Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

The Great Turnaround

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Old 14th Jan 2018, 11:01
  #41 (permalink)  
 
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Originally Posted by Big M View Post
Dragon man, jetlikespeeds is quite correct,

Please head to The Street at QCC, find the Coolaid dispenser and drink liberally from it until you see the light. We have the youngest fleet of any airline and always use "the right aircraft for the right route". This is why our CEO is the highest paid of any airline in the region (world??)
Yea right, it must be cos I never go to the street or drink coolaid only the day to day reality is what I see and the light at the end of the tunnel is a train!!!
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Old 14th Jan 2018, 20:38
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We have the youngest fleet of any airline and always use "the right aircraft for the right route".
Indeed at privatisation thanks to a handy $1.35 billion (in 1994 dollars) Qantas HAD the lowest IATA fleet age at 6.3 years.

Including JQ yes the fleet age is acceptable on an international basis. Take those 120 odd aircraft out and the fleet age is getting up there at 11.7 years last time I checked. So Brontosaurus Clifford is right, Qantas needs a new fleet. Shame the reptilian brain didn't think of that before handing out $1.75 billion of other people's money..

Qantas needs a domestic twin aisle aircraft, i dunno a 788. Instead they sent them to the backpacker network. Now Australia crams single aisle aircraft into the same airspace for the same uplift.Two 738 is about 1.5 767 worth of passengers....No wonder congestion is worse.

When you consider the vigour with which JQ was expanded and executed throughout the region, its actual contribution is not that great. There is a role for JQ, but it never was going to be the nirvana IR wanted. low fare airlines are very sensitive to economic cycles and highly elastic models. You need to fill the aircraft all the time... Of course warehousing the expense (perfectly permitted under accounting convention) allows a different industrially suitable narrative.
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Old 14th Jan 2018, 22:19
  #43 (permalink)  
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Originally Posted by dragon man View Post
'

Although off topic a bit what is not talked about is the urgent need to upgrade the fleet.
12 A380s probably Max another 8 years
10 747s passed their used by date IMO max 8 years
28 A330s I donít know what their use by date is but suspect some must be close to it.
73 737s I suspect the oldest of these are close to retirement.

.
A380- first delivered in 2008? Could go as long as 2028 or maybe longer? Suspect fuel costs will be the final part of that puzzle from 2023 onward.
744- 2023 I think is the current plan. Despite the narrative the 787 is NOT the replacement- at least not on a one for one basis. The only way the 787 replaces the 744 is with two of them and some creative Scheduling. Eg one 787 does BNE- LAX- JFK and another does BNE- SFO or BNE- DFW.
A330- oldest of these is late 2002/ early 2003? So likely to start needing replacing in about 5 years or so? Suspect the additional 787s on order will take care of these 29 aeroplanes.
737- 15 oldest were from January 2002. Youngest is November 2014. Will start to need need other options in about 4 years. Still have 100(ish) A320s on order. I reckon the A320 family will replace the 737. Maybe even some A321s to start with to allow the A330 to be replaced on transcontinental routes to expand internationally or to retire the older A330s in a few years.

So the time frame from about 2021 to 2030 will essentially see the entire current Qantas fleet replaced except for the 787s and some of the newer 737s.
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Old 15th Jan 2018, 01:33
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Re the fuel price decline. It's as important to be lucky as good!

Ditto the whole OZ economy - lucky with the resource boom, lucky that Chinese investors see Sydney & Melbourne property as a bolt hole.
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Old 15th Jan 2018, 01:59
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A330- oldest of these is late 2002/ early 2003? So likely to start needing replacing in about 5 years or so? Suspect the additional 787s on order will take care of these 29 aeroplanes.
How many additional 787's are on order? Have I missed an announcement?
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Old 15th Jan 2018, 06:49
  #46 (permalink)  
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Bit inelegant of me. Should have used ‘options’ rather than ‘orders’. I think QF have fixed dates/ delivery slots on another 8 in FY19/20 but are yet to firm those up. Maybe more at half yearly results end of Feb. That takes the remaining options down to 37.

Either way, they have options in the pipeline that can easily replace the A330s.
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Old 15th Jan 2018, 10:40
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Folks,
One of the more interesting exercised here is to do an little work on what the bottom line would have looked like if the "real" Qantas had had a fuel efficient fleet these last 15 years, flying the same gross revenue.

IE: B777-200/300ER in the main, with a lot more B787 already, there is a reason why Cathay, BA, Emirates etc. have so may B777.

The "bottom line" --- the big losses of the bad years turn into small profits and small losses, the financing cost of an efficient fleet fleet is a small cost, versus the now very aged B747 fleet, and the A380, which has turned out a commercial dud for Qantas, and most others.

In my opinion, it was the Dixon era that set scene, the performance of the present management, in my opinion, has been mediocre at best, the future is far from clear.

Tootle pip!!

