MERGED: Alan's still not happy......
Join Date: Dec 2013
Location: Hunter Valley NSW
Posts: 169
Likes: 0
Received 0 Likes
on
0 Posts
Thanks Nitpicker, but am still firmly on my perch. I am somewhat grateful to see my fellow members of the Retired Airline Pilots Association, have mainly managed to keep going, despite years of chronic jet lag, too many marriages, chronic tiredness, and cabin fumes. In fact it gives me great hope in that our last Capt, that fell off his perch, was 98! No, I am simply here to join the protest and the fight for QF.
Join Date: Jul 2006
Location: Australia
Posts: 1,188
Likes: 0
Received 0 Likes
on
0 Posts
Oldhand2
Dont forget the fifth loss making entity JQ NZ.
Over the last fortnight or so I've had discussions with the general public. Nearly everyone I've spoken to is of the opinion that AJ is destroying QF. Even his presence is causing brand damage. Maybe a reason for his recent lack of public appearances?
MC.
Dont forget the fifth loss making entity JQ NZ.
Over the last fortnight or so I've had discussions with the general public. Nearly everyone I've spoken to is of the opinion that AJ is destroying QF. Even his presence is causing brand damage. Maybe a reason for his recent lack of public appearances?
MC.
Join Date: Jul 2008
Location: south pacific vagrant
Posts: 1,334
Likes: 0
Received 0 Likes
on
0 Posts
dh has said nz is basically breaking even. supposedly made 60k or thereabouts last year.
how much it contributed towards the costs of the aoc that made it possible is a whole 'nother question of course
how much it contributed towards the costs of the aoc that made it possible is a whole 'nother question of course
Join Date: Mar 2007
Location: Roguesville, cloud cuckooland
Posts: 1,197
Likes: 0
Received 16 Likes
on
5 Posts
Dont forget the fifth loss making entity JQ NZ
Join Date: Aug 2009
Posts: 509
Likes: 0
Received 0 Likes
on
0 Posts
ALEA - no, ASK's is correct. The 65% represents capacity. Qantas Group will continue to maintain 65% of the market capacity.
Their position is based on the curve, this is the sweet spot. Higher, and there is too much capacity, damaging yields and increasing cost-base. Too less, and capacity won't support demand, provide an attractive (and sustainable) offering for premium traffic. But it it's all mathematic.
Re the offshore ventures; they were never going to make money from start. Start-up costs and market penetration takes years to overcome and return.
The benefit of the ventures is the feeder traffic. That will deliver on-flow to support their operations, in addition to local traffic.
They (ventures) need to grow in order to take advantage of scale, which will then improve their cASK position, and provide a sustainable return. But you need time for this… Typically, it is five years…
Their position is based on the curve, this is the sweet spot. Higher, and there is too much capacity, damaging yields and increasing cost-base. Too less, and capacity won't support demand, provide an attractive (and sustainable) offering for premium traffic. But it it's all mathematic.
Re the offshore ventures; they were never going to make money from start. Start-up costs and market penetration takes years to overcome and return.
The benefit of the ventures is the feeder traffic. That will deliver on-flow to support their operations, in addition to local traffic.
They (ventures) need to grow in order to take advantage of scale, which will then improve their cASK position, and provide a sustainable return. But you need time for this… Typically, it is five years…
Join Date: Jul 2006
Location: Australia
Posts: 1,188
Likes: 0
Received 0 Likes
on
0 Posts
Waren9,
I have to take your word for it that JQ NZ made a token profit of $60K.
The problem for QF is, whilst AJ has been napping & focussing on making his $60k a year on JQ NZ, AIR NZ has ordered the 787 9.
With a range of up to 8500nm with a full payload. It opens the opportunity for AIR NZ to fly from Auckland direct to destinations such as Chicago, Miami, Calgary or Detroit.
One stop via AKL, may end up a better offering than QF via LAX or DFW.
