QF Shares hit $1.00 Discuss

[Romulus]

Originally Posted by 600ftlb

Stupid statements like there are too many better value for money options out there. and You pay premium prices and you expect a premium product, prove without a doubt, you are a sheep who believes in perception rather then the truth.

The perception that Qantas charges much more then anyone and is just **** all round.

If Qantas is so ****, why are their price points basically exactly on par with Virgin if not cheaper in many instances ? Don't believe me ? Goto webjet.com.au the easiest price aggregator in Australia. Prove me wrong. Not that I care, I check facts before I form opinions, something obviously foreign to you.

Qantas charge those rates where Virgin compete because Virgin are there. More importantly look at QF pricing where Virgin aren't and see what effect a new entrant has on their price.

Not surprisingly Qantas charge a premium where there is no competition. Such is the way of business.

One of the key issues for Qantas is the impact of international partners with Virgin. There is now a choice of Singapore in combination with an Australian domestic carrier. And yes, Singapore currently flog you guys for quality of product, service and flexibility for travel.

So well that 2 companies I have recently undertaken work for have moved from an all Qantas travel policy to an individual choice policy (with specific price requirements included) and people are voting with their feet.

Qantas needs to lift their game, from pricing, to destination options, to counter and cabin crew. Many probably won't like that last bit, but the simple fact is that too many QF staff come across as grumpy and miserable. You can blame Joyce and Co all you like but as a customer where do you like to shop - the "happy, friendly" place or the "sit down shut up and you'll get what you're given" place? Again, where genuine choice exists people are voting with their dollars.

That's not to say Qantas is ****, because they certainly aren't. But a major lift in their game is needed to match the currently far superior offerings of your competitors.

Originally Posted by 600 ftlb

Qantas does compete on price, Qantas has MORE frequency, Qantas has the BEST on time performance. Simple facts.

Yet every time I want to change my ticket, and I admit if happens a lot due to changing meetings and the like, Qantas do everything they can to make those cheaper tickets less attractive in terms and conditions. Again, that's their choice, but when I do manage to get away early from a meeting in Canberra (as a recent example) not moving me forward from a peak hour flight to a 2pm flight that is half full using the reason that my ticket class doesn't allow such changes is a major difference to your competition who usually can't do enough to help me get away from the airport and back home as quickly as possible.

The price isn't everything, as Qantas keep trying to point out, and as you do yourself with commentary on frequency and on time performance, other factors are there. Making life that little bit harder or less flexible for people who work for one of your top 10 customers is not a great idea. That goes beyond your webjet question, it goes to the core ethos of your company. Domestically I fly roughly 2/3 Qantas, 1/3 Virgin. Yet Virgin are the ones currently making my life easier as opposed to Qantas' view that sitting in their lounge for 3 hours if perfectly fine.

Sure, that's a first world problem, it certainly isn't the end of the world. But when I have a choice who do you think I will choose - the airline that gives me a nice lounge for 3 hours or the airline that gets me to my personal lounge 3 hours earlier?

Originally Posted by 600 ftlb

But don't let your perception get in the way of the truth. And don't fill up this board with mindless **** statements with no proof and statements akin to 'yeah qantas is **** because its oh so expensive and you'll all be out of a job soon but good luck to all.'

Have you even flown Qantas lately to label them in such an idiotic way ?

Reasonably regularly. I wouldn't be in your Top 100 or anything but I'm certainly in your top tier. Your marketing people keep telling me how valuable I am to you, I keep getting all sorts of wonderful offers for all sorts of stuff, clearly your people are mining their databases to get a larger "share of wallet" from me yet somehow your opposition manages to lure me away by backing up their hipster image with the view "hey, we're an airline, let us get you where you want to go as effectively and efficiently as we can" rather than making me hang around airport terminals.

Qantas are in a similar position to BMW. They are a premium brand, they are premium priced, but they have the equivalent of Lexus nipping at their heels. Your competitors have an aggressive attitude toward growth, they do everything you do and more and they are taking your market. Just as BMW is no longer superior to Toyota (in the form of Lexus), Qantas is no longer superior to Virgin or Singapore or Emirates or anyone other than the genuine LCC's like Tiger.

