Qantas Expands International Routes

[B772]

T-VASIS

As you suggest the B777-200LR can operate LHR-PER with a full pax load and 15 tonnes of cargo. PER-LHR is viable year round provided there is no expectation of cargo being uplifted.

At some stage in the near future QF will have to go back into SIN-LHR by overflying DXB or operate PER-LHR nonstop due to political/religious problems mounting in the Middle East.

There is already evidence of QF losing LHR traffic to other carriers, especially high yielding traffic who do not wish to transit DXB. In an attempt to keep the premium cabins full QF are now contacting J class pax with frequent points available offering a transfer to F class. This is in addition to contacting Y class pax with frequent points available and offering a transfer to J or F.

[Pontius]

The SQ "lay down beds" are not all that flash, having tried to stop myself sliding to the floor for many hours on a sin - BNE flight.

The service is great, the food good, but the Seats are nothing special.

Compared to what?

Qantas Skybeds? SQ is much more comfortable and doesn't have lumps digging into every part of your body.

Qantas domestic seat? SQ is vastly superior to the sit-up-and-beg QF seat....and lies flat.

Qantas 'new' lie flat seat (as per A380)? Qantas just about wins over SQ but I don't see too many of ANY of those options on a QF 737.

The QF product is an embarrassment, especially when it laughingly suggests a 737 is an appropriate vehicle to compete with the likes of SQ's 777. Why on earth would I buy a QF business class ticket and sit upright in a noisy, single-aisle machine with the lacklustre QF service when I can fly SQ in a proper aircraft for the job, with decent seats and a world-beating cabin service?

I used to use the QF flights all the time when it was a twice-daily A330 with Skybeds. The service linked nicely with the European flights and it was rare to see too many empty seats (though I appreciate this does not imply a good yield). With Qantas shunning WA it was a no-brainer switching to SQ and QF lost another Platinum One passenger. I'm sure Joyce and Co won't be losing any sleep over my departure but on my last SQ flight the bloke sitting next to me was in exactly the same situation........and equally annoyed that he couldn't use his QF miles for anything that he actually wanted (not relevant I know, but with over 1.8 million miles between us and unable to use them for something WE wanted it was another indication of why QF is losing customers).

The 'new' service to SIN will probably work as far as profitability is concerned and that's obviously what's important to QF. As far as encouraging travellers on the route to QF from SQ they don't have a hope in hell.

[Snakecharma]

Pontious, I suspect it depends on what SQ fleet type you are comparing.

I was talking about the 330 which has the same J class seat as virgin have on their 330's, same as Fiji airways on theirs too.

It is an angled lie flat bed, in that it extends flat but at an angle, so you are constantly sliding towards the bottom of the seat.

A proper lie flat bed/seat that is also level is, I reckon, a much more comfortable proposition.

I don't know what QF have in their aeroplanes these days.

[Mahatma Kote]

Isn't the pitch the same on the QF738 and A330? 32 inches (in most rows)? Everything else would be on par e.g. seat / cabin / IFE quality?

There a huge difference for general passengers between 3-3 and 2-4-2. But beyond that, the 738 has less seat room than the 330.

738 Cattle Class Figures: 17.2" width, 30" Pitch, 5" Recline
A330 Cattle Class Figures 17.5" width, 31" Pitch, 6" Recline

Then there is the average time to get served. I recall the A330 was quite a bit quicker due to more cabins and galleys.

Cabin comfort is much better on the A330. It's very quiet in comparison and the ride is smoother.

The only win for the 738 is average egress time is less than the A330.

[1a sound asleep]

I just read that Emirates wants another 5 year extension to the QF deal. God help us


"In 2013 Qantas killed the Flying Kangaroo's long-standing joint venture with British Airways in favour of a five-year hook-up with Emirates. This created passengers for Emirates on their routes from Dubai to European airports. It has been very profitable for Emirates but the deal is due to expire in 2018

Now Emirates is keen to extend its alliance with Qantas (no wonder) for another five years and further wants to boost the number of its A380s flying to Australia. Its time Qantas stood on its own two feet and realised that this joint venture is only helping Emirates profits and driving passengers away from Qantas.


Qantas needs to be in joint ventures with a number of airlines and preferably those that are members of One World alliance and not furthering the dangerous world dominance and industry destruction that Emirates is creating


https://www.facebook.com/AirlineSafety

[B772]

In my earlier post addressed to T-VASIS I should have mentioned the B777X both the 8 and 9 as being a suitable a/c for QF to overfly the Middle East. We do not know the payload/range as yet but I am confident it would meet the QF requirements for the route.

