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So you need a new fleet Leigh?

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So you need a new fleet Leigh?

Old 16th Dec 2018, 20:28
  #661 (permalink)  
 
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On top of the foregoing, the stated profitability of JQ has always been a joke.

There is a typical airline economic pie chart which shows that typical airlines pay about a third of their overhead in fuel, and about a third in leases, charges, fees, insurance etc. The remaining third of the cost pie is staff.

At one stage QF were claiming that JQ was 20% more profitable per passenger after getting less revenue from each due to discount pricing. The only way that would be true is is the staff all worked for 33% of Qantas pay or if <gasp!> someone was hiding other costs in oher areas of the “group” accounts.

JQ Hong Kong, Viet Nam, Asia and International all are acknowledged money losers.

Regarding Qantas International ASK metrics: Longhaul flies their (big) aircraft around 18 hours a day, each, with only one stop. While a smaller domestic aircraft might do 12 hours. While a 737 is doing a 45 minute turn, the 330 is flying 180,000 ASKs. In fact, a 330 can do 4.3 million or more seat kilometres in a day whereas a 737 would do only just over a million. The tyranny of distance and the math of lots of seats grinding out the miles all day.

The reason that long haul suffers in comparison to shorthaul in revenue per ASK is a simple matter of efficiency and competition. Looking at flights in mid January for a MEL-SYD return shows that the cheapest QF flight costs $0.17/km. The cheapest BNE-NRT on the other hand is $0.11/km. BNE-LAX goes for $0.074/km. And its often much cheaper.

International is a tough business because you almost always have a capable flag carrier as competition on any route. And try running a Qantas group without its international feed. Oh! That's right! We did try that when the geniuses thought that they could be a lounge & code share business. How'd that work out again?

Qantas needs more than just a new fleet.
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Old 17th Dec 2018, 00:39
  #662 (permalink)  
 
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All very interesting.
The following , as best as I can remember , relayed to me at a dinner party sometime ago might be worth running up the flag pole to check veracity.
If any of the following is anyway close to truth , it paints the “wee one” in a very poor light.

Alledgedly, so the story goes , when the smartest guys in the room created the Terminal decline myth in order to destroy the share price (only genius’ could achieve that with high load factors ,apparently !)
Then locking in future performance bonus’ at the created depressed price , they got a bit nervous about a potential hostile takeover due to the now favourable price / equity ratio for such an attempt.
Apparently there was a group , the same old suspects , Dixon,Gregg, Carniege , Singo et al ,alledgedly trying to borrow Dubai money to finance a hostile takeover.
Some months after this group started circling , old Clark from Qantas’ mates ? at Emirates came a calling with a summons for the Wee One to meet at their Hidden Valley resort , in the Blue Mountains.
From that meeting Qantas ended up with the Emirates /Qantas overlord alliance ?
Low and behold the hostile takeover group faded away .
From all that , one can only assume Clarke used the information to leverage a deal that the Wee One couldn’t say no to , in exchange for pulling the finance on the takeover deal for Dixon and his mates.
Around this time the media released pictures of the little fellow and old scroats having quite a heated tête-à-tête.
Soon after the transformation started in earnest and the International section that was in terminal decline and their fleet was wound back quite dramatically.
It was alledged that all the aircraft that were disposed of for this transformation ( the 747 + 767’s) were all aircraft leased by the fellow with the saggy ball sack monicker.
Was this a vindictive payback by the Wee One for the attempted hostile takeover and the untenable position this placed him in with his new middle eastern overlord masters ?
Who knows , but makes for interesting conjecture, non the less !