[S70IP]

Qantas has the BEST on time performance. Simple facts.

Yes that's true, (if you ignore Tiger Airways for the last 5 months). A few coments though:

1. OTP is a self assessed industry benchmark. Watch Virgins OTP sky rocket when it get ACARS and click off the park brake with one minute to go to pushback within 15 mins like Qantas often do.
2. Virgin flys to more destinations than Qantas. If Qantas flew to more destinations, that Jetstar fly and Qantaslink fly to, I think it would be interesting to see Qantas OTP then. For example May 2012, Jetstar and Qantaslink were 79.4% and 75.8% respectively.
3. As far as the routes that both Qantas and Virgin fly on Qantas are ahead 34 to 22. Watch that number come a lot closer when Virgin get more gate room in Sydney and Perth.

[Keg]

Just a few quick points of clarification.

Watch Virgins OTP sky rocket when it get ACARS and click off the park brake with one minute to go to pushback within 15 mins like Qantas often do.

In order for us to release the park brake, we need to be locked up, ready to push and essentially be waiting for an ATC clearance to push back. As a rule, QF pilots don't arbitrarily release the park brake to tick the box. Quite the opposite in fact, releasing the brake early covers for other areas who may have stuffed something up. If we release the park brake early those issues are never fixed.

I'd be stunned if DJ didn't work the system the same way when they get ACARS. It'll need something other than what you suggest for the OTP figures to change.

Watch that number come a lot closer when Virgin get more gate room in Sydney and Perth.

Yes, more gate space would be a great thing and not just for DJ. Certainly there are times these days when gate space for QF services is an issue- particularly in MEL, SYD and PER. Of course, the Sydney movement cap occasionally doesn't help (all carriers) with the apron congestion it causes.

[Captain Gidday]

Watch Virgins OTP sky rocket when it get ACARS and click off the park brake with one minute to go to pushback within 15 mins like Qantas often do.

You can click off the park brake all you like, but if a door is still open, nothing will register on the ACARS. Logic for recording Off Blocks is "Doors Closed + Park Brake Released".
It's in fact far easier to Bend It Like Beckham without ACARS. How many Virgin flights actually push at :20 but call it :15. Dozens? Hundreds?

[travelator]

1. OTP is a self assessed industry benchmark. Watch Virgins OTP sky rocket when it get ACARS and click off the park brake with one minute to go to pushback within 15 mins like Qantas often do.

Can't comment on other machines but the ACARS in mine requires all doors to be closed and park brake released before it will register off blocks. Don't know how you can fudge that (as is being suggested) without actually being off blocks. What do other operators use? The honor system?

Wow, gotta be quick 'round here! Two posts in while writing mine. Beat me to it Keg and Gidday

[S70IP]

Ok thanks for the info.
Virgin OTP recorded by the gate staff radioing back to AMCO as the aircraft pushes back. What goes in the flight log or radioed in airborne by the pilots doesn't really count except for arrival est.

[Arnold E]

Surely charging higher fares would only force those 13% o to another carrier?

So its better to lose $450M then... pure genius, no wonder your the big cheese and I'm only a LAME

[Mstr Caution]

Certainly there are times these days when gate space for QF services is an issue- particularly in MEL, SYD and PER.

Regarding Perth, any truth to the rumour that QF lease the terminal & gates to Virgin in Perth.

The lease ending next year.

[Fliegenmong]

SOPS -

"Rebrand it QF, and we have a new "QF light". Or am I thinking too hard?"

Nup, not thinking too hard at all, just thinking like many of us were years ago when jokestar started......the smoke and mirrors of it all will be relying on the populace thinking it is still QF, when it clearly will not be. Jitconnect and all that....

Then again, thinking of it another way, they've (clifford dixon joyce) royally screwed the brand over already...

[Keg]

Regarding Perth, any truth to the rumour that QF lease the terminal & gates to Virgin in Perth.

