So you need a new fleet Leigh?
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Rated, you do realise that:
From where I sit, that's actually pretty good evidence that Qantas is doing a far better job at managing non-fuel costs and revenue than most of its competitors.
- fuel prices changes affect Qantas's competitors just as much as Qantas
- Qantas and its competitors try to adjust ticket prices and flying patterns to absorb fuel price rises, and to capture additional price sensitive traffic as prices fall, and
- as such, fuel price changes only affect profitability to the extent that Qantas and other airlines are unable to respond to them fully?
From where I sit, that's actually pretty good evidence that Qantas is doing a far better job at managing non-fuel costs and revenue than most of its competitors.
Rated, you do realise that:
From where I sit, that's actually pretty good evidence that Qantas is doing a far better job at managing non-fuel costs and revenue than most of its competitors.
- fuel prices changes affect Qantas's competitors just as much as Qantas
- Qantas and its competitors try to adjust ticket prices and flying patterns to absorb fuel price rises, and to capture additional price sensitive traffic as prices fall, and
- as such, fuel price changes only affect profitability to the extent that Qantas and other airlines are unable to respond to them fully?
From where I sit, that's actually pretty good evidence that Qantas is doing a far better job at managing non-fuel costs and revenue than most of its competitors.
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What do you disagree with? That profitability depends on managing revenue and non-fuel costs, as well as fuel costs? That Qantas International has a tonne of competitors? That those competitors also have to buy fuel at roughly the same price as Qantas? That those competitors (generally) have more fuel efficient fleets? That Qantas International has been more profitable than almost all of those competitors for the past few years, and still is? Or so you think that that profitability comes from some magical source that isn't Qantas burning less fuel (because it definitely isn't that, flying 747s), managing its non-fuel costs better, or managing its revenue better?
I'm all for having a good debate, but could you please tell me what you disagree with?
you forget to mention most competitors have slave labour and basically can crew an entire A380 for the cost of one QF A380 captain !
ground staff mostly earning around $100 per week.
cabin crew weight limits or if the cabin crew average 30kilod less each times 20 then that’s 600kg of extra payload .
good luck competing with that !
ground staff mostly earning around $100 per week.
cabin crew weight limits or if the cabin crew average 30kilod less each times 20 then that’s 600kg of extra payload .
good luck competing with that !
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You can’t be serious. 3 787s will burn the same amount of fuel as 1 380.
The source of Qantas International's 'profitability' was:
- Drop in fuel price leading to FUEL cost saving of $597 million.
- A curiously well timed impairment of the International fleet (CGU) resulting in a reduction of $326 million non-cash charge in deprecaition
With the tax offsets gone and higher fuel price, Qantas is again exposed as their fleet metrics lag the industry such that when fuel price rises their fuel included CASK increase disproportionately to their peers.
Overlooking the statement that Little Napoleon sprouted out about fuel cost recovery by the end of the year, you neglected to mention two caveats:
- International demand remaining as it is (ie no worsening of the international economy
- No other pertinent change.
Perhaps the reason the competitors are actually withdrawing capacity is because they assess that yields will fall and the world economy worsens.
Thus with a narrower operating margin than their competitors due their horrible fleet metrics, the gap closes (revenue declining quickly and costs largely static and higher than their competitors) far quicker than it does for their competitors due their fuel inefficient lagging the industry fleet mix.
https://www.abc.net.au/news/2018-01-...-study/9333616
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you forget to mention most competitors have slave labour and basically can crew an entire A380 for the cost of one QF A380 captain !
ground staff mostly earning around $100 per week.
cabin crew weight limits or if the cabin crew average 30kilod less each times 20 then that’s 600kg of extra payload .
good luck competing with that !
ground staff mostly earning around $100 per week.
cabin crew weight limits or if the cabin crew average 30kilod less each times 20 then that’s 600kg of extra payload .
good luck competing with that !
That isn't because Qantas has had a windfall from lower fuel costs. If that was the case, all of its competitors would be rolling in money.
It's because it has managed its revenue other non-fuel costs better, which has allowed it to retain more of the fuel cost benefits than its competitors, and to offset more of the impact of the recent fuel cost increases.
.It's because it has managed its revenue other non-fuel costs better, which has allowed it to retain more of the fuel cost benefits than its competitors, and to offset more of the impact of the recent fuel cost increases.
