MERGED: Alan's still not happy......
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Accounts filed recently with Singaporean regulators show Jetstar Asia's holding company, Newstar Investment, posted a bottom-line profit of $S2.5 million ($2.2 million) for the year to June, compared with $S2.1 million a year earlier.
Read more: Jetstar Asia records second profit
Read more: Jetstar Asia records second profit
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Jetstar Asia made a profit, but no one will ever know what was booked as real ticket revenue, leasing revenue, or how costs were allocated across the Jetstar Group. As Jetstar Asia is not a listed entity they do not need to engage in arms lengths transactions with any other company. Their accounts are filed solely for tax purposes, just like Jet Connect is just a shell company through which QF runs its costs and some leasing of planes through NZ.
So Jetstar Asia's revenue fell - but their aircraft operating costs fell despite apparently operating the same number of aircraft.
Tiger Singapore just made a huge loss, with their unit costs rising, yields falling, and PLF plunging from 85% to 75%. They blamed overcapacity and intense price competition ex SIN. Just go and check what Jetstar Asia is charging KULSIN after the Chinese New Year Holidays (after 5 Feb) - and you'll know what I mean - most flights going for $0.
SIA itself is distancing itself from price wars and is charging what they please ex SIN to regional destinations - S$700 to Jakarta, S$850 to Manila and S$650 to Ho Chi Minh City are their normal fares. And SQ is full. The LCCS are just tripping over themselves to drive the airfares down to $0
In Tiger Singapore's latest accounts, they stated that the average length of their flights was 1800 km and average fare $99, and and average anciliary income $25. In the previous year, the average length of flight was also 1800km, but average fare $118. So they've taken a 20% hit on yield.
Jetstar Asia is smaller ex SIN and has to match Tiger's prices. I can't see how they are making a cent in this environment.
If Jetstar Asia was a standalone listed entity and had to declare their costs and revenue on an arms length basis, we would then have a clearer picture of their accounts.
The latest accounts show Jetstar Asia's revenue fell 4 per cent to $S507 million last financial year. Its fuel bill and aircraft operating costs fell while marketing expenses rose substantially.
Read more: Jetstar Asia records second profit
Read more: Jetstar Asia records second profit
Tiger Singapore just made a huge loss, with their unit costs rising, yields falling, and PLF plunging from 85% to 75%. They blamed overcapacity and intense price competition ex SIN. Just go and check what Jetstar Asia is charging KULSIN after the Chinese New Year Holidays (after 5 Feb) - and you'll know what I mean - most flights going for $0.
SIA itself is distancing itself from price wars and is charging what they please ex SIN to regional destinations - S$700 to Jakarta, S$850 to Manila and S$650 to Ho Chi Minh City are their normal fares. And SQ is full. The LCCS are just tripping over themselves to drive the airfares down to $0
In Tiger Singapore's latest accounts, they stated that the average length of their flights was 1800 km and average fare $99, and and average anciliary income $25. In the previous year, the average length of flight was also 1800km, but average fare $118. So they've taken a 20% hit on yield.
Jetstar Asia is smaller ex SIN and has to match Tiger's prices. I can't see how they are making a cent in this environment.
If Jetstar Asia was a standalone listed entity and had to declare their costs and revenue on an arms length basis, we would then have a clearer picture of their accounts.
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And the first profit was due accounting practices and over-inflated leases of Aircraft to Mainline.
Your dreaming if you think the ownership % in the Asian Offshoots are actually split profit wise as the share % shows...If this is the case the loses should also be same.
In most cases QF were looking for a solution to their cock-up business decisions and needed help, it was not a charity agreement made from the investors point of view... SIN/Vietnam/HK
Jetstar HK is a recent example. The delayed start has new A320's requiring delivery. Storage at great expence or use as overcapacity airframes, is being billed to the QF group, some Mainline directly.
This must be a great win for China Eastern/Pansy Ho, et al investors with no costs their way.
FFRATS
Your dreaming if you think the ownership % in the Asian Offshoots are actually split profit wise as the share % shows...If this is the case the loses should also be same.
In most cases QF were looking for a solution to their cock-up business decisions and needed help, it was not a charity agreement made from the investors point of view... SIN/Vietnam/HK
Jetstar HK is a recent example. The delayed start has new A320's requiring delivery. Storage at great expence or use as overcapacity airframes, is being billed to the QF group, some Mainline directly.
This must be a great win for China Eastern/Pansy Ho, et al investors with no costs their way.
FFRATS
short flights long nights
Ok, I have to ask this, even at the risk of appearing stupid. Just how, if you charge $0 for a ticket, do you plan to make any money?
To me, it seems like a crazy idea, but perhaps I'm missing something.
To me, it seems like a crazy idea, but perhaps I'm missing something.
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With 15 minutes of cruise time, how many coffee and muffins and chicken rice can you sell on KULSIN? Jetstar charges S$12 for Chicken Rice. Air Asia charges 12 RINGGIT - 63% cheaper.
Just checked - For most of Feb after Chinese New Year, SIN Jakarta fares on Jetstar have a base fare of S$14 to S$24. On Monday 24 Feb the base fare is S$4. Yes, that's four bucks. With taxes and fees it is S$34 (but the taxes all go to the airport, not really to Jetstar).
Tiger - most of Feb they're charging S$72 one way to Jakarta
Air Asia - most of Feb they're charging S$78 one way to Jakarta
Jetstar - most of Feb they charge A$65 (S$72) Sydney-Melbourne (slightly shorter than SIN-CGK)
SIA - most of Feb they charge S$560 return (S$280 one way) to Jakarta.
