I left when the doors were closed and the lights were turned out Amos.

Fri "The Australian"

Hard lessons as Concorde exits
Robert Gottliebsen
October 24, 2003

When the Concorde flies between London and New York for the last time today, it signals the failure of an air service that was based entirely on demand from upmarket passengers.

Yet in theory it should have worked because, based on what happens in the Australian market, traditionally around 2.5 per cent of the passengers provide about a fifth of the revenue.

While Concorde has shown that it is difficult to rely solely on business and other upmarket travel, a string of global discount operators have shown that you can do the reverse and make money offering a commoditised, low-priced airline service.

So it is no coincidence that, as the Concorde heads to the museums, Qantas is not only planning a discount airline but is recruiting executives from Ryanair, which in Europe provides a discount service that makes Australia's Virgin Blue look like it's running the Concorde.

Ryanair's expertise is stripping out all but the basic essentials of airline travel. But, as so often happens in Australia, the future structure of the airline industry will revolve around the enterprise agreements of each of the players.

Many other industries, including banks and manufacturers, are also shaped by the enterprise agreements that companies negotiate with their staff.

In the last century, Qantas and Ansett operated from the same enterprise agreement. What changed airlines in Australia was the ability of Virgin to secure a totally new enterprise agreement.

Under this agreement, counter staff could be swung into helping people board the aircraft and cleaning it. The first officer would be prepared to assist cleaning if it was necessary to get the aircraft away on time.

This flexibility is the essence of a discount airline. But Virgin claims that it also enables it to achieve a far greater "on time" score.

At the moment, Qantas dominates the 2.5 per cent of airline travellers who generate a fifth of the revenue by providing an array of value-added services. But the surveys are showing that, while the add-on services are very welcome, what the business passenger needs more than anything else is on-time travel.

And, when labour agreements are not flexible and the former upmarket competitor Ansett is out of the game, it inevitably leads to planes being delayed or cancelled - particularly during a cost-reduction phase.

Virgin must see its on-time record as its greatest potential opportunity to seek business travellers. The great danger to Virgin is that as it increases market share so its people will look enviously across at the Qantas work practices. Qantas has more people doing what is essentially the same job. Inevitably the gap will narrow.

But a Ryanair-style discount airline will require work practices and systems that are even more flexible than Virgin's. If such an agreement is reached, it will make the next Virgin enterprise bargaining session - due in about two years - a lot easier.

Whether Qantas can succeed in the discount airline business will depend on whether it can arrange a totally different enterprise agreement. But, of course, in the next few years it is going to be much easier for New Zealand aircraft to operate in Australian skies and vice versa.

In New Zealand, Qantas has the sort of enterprise agreement that it will need in Australia, and it is conceivable that, if Australian talks fail, the discounter could be based across the Tasman.

What Concorde showed was that an airline needs each flight to be filled with people from various segments of the passenger market. For domestic airlines the risk is that the service is going to be commoditised as discount fares become a bigger and bigger part of the industry - at least in the short-haul business.

Robert Gottliebsen writes for The Australian and hosts Business Daily on ABC Asia Pacific TV.

=========================================

Why should prospective new recruits to a QF LCC reject a jet job at what in most cases could mean a substantial increase in pay and conditions so as to protect mainline pay and conditions?

After all, mainline doesn't seem to be doing too much about it themselves except for being up to their neck in ****e and saying 'don't make waves'.

See the thread "Erosion of Pay and conditions - what are we doing about it' and see how many QF pilots addressed this issue.

Les miserables are at the gate - for less than you are getting paid now.

Not quite sure how Gottliebsen did his calculations, and got "2.5% of the passengers provide about a fifth of the revenue".

Lets take a QF international and a QF domestic example to check it out. First international:

SYD-LHR = 17016 kms great circle; say about 34000 return kms. For simplicity, two classes of pax: business class @ $A8500 return and discount economy @ $1700. BTW it doesn't change much if a more complex mix is used. Gottliebsen had "2.5 per cent of the passengers provide about a fifth of the revenue" which I interpret as 2.5% in business class. Business class runs @ 25 Oz cents per pax-km. Discount economy @ 5 cents per pax-km. So per 100 pax, the 2.5 business pax provide 0.625 cents per km, and the 97.5 economy pax provide 4.870 cents per km. All up, that's 5.495 cents per km, and the business class provides 11%. The figure might be conservative, because when the corporate deals are put in, the business class fare drops to 21-22 cents per pax-km. Maybe my interpretation was wrong, and he meant 2.5% in first class. Well, change the mix to be 2.5% in first class, 70% load factor in business and 85% load factor in Y class; with one of the 14F/79J/265Y 747-438 Longreach aircraft. F is $A12345 return. The 2.5% in first class are still only 12% of the revenue.