You cannot compare a 380 burning 13,000kgs of fuel per hour and carrying 480 odd pax with a 777 burning 4,500kgs per hour carrying 400 pax. Those extra 80 pax are consuming 8,500kgs per HOUR every hour the jets are in the air. To put that another way, every flight QF takes to LAX they are selling an extra 80 odd seats but burning 120,000kgs of jet fuel extra to just about all their major competitors. London it's 240,000kgs. One way.
Unless Qantas has the capital to fix this self induced problem, it is in serious trouble. Joyce might take solace in the fact he can make money domestically with a quasi monopoly and blame International for giving him a big fuel bill, but HE has created and exacerbated that problem by throwing money away on rubbish self enrichment programmes and not ordering a single jet. There is absolutely no getting around it.
Also - almost unique to Qantas is the enormous housing price growth in the major capital cities. That has now stopped, but for the last ten years anyone has been able to borrow on the value of their home and spend on travel. It is not an insignificant factor.
You cannot compare a 380 burning 13,000kgs of fuel per hour and carrying 480 odd pax with a 777 burning 4,500kgs per hour carrying 400 pax. Those extra 80 pax are consuming 8,500kgs per HOUR every hour the jets are in the air. To put that another way, every flight QF takes to LAX they are selling an extra 80 odd seats but burning 120,000kgs of jet fuel extra to just about all their major competitors. London it's 240,000kgs. One way.
Close. The 777 Burns 8600kg per hour on long haul and carries 350 in a 3 class config.
Close. The 777 Burns 8600kg per hour on long haul and carries 350 in a 3 class config.
Config changes - I picked a mid config B777 which was two class. As per burn, I am not a 777 guru, but have asked guys what their burn has been in cruise and 'generally' the answer is 4,000-5,000kgs/hr. I can't recall any higher. Of course that's in cruise, a 744 burns 40,000kg/hr on the takeoff roll
I can quote this which was posted here a few years ago as a specific flight in 2010, an EK 777-200LR carried 98t of trip fuel (Flight Time: 13h55m). I didn't make a note of the load (if it was even available), but that indeed shows a higher figure of c7,000kgs/hr.
So to make the adjustment that's 'around' an extra 85,000kgs one way to LAX (170,000kgs one way to LHR) for 'around' 100pax extra. Better hope they fill those 100-odd seats or it gets VERY expensive
I can quote this which was posted here a few years ago as a specific flight in 2010, an EK 777-200LR carried 98t of trip fuel (Flight Time: 13h55m). I didn't make a note of the load (if it was even available), but that indeed shows a higher figure of c7,000kgs/hr.
So to make the adjustment that's 'around' an extra 85,000kgs one way to LAX (170,000kgs one way to LHR) for 'around' 100pax extra. Better hope they fill those 100-odd seats or it gets VERY expensive
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It's put its revenue into share buybacks and Jetstar. Qantas has managed its costs appallingly badly. Even if what you suggest actually is the case (and anyone with any idea of what is going on inside QF knows that to be patent rubbish) just imagine how well Qf SHOULD have been doing if money was not thrown away on Jetstar and share buybacks but instead spent on a fleet of 777's. Fuel is the biggest expense and fuel is the one thing that has the QF fleet absolutely hamstrung.
You cannot compare a 380 burning 13,000kgs of fuel per hour and carrying 480 odd pax with a 777 burning 4,500kgs per hour carrying 400 pax. Those extra 80 pax are consuming 8,500kgs per HOUR every hour the jets are in the air. To put that another way, every flight QF takes to LAX they are selling an extra 80 odd seats but burning 120,000kgs of jet fuel extra to just about all their major competitors. London it's 240,000kgs. One way.
Unless Qantas has the capital to fix this self induced problem, it is in serious trouble. Joyce might take solace in the fact he can make money domestically with a quasi monopoly and blame International for giving him a big fuel bill, but HE has created and exacerbated that problem by throwing money away on rubbish self enrichment programmes and not ordering a single jet. There is absolutely no getting around it.
Also - almost unique to Qantas is the enormous housing price growth in the major capital cities. That has now stopped, but for the last ten years anyone has been able to borrow on the value of their home and spend on travel. It is not an insignificant factor.
You cannot compare a 380 burning 13,000kgs of fuel per hour and carrying 480 odd pax with a 777 burning 4,500kgs per hour carrying 400 pax. Those extra 80 pax are consuming 8,500kgs per HOUR every hour the jets are in the air. To put that another way, every flight QF takes to LAX they are selling an extra 80 odd seats but burning 120,000kgs of jet fuel extra to just about all their major competitors. London it's 240,000kgs. One way.
