, or hubbing in/through SIN. Changi gives rental rebates, co-shares marketing and advertising fees to launch new routes etc. Can't imagine KLIA doesn't do likewise.

I haven't seen many pax purchase ancilary services on SINKUL - there just isn't too much time. However I usually purchase the miles add on for SGD30, which gives me 1000 QF points (for a 184mile flight) plus a meal. Having done heaps of SIN-KUL and SIN-CGK on Jetstar, I'm nearly QF silver!

(Note: Never use the AU site when booking jetstar asia flights because it costs A$30 for the add-on on the AU site and S$30 for the add-on on the SG site. So you get a 20% saving booking in SGD!)

[PPRuNeUser0198]

There are a number of AR streams for the LCC's that are not limited to just on-board sales.

The advantage to the airlines is that most of these streams have little cost or overhead - so they're high margin solutions e.g. change fees, select seating, pre-boarding, car | hotel bookings etc.

Multiply these revenue streams by the millions of passenger carried and you have millions of dollars in turnover.

[EWP]

I wonder if the 6 'deferred' A380's will now make an appearance sooner than 2019 now that the 320 NEO's will probably disappear into thin air. Something is going on with Melbourne International - the cabin crew build up there plus Onboard Manager roles open for application indicate something is happening...I gues just watch this space, could be wrong...

[TIMA9X]

Back to Basics for Joyce & Co - Why not call it Qantas?

Salvage job ... there is a way out for Joyce. Photo: Alex Ellinghausen

Could that solitary figure rummaging through the used parachutes at Sydney Airport really be our very own Qantas boss Alan Joyce?


After his spectacular flame-out over Kuala Lumpur last week, the airline tentatively under his command has been left rudderless while those running it seem desperately short of ideas on how to repair the damage.


That has placed Joyce in an extremely vulnerable position, and the obvious victim should institutional investors demand retribution for a much-vaunted policy and plan that seemed, at best, fanciful and has now been abandoned altogether.


Since June last year, Joyce and his senior executives have spent every spare minute banging on about setting up a new premium Asian-based airline, all of which was endorsed by the Qantas board and chairman Leigh Clifford.
But it was a plan that was never going to fly. For it was first and foremost a threat - and a hollow one at that - to its own workforce rather than a legitimate blueprint to turn around the company's fortunes.


If there was any strategy involved in the plan, it was purely as part of an ideological battle over trade unionism in general and Fair Work Australia in particular, which culminated in management shutting down operations for almost three days last November.


There is no denying the challenges confronting Qantas.
Soaring fuel prices, competition from subsidised government-owned carriers, global economic upheaval, topped off by natural disasters in key markets Queensland, New Zealand and Japan.


But the Asian option addressed none of those factors and Joyce now presides over an organisation where industrial relations could best be described as toxic while his customers, disillusioned and jaded, have begun walking across the terminal to rival Virgin Australia.


Qantas has also had to embark on an expensive campaign to compensate those inconvenienced by the grounding of its fleet last year. Sadly, shareholders are footing the bill.


It would be unfair to label the abandoned Asian plan as half-baked for it never reached that stage. There was no oven, no cake tin and certainly no ingredients.


You don't need to be an aviation expert to realise the problem facing the industry is overcapacity. So how on earth does establishing a new airline solve that? And wouldn't it merely cannibalise your existing business?
Initially it was to be based in Singapore, then Kuala Lumpur, except there were no agreements with anyone in those centres.


The original plan was to employ 11 Airbus A320s, a small aircraft that does not lend itself easily to upscale service. And with such a small fleet, it could never provide the frequency business travellers require.


And what about the years of losses involved in establishing a new brand? Even Jetstar, the discount tail that now wags the Qantas dog, took years to turn a buck.


But all is not lost. There is a way out for Joyce, a means by which he could salvage something from the wreckage. Rather than partner an Asian carrier such as Malaysia Airlines or Singapore Airlines, perhaps the Irishman could convince the board to go it alone, and establish its own premium international carrier.


And a brand? Why not call it Qantas? You could promote it to business travellers throughout the region, offering an upscale service, with an impeccable safety record and employing the most highly skilled staff, the kind of pilots who can safely navigate an A380 back to earth with a Rolls-Royce engine spewing flames.


Passengers may even pay a premium for it. Use fuel-efficient jets and you could cut down on the cost.


Joyce certainly needs to come up with something. For the momentum is building at Virgin, the once-deflated rival now headed by the very person Joyce beat for the top spot at Qantas. At every turn, the Qantas chief has been outsmarted and outmanoeuvred by John Borghetti. Where Joyce has focused on cost cutting and discount service, Borghetti has targeted a premium offering, moving Virgin up the scale.


Discount airlines are a commoditised business. Borghetti, realising its limitations as a business model, has focused on yield. In a nutshell, that means business travellers.
Australian corporations spend up to $6 billion annually on air travel. And every corporate dollar Borghetti attracts to Virgin, comes straight from the revenue at Qantas.


Virgin now has around 17 per cent of the local corporate market, well above the target Borghetti set when he was appointed to Virgin.
Joyce aided that quest last November, when Virgin leapt in to pick up the slack, conveying thousands of stranded Qantas passengers on the weekend before the Melbourne Cup, allowing Borghetti to showcase his new offering to a wider audience.


But his biggest coup has been in building an international offering through codeshare arrangements. With Etihad, Singapore Airlines, Air New Zealand and Delta in tow, Virgin now offers a vast international network, built at minimum cost.


Qantas, meanwhile, continues to shrink its international service. Its European destinations have been whittled back to London and Frankfurt and it recently dropped half its European flights from Singapore and Bangkok, offloading customers on to British Airways. The Mumbai service was dropped altogether.


That shrinkage has made it less attractive to customers and to potential partners. The good news at least is with the Asian option now consigned to the dustbin, Qantas management can focus on running Qantas.

Read more: Back to basics for Joyce & Co

It's not rocket science.....

[Worrals in the wilds]

What, selling tickets to Aussies who want to travel to/from Australia at a reasonable price (not necessarily the best price) on a service provided by Aussies? Far too boring...let's leave that to the virginal opposition while we concentrate on having very public domestic disputes with our frontline staff, conducting our strategic planning via media release (with apologies to Dr Pepz) and blundering into markets where even the local angels fear to tread.

Some girls wander by mistake...

P.S. Where's Olivia these days? Doin' stuff?

[denabol]

Ian Verrender has put back the missing mongrel into the SMH business pages.

It would be unfair to label the abandoned Asian plan as half-baked for it never reached that stage. There was no oven, no cake tin and certainly no ingredients.


Read more: Back to basics for Joyce & Co