Last edited by blow.n.gasket; 17th Dec 2018 at 01:28.
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Old 17th Dec 2018, 02:21
  #663 (permalink)  
 
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JQ, $461 million profit vs QF INTL $399 million profit.
JQ needed 93 aircraft doing domestic and international legs to achieve that. How many of QF's 214 aircraft fleet are international? I reckon from that Annual Report - 27 - not counting any of the 737's and disregarding that the 787's do some domestic legs. So on a per aircraft basis, QF International is far more profitable.
From the Report:
Jetstar International had strong earnings with ROIC>WACC whilst all Jetstar’s branded airlines in Asia were profitable. Jetstar Japan maintained its domestic Low Cost Carrier (LCC) leadership position, Jetstar Pacific improved its domestic position as capacity discipline returned to the market and Jetstar Asia contributed to benefits from the Singapore hub switch.
They won't say how profitable Jetstar's branded airlines in Asia are though, will they. They don't even say that Jetstar International is profitable. It only has to be $1, but that wouldn't be much of a return on investment would it?
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Old 17th Dec 2018, 03:04
  #664 (permalink)  
 
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Are the QF profit figures inclusive of the numerous domestic sub-operations who wear the red and white and who contribute to the overall QF revenue?
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Old 17th Dec 2018, 03:55
  #665 (permalink)  
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Originally Posted by bazza stub
Are the QF profit figures inclusive of the numerous domestic sub-operations who wear the red and white and who contribute to the overall QF revenue?
An interesting question.
Effectively yes, with certain caveats.
That is under AASB 127 whereby control is presumed to exist where certain conditions are met.
Something like Cobham, where a contractor in which QF does not have a controlling interest (although owns the aircraft-assuming there is lease charges) ought not be included in a consolidated segment. As stated a few caveats exist.



Allegedly, so the story goes , when the smartest guys in the room created the Terminal decline myth in order to destroy the share price (only genius’ could achieve that with high load factors ,apparently !)
Then locking in future performance bonus’ at the created depressed price , they got a bit nervous about a potential hostile takeover due to the now favourable price / equity ratio for such an attempt.
Apparently there was a group , the same old suspects , Dixon,Gregg, Carniege , Singo et al ,alledgedly trying to borrow Dubai money to finance a hostile takeover.
Some months after this group started circling , old Clark from Qantas’ mates ? at Emirates came a calling with a summons for the Wee One to meet at their Hidden Valley resort , in the Blue Mountains.
From that meeting Qantas ended up with the Emirates /Qantas overlord alliance ?
Low and behold the hostile takeover group faded away .
Yes blown.
The terminal decline narrative emerged from nowhere. It required at the core a controlling shareholder, in effect somebody with a substantial enough shareholding to block hostile activity, control the foreign ownership restrictions, but be closely aligned with management.
Taking the share price south was risky. Is it any wonder that the interests referred to above are no longer substantial interests?
Little Napoleon's options were rather 'amazingly' issued right at the low water mark.
Interestingly in confronting the 'biggest loss in Qantas' history, he (Little Napoleon) with conviction in his voice, incredibly predicted that the very next year, Qantas would be profitable...Incredibly it was. What dates did those very cheap options vest?

Amazing set of coincidences isn't it?
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Old 17th Dec 2018, 05:22
  #666 (permalink)  
 
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That was basically where I was going with the question. How do Qlink fleets appear on the balance sheet? And the 717, an extremely lucrative fleet by all accounts, where/how does that factor into the wider bottom line I wonder.
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Old 17th Dec 2018, 06:04
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reminds me of a joke...
A businessman was interviewing applicants for the position of divisional manager. He devised a simple test to select the most suitable person for the job. He asked each applicant the question, "What is two and two?" The first interviewee was a journalist. His answer was "Twenty-two." The second was a social worker. She said, "I don't know the answer but I'm glad we had time to discuss this important question." The third applicant was an engineer. He pulled out a slide rule and showed the answer to be between 3.999 and 4.001. The next person was a lawyer. He stated that in the case of Jenkins v. Commr of Stamp Duties (Qld), two and two was proven to be four. The last applicant was an accountant. The business man asked him, "How much is two and two?" The accountant got up from his chair, went over to the door and closed it, then came back and sat down. He leaned across the desk and said in a low voice, "How much do you want it to be?" He got the job.
https://www.proformative.com/questio...countant-jokes
Originally Posted by bazza stub
where/how does that factor into the wider bottom line I wonder.
Wherever it is most useful to the required narrative is the answer.
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Old 17th Dec 2018, 06:29
  #668 (permalink)  
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Originally Posted by CurtainTwitcher
reminds me of a joke...