I have to take your word for it that JQ NZ made a token profit of $60K.
The problem for QF is, whilst AJ has been napping & focussing on making his $60k a year on JQ NZ, AIR NZ has ordered the 787 9.
With a range of up to 8500nm with a full payload. It opens the opportunity for AIR NZ to fly from Auckland direct to destinations such as Chicago, Miami, Calgary or Detroit.
One stop via AKL, may end up a better offering than QF via LAX or DFW.
Join Date: Sep 2010
Location: Castle NastySwine
Posts: 157
Likes: 0
Received 0 Likes
on
0 Posts
T-Vasis
They (ventures) need to grow in order to take advantage of scale, which will then improve their cASK position, and provide a sustainable return. But you need time for this… Typically, it is five years…
Join Date: Jul 2006
Location: nsw
Posts: 7
Likes: 0
Received 0 Likes
on
0 Posts
More Subsidies
S60k profit is total crap. QF have 25 staff on Akl and probably similar numbers on Wlg and Chc. All providing check in staff for JetStar and JetConnect. Don't forget QF provide "operational" money + 10% for JetConnect. {See transcripts from QF FWA hearings}
Market share and idiocy
T-Vasis...by what convoluted sophistry do you reckon that having 65% of the ASKs equals having 65% of the market? An entity having 65% of the available seats still needs to match load factors with the competition to claim that market share.
You can fly 90% of the ASKs with a 55% load factor and still only have half of the market if your competition is flying full.
For those of you who are puzzled by the path taken by QF management, have a look at something called "The Boston Matrix" it is a gratuitously simple treatment of businesses by market share and market size. See if you can pick the star and the cash cow and see if that doesn't explain just about everything about Jetstar. And then marvel at the reductio ad absurdum nature of the model. For this kind of insight QF pays consultants millions per year. They would be better off auditing my kid's kindergarten class for life (and business) lessons.
You can fly 90% of the ASKs with a 55% load factor and still only have half of the market if your competition is flying full.
For those of you who are puzzled by the path taken by QF management, have a look at something called "The Boston Matrix" it is a gratuitously simple treatment of businesses by market share and market size. See if you can pick the star and the cash cow and see if that doesn't explain just about everything about Jetstar. And then marvel at the reductio ad absurdum nature of the model. For this kind of insight QF pays consultants millions per year. They would be better off auditing my kid's kindergarten class for life (and business) lessons.
Join Date: Nov 2007
Location: Bexley
Posts: 1,792
Likes: 0
Received 0 Likes
on
0 Posts
I must admit, I don't understand why ASKs or market capacity has any relevance when your load factors drop.
I remember when Qantas were making money holding 51% market share versus Ansett's 49%.
If this is all based on a fabled S curve, Alan might want to reconsider the plan because it isn't working. IATA recognised the end of the S curve in 2006, particularly in markets where LCCs exist. Can read about it here -
https://www.iata.org/whatwedo/Docume...sey_SCurve.pdf
I remember when Qantas were making money holding 51% market share versus Ansett's 49%.
If this is all based on a fabled S curve, Alan might want to reconsider the plan because it isn't working. IATA recognised the end of the S curve in 2006, particularly in markets where LCCs exist. Can read about it here -
https://www.iata.org/whatwedo/Docume...sey_SCurve.pdf
Join Date: Feb 2007
Location: Melbourne
Age: 57
Posts: 628
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by fedsec
I remember when Qantas were making money holding 51% market share versus Ansett's 49%.
Join Date: Nov 2007
Location: Bexley
Posts: 1,792
Likes: 0
Received 0 Likes
on
0 Posts
I think people would pay a little more to fly. Those airfares of the past gave us the highest standards of safety in the world. Travellers often now pay more for a cab to the airport than their airfare. It isn't sustainable.