PS: as far as fleet financing is concerned, the ownership cap is a furphy, Qantas would have no trouble financing a fleet without an extended share capital, in the present market, which seems unlikely to change dramatically any time soon.
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Old 15th Jan 2018, 21:32
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One of the more interesting exercised here is to do an little work on what the bottom line would have looked like if the "real" Qantas had had a fuel efficient fleet these last 15 years, flying the same gross revenue.
  1. The operating revenue has gone backward in real terms. It has only just gone up in nominal terms. Compared to industry peers it is backwardation..
  2. The over egging of the JQ pudding to solve their industrial and QSA imagined limitations has generated less marginal revenue. A role for JQ exists, but it is not a scale business. They are volume businesses with very elastic MR.
  3. Qantas fuel spend for ASK is way higher than peer airlines attributable in a substantial part to fleet decisions.
Let us imagine that instead of a greenfield operation with Impulse, Qantas instead engaged employees, say using the 734 fleet, rebranded, repainted with high density seating...A Qantas lite. How would that have fared?
  • Same gates
  • Same pilots, maybe different conditions (like Australian airlines)
  • New flight attendants? (Maybe)
  • Same engineering
  • Same load control, flight planning
Start up costs minimal.


No, they decided JQ would grow and replace Qantas, a high yield business with fantastic branding low debt load. Instead they directed all their energy to re-invent the wheel, deny career opportunities, duplicate cost centres throughout the business, two engineering systems, maintenance systems, ticketing systems, management structures, administrative functions and on and on..However 'creating competitive wage tension' spreading FEAR, UNCERTAINTY and DOUBT. Giving HR/IR a prominent role.


No wonder the Operating revenue went no where...
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Old 16th Jan 2018, 00:39
  #49 (permalink)  
 
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Folks,
I find it interesting that there is not one other comment, in the whole thread, on fuel costs, a dominant cost, and fleet fuel efficiency in international operations, against which all other costs are almost marginal.

I have no doubt that the investment freeze that resulted in the present international fleet was part of the program to maximize the cash holdings when the plan to take the company private was hatched, but the results have severely, almost terminally, limited the performance of the international operation.

The Air New Zealand results in recent years are, indeed and in part, a lesson on what should have been done.

Finally, there are broadly two kinds of companies, those who treat employees as a cost, those who treat employees as an asset.

Long before the current management, QANTAS was the former, even in the 1960s, in the earliest MBA courses in Australia, QANTAS was used as a textbook example of how to not treat employees.

Try and imagine what a company QANTAS would be today, if it had been run by somebody with the clarity of vision and common sense of Herb Kelleher of Southwest Airlines.

Tootle pip!!
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Old 16th Jan 2018, 21:02
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Qantas 'worst major airline' for fuel efficiency on trans-Pacific flights, study suggests - ABC News (Australian Broadcasting Corporation)

An accounting turnaround, but the fundamental metrics are unchanged....
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Old 17th Jan 2018, 01:55
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There are perfectly rational explanations for that report RD. The reporters (typically!) havenít looked into it deeply enough and should have contacted QF first:

From QF ĎIn the Newsí
1. Fuel efficiency on Pacific flights Ė Media are reporting on our ranking in a new study of airline fuel efficiency and carbon emissions when flying across the Pacific. We rank low in this study because we use larger aircraft, fly very long distances and have premium cabins that naturally have fewer people on board. Weíre committed to reducing carbon emissions and are continually looking at ways to lower them across our operations. The introduction of our more fuel efficient Dreamliners and our FlightPulse app for pilots are a couple of recent examples.
You would hope that the people writing that knew they were writing to, and for, airline professionals and would therefore assume they might be across basic airline fundamentals, but clearly not!

You canít make this up! Flight Pulse might be the heart of the great Ďturnaroundí? Forget 777ís 20 years ago. Itís Flightpulse! No one here has thought of that....

Last edited by V-Jet; 17th Jan 2018 at 02:08.
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Old 17th Jan 2018, 02:05
  #52 (permalink)  
 
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Qantas said the study was not an accurate representation of its fuel efficiency across the Pacific, and it had a number of fuel-efficiency programs in place.
I would not agree with the quantum of difference either, but the fact is that the difference is still stark, there is no way that having an inefficient fleet, fuel wise, can be turned into an efficient fleet, short of having the efficient aeroplanes.

The whole point I have made on another thread.

If Qantas had had an efficient fleet during recent years, it would NOT have made the losses it did on international operations. As I also said, in my opinion, the investment freeze that resulted in the present fleet went back to the preparations to take the company private and strip it.

The international operation has never been as bad a business as "management" has made it out to be, one of the few aviation or financial journalists who ever called it for what it was, as opposed to re-publishing the PR spin, was the late Ben Sandilands.

Tootle pip!!
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Old 17th Jan 2018, 02:15
  #53 (permalink)  
 
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We rank low in this study because we use larger aircraft, fly very long distances
Perhaps the QF SYD-LAX route is a longer distance than the SYD-LAX route flown by Virgin, Delta, United etc? Could be up to 64% longer hence the different fuel usage, now it all makes sense.
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Old 17th Jan 2018, 03:19
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Folks,
The major reason is quite simple, don't look for justifications. Don't try and make it complicated. Apply Occams Razor.