https://www.proformative.com/questio...countant-jokes

Wherever it is most useful to the required narrative is the answer.
This precisely is the problem with over reliance on financial statements that provide no detail of materiality. This threshold is management chosen.
Some analysts accept fanciful measures of 'Underlying Profit Before Tax', management chosen measures of profit neglecting things that lower the 'number'. Management chosen 'preferred measures' are neither statutory, measured or even commented on during a general purpose audit. Those with experience of the 'herd of analysts' might be interested why would a management chosen measure be that which upon an analyst relies to make a recommendation of buy, sell or hold? The answer is disturbing in that many of the models that spit out the recommendations are set up that way.

To channel Gordon Gekko, 'Most analysts don't know preferred stock from livestock'

Accounting is but another dark art.

That was basically where I was going with the question. How do Qlink fleets appear on the balance sheet? And the 717, an extremely lucrative fleet by all accounts, where/how does that factor into the wider bottom line I wonder.
Is a great question. The fleet is an asset. It is now owned by Qantas. Book value another question. Whether there is actually a lease charge most likely tied up in commercial-in-confidence. Whether they actually are reported in Qantas or another segment is a good question. These assignments have been known to shift, depending on the preferred narrative.



Qantas still need a new fleet.
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Old 17th Dec 2018, 22:23
  #669 (permalink)  
 
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Originally Posted by a_pilot

JQ made 15% more profit with only 70% of the ASK as QF INTL. Is JQ really such a basket case ? Is it really such a waste of resources ? Doesn't JQ provide the group a better return than QF INTL ? Shouldn't this be where more resources go ?
By your logic, shouldn't the resources be directed and Qantas domestic?
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Old 17th Dec 2018, 23:17
  #670 (permalink)  
 
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No doubt there is subterfuge....

But...what gets lost in the intra-company rivalry is that Qantas needs Jetstar, and Jetstar needs Qantas.

Each would be severely hobbled without the other and so imagining ROIs without the 2 being conjoined is completely hypothetical and ultimately pointless.

PG
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Old 18th Dec 2018, 01:29
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Originally Posted by Popgun
No doubt there is subterfuge....

But...what gets lost in the intra-company rivalry is that Qantas needs Jetstar, and Jetstar needs Qantas.

Each would be severely hobbled without the other and so imagining ROIs without the 2 being conjoined is completely hypothetical and ultimately pointless.

PG
I agree with you about the symbiotic relationship but the thing that really pisses mainline staff off is the ongoing subsidy of Jetstar and the way the books are manipulated to hide the real state of JQ operations - especially JQ International. For example, all the fuel that is uplifted by QF group aircraft in HNL is billed to QF International. Joyce decides which section of the group that he wants to look good and the section that he wants to sacrifice.

The public branding of QF International as being in “terminal decline” 18 months after Joyce took over justified his decision to cancel the last 8 A380’s and 50 B787 orders. This freed up the money to purchase 110 A320’s for Jetstar in its many guises. Those orders have been delayed a couple of times because Jetstar expansion has not met “predictions”. How much money in fuel would have been saved if those B787’s had been delivered to QF International on time (not to mention how many pilots careers would not have suffered such significant stagnation).
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Old 18th Dec 2018, 03:29
  #672 (permalink)  
 
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Qantas needs Jetstar, and Jetstar needs Qantas.
Maybe, for a passenger on-carriage point of view. From a stand alone view point? Qantas, from a "pays the bills" viewpoint pays it's own bills and still makes money. Jetstar? Where would they be if they were buying their own aircraft, or perhaps paying their own fuel bills? I certainly think Jetstar needs Qantas far more than Qantas needs Jetstar.
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Old 18th Dec 2018, 07:07
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Originally Posted by Traffic_Is_Er_Was
Maybe, for a passenger on-carriage point of view. From a stand alone view point? Qantas, from a "pays the bills" viewpoint pays it's own bills and still makes money. Jetstar? Where would they be if they were buying their own aircraft, or perhaps paying their own fuel bills? I certainly think Jetstar needs Qantas far more than Qantas needs Jetstar.