Unless Qantas has the capital to fix this self induced problem, it is in serious trouble. Joyce might take solace in the fact he can make money domestically with a quasi monopoly and blame International for giving him a big fuel bill, but HE has created and exacerbated that problem by throwing money away on rubbish self enrichment programmes and not ordering a single jet. There is absolutely no getting around it.
Also - almost unique to Qantas is the enormous housing price growth in the major capital cities. That has now stopped, but for the last ten years anyone has been able to borrow on the value of their home and spend on travel. It is not an insignificant factor.
You're trying to compare QF's 480-seat, premium A380 configuration with a high-density, 400-seat 77W configuration, and as donpizmeov has pointed out, your fuel burn numbers for the 77W are off by a country mile. I've also seen lower burn numbers for A380s. Once you add in lower crew costs and yield premium, the A380 can equal or better the 77W. (Leeham has a decent analysis, if you want to see some numbers: https://leehamnews.com/2018/12/06/is...n-a-777-300er/). The risk with the A380 has always been whether you can fill it, not its CASM numbers, and QF does a reasonably good job of filling its A380s.
Yes, QF is more exposed to the Australian economy than international airlines. But, QF targets premium customers and corporates, who tend to be less affected by issues like the housing market (short of a major recession). Also, it is the international airlines who tend to add and subtract capacity into Australia based on our market conditions, so there is something of an automatic stabiliser in the market.
It doesn’t matter if you fill it or not it all boils down to yield. Just ask Freddie Laker, 100% load factors and he went broke.
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Data tells the story.
Their fuel included CASK is out of the park bigger, the problem for them is simply lack of fleet planning.
At some point they will need to fund it. At that point the tide is out and the market will see who was swimming naked.
With respect to the relative staff costs, if that argument had statistical credibility then the salary of say Philippines Airlines flight crew, office staff, cabin crew and engineers would see operating margins for PAL at many multiples those of their more 'expensive' competitors. That it not the case.
Qantas International showed a net route reduction and static ASK from the 'terminal decline' year on.
With respect to the 'fuel windfall' it is their fleet metrics that mean they suffer more from rising prices and benefit more from falling prices.
Factually, from 2009 to 2015 the amazing year of 'transformation' the competitors were in fact, rolling in money.
In the corresponding period Qantas by stark comparison had net losses of AUD$ 2.0 billion
That Qantas now have increased their ASK incrementally does not translate to increased market share, they have in actual fact surrendered market share ex-Australia as the JQ rollout continued. In so doing they hoped the consumer would brand substitute away from QF. The customers did, except they didn't substitute JQ for QF, they went elsewhere. The brand damage done by their 'strategy' is estimate by external research to total around AUD$1 billion. Having read the analysis it is really difficult to quantify, however in real terms the revenue of the group has declined. Brand damage and yield dilution is part of the result.
Swapping out an A380 for a B789 may improve yield but with far fewer seats their revenues decline markedly.
This is why another 'austerity drive' is on the cards.
Little Napoleon has much higher operating costs. Instead of correctly attacking fuel expense per ASK they hacked into staff.
Penny wise maybe, but pound moronic.
Their fuel included CASK is out of the park bigger, the problem for them is simply lack of fleet planning.
At some point they will need to fund it. At that point the tide is out and the market will see who was swimming naked.
With respect to the relative staff costs, if that argument had statistical credibility then the salary of say Philippines Airlines flight crew, office staff, cabin crew and engineers would see operating margins for PAL at many multiples those of their more 'expensive' competitors. That it not the case.
Qantas International is doing better than most of its competitors and has expanded it's market share ex-Australia over the past few years.
That isn't because Qantas has had a windfall from lower fuel costs. If that was the case, all of its competitors would be rolling in money.
That isn't because Qantas has had a windfall from lower fuel costs. If that was the case, all of its competitors would be rolling in money.
With respect to the 'fuel windfall' it is their fleet metrics that mean they suffer more from rising prices and benefit more from falling prices.
Factually, from 2009 to 2015 the amazing year of 'transformation' the competitors were in fact, rolling in money.