As to why Jetstar wishes to charge almost nothing SIN CGK when their competitors are charging much more, I really can't understand. Plus under the SIN Indonesia bilateral, LCCs are forced by Indonesia to serve free food and drinks - and Jetstar/Valuair serve some sort of bun and water. So the impetus to buy food is even less.
Just checked - For most of Feb after Chinese New Year, SIN Jakarta fares on Jetstar have a base fare of S$14 to S$24. On Monday 24 Feb the base fare is S$4. Yes, that's four bucks. With taxes and fees it is S$34 (but the taxes all go to the airport, not really to Jetstar).
Tiger - most of Feb they're charging S$72 one way to Jakarta
Air Asia - most of Feb they're charging S$78 one way to Jakarta
Jetstar - most of Feb they charge A$65 (S$72) Sydney-Melbourne (slightly shorter than SIN-CGK)
SIA - most of Feb they charge S$560 return (S$280 one way) to Jakarta.
As to why Jetstar wishes to charge almost nothing SIN CGK when their competitors are charging much more, I really can't understand. Plus under the SIN Indonesia bilateral, LCCs are forced by Indonesia to serve free food and drinks - and Jetstar/Valuair serve some sort of bun and water. So the impetus to buy food is even less.
Last edited by DrPepz; 29th Jan 2014 at 09:41. Reason: Added in fare comparisons
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SOPS,
It's called a "loss leader".
You have a dozen or so of seats at $0, and the rest at various tiered prices to make a profit in totality. The "add ons" ( baggage, cabin services,etc.) improve the profit.
You can effectively advertise these sets as if there are plenty.
As to the $2.2 million profit, Dennis Choo gets to take half for his share in the company.
It's called a "loss leader".
You have a dozen or so of seats at $0, and the rest at various tiered prices to make a profit in totality. The "add ons" ( baggage, cabin services,etc.) improve the profit.
You can effectively advertise these sets as if there are plenty.
As to the $2.2 million profit, Dennis Choo gets to take half for his share in the company.
Big picture guys. I can't believe you still question it. If regular muffins don't haul in the big bucks, you super size them!
I reckon I could even explain that to Raj and he would understand. Why can't you immediately see the possibilities?
I reckon I could even explain that to Raj and he would understand. Why can't you immediately see the possibilities?
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QF9 will be cancelled on 17 Feb, 11 Mar and 24 Mar due to low loads, and QF10 on 18 Feb, 12 Mar and 25 Mar. Pax will be rebooked on EK. I know that it's just 3 flights - but QF never did cancel any Europe flights when they operated via SIN.
Ladies who lunch...
Little blurb in the Financial Review today mentioning that Olivia Wirth and Joyce were spotted yesterday at the Rockpool lunching on the shareholder's dwindling funds.
Likely planning the media management strategy...
And today's Australian is carrying an article behind a paywall suggesting that the sale of the QF Brisbane domestic terminal is on the cards. The report suggests a value of $ 150 Million to be added to the coffers in a lease-back scheme.
Which is less than one half of an $A380 (The CFO's apparent version of a bitcoin)
Let's see...that should be enough for just over a year of leases for the eventual operational spares fleet.
Likely planning the media management strategy...
And today's Australian is carrying an article behind a paywall suggesting that the sale of the QF Brisbane domestic terminal is on the cards. The report suggests a value of $ 150 Million to be added to the coffers in a lease-back scheme.
Which is less than one half of an $A380 (The CFO's apparent version of a bitcoin)
Let's see...that should be enough for just over a year of leases for the eventual operational spares fleet.
Last edited by Australopithecus; 29th Jan 2014 at 22:11.
With all this talk of sale of terminals and the like - wasn't there some legal issue related to ownership of terminals?
I remember during the Fox & Lew Tesna debacle that their supposed aim was to get hold of the terminals but there was something about it only being able to be owned by an airline? Or was that just Sydney
I remember during the Fox & Lew Tesna debacle that their supposed aim was to get hold of the terminals but there was something about it only being able to be owned by an airline? Or was that just Sydney
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Correct Dr. Pepz!
I used to fly QF to Europe but no more. This year we booked SIA/LH to Frankfurt and back. I prefer to stop over in Singapore, Bangkok or KL because these are more vibrant, liberal and entertaining places than the sand pit with it's Sharia law.
I also never understood why QF stopped flying to places like KL and HCMC and has only 1 service a day to Bangkok.
I used to fly QF to Europe but no more. This year we booked SIA/LH to Frankfurt and back. I prefer to stop over in Singapore, Bangkok or KL because these are more vibrant, liberal and entertaining places than the sand pit with it's Sharia law.
I also never understood why QF stopped flying to places like KL and HCMC and has only 1 service a day to Bangkok.
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the terms of the BNE terminal agreement are a little 'unique' (compared with SYD) but with the expansion by BAC the timing for a sale & lease back is a sound move. The interesting bit will be the confidential transaction docs and the ability for the leasee to 'flex' ops across the gates .......... suspect if it is on that they may not all have the same looking tail
AT
AT
Apparently Rockpool now gives Qantas staff discounts. Imagine the contra deals you could get? Neil Perry I bet pays for his flights and I am damn sure Joyce would pay for his meals, not.
All QF pax that fly to UK/Europe from anywhere other than SYD and MEL, (and even a lot of those) are Flying on EK metal now. QF has left them no other choice. This was never going to be a good deal for QF frontline employees.
the Don
the Don