I seem to vaguely recall , quite awhile ago now , a pilot getting stood down off a training course in Qantas for having a similar argument with a management pilot .
Seems like nothing’s changed with people’s perceptions regarding the true amazingness of the amazing business !
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Old 18th Dec 2018, 07:13
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I wonder if we’re about to find out the truth, once Gregg squeals?
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Old 18th Dec 2018, 07:21
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Originally Posted by blow.n.gasket



I seem to vaguely recall , quite awhile ago now , a pilot getting stood down off a training course in Qantas for having a similar argument with a management pilot .
Seems like nothing’s changed with people’s perceptions regarding the true amazingness of the amazing business !
He wasn’t stood fown for long! (As sressful that must have been)
Wrongful dismissal case in court could have been interesting.
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Old 18th Dec 2018, 09:08
  #676 (permalink)  
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Originally Posted by SandyPalms
I wonder if we’re about to find out the truth, once Gregg squeals?



‘Truth is incontrovertible. Panic may resent it. Ignorance may deride it. Malice may distort it. But there it is'
-Sir Winston Churchill


Ever wonder why Lucinda Holdforth was gagged when wanting to write about the events leading up to the 'spontaneous' grounding of Qantas 29 October 2011?

Maybe, for a passenger on-carriage point of view. From a stand alone view point? Qantas, from a "pays the bills" viewpoint pays it's own bills and still makes money. Jetstar? Where would they be if they were buying their own aircraft, or perhaps paying their own fuel bills? I certainly think Jetstar needs Qantas far more than Qantas needs Jetstar.







Evidence of absence is not absence of evidence.
Sitting in the bowels of QCA are the management accounts showing who pays for what.
That Qantas management choose to provide zero detail is indicative that the 'amazing business' exists on in the mind of Little Napoleon and those in Fort Fumble that believe every problem an airline faces is solved with adversarial IR.
It is plausible that JQ was created to 'wedge' VAH. It is equally as plausible that it was an invention of consultants, sold to inept management as a panacea to labour unit cost.
Indeed the old stomping ground of Bruce Buchanan Boston Consulting Group (BCG) had such a 'matrix'. To inept airline managers, it may have seemed divine.
Jetstar could simply have been a bit of both; a bit of a wedge, stimulating 'eleastic' leisure travel. Mr Gregg also highlighted during a hearing by your Australian parliament that it would 'generate competitive wage pressure' .

It is worth noting that until Little Napoleon and the Fossil got hold of Qantas, JQ was, contained within the fenced paddock. It may be the reason for the falling out between Mr Dixon and Little Napoleon. Once Little Napoleon had unchecked access to those management accounts, it grew exponentially. A little from Column A and a little from Column B, no one noticed. Before long JQ was as big as the parent, yet despite all this lacked the ability to drive revenue and margin. Seeing his creation myth grow before his eyes is one thing, but for a business spoken so highly of, in carefully worded statements, scant proof of its performance is forthcoming, with the exception of carefully crafted narrative supporting figures. Curious minds may wonder why? The answer is that they are not required to demonstrate under the audit provision in the very slack accounting governance framework in Australia. They are not required to disclose who pays for what, wonder why they choose not to!

It is further worth noting that the board are lightweight. Wearing T Shirts and a scraggy appearance might be hip but it doesn't necessarily mean one can understand corporate finance. Throw in a bunch of Freehills lawyers and a few leasing people and the reality that Little Napoleon could spin a big yarn and be believed is not implausible.

It is possible that the whole lot of them know little, care less.
One might hope that Mr Goyder learned a little from his attempt at Wesfarmers to re-invent the hardware wheel here in Europe with Bunnings.
With most of the cost an airline incurs setting up and running the business being fixed then the possibilities are few as to where JQ would actually enjoy 'cost savings' Simply look at the seed of start up capital of any stand alone airline that started in the last 15 years. Until they generate sufficient scale they require more capital. JQ was 'profitable' very early. It was never going to stand alone. Thus where would it generate actual realisable 'savings'?
  • Labour at the margin
  • Out sourced everything
  • Borrow lots from the parent and not be required to pay
  • 'Lease; aircraft from the parent at less than a market rate
With a very elastic revenue model the business is not probably what Little Napoleon's ego would have him tell himself every day.

