MERGED: Alan's still not happy......

[600ft-lb]

I think the best thing for Qantas would be to remove a lot of management. Front line managers aren't allowed to actually manage these days because they need approval from above and those above them need approval and so on.

Nothing happens, the place has become a quagmire where nothing is allowed to happen unless everyone in the tree gets a look in. Front line management have been reduced to company real life mouthpieces for the faceless corporation who deliver the consistently bad news every 6 months that another round of redundancies are occurring.

The company has that many policies and procedures, rules and regulations, meetings, managers for managers, is it any wonder they can't effect real change. When the sh!t does hit the fan the front line staff know what to do because that's why they're employed.

It seems that ken borough wants a medal for management doing such an excellent job in employing staff in the first place all those years ago who have gained sufficient knowledge and experience to deal with the sh!t hitting the fan. As most people who work in the actual operations side of things, management don't make any operational decisions day to day - the call to IOC is to inform them of what's being done, not to ask what to do.

At least within Engineering, the latest decision is an absolute pearler. Double the amount of managers - yes seriously, in this time of austerity. We all know they want to sack the DMM's and replace them with managers who aren't unionised but they don't have the guts to actually say so.

[airsupport]

Same in the office airsupport, many started straight out of school as 15 year olds. Learnt on the jobs from older, experienced people who had worked for QF at many a station.

I am sure it is sadly, I quoted Engineering as that was my area of experience.

No amount of Academic Study can ever replace good old hands on experience.

[Troo believer]

Stirred up a hornets nest!
When and how old was Borghetti when he started with Qantas. Speaks volumes doesn't it. Let me think now how many current airlines were started and run by Pilots and Engineers. Qantas, Cathay, KLM to name a few and from where I sit most operational decisions are made at the coal face not in some back room in Sydney. It's amazing that when the s it really hits the fan it's the crews responsibility to sort out. You can't prescribe a procedure or task for every possibility and pilots engineers and cabin crew along with the ground terminal staff run the airline not managers in ivory towers. Mathematics degree big deal.

[Romulus]

Fedsec - perhaps reread what I wrote regarding Hyundai/Mercedes then. You are talking about buying (permanently owning) a vehicle, not renting a seat and that vehicle is used repeatedly by the family unit (be that unit a single right up to whatever size family fits).

Constantly available alternatives on an as needed basis simply aren't available, you either buy the Hyundai or you buy the Merc (or any other vehicle you so desire) but once you've bought it you own it, you don't buy another vehicle for your next trip.

Air travel you go to your favourite website, an agent or whatever and make your choice on a per trip basis. Your decision will be influenced by price, reputation, duration of trip (stopover effects etc) and so on.

Which is totally different to buying a vehicle based on luxury/status level.

Now, as far as prices go, if they are not a key determinant why not raise them $20? $50? $100? If people are prepared to pay more as you say then there will be no impact.

Or you are saying you believe the $10 price rise will cause less of an effect on ticket sales than it does on profit. This is where pricing theory gets very interesting. Firstly let's ask ourselves where it WILL make a difference, and that is clearly the budget customer. Most tickets are sold well above the headline advertised price anyway (that's another matter we will come to) but for the price conscious flyer on the $100 ticket they will fly your competition.

So what happens. Firstly unless you sell that seat to a higher paying customer, which isn't likely unless you are already at 100% load factors, you've just lost $100. So that's $100 less contribution to covering your fixed cost base than you had previously. Which means your $10 ticket price rise needs to cover that $100 so there goes the benefit of the price rise for 10 other tickets. So if you've got 150 or so people on a 737 and you lose half a dozen of the really cheap flyers down the back you are ahead.

Or are you?

Those people still fly. Except instead of flying with you they fly with your competition. So your competitor picks up the people filling the cheap seats (unless they are also running at very high load factors) and that's the double whammy - you are spreading your essentially fixed costs across less people, whereas your competitor is now picking up more.

And then we get to the headline rates argument. MOST Qantas fares ARE already significantly higher than the competition. But to compete in marketing land they need a few competitively cheap seats to give them something to advertise. So what you're saying is effectively already in place - QF DO charge more, and usually by a lot more than $10.

And then we get to your load factor argument. And that argument actually runs COUNTER to your own theory. QF Sept loads to/from Japan for QF are 84% vs Jetstar at 67% which on the surface would say you are correct.

But here's the fundamental question - where did the Jetstar 67% come from? Jetstar hasn't been around that long, yet they're running 2/3 full based on lower service and lower fares. Those people have CLEARLY chosen to purchase on lower fares. Sure people PREFER to fly full service but out of your argument a very significant number of people have chosen exactly the opposite of what you have stated will happen.

And by keeping those 67% on QF group aircraft you prevent them going to other carriers and helping your competition cover costs. AND you also help keep QF mainline ticket prices at higher levels by making people choose the clearly differentiated lower service brand.

So having Jetstar available to suck up the budget traveller dollar is doing EXACTLY what you think is such a revolutionary idea - it is helping mainline keep the average price of a ticket higher. You can argue an extra $10 or so if you like, but what the JQ strategy delivers is a much more substantial premium than that.