[PPRuNeUser0198]

They book QF end up on Emirates, they enjoy the experience, which website do you think that they will go to next time?

The Qantas product isn't all that bad. There are pros and cons for both carriers. I have flown a lot on both, and they have they good and bad points. I don't think every 'QF' customer who travels will only ever go on EK metal again. Plus - it is a revenue share deal anyway, so QF will profit by QF coded customers.

QF cannot do the same because?

Qantas has established businesses e.g. catering, fleet presentation etc. They can't simply shut up shop and tender that business. You need a greenfield business like Virign, Tiger and Jetstar, who can. Qantas is burdened by their established businesses, as they can't tender work to compete (against themselves). I am sure if Qantas could, it would close down all of it. They're inefficient. Having more sub-contractor competition in the market drives competition, efficiency, and value. So Qantas has costs for this infrastructure at an AUS cost base, in the likes for SYD / MEL / PER etc. Singapore, only has one port (Changi), already on a lower cost base, and leveraging economies of scale that Qantas can't. This is especially the case for fleet specific equipment. Let's say you have a truck for the A380 in MEL. There are only two movements for QF 380's. In Changi, there are a large number. Now if Qantas had all the ground handling work in Melbourne, then Qantas would be in a better position. However, there are a lot of providers in Melbourne. Competition is fierce. Qantas cannot compete on cost with these other operators. On the other hand, in Changi, there are only really two suppliers - for all airlines. SATS and Dnata. Huge volume. Limited competition. There is a third, which Jetstar just moved to, but they are a start-up from what I understand.

Jetstar has COST QF money.

I disagree with this on the basis that the Australian franchise makes money. I believe it has since day one. Yes, the others may not be, but we can't expect the start-up's to make money. And then you have industry downturn, which affects everyone. We have just moved through this. On all accounts, I understand the franchises are on the upswing... We will see.

QF red tail fleet decisions have been mismanaged. Wrong choices have been made over the last 15 years.

Agree with this. The vision of A380 / B787 was the 2000 dream. It was the model at the time. The landscape (aviation) was different then, to what it is today. The delays with both aircraft type also caused an impact. It would not be fair to blame 'management' 100%, but I agree a portion should be.

Jetstar, Internationally has underachieved. Yet it has been given capital.

It must be noted that Qantas is only a shareholder, and has only partly funded these businesses. It is shared risk. And the investment is quite small, relative to the overall CAPEX. Qantas does need to be entrepreneurial at the same time. To invest in revenue opportunities. This is the basis of the franchises. But these a tough businesses, in tough economies. But I think it is right to give it a go. Someone else will. I still believe there is good in this. I think time will deliver. But if they don't, this is not large money lost. Yes it is money - but the payoff could be even bigger for the Group.

since the outfit in question has been known as "Jetstar Pacific" for 7 years now.

Qantas may have been an investor, but I don't believe Qantas has had an active role in transforming the business. I think this has started now. Vietnam is a challenge to do business in. I think it has taken time to get it right, and I think this is now. JP is growing. The fleet has been improved. Synergies are being leveraged. I think you'll see JP go from strength-to-strength.

You conspicuously failed to mention Jetstar Hong Kong. Presumably it's in "embryonic start-up".

It is hard to blame Qantas on this. There are politics at play in HKG. This is clear. I again say that Qantas is only an equal shareholder in this investment. Let us hope it gets legs soon. CX is doing everything it can to stop this start-up.

In fairness for this part of the argument, I believe QF subcontract their catering/ground staff etc in Singapore to SATS -- which is owned by Singapore Airlines. There is no such catering truck sitting around SIN all day waiting for QF to arrive. Surely this is indicative of other stations around the world??
On the other hand, QF used to do the lions share of foreign airline ground handling in Australia until the past few years when anecdotally contracts were given away by management jacking up prices by 50+%

You have misunderstood my commentary. I refer to Australian operations, not international. All ground handing in offshore ports is by third parties. My argument is that in AUS, there are no economies of scale, due to end-of-line operations, were Qantas has to supply all the required infrastructure in multiple ports, to service low volume operations. Versus high density operations SQ enjoys in their hub of Changi.

Qantas ground handling has lost contracts simply because they cannot compete with other Australian providers. Now that catering, fleet presentation etc., are all stand-alone in that they are responsible for their own P + L's, they have to price to deliver returns. The cost base of these legacy operations is way higher than the likes of your Dnata / Toll's, Menzies, Aerocare etc. Just compare wages as a start. It is difficult for Qantas to drive cost improvements in these businesses, as so much has been built on legacy. You need pretty big transformation. That usually means a new cost base. Hard to do when you don't have the luxury of a greenfield business.