Qantas need the new fleet.
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Old 30th Dec 2018, 21:43
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The Last 747: Airlines Dump the Jumbo Jet, Transforming International Travel

https://www.wsj.com/articles/the-las...el-11546059601

Smaller, ultraefficient long-range airliners are overtaking the once celebrated giant of the sky; crammed seats and fewer perks

Robert WallDec. 29, 2018 12:00 a.m. ETAbout a year ago, a Boeing BA -0.24%747 operated by Delta Air Lines took off from Atlanta for a three-hour flight to Pinal Airpark, a boneyard for unwanted aircraft in Arizona’s Sonoran Desert.

Delta has replaced its fleet of jumbo jets with Airbus A350s, one of a new breed of smaller, ultraefficient long-range airliners. Nearly every other airline in the world is doing a version of the same thing, replacing huge jets with smaller ones.

The newer planes, which include the Boeing 787 Dreamliner, are redrawing the map for global air travel. They can fly just as far as the jumbos, but often are less expensive to operate on a per-seat basis. They allow airlines to offer multiple flights on routes that once justified only a single big aircraft. That helps fill seats and boost profits.

Small Long-Haul Planes Take Off

Larger jets are losing their cost edge on intercontinental flights...


...as newer, more efficient aircraft can fly similar ranges and be at least as cost effective.

Source: the companies

For passengers, this is a mixed blessing. As planes get smaller and flights more frequent, long-haul travel is taking on some of the cattle-car characteristics of domestic travel—inexpensive tickets, cramped seats and no free meals.

On the other hand, for many international travelers, the shift is eliminating what has been an almost mandatory stopover in a global airport hub such as New York, London, Dubai or Singapore.

“Since the dawn of air travel, people always wanted to fly direct,” says Ihssane Mounir, Boeing’s chief jetliner salesman. Smaller planes have changed the economics of the industry, he says, and have “pushed big aircraft, to some extent, out of the market.”Delta 747s are cleaned and prepped for storage at Pinal Airpark, a boneyard for unwanted aircraft in Arizona’s Sonoran Desert. Photo: Dustin Chambers/ZUMA PRESS
Amplifying the shift is the proliferation of no-frills budget carriers flying internationally that have helped to drive down ticket prices and spur a boom in air travel. Long-haul flights—once an extravagant commitment of time and money—are becoming less expensive and more convenient.

Between 2007 and 2017, the average fare between North America and Europe, adjusted for inflation, declined by 40%.

In 2000, airlines flew 1,414 direct international routes of more than seven hours, according to air-travel data provider OAG Aviation Worldwide Ltd. This year, they flew 2,778. Direct service now links Providence, R.I., with Edinburgh, Scotland, Oakland with Barcelona, Las Vegas with Copenhagen, and Los Angeles with Chengdu, China.

New Links

The Boeing 787 and Airbus A350 long-haul planes have allowed airlines to offer direct flights between far-flung cities. Some of them include:


New airline routes, in miles

3,830

Source: the companies, FlightRadar24

That is a boon for travelers such as Evan Laskaris, a Greek-American who lives in Chicago. When he was growing up in South Carolina, traveling to Greece involved flying to New York’s LaGuardia Airport, taking a cab to JFK, then flying to Athens. Flying from Chicago was easier, but still took 14 hours, including a three-hour layover in Frankfurt.

American Airlines Group Inc.’s new direct flight between Chicago and Athens on a Boeing 787 Dreamliner should take 10 hours 40 minutes. “If I can go direct, I’m going to go direct,” says Mr. Laskaris, a program director at a logistics company. “In the past, I didn’t have that choice.”

Airline executives and analysts say the smaller jets have contributed to today’s record profits. Load factor, a measure of seats sold, should reach a record 81.9% this year, according to the International Air Transport Association, in part because smaller planes are easier to fill. The past five years have been the best for collective airline profits, despite the decline in airfares, according to the IATA, an industry trade group.