Hopefully that answers your question and isn't too longwinded a reply.

[maggotdriver]

Here's an idea.....mmm. Just like there was room available for premium economy, let's have BOGAN economy. Must be there an hour before hand, have to pay for everything and must board between 35-25 mins before or your off! The facts are that J* DO have access to the lounge, frequent flyer, covered aerobridges, capital city airports, allocated seating and I'm sure a myriad different other things here I have forgotten so let's cut the crap! It isn't a low cost carrier (at least by the definition and its apparent associated cost base that was sold to all QANTAS staff).
Speaking of your savvy punters, how long do you think it will take (if it hasn't already) for the young of today to work out that they can wear their jumper, fill up a bottle of water from home and buy a Big Mac? People aren't as stupid as you may think. Cut out the credit charge (overcharge shonk) and guess what? You've catered for the fast, mobile, young crowd who will switch allegiance as quickly as possible and you've insulted your premium customer WHO KNOWS that the 787 is meant to be great and you give them a 25 year old plane and wonder what is wrong? Human beings ain't numbers!
Oh! and now you have one overall management and all the economies of scale, including the possibility of tech crew doing mixed fleet flying... at maximum hours and efficiency, now there's a thought...

[Shot Nancy]

Ken Borough = KB = Kevin Brown.
That's not the Kevin Brown we use to know and love is it?

[DrPepz]

Jetstar HK Rejects HK Airport's Claim

Jetstar rejects claim airport unable to cope - The Standard

Jetstar rejects claim airport unable to cope

Imogene Wong

Friday, December 27, 2013

Jetstar Hong Kong yesterday insisted that it could operate flexibly, using slot resources at non-peak periods at Chek Lap Kok airport.
It was responding to a claim in a radio interview on Wednesday by of the Civil Aviation Department director-general Norman Lo Shung-man that the airport may not be a suitable place to develop budget flights.

Lo said on air that the existing two airport runways will be saturated within two to three years. As few timeslots are available, the development of low cost carriers in the SAR will not be practical as they focus on short-haul, high-frequency flights.

The number of flights at the airport has reached a record 370,000 over the past 12 months, with an average of 65 flights per hour, close to an upper cap of 68 per hour, Lo said.

A Jetstar Hong Kong spokesman countered that there is still much room for flights during non-peak hours, from midnight until the early hours.

Legislator Yiu Si-wing, who represents the tourism sector, also believes there is capacity for low-cost airline development. He said that budget airlines only account for about 5 percent of market share in Hong Kong. Other top airports have around 20 percent. But Lo stressed the need to build a third runway.

Jetstar Hong Kong said it remains confident of getting a license.

Off peak hours? So are they going to do HKG PVG at 2am? The return will come into HKG at 7am which is peak hour in HKG.

[ALAEA Fed Sec]

Ken Borough = KB = Kevin Brown.
That's not the Kevin Brown we use to know and love is it?

After the LAME 2008 dispute, Kevin Brown (with a smile on his face) called me a b@stard and said the LAMEs kept him up all night monitoring Pprune.

[Wedcue]

Some of the most successful people I know, from obstetricians to corporate lawyers and retired hardworking mum's and dad's fly Jetstar. I don't know where the notion that only bogan's fly Jetstar comes from.

From what I've seen in terminals, the eloquently named, "bogans" are the ones who fly Tigerair.

Just the other day in BNE, gate 34, mum and dad bogan, with shoe-less children in tow, was drinking a Jim beam trying to board the go-cat. Stay classy Brisbane.

[airsupport]

Steve,

Is this KB posting here actually an Engineering person, PLEASE tell me he is NOT.

[ALAEA Fed Sec]

Fedsec - perhaps reread what I wrote regarding Hyundai/Mercedes then. You are talking about buying (permanently owning) a vehicle, not renting a seat and that vehicle is used repeatedly by the family unit (be that unit a single right up to whatever size family fits).

Romulus the Hyundai/Mercedes debate matters not if it is about buying a car or renting an airline seat. It begs the question - will a consumer pay extra for better quality? People still buy Mercedes and people still chose to fly on airlines that charge extra in fact I say that more Australians would be prepared to pay slightly more to fly Qantas than Jetstar. I've used one example where the airlines are in direct competition to demonstrate that.

Those people still fly. Except instead of flying with you they fly with your competition. So your competitor picks up the people filling the cheap seats (unless they are also running at very high load factors) and that's the double whammy - you are spreading your essentially fixed costs across less people, whereas your competitor is now picking up more.

Really? Did you go to the same school as Aviation expert Geoffrey Thomas? A lot of things may sound good in theory but in practice they often work differently.

And then we get to your load factor argument. And that argument actually runs COUNTER to your own theory. QF Sept loads to/from Japan for QF are 84% vs Jetstar at 67% which on the surface would say you are correct.

But here's the fundamental question - where did the Jetstar 67% come from? Jetstar hasn't been around that long, yet they're running 2/3 full based on lower service and lower fares. Those people have CLEARLY chosen to purchase on lower fares. Sure people PREFER to fly full service but out of your argument a very significant number of people have chosen exactly the opposite of what you have stated will happen.