- SIA Aggregate Net Profit after Tax AUD$ 3.4 billion
- CX Aggregate Net Profit after Tax AUD $4.5 billion
- ANZ Aggregate Net Profit after Tax AUD$ 900m
In the corresponding period Qantas by stark comparison had net losses of AUD$ 2.0 billion
That Qantas now have increased their ASK incrementally does not translate to increased market share, they have in actual fact surrendered market share ex-Australia as the JQ rollout continued. In so doing they hoped the consumer would brand substitute away from QF. The customers did, except they didn't substitute JQ for QF, they went elsewhere. The brand damage done by their 'strategy' is estimate by external research to total around AUD$1 billion. Having read the analysis it is really difficult to quantify, however in real terms the revenue of the group has declined. Brand damage and yield dilution is part of the result.
Swapping out an A380 for a B789 may improve yield but with far fewer seats their revenues decline markedly.
This is why another 'austerity drive' is on the cards.
Little Napoleon has much higher operating costs. Instead of correctly attacking fuel expense per ASK they hacked into staff.
Penny wise maybe, but pound moronic.
Last edited by Rated De; 24th Feb 2019 at 03:00. Reason: arithmetic
V-Jet, if you're trying to argue that QF should have bought the 77W instead of the A380 back in 2000, then sure, I agree with you. But that's ancient history.
If Qf is so protective of the premium market, why did they move heaven and earth to throw all those precious customers away to EK.
The figures aren't out by a country mile, Napoleon is.
.Little Napoleon has much higher operating costs. Instead of correctly attacking fuel expense per ASK they hacked into staff.
Penny wise maybe, but pound moronic.
Penny wise maybe, but pound moronic.
Factually, from 2009 to 2015 the amazing year of 'transformation' the competitors were in fact, rolling in money.
As for harping on about CASK, you don’t seem to understand that a cabin that has a high ratio of premium seats (787, A380) in turn leads to lower ASK’s. This also means less seats to defer fixed costs against. But the higher premium seat mix delivers significantly higher PROFIT. That is what the business is all about.
Your commentary about stagnant ASK’s or rising CASK is largely irrelevant. Qantas is there to make as much profit as possible, not ship the largest amount of passengers. They could fill the planes with economy seats, drive up ASK’s and drive down CASK, for what? And that is already what the low cost side of the brand has done.
Chasing market share (in the domestic sphere) is what primarily led to Qantas’s huge loss you refer to. That’s not the strategy any more and it’s paying off big time.
I’m not suggesting Joyce is a good manager. The ‘line in the sand’ was his strategy and it was an utter disaster. But to be constantly trying to trash talk Qantas’ business metrics while they are pumping out bumper profit after bumper profit in stark contrast to their only local competitor, makes it look like you don’t understand the business as well as you pretend to.
Last edited by Beer Baron; 24th Feb 2019 at 10:38.
Qantas is there to make as much profit as possible.
I would not put the management 'team' at QF in charge of a primary school tuck shop. If anyone else would, they need their heads read.
Vjet if a 777 could burn 4.5t per hour, Boeing would not have made the 787 that carries less and burns around the same . EKs latest 380 (last 7 yrs) bur 12.6t per hour (ULR), have 520 seats (3 class) and carry max ZFW to a bit over 15hrs . The same companies 77W start shedding ZFW at 11hrs, and had to block seats to below 300 when flying dxb to lax . The 77x will do a lot better, but costs half a billion dollars (real dollars that is) a copy . Half of the 300 ordered have been ordered by the same company .
787s cost a fraction of this, are cheaper to operate, so accountants love em .
Rated de is correct when he says QF has a huge cost awaiting to renew the fleet .
787s cost a fraction of this, are cheaper to operate, so accountants love em .
Rated de is correct when he says QF has a huge cost awaiting to renew the fleet .
Pretty sure I amended the tripler figure to say 7k/hr. Regardless, it’s arguing over peanuts. The real money has been thrown away on fripperies. Like self enrichment.
Qf Cabin Crew have just been given written notice the 744 will be around until 2025.
Qantas need a new fleet. As they have since 2000.
Qf Cabin Crew have just been given written notice the 744 will be around until 2025.
Qantas need a new fleet. As they have since 2000.
That's right you selected the 772LR .Burns around 7.5t/hr and carries 250 pax in a three class config .in fact one of the few aircraft that under performs the 380 .
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‘QF cabin crew have just been given written notice the 744 will be around until 2025’
Sorry, I’m QF cabin crew and I can tell you that’s absolute rubbish. I have the latest message from our Union and I can tell that all 744’s will be retired by end of calender year 2020 with OEB the next to go in April.
Sorry, I’m QF cabin crew and I can tell you that’s absolute rubbish. I have the latest message from our Union and I can tell that all 744’s will be retired by end of calender year 2020 with OEB the next to go in April.