[FYSTI]

Its rare to see such slippery use of language & selective amnesia to promote a faith, a belief as an "almost certainly truth".

Originally Posted by T-Vasis

I disagree with this on the basis that the Australian franchise makes money. I believe it has since day one.

I believe - nuff said. There is no proof, because the accounts that would enable such proof have not been released. Your statement is a one of faith, not fact. Present evidence other than some vague about profitability statement by CEO's.

Originally Posted by T-Vasis

On all accounts, I understand the franchises are on the upswing... We will see.

Once again, a statement of belief, faith, and untestable, except in hindsight - yet crafted to mold perception today.

Originally Posted by T-Vasis

It must be noted that Qantas is only a shareholder, and has only partly funded these businesses. It is shared risk.

But yet Qantas appears to have all the liabilities. Qantas always seems to providing the capital injections, yet always seems to have its equity diluted. Singapore, Japan & Hong Kong come to mind.

Originally Posted by T-Vasis

And the investment is quite small, relative to the overall CAPEX.

So what you are implying is leverage. That precious seed capital could have been alternatively used for improvement in the mainline brand using the same concept, ie leverage. But that appears not to suit the agenda to effectively offshore the bussiness.

Originally Posted by T-Vasis

Qantas does need to be entrepreneurial at the same time. To invest in revenue opportunities. This is the basis of the franchises. But these a tough businesses, in tough economies. But I think it is right to give it a go. Someone else will. I still believe there is good in this. I think time will deliver. But if they don't, this is not large money lost. Yes it is money - but the payoff could be even bigger for the Group.

Once again faith & belief, trust us it will all work out in the end.

Originally Posted by T-Vasis

Qantas may have been an investor, but I don't believe Qantas has had an active role in transforming the business. I think this has started now. Vietnam is a challenge to do business in. I think it has taken time to get it right, and I think this is now. JP is growing. The fleet has been improved. Synergies are being leveraged. I think you'll see JP go from strength-to-strength.

More bogus information, Qantas had a whole team of executives in running (including operations) in Vietnam beginning around 2007/2008. Two of them were subsequently arrested and it became a major diplomatic incident Fears for Jetstar execs questioned in Vietnam

Originally Posted by T-Vasis

It is hard to blame Qantas on this. There are politics at play in HKG. This is clear. I again say that Qantas is only an equal shareholder in this investment. Let us hope it gets legs soon.

Can't blame Qantas? Really? Politics and national interest are always at play. CX were only going to do what Qantas did to SQ about the Pacific - fight tooth & claw to preserve their domain. You even had Qantas lobbing politician with "dirt sheets" on the M.E carriers, just prior to signing a deal with one of them (Olivia Wirth is Qantas's high flyer )

Bottom line is there is a limited amount of capital available as the footings for debt foir the entire business. The choice was made years ago to attempt to offshore the business, rather than invest in the mainline product. That choice is now bearing a bitter fruit. There is no transparency in the public accounts that enables independent validation of anything other than the Group P&L, it is a black box.

Everything else is an act of faith. I don't want vague statements that could be argued away with changes of definition, I want proper accounts with full footnotes, concrete numbers that have been audited. I will be happy to be shown any documentation that you can point to.

[Metro man]

QANTAS is a member of the Oneworld alliance and their miles and status can be used on other alliance members where as Emirates are only allied with QF therefore the QANTAS program is probably the better one to be with unless you travel almost exclusively on EK/QF.

If you prefer the EK product you can book codeshare flights which results in less revenue for QANTAS compared to having you on their own aircraft.

However if Emirates were to join Oneworld you'd need to think again.

[FFRATS]

T-Vasi, Don't take this the wrong way but you look like you have been 'drinking the Kool aid' mate. Or believe the weekly company news letter's JQ put out...

JQ-

I disagree with this on the basis that the Australian franchise makes money. I believe it has since day one.

So will a kids lemonade stand when Mom and Dad buy the shop out and also provide the the shop, lemons, sugar etc.

It must be noted that Qantas is only a shareholder, and has only partly funded these businesses. It is shared risk

Unfortunately QF has funded most Start up costs internationally , only to dilute share holdings later so IF any profits were ever made the business model still needs to recoupe losses. The original Business model would never take this into account so flawed from conception. EG, JQ Asia only profit was Leasing AC, that had no routes to fly, to JQ OZ , A330's persisting on loss making routes for years, having to buy Value Air to be able to fly to Indo.