With many passengers focusing on inexpensive fares, however, many long-haul flights no longer offer the kind of international travel experience that was common in yesteryear. Amenities once taken for granted by international economy-class passengers, such as free food or a checked bag with the price of the ticket, have become extras.

Seating layouts are determined by airlines, not plane makers. Although premium-class passengers still get plenty of space into the new long-haul flights, economy fliers frequently are packed as tightly as they are on short-haul discount runs.

Long-haul travel “is no longer something that is a luxury,” says Jennifer Munro, a hiring consultant and a frequent flier. “Now it is like riding a bus, something that gets us from here to there.”

Shifting SkiesDelivery and use of new Boeing 787 and Airbus A350planes have boomed as the megatransport 747 andA380 sales fade.Source: the companiesNote: 2018 figures are through November.

.deliveriesAirbus A350Boeing 787Airbus A380Boeing 7472010’11’12’13’14’15’16’17’18050100150200250

Flight FrequenciesSource: OAGNote: 2018 data through Oct. 1

.flightsA350Boeing 787A380Boeing 7472010’11’12’13’14’15’16’17’180200,000400,000600,000800,000

Global hubs aren’t going away. Even some large cities can’t sustain demand for direct flights. Fewer than four passengers a day, on average, travel between Seattle, where Boeing makes most of its planes, and Toulouse, France, where archrival Airbus SE EADSY 0.80%is based, according to data from travel-technology company Sabre Corp. They still have to fly through hubs such as Amsterdam, London or Paris—and probably will for years to come.

It has been 80 years since Lufthansapioneered nonstop trans-Atlantic flights with a four-engine Focke-Wulf Fw200 propeller airliner, named the Brandenburg. The trip from Berlin’s Tempelhof Airport to New York’s Floyd Bennett Field took almost 25 hours.

International travel opened up to the wider public only much later, thanks again to aircraft innovation. The Boeing 707, the first mass-produced, long-haul jet-powered plane, entered service with Pan Am in 1958, flying between New York and Paris.

Boeing’s 747, which began flying commercially in 1970, came to define trans-Atlantic flight for a generation. Almost two decades ago, Airbus bet big on its own giant, four-engine aircraft—the A380 superjumbo jet.

The two plane makers shared the same idea: Airlines, saddled by high operating costs and limited airport slots, would shuttle large numbers of passengers in a limited number of giant planes between a handful of global hubs. Getting to one of these hubs usually involved a connecting flight, as did reaching a final destination from the hub at the other end.

For much of the modern aviation era, a plane’s range was mainly dictated by how much fuel it could carry. Bigger planes, with bigger gas tanks, could fly longer.

Then, suddenly, technology allowed long-haul planes to shrink.

In 2003, Boeing started developing what would become its twin-engine 787 Dreamliner. Made partly of composite material, it was light enough to fly as far as a 747. But it was much smaller, carrying an average 242 passengers, compared with the 410 typical for the 747.

Airbus, which had just bet big on the 575-seat superjumbo, answered with its own version of what the industry has dubbed a “hub buster”—the A350, which typically seats 325.

“The 787 and A350 were, and are, disrupters,” says Nico Buchholz, a former fleet planner at Deutsche Lufthansa AG.

The Dreamliner embraced a host of new technologies, notably its weight-saving carbon-fiber fuselage. Composites account for half of the weight of the Dreamliner’s hull. The plane’s electric system replaces some of the heavy hydraulics and pneumatic components typical in big jets. All that, plus more efficient engines, allow the plane to undercut the larger planes in an important metric: per-seat flight cost.

Bigger planes once won that contest because fixed costs such as pilots, crew and fuel were spread out over more seats. But the new breed of lighter planes upended that.

United Continental Holdings Inc.’s United Airlines spent about $17,748 an hour to operate its latest 747 in the 2017 fiscal year, according to consulting firm Oliver Wyman. It spent $10,123 for one of the airline’s smaller 787 Dreamliners. That translates to a per-passenger cost of 9.19 cents a mile for the Dreamliner, compared with 9.23 cents a mile for the bigger plane.

The smaller planes also are easier to fill up, reducing the need to offer discounted tickets.