Nothing runs counter to my theory. The 67% of people flying Jetstar didn't come out of thin air. They were taken from the pax who used to fly Qantas, not because they choose to purchase a lower fare, it's because Qantas stopped flying many of the routes and reduced frequency on Narita services leaving the travelers with no other choice (apart from JAL who benefited from the exercise).

I'll show you some more in depth analysis of the Japan routes and what they have done. It will answer the question about where the pax came from.

Sept 2013 figures were not a one off. It best to show the Sept figures for the last 3 years.

Sept 13 - Qantas 30 flts 84% load - Jetstar 113 flts 67% load - JAL 30 flts 87% load.
Sept 12 - Qantas 30 flts 84% load - Jetstar 114 flts 68% load - Jal 30 flts 88% load.
Sept 11 - Qantas 30 flts 79% load - Jetstar 81 flts 76% load - JAL 30 flts 79% load.

You can see that Japan Airlines is equal to or ahead of Qantas each year. Now I will throw in the couple of years pre Jetstar.

Sept 06 - Qantas 191 flts 76% load - JAL 90 flts 70% load.
Sept 05 - Qantas 125 flts 79% load - JAL 90 flts 74% load.

As you can see, Qantas were the market leader with well above break even load factors and 5 times as many flts as they run today. Most of these services are now run by Jetstar who are running about 10% points behind what the flights were previously carrying. JAL has been turned from the market loser to the market leader.

On a side, between 2007 and 2010, Japan Airlines transferred a majority of their Aussie services over to their low cost carrier JALways. The venture failed and JALways was merged back into Japan Airlines in 2010. JALways ran head to head with Japan Airlines on these routes (also taking Japan Airlines routes as Jetstar have from Qantas) and were similarly 5% to 20% behind their parent company. Hence the now reduced JAL services to Australia.

The people of Japan rejected the lower fare tickets in favour of the more expensive Japan Airlines tix. The people of Australia appear to be more inclined to purchase Qantas tix over Jetstar despite their reduced frequency of traveling times. These all come from Govt database figures not bulldust Qantas powerpoint presentations to investors.

Hence I say that people are prepared to buy a Mercedes, whether that be a car or an airline seat.

[spelling_nazi]

Exactly...

Re:"But here's the fundamental question - where did the Jetstar 67% come from? Jetstar hasn't been around that long, yet they're running 2/3 full based on lower service and lower fares. Those people have CLEARLY chosen to purchase on lower fares. "

Utter crap. In many cases consumers were forced onto one star. Gifted routes from mainline.

[airsupport]

Steve,

Is this KB posting here actually an Engineering person, PLEASE tell me he is NOT.

I guess now he must be.

I wasted a lot of time yesterday thinking I was helping someone out by explaining how the system used to work and still should, not knowing he knew all along and looks like he is actually part of the problem.

[ALAEA Fed Sec]

KB was Qantas Manager of people. Not an Engineer. He moved on to the NBN project about 2010.

[mmciau]

Has Turnbull realised he has a dill in the NBN?

[Going Boeing]

Some of the most successful people I know, from obstetricians to corporate lawyers and retired hardworking mum's and dad's fly Jetstar. I don't know where the notion that only bogan's fly Jetstar comes from.

Wedcue, you have given an example of the problem.

When Dixon set up Jetstar, he stated that it would not be in direct competition with mainline and it would not be allowed to cannibalise the parent. In its original form, "successful people" would not have chosen to fly Jetstar but all the changes away from the strictly LCC model have made it more appealing to regular travelers who need to keep costs under control and thus are taking market share away from the parent. I have no doubt that this is intentional on the part of Dixon and Joyce.

[airsupport]

KB was Qantas Manager of people. Not an Engineer. He moved on to the NBN project about 2010.

Thanks Steve, SO glad he was NOT an Engineer or any sort.

Guess that explains too why the NBN is in such a mess........

[The Professor]

The airline cannot dictate price AND volume.

They can chose one or the other.

Some pax are forced onto JQ in the absence of QF service but most VFR pax purchase decisions are based purely on price.

Many people here misunderstand the reason behind the growth of JQ. In the medium term, the JQ brand will disappear.

[blueloo]

Many people here misunderstand the reason behind the growth of JQ. In the medium term, the JQ brand will disappear.

Is it to;

To undermine wages and conditions of pilots, engineers and other key staff?

Or to reduce arguably some of the worlds highest safety standards down to 'worlds best practice' - in other words the minimum legal requirements?

Or is it to cannibalise, 'trash', and possibly destroy one of Australia's great brands so that it may never recover.....

Or piss of countless loyal passengers forcing them onto other airlines.

If it is, then they are having great success! (Depending on what you measure as success)

[Mstr Caution]

Kevin Brown - The guy that briefed staff at the Capitol Theatre Sydney (around 2005) that the biggest single threat to Qantas Domestic was the growth of Rex with its lower staff cost base.