Or the other way to do it keep pumping money in!
How much money into JQ Japan has been injected and reduced the 'investors' holding's lately.

JPacific,
To add to FYSTI, don't forget the AC VNA -198 , brand new A320 in Australian config, gifted to JPA to help get the Exec's out of jail! 40Million + write off from QF books.
No money gets back to QF, just to 'The Party'. It's only getting expanded because Vietjet has 4x it's size in 3 yrs and it's costing some Party members a new Rolls Royce

JQHK/ Red Q all a joke that need not be discussed due so many flaws in the approach in doing business in Asia.

FFRATS.

[indamiddle]

T-vasis,
Qantas will never see a profit in Vietnam. The government has complete control and will use the same accounting standards QF uses to ensure that JQ will never show a positive result. Any profits will go to the government.
My greatest wonder is that if JQ is going so well overseas ( it never has) then why is it that QF has to cough up for initial capital establishment costs and for further capital injections to prop them up. Based on your optimistic projections JQ should be easily able to fund these start ups.
I have never heard JQ mentioned once as providing capital to a brother start up. It is always QF.
What i would like to know is if anyone out there knows the actual capital injections, initial and subsequent, for Japan, Hong kong, Vietnam and singapore. I would also like to include here the loans qantas has made to its partners to 'facilitate' the start ups. ( this has happened at least in one case). Add all the losses accumulated minus the few profits and this will show a negative ROR! The figures, if anyone can provide them, will definitely show the disaster that has occurred o/s while Joyce has ignored mainline.

[moa999]

FRRTAS - You mean VN-A198 which is leased from AWAS - so not gifted to BL as they don't own it.
Jetstar Pacific VN-A198 (Airbus A320 - MSN 4459) | Airfleets aviation

Indeed not aware that JQ own any aircraft - they are all leased (that is part of their business model) - so even if a plane was diverted from AU to VN register, can't see a cost being anything near $40m.

indamiddle - Qantas Group provides the startup capital. Not JQ not QF, but the publicly listed company.

[FFRATS]

moa999
Agreed on lease. Not many company's own their fleet.
I'll re word, it was a 'gifted lease' then....diverted from OZ to help out QF/VN relationships after Fuel hedging excuse for Losses.

Interesting to see who pays the lease?

It is very grey the whole business process in VN, indamiddle is spot on about profit and actual returns to QF. (qf being the sector that shows the losses for the Qantas Group mistakes)

FFRATS.

[VR-HFX]

FFRATS

Re JQ JP.

So far Qantas Group has contributed Yen 15 billion (AUD 160m) out of a total of Yen 33 billion in capital. Y4bn at startup, Y5.5bn in Nov 13 and another Y5.5bn in Nov14.

Loss year 1 was Y8.8bn, year 2 Y11.1bn and predicted loss year 3 between Y 9-10bn which will mean another capital call by Nov 15.

Japanese CEO was moved on in Feb and replaced by an Irishman from JQ OZ.

Watch this space.

[chrisb74]

ScootBiz on the 787 is fairly much permanently on sale for $299 each way. Sometimes they do $249.

Qantas Y on the 737 is currently on sale for $199 each way.

Both include Luggage, Food and IFE.

I know what I'd choose.

[wheels_down]

Japanese CEO was moved on in Feb and replaced by an Irishman from JQ OZ.

Watch this space.

The Brits and the Irish used to run Tiger Airways in Australia and Singapore. And didn't that work out well

[busdriver007]

As an Irishman said to me "Us Irish think we are god's gift to aviation, and we are not!". What is suspected of being ability is pure B&^%$&t.

[Hoofharted]

It is hard to blame Qantas on this. There are politics at play in HKG. This is clear. I again say that Qantas is only an equal shareholder in this investment. Let us hope it gets legs soon. CX is doing everything it can to stop this start-up.

My goodness - this is news to QF management? They thought they would just ride into town and "kick a few butts" without knowing that Swire own the entire town? They didn't learn from the fiasco in Vietnam that doing business in that part of the world is shall we say "different"?

Just shows the level of parochial ignorance that seems to be afflicting these management types.

[crewmeal]

I believe Sir Tim has his eyes on the Pacific. If that's the case there will be nowhere safe for QF to operate to without EK having a big say.

[MEA332]

A330-300s

Rumour is (from Snr Tech Crew), Qantas is looking at ex Skymark's Airbus A330-300s that are in storage (5 airframes with Trents all <2 years old). Maybe Qantas is looking at expanding the International fleet???