MERGED: Alan's still not happy......
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Ratpoison et al - in a competitive leisure market where the consumer purchase decision is primarily driven by price, Jetstar has to discount considerably to secure the sale. The cheapest fare always wins.
From there, the airline can extract additional revenue through ancillary streams available from various points in the customer corridor. This is where, in particular, LCC's actually make money. Yields are poor and margins thin. Lowest cASK's are key to maximising revenue returns.
Increasing fares will simply price Jetstar out of the market and/or will change the consumers decision to travel, as leisure is discretionary.
I also understand the domestic pool of ~$700M in 2012 is down to less than ~$100M in FY14.
Inept - I think not…
From there, the airline can extract additional revenue through ancillary streams available from various points in the customer corridor. This is where, in particular, LCC's actually make money. Yields are poor and margins thin. Lowest cASK's are key to maximising revenue returns.
Increasing fares will simply price Jetstar out of the market and/or will change the consumers decision to travel, as leisure is discretionary.
I also understand the domestic pool of ~$700M in 2012 is down to less than ~$100M in FY14.
Inept - I think not…
Don Quixote Impersonator
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It is was and always will be about total revenue being greater than total actual costs, including depreciation.
Following on ratpoison's line of thought, the railway train from Perth to Bunbury, ~77nm, fairly comfortable, business class type seating, food and beverage extra, Fare $30.50 = around $710 Per Syd. Around 90 minutes. And they make a profit.
Like the "air charter" business the airlines have for the lat several decades trained the public to expect ever decreasing fares to the positively ridiculous levels at which they are now.
They have now locked themselves into a death spiral as afar as revenue is concerned. If they increase the regular fares to economic levels and/including cancelling the idiot sub$100 specials, they will be forced to rely on the business fares which are actually also subsidised by the sub economic economy fares, they are screwed.
it is only the speed at which they get screwed that would vary.
I think they call airline finances Voodoo economics.
The chattering class would find Skype et al just as effective for family comms and much less stressful
.
There is no "right" to cheap travel anything, at least to subsidised mass travel, unless we vote for it, which would be a Pandora's box.
Following on ratpoison's line of thought, the railway train from Perth to Bunbury, ~77nm, fairly comfortable, business class type seating, food and beverage extra, Fare $30.50 = around $710 Per Syd. Around 90 minutes. And they make a profit.
Like the "air charter" business the airlines have for the lat several decades trained the public to expect ever decreasing fares to the positively ridiculous levels at which they are now.
They have now locked themselves into a death spiral as afar as revenue is concerned. If they increase the regular fares to economic levels and/including cancelling the idiot sub$100 specials, they will be forced to rely on the business fares which are actually also subsidised by the sub economic economy fares, they are screwed.
it is only the speed at which they get screwed that would vary.
I think they call airline finances Voodoo economics.
The chattering class would find Skype et al just as effective for family comms and much less stressful
. There is no "right" to cheap travel anything, at least to subsidised mass travel, unless we vote for it, which would be a Pandora's box.
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Hedge Funds
Last edited by onedottoolow; 11th Mar 2014 at 11:33.
Onedottwolow, now you understand what is going on. Alan was supposed to fail and deliver Qantas into the hands of the APA mob. Unfortunately the APA mob underestimated his stupidity and he instead delivered Qantas into Emirates hands - witness John Singletons rage after the announcement.
EXACTLY!!!
There's been some mistake...
Qantas today announced a new code share deal with Bangkok Airways, a Skytrax rated 4 star airline. (!)
The deal gives Qantas passengers connections from both Bangkok AND Singapore.
This bypasses Jetstar Asia as the only connection option for QF pax in SIN. Aaaaaaamaaaazing!
You'd almost think that QF has decided to try and run an airline with this kind of reckless customer service initiative.
The deal gives Qantas passengers connections from both Bangkok AND Singapore.
This bypasses Jetstar Asia as the only connection option for QF pax in SIN. Aaaaaaamaaaazing!
You'd almost think that QF has decided to try and run an airline with this kind of reckless customer service initiative.
Last edited by Australopithecus; 12th Mar 2014 at 01:05.
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How is the Bangkok Airways deal going to allow AJ to exploit Asian markets and repatriate the profits back to Australia.
Perhaps the structural review has proven you should stick to your core business and operate code shares with the established Asian players.
First a return to Hamilton Island, now Bangkok Air code shares.
What's next? Increased A330 premium services to Asia?
Perhaps the structural review has proven you should stick to your core business and operate code shares with the established Asian players.
First a return to Hamilton Island, now Bangkok Air code shares.
What's next? Increased A330 premium services to Asia?
J* Sin closure imminent??
A source advises an announcement imminent.....
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If true ....... Think of all the operational flexibility all the extra parked 320s (and 330's ? ) will provide...
What foresight!!
Bonuses all round !
What foresight!!
Bonuses all round !
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Singleton got it exactly right.
We can't beat them on wages but we can level the playing field to get the revenue back into focus.
And he should be Chairman.
We can't beat them on wages but we can level the playing field to get the revenue back into focus.
And he should be Chairman.
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The question may no longer be whether it is Jetstar or Qantas that can achieve a profit in Southeast Asia. Instead, it is a balance of which brand generates the lowest loss or highest prestige.