Now domestic: SYD-MEL; say about 1410 return kms. Two classes of pax: business class @ $A474 return and various discount economy @ $200. Gottliebsen had "2.5 per cent of the passengers provide about a fifth of the revenue" which I interpret as 2.5% in business class. Business class runs @ 33.6 Oz cents per pax-km. Discount economy @ 14.2 cents per pax-km. So per 100 pax, the 2.5 business pax provide 0.839 cents per km, and the 97.5 economy pax provide 13.810 cents per km. All up, that's 14.649 cents per km, and the business class provides 6%. Again the figure is conservative, because when the corporate deals are put in, the business class fare drops to 26-28 cents per pax-km.

Nowhere is business class (or first class) providing a fifth of the revenue. The business class argument is a smokescreen in Australia for the more complex drivers behind the fundamental business change that Qantas are driving for with the LCC. Possible flight crew cost change is another smokescreen, and IMHO is one that won't be pushed too hard. These aren't the things which are the major cost differentiators between mainline and low-cost operation for any airline, and the QF LCC agenda is focused elsewhere.

Well Col., after your last post above, I suggest that you delete the entire thread titled, "Erosion of Pay and conditions - what are we doing about it" - as you have effectively answered it yourself! :uhoh:

And OverRun has aptly demonstrated why beancounters are effectively screwing every airline they are allowed to get their hands on!
The mindset of accountants working for airlines appears to be capable of ONLY treating an airline as another transport business, and hence they work in miles or kms as the basis for their calculations of cost structure, as if the aircraft were a taxi, truck, or bus.
Is it any wonder that so many companies are being sent to the wall BECAUSE of this ignorance.
As an example, OverRun, fewer miles (achieved by track shortening, as is sometimes offered by ATC) may NOT necessarily result in a cost saving in aircraft operation (depending upon the decision of the pilots) - and as a matter of fact may even INCREASE costs. However to people who think of aircraft as simply another form of transportation, this concept is probably quite inconceivable. :sad:

Interesting figures OverRun but I would check those Business class fares to Mel. Last time I bought a flexi fare economy ticket it cost me $450!

Business class more like $900 I would suggest!

Hows this for a scenario:

'Skimpy' is started up using Impulse model and AOC, the existing 14 717's and drivers. This is toped up by 9 new 738s crewed by mailine pilots.

Over 12 months the 717's are phased out and replaced by new 738's which come from the original QF capital expenditure of 6 billion. These are crewed by mainline, and the surplus Impulse drivers slot into mainline as S/O's.

Upside:
QF has existing 737 pilots ready to go as well as training infastructure. Impulse gives them the start up as well as AOC and excellent business model.

Mainline pilots keep the career prospects for junior pilots and the surplus drivers due to 'cannibilised flying' have a place to go. The "goodwill" of ALL mainline pilots is maintained as I believe that from the 744 down they are all concerned about this LCC issue and what will happen to Captains kids as well as being the 'the thin edge of the wedge'.

Impulse drivers get to swan around the world for a couple of years making about the same money, if not more for some, before getting back into a window seat. More importantly, they get job security that they have not had before.

Just a bit of lateral thinking.............:8

I think you'll have a hard time gettin' that scenario past the other Qantaslink boys and girls (Eastern and Sunnies) SHRAGS

Good thought SHRAGS, but doubtful I think.

I know of several guys flying the 717's who have been turned down by QF for a job, even twice for a couple of them!

So, for that reason, I don't think the company will come into giving instant mainline employment to those guys, despite the fact that they are technically employed by qf already....

Sorry SHRAGS but I also think yours is an unlikely outcome.

Like I said on page 1 "fifty bucks and my left nut" that Impulse will play a part with regard to crewing Skimpy. However, I omitted that I also think Jetconnect will have a big part to play as well. From my research on Jetconnect they have a strong experience base to work with( heaps of ex AN737 pilots). If QF Flight Operations does not recognise the potential of this from Jetconnect it will have wasted a great resource.

If Skimpy is even going to stand half a chance at success, it is going to have to be a 'lean and mean outfit'. "Out with" the staff travel, superannuation, LSL, bonuses, and all the other frills that go with the present. "In with" the pay for your endorsement(and yes I would imagine the Impulse crews will have to do this as well) , heaps of overnights with crappy allowances, minimum rest and working harder than ever before.