So airlines began buying the smaller planes and mothballing their bigger ones.Many airlines are replacing their hulking Boeing 747s with smaller and lighter Boeing 787 Dreamliners.Photo: Bayne Stanley/ZUMA PRESS
Last year, Singapore Airlines Ltd.consigned one of its first A380s to the scrapyard. It was only 10 years old. Nobody else was found who wanted to fly it.

“The role of the big planes has diminished,” says Campbell Wilson, senior vice president for sales and marketing at the Singapore carrier.

The company’s Scoot budget carrier operates Boeing’s Dreamliner for long-haul service linking Singapore with cities such as Berlin and Athens. In October, Singapore Air began flying the world’s longest route, between Singapore and Newark, N.J., with the Airbus A350.

Boeing, which has sold more than 1,400 Dreamliners, plans to deliver around 140 this year. It will make just six 747s this year, down from an average 30 a year since 1969. Almost all of the new 747s are headed for freight service.

Airbus has sold 890 A350s since 2006, compared with 331 A380 superjumbos, which it has been selling since 2000. Airbus had hoped to churn out as many as 48 of the superjumbos every year, butthis year is set to deliver about 12, and next year, just six. It will produce more than 80 A350s this year.Alan Joyce, left, chief executive of Australia’s Qantas Airways, says the airline can fly two Boeing Dreamliners to an overseas destination more profitably than one giant A380. Photo: william west/Agence France-Presse/Getty Images
Australian airlines, by geographical necessity, specialize in long-haul travel.Qantas Airways Ltd. , one of the country’s biggest, has been a steady buyer of the giant 747s and A380s over the years. Today, Alan Joyce, Qantas’s chief executive, says the airline can fly two Boeing Dreamliners to an overseas destination more profitably than one A380, transporting about the same number of passengers.

The push for more direct routes doesn’t only stem from technological innovation. Governments have opened up air access to ease congestion at big hubs and foster more convenient flights. Flights to China used to focus on Beijing, Shanghai or Guangzhou. Now cities such as Wuhan, Xi’an, and Hangzhou have direct international air links.

When Japan’s primary hub, Tokyo Narita, filled up, Japan’s government expanded the largely domestic airport of Haneda and opened it to overseas flights.

Some airlines still focus on big jets. Dubai, the home airport of Emirates Airline, is a perfect stopping-off place for travelers between Asia and Western Europe and North America. Emirates is the world’s biggest buyer of the A380, Airbus’s superjumbo.

Emirates President Tim Clark says that without big planes, the growth of air traffic will be constrained by airports that are reaching their limits for takeoff and landings slots. Dubai is building a huge, five-runway airport designed to eventually handle 250 million passengers a year.

“In the end, you are forced into a higher gauge of aircraft,” he says.

That isn’t the way other airlines are thinking. At an airfield near Tarbes in southern France, about 70 miles from where the A380 superjumbo made its maiden voyage 13 years ago, one of those planes is parked on the tarmac.

Singapore Airlines decided to stop using the plane, which is owned by Dr. Peters Group, a private company that finances aircraft. After looking for a new customer, the owner has decided to sell the plane for parts.
stormfury is offline  
Old 31st Dec 2018, 00:43
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That article just about contradicts every argument put forward by the QF board over the last 20 years. What ever happened to the capacity restraint argument that they were running for years?
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Old 31st Dec 2018, 04:26
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Thanks for posting the article Storm Fury.

Just a little less than a year ago, the fossil Chairman claimed it was the QSA 1992 stopping the re-equipment of Qantas.
Share buy-backs in excess of $2 billion and a year later not much of substance has changed at Fort Fumble,
although it appears Little Napoleon has finally noticed what nearly every other carrier noticed a decade ago.

Today, Alan Joyce, Qantas’s chief executive, says the airline can fly two Boeing Dreamliners to an overseas destination more profitably than one A380, transporting about the same number of passengers.
What amazing insight.
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Old 31st Dec 2018, 05:17
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Mid next decade Virgin will have a domestic 737 fleet age of 3 years.

QF will be sitting at over 17.
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