Not that I've ever heard of. I have heard the rumour that once the other terminal is up and going that we'll be moving to a system similar to what is proposed for Sydney. That is, we'll have all QF movements at the current terminal (including international) whilst DJ will move across the road to the new terminal and the international terminal.

Not sure how true it is, just what I keep hearing.

[Romulus]

Originally Posted by Arnold E

So its better to lose $450M then... pure genius, no wonder your the big cheese and I'm only a LAME

Question comes down to fixed costs per passenger vs variable costs.

If, by charging higher fares, you lose some passengers but keep enough so that the fare increase offsets the loss then you're obviously ahead.

Equally if you lose an additional 1% of your total customers (i.e. 12% of market) then you need to be very careful that the lost revenue is offset by the extra income. Which costs are truly variable (i.e. 1 less passenger means 1 less passenger's worth of cost), which are semi variable (i.e. 1 less passenger equates to a cost saving of a partial share of 1 passenger, I believe fuel would fall into this category for instance) and which are fixed (eg airport handling fees, cost of you MCC, training school etc).

The problem would seem to be that increasing fares will decrease passenger numbers which will mean the semi variable and fixed costs have to be spread across fewer tickets which will then mean you need to increase fares to cover that additional cost per ticket or you make a further loss.

I've had 2 major arguments when consulting to companies who want to kill off what they believe to be non profitable products becasue they have never understood that less products means that the fixed costs allocated to the deleted product(s) must then be spread across the remaining products.

That isn't to say that products should never be deleted, just that all the ramifications need to be explored. As QF have shorn themselves down to 8 international routes that means the entire fixed cost structure burden must be paid for across those 8 routes. No idea how that calculation was undertaken before the routes were deleted but I'd assume a professional organisation like QF would have done so.

Equally if they didn't they wouldn't be the first.

[TheWholeEnchilada]

...As QF have shorn themselves down to 8 international routes that means the entire fixed cost structure burden must be paid for across those 8 routes. No idea how that calculation was undertaken before the routes were deleted but I'd assume a professional organisation like QF would have done so.

Not only that, management have increased the administrative cost base by duplicating the mainline structures with the split of international & domestic! I suspect that if you can work it out, so can they and it's not by accident. What could possibly be the motive...

[Capt_SNAFU]

8 routes? I think it is a few more. Not many. Do you know something we don't?

[Arnold E]

Question comes down to fixed costs per passenger vs variable costs.

NO genius, the question comes down to...... do you want to lose money or make money,,, chee

[tgbgtgb]

Thought he may have meant destinations but I count at least 13. But thats just picking on details. If he was to go back and edit that to a more correct number it would still be an interesting point.

[extralite]

Good posts Romulus. Thanks for taking the time. Economies of scale acting against qantas int now too. It's a messy end, planned or incompetence is the only unknown.

[standard unit]

It's a messy end, planned or incompetence is the only unknown.

I had a conversation with a top Sydney medical specialist about 3 months ago who quite obviously knew people close to the action.

He told me that things were going to get very bad for Qantas.

Planned I'd say..........

[600ft-lb]

Looking at the big Qantas related rumor going around at the moment, regarding Emirates.

Joining the dot with Alan Joyce actively lobbying in parliament this week to remove the Qantas Sale Act foreign ownership restrictions.

Putting the 2 together, I wouldn't be suprised if a deal were done, contingent on the law being changed. Potentially, the windfall for the UAE as a country, is massive. Both major airlines in Australia feeding passengers into their country and onwards to Europe/UK.

[600ft-lb]

Also, the $450million loss international supposedly will post.
http://www.asx.com.au/asxpdf/2012060...p2dqlc6z3k.pdf

'Transformation costs' - $370-380million FY 11/12
'Industrial Action' - $100million

$480million in self inflicted costs. What geniuses they will be after a profit is posted.

Hopefully the Asian strategy will pay off to pay back the $450million bond due in 2013...
Bond | QANTAS AIRWAYS 03/13 REGS | USQ77974AW52 | 881627

[Keg]

I think those transformation and IR costs are on top of the supposed $416 million dollar loss for international. Of course, who freaking knows with this mob.