Join Date: Feb 2007
Location: Melbourne
Age: 57
Posts: 628
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by fedsec
I think people would pay a little more to fly. Those airfares of the past gave us the highest standards of safety in the world. Travellers often now pay more for a cab to the airport than their airfare. It isn't sustainable.
Sure people LIKE to fly Qantas, especially when they're not picking up the tab, but the rise of Virgin, Jetstar and Tiger tells you what the market wants.
We need to smarten up and respond to that otherwise we'll be buried by foreign competition.
Join Date: Apr 2001
Location: Adrift upon the tides of fate
Posts: 1,840
Likes: 0
Received 0 Likes
on
0 Posts
As usual, what you are seeing is the pendulum swinging.
Previously, a few people paid a large amount of money to fly.
Now, a large amount of people pay a miniscule amount of money to fly.
Previously, the airlines made money.
Now, the airlines lose money.
Guess which way the pendulum will swing?
Guess what that means for LCCs?
Previously, a few people paid a large amount of money to fly.
Now, a large amount of people pay a miniscule amount of money to fly.
Previously, the airlines made money.
Now, the airlines lose money.
Guess which way the pendulum will swing?
Guess what that means for LCCs?
Join Date: Feb 2005
Location: Bolivia
Posts: 434
Likes: 0
Received 0 Likes
on
0 Posts
The S curve can only work in a market with multiple carriers operating out of multiple hubs. Clearly if 65% is the magic number, in a duopoly the carrier getting only 35% is not going to survive. Funnily enough Virgin has survived on less than 65% due to a lower cost base.
The Australian market will return to approx 50/50, Joyce just has to work out how to make money out of it in the modern environment, and it won't be by returning to the price gouging of the regulated era. It can only come from abandoning his line in the sand, which will result in sustainable yields over time, and lowering his overheads to achieve acceptable margins.
That of course assumes that he actually wants mainline to return to profitability, which I don't think is a given.
The Australian market will return to approx 50/50, Joyce just has to work out how to make money out of it in the modern environment, and it won't be by returning to the price gouging of the regulated era. It can only come from abandoning his line in the sand, which will result in sustainable yields over time, and lowering his overheads to achieve acceptable margins.
That of course assumes that he actually wants mainline to return to profitability, which I don't think is a given.
Last edited by Vorsicht; 27th Dec 2013 at 01:18.
Join Date: Apr 2008
Location: Sydney
Posts: 265
Likes: 0
Received 0 Likes
on
0 Posts
Well no, as Vorsicht says the theory is 65% is the profit max point and a company will do extremely well if it can defend this (small price wars notwithstanding)
The problem is that in order to succeed long-term you need to have a cost base that is equal or better than (as it should be when you are bigger) your competitor.
Unless QFdom fixes its cost base it will shrink to oblivion, just like QFint
The writing was on the wall for QFint when Australia first started implementing open skies and giving away capacity predominately to foreign carriers with lower cost bases.
The writing was on the wall for QFdom when Compass first started, then Compass2, then Impulse, then Virgin, then Jetstar (rebadged Impulse) with substantially lower cost bases
---
For those who question management on this one - what market share should Qantas drop to? Remember that dropping share does not necessarily mean profitability, Virgin could well continue to add capacity - supported by further shareholder injections until it gets to 65%
The problem is that in order to succeed long-term you need to have a cost base that is equal or better than (as it should be when you are bigger) your competitor.
Unless QFdom fixes its cost base it will shrink to oblivion, just like QFint
The writing was on the wall for QFint when Australia first started implementing open skies and giving away capacity predominately to foreign carriers with lower cost bases.
The writing was on the wall for QFdom when Compass first started, then Compass2, then Impulse, then Virgin, then Jetstar (rebadged Impulse) with substantially lower cost bases
---
For those who question management on this one - what market share should Qantas drop to? Remember that dropping share does not necessarily mean profitability, Virgin could well continue to add capacity - supported by further shareholder injections until it gets to 65%