Over any stage length, the per seat (or fuel$$/AKTM) fuel consumption of a B777-300ER will be about 27 % (sometimes even better) than a B747-438, and the A-380, in the real world, is not much better.

That is comparing like with like.

If you go to the maximum ranges (Dallas - Sydney) the B777 does even better, pro rata.

There is a bleeding good reason why QANTAS major competitors now all have big fleets of twins.

The sad part is that the technical end of QANTAS (what is left of it) knows this all to well, after all, QANTAS was one of the world's first airlines to have an extensive EROPS/EDTO network, over the Pacific, long before any US, European or Asian carrier. ANZ was the ONLY other airline that was close to QANTAS in these developments, they have not chosen to forget.

The in-service fuel figure for various B787 are bettering "book", the projected figures for the B777X ( and Boeing always get pretty close to these in service) are outstanding, even compared to the present B777-200/300ER.

No 3/4-hole can ever get close, this is not news.

Quite simply, if QANTAS had carried the same AKTM as in recent years, in B777/787 on long range operations, instead of B747/A380, it would not have made the big losses it did, and the current profits would be correspondingly even better.

It ain't rocket science!!

Tootle pip!!

Last edited by LeadSled; 17th Jan 2018 at 03:31.
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Old 17th Jan 2018, 03:38
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New 787/777X maybe $300-500Million, used 747 maybe worth $10Million.
I hope they update the fleet soon, but the extra fuel costs go a way towards higher lease costs.
If there is a rapid rise in fuel price that would be bad.
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Old 17th Jan 2018, 04:06
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There is a bleeding good reason why QANTAS major competitors now all have big fleets of twins.
With fuel representing 30% of operating costs it is bleedin' obvious, except to the smartest guys in the room..


Quite simply, if QANTAS had carried the same AKTM as in recent years, in B777/787 on long range operations, instead of B747/A380, it would not have made the big losses it did, and the current profits would be correspondingly even better.
Just maybe the tide is going out and we will see the little fella swimming naked...Sorry for the imagery
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Old 20th Jan 2018, 04:31
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Folks,
I presume you have seen Joyce's comment along the lines that he would have to be very drunk to order any more A380.
Likewise, his comments that the fuel saving are so great, it is cheaper to fly two B787 in tandem, rather than one A380.
As I said, the Qantas international bottom line would have looked very different if it had had a modern fuel efficient fleet these last 15/20 years.
Tootle pip!!
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Old 20th Jan 2018, 04:57
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leadie, the airline I work for has a large fleet of both 380 and 777. It has found that the 380 does better than the 777 on ULR sectors, as the 777 is MTOW limited when sectors exceed 12hrs and seats/cargo needs to be blocked/left behind. The 380 is carrying MZFW out to 15hrs. On flights from DXB to LAX, for example, the 773ER would have 90 seats blocked, so 265 seats and burn 8.6t/hr. The 380 is carrying 517 and burning 12.7t/hr (15hr sector). I do understand that QF only has the first generation 380 so may have different numbers, as our newer Aircraft have a greater MTOW and a lesser burn than our original ones.
The two beats four argument does work when a 777 is lined up against a 747 as they effectively carry the same load, all be it with the 747 being able to take a greater load further. But when the quad carries significantly more, the twin advantage is reduced. For example our 772LRs burn more per seat than our 380s.
It's all well and good to have a low fuel burn, but to make it work you need to be able to carry an economic load.
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Old 20th Jan 2018, 05:20
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Originally Posted by donpizmeov View Post
leadie, the airline I work for has a large fleet of both 380 and 777. It has found that the 380 does better than the 777 on ULR sectors, as the 777 is MTOW limited when sectors exceed 12hrs and seats/cargo needs to be blocked/left behind. The 380 is carrying MZFW out to 15hrs. On flights from DXB to LAX, for example, the 773ER would have 90 seats blocked, so 265 seats and burn 8.6t/hr. The 380 is carrying 517 and burning 12.7t/hr (15hr sector). I do understand that QF only has the first generation 380 so may have different numbers, as our newer Aircraft have a greater MTOW and a lesser burn than our original ones.
The two beats four argument does work when a 777 is lined up against a 747 as they effectively carry the same load, all be it with the 747 being able to take a greater load further. But when the quad carries significantly more, the twin advantage is reduced. For example our 772LRs burn more per seat than our 380s.
It's all well and good to have a low fuel burn, but to make it work you need to be able to carry an economic load.
The real winner for QF in this argument would be to get the 5 I think it is 747-800 white tail pax Aircraft that Boeing donít have a home for. It would slaughter the ERs in range , payload and fuel burn. Wishful thinking I know.
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Old 20th Jan 2018, 08:16
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Have a read of this, I didnít realise how impressive the 747-800 was.

http://www.boeing.com/assets/pdf/commercial/airports/acaps/747_8.pdf
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