That is why I doubt the mainline guys are going to want to even bid for it, if they get a chance to.

Hoss, remember my analogy the other day? Bet your wife, bet your job, but never bet your balls:}
Superannuation is a legal obligation by employers in Australia. Dunno about INZiD however.

Bargearse, I don't think the QF decision has anything to do with EAA/Sunstate. Remember we are all seperate business units. Nobody "owns" the flying. Sure, It'll be disappointing to be bypassed yet again, but QF will do whatever they see fit.

Had lunch with a couple of Impulse dudes the other day and it does sound like they are in the box seat. Expect an announcement in the next couple of weeks.

Does that mean that all the ex-Impulse 190 crews who retain 'seniority' in Impulse are the walk up starts for recruitment to Skimpy or will they look to the 'street'?

If the decision come shortly to crew the LCC with new crews outside of the Q Mainline . What is AIPA's position on this?

It doesn't appear that AIPA has a position on anything......Until it starts to affect the B744 pilots.......

Is Trevors son still with Impulse or has he hopped across to the real QF

Detroit News

Low-fare airlines' prices challenge major carriers
Discount lines take 28% of U.S. tickets
By Joel J. Smith / The Detroit News

When Melanie Golden was looking to buy an airline ticket to fly to San Diego to attend a friend's wedding, she had three criteria for selecting her carrier: price, price and price.

"I chose Southwest," said Golden, 31, of Plymouth, a recent Walsh College graduate. "I couldn't find a ticket any cheaper. Every airplane is basically the same. One seat fits all. I don't care whose logo is on the plane. I just want a cheap ticket."

Golden is like hundreds of thousands of other cost-conscious travelers nationwide. Whenever possible, they're ignoring big name carriers with pricey tickets in favor of low-cost, no-frill airlines.

Travel on discount airlines is soaring at the expense of the major carriers. About 28 percent of all domestic tickets are now purchased from low-fare carriers, while just 13 years ago that number was less than 3 percent.

Major airlines recognize the threat imposed by the discounters and are struggling to dramatically lower their operating costs before they lose more customers.

Richard Anderson, CEO of Northwest Airlines, said that Northwest is forced to cut operating costs so the airline can afford to match low-fare airlines or risk losing more passengers.

"Low-cost carriers are having an ever-increasing impact on our fares," Anderson wrote in an employee newspaper. "Just as many people today are more likely to go out of their way to shop at chain discount stores such as Wal-Mart or Costco, so are our customers prepared to trade some of the conveniences of network carriers for the lower prices of discount carriers."

"As a general rule, we need to meet low-cost competitor prices or lose business," Anderson wrote.

Northwest, which handles 75 percent of the passengers at Detroit Metropolitan Airport, is particularly concerned because 70 percent of its domestic routes also are served by at least one low-cost carrier.

The flying public certainly has benefited from the influx of low-fare carriers. When Spirit Airlines began offering a nonstop flight between Detroit and Los Angeles a year ago, it forced Northwest to drop its last-minute purchase price from $418 to $198.

The same thing happened when Spirit began service to Myrtle Beach, S.C. Without a weekend stay, Northwest's price was $545, but today it's less than half that price.

"There's an increasing threat of the growing low-cost market share and the pricing pressure that causes," said Doug Steenland, Northwest's president. "The challenge is going to be for the network carriers to get their costs in line so they can be fully price-competitive with low-cost carriers. When that happens, I think you'll see a stall in the growth of low-cost carriers."

Not everyone believes the big airlines can match the discounters' operating costs.

"The major airlines will never be able to get their costs as low as the discount carriers," said Darryl Jenkins, director of George Washington University's Aviation Institute in Washington, D.C. "You can only reinvent yourself so much.

"The sleeping giants are the low-fare carriers that are starting out and don't have to work with all the restrictions that the legacy carriers are faced with," Jenkins said. "This won't be a pretty battle."

Currently, Metro Airport is dominated by Northwest, which operates its largest hub there through a new $1.2 billion terminal and has more than 500 daily departures.

But Metro also has three low-fare carriers operating daily flights: Spirit, Southwest and America West. Others, such as Jet Blue and Frontier, are considering operations there. Spirit is the second biggest carrier at Metro, handling about 5.4 percent of the passenger traffic; Southwest is third with 2.8 percent.

Spirit is growing rapidly in Detroit, expecting to double its size in the next five years. Passenger traffic has jumped nearly 20 percent in the last 12 months, while Northwest and its affiliates have grown less than 5 percent.