Interesting load factor charts over the last two years to Indonesia, Thailand & Singapore.
MC
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Singleton got it exactly right.
We can't beat them on wages but we can level the playing field to get the revenue back into focus.
And he should be Chairman.
We can't beat them on wages but we can level the playing field to get the revenue back into focus.
And he should be Chairman.
For those who couldn't get this AFR link interview posted by MC with Leigh "I wouldn't be doing this if it wasn't fun" Clifford, a reaction related to the John Singleton video a few months later.
sorry, the best I could do, it's a little out of sink,
.
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Wasn't Andrew David running Singapore and the International widebodies?
Was he replaced?
Was he replaced?
When VA took a majority stake in Tiger, JB sacked Andrew David again
I wonder if he'll be sacked by JB a third time?
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Thanks for the video TIMA9X.
Interesting viewing, although LC didn't need to tell us he doesn't know much about airlines, that's pretty obvious.
The best he can come up with is trying to get in on the FIFO business!!
Someone around the table should thank him for his valuable insight, then politely let him know that airlines have been cashing in on mining towns since Lasseter went bush.
Interesting viewing, although LC didn't need to tell us he doesn't know much about airlines, that's pretty obvious.
The best he can come up with is trying to get in on the FIFO business!!
Someone around the table should thank him for his valuable insight, then politely let him know that airlines have been cashing in on mining towns since Lasseter went bush.
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Clifford Vid says so much..
Hard to quote but basicly Clifford's answer to his Board Management style at Q-
I've come to the airline industry with only a pax perspective (first class) and over the last 5ys learned so much about the industry...
Cliff mate, glad you got paid to get a lesson in Aviation (miss) Management. Take your conceded pass mark (just for turning up to each class) and go look for another course in retirement, possibly in Buddhism to see what Karma is coming your way.
FFRATS
Hard to quote but basicly Clifford's answer to his Board Management style at Q-
I've come to the airline industry with only a pax perspective (first class) and over the last 5ys learned so much about the industry...
Cliff mate, glad you got paid to get a lesson in Aviation (miss) Management. Take your conceded pass mark (just for turning up to each class) and go look for another course in retirement, possibly in Buddhism to see what Karma is coming your way.
FFRATS
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........and I thought that Joyces's brainstorming methodology was to surround himself with people who are good at what they do and have greater knowledge. After watching this video, Clifford is a guy well out of his depth and has neither of these attributes yet is the Chairman.
Have Joyce and the board shuffled Clifford out of the way to become a figurehead or does he genuinely take part in the decision making?
Nice video though TIMA9X.
Have Joyce and the board shuffled Clifford out of the way to become a figurehead or does he genuinely take part in the decision making?
Nice video though TIMA9X.
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TIMA9X
Thanks for the vid.
I woudn't hang him on the strength of that interview.
He is doing what a Chairman should do. Standing back and watching the big picture and casting around the business world at large for feedback.
Maybe a chat With the CEO every cuppla weeks worked in the mining business, where it takes that long between mine and furnace but the aviation world works in real time.
I'm surprised that he and maybe Joist, were surprised at the size of the loss but it is possible that it was, a surprise to Clifford at least. Maybe not that there would be a loss, but the size of it.
It wouldn't be he first time a CEO has ambushed a Board with this sort of result hoping to the end it would all work out at the end.
So what can the Board do without further frightening the horses = share price and more importantly further demoralizing the staff.
Changing horses on the run is more likely to result in an even bigger train smash.
OR
Keep Joist in the traces and force him to fix his frck ups under riding instructions from the Board who represent the owners.
There is of course only 2 possible results.
He finally gets it and fixes it, by harnessing the huge depth of goodwill the staff and market have towards the QF brand.
Or the Board eventually
falls into the hands of Singo and his mates, which may not be such a bad thing.
Virgin and QF need each other to keep the market stimulated. There are plenty of really smart people in Virgin who could step into Borghetti's shoes.
One wonders how much and on what terms it would take Singo and his mates to get Borghetti to head up QF.
Just sayin.
Thanks for the vid.
I woudn't hang him on the strength of that interview.
He is doing what a Chairman should do. Standing back and watching the big picture and casting around the business world at large for feedback.
Maybe a chat With the CEO every cuppla weeks worked in the mining business, where it takes that long between mine and furnace but the aviation world works in real time.
I'm surprised that he and maybe Joist
, were surprised at the size of the loss but it is possible that it was, a surprise to Clifford at least. Maybe not that there would be a loss, but the size of it.It wouldn't be he first time a CEO has ambushed a Board with this sort of result hoping to the end it would all work out at the end.
So what can the Board do without further frightening the horses = share price and more importantly further demoralizing the staff.
Changing horses on the run is more likely to result in an even bigger train smash.
OR
Keep Joist in the traces and force him to fix his frck ups under riding instructions from the Board who represent the owners.
There is of course only 2 possible results.
He finally gets it and fixes it, by harnessing the huge depth of goodwill the staff and market have towards the QF brand.
Or the Board eventually
falls into the hands of Singo and his mates, which may not be such a bad thing.
Virgin and QF need each other to keep the market stimulated. There are plenty of really smart people in Virgin who could step into Borghetti's shoes.
One wonders how much and on what terms it would take Singo and his mates to get Borghetti to head up QF.
Just sayin.