"We're growing and doing very well," said Ned Homfeld, chairman of Spirit Airlines, which originally started in Detroit, but now is based near Ft. Lauderdale, Fla. "We are as good as the majors. We want to give consumers a product that meets or exceeds that of the major carriers. They now see they have to compete with us."

Some critics argue that once the major airlines finish cutting costs and can compete one-on-one with the discounters that the low-fare carriers will be the losers.

"What people have missed is they think Northwest is this great big dinosaur that is just sitting there letting people eat them," said Michael Boyd, president of the Boyd Group, an aviation consulting firm in Evergreen, Colo. "That's not true. Northwest is a lot more efficient today than it was two years ago."

Northwest has implemented $1.4 billion in cost cuts so far by closing up facilities, laying off more than 5,000 employees and cutting back on some routes.

With such budget-trimming moves, "The low-fare carriers market share could very well level off and shrink," Boyd said. "You're going to see that because the Northwests of the world are going to come back swinging."

Spirit's Homfeld disagrees.

"I don't think the low-cost carriers will be driven out of the industry," he said. "The low-cost carriers have grown and matured and have a strong foothold now. We have a good product and it's not as simple as just pushing us out."

Southwest officials believe the only way major airlines can compete with discount carriers is to drastically cut operating costs, something that would face stiff opposition from the labor front.

Northwest is an example of that. Last spring, the airline announced it was seeking $950 million in concessions from its seven labor unions, hopefully by early summer. To date, no concessions have been approved.

"The major carriers are just going to have to cut their costs because customers are voting with their pocketbooks," said Gary Kelly, executive vice president and chief financial officer at Southwest, which has been operating 32 years.

"We would be foolish to think our competitors will continue with very high costs. We have to be prepared for that," Kelly said. "But in a sense, we will be better with improved competition from the majors. It will cause us to be motivated to improve ourselves even more."

Currently, operating costs for the top six major airlines -- Northwest, American, Continental, Delta, United and US Airways -- averages about 10 cents per available seat mile. The same cost average for seven discount carriers is about 25 percent lower or 7.4 cents an available seat mile.

Bernie Han, Northwest's chief financial officer, said that 40 percent of the cost per available seat mile (CASM) is made up of employee wages and benefits. The remaining 60 percent consists of other operating costs, such as fuel, aircraft facilities, maintenance and travel agent commissions.

==========================================

Mon "The Australian"

No-frills do not fly well with a full deal
By Steve Creedy
October 27, 2003

No-frills airlines are here to stay but full-service carriers are becoming smarter about ways to deal with them, British Airways chief executive Rod Eddington says.

While the budget airline phenomenon has been a boon for the consumer, the BA boss doubts the wisdom of full-service airlines starting low-cost airline offshoots.

In an interview with The Australian, Mr Eddington declined to comment on plans by partner Qantas to start a low-cost carrier next year. But he reiterated the stance taken when he sold British Airways low-cost Go subsidiary to Easyjet.

"We sold Go because I put a simple proposition, which was that no full-service network carrier had ever successfully been able to operate a full service network airline and a no-frills carrier in the same market," he said.

"Plenty have tried. Most recently KLM sold Buzz and Air Canada, who set up several, including Tango and Jazz, went bankrupt.

"So a simple observation: no one's ever done it."

Mr Eddington, whose airline has endured an explosive growth in low-fare carriers in one of the world's most aggressive markets, said Go had confused BA's customers and staff.

The low-cost offshoot had also prevented a vigorous competitive response to low-cost competitors by mainline BA.

He said BA's short-haul business had been losing £300 million a year when he arrived at the airline but executives had seen Go as its main response.

"We're much smarter now about how we compete with the no-frills carriers," he said. "We have greater use of the web, we've completely changed our pricing distribution strategy and we've been much smarter about what we do and how we do it."

The BA chief said the British carrier had pioneered what he regarded as the sensible full-service response to no-frills carriers.

The carrier had pulled off low-yielding routes in favour of those with a reasonable mix of premium and leisure traffic.

It had also replaced widebody aircraft on shorthaul routes with smaller Airbus A319 and A320 aircraft flying high frequencies to drive business travel.

"And then use the net intelligently to sell the back of the aeroplane," he said. "Unashamedly learn some of the lessons from the no-frills carriers."

Mr Eddington said BA's lower fares had been well received but it also meant the airline had to lower costs because yields were thinner.

The airline was taking a million pounds a year out of its cost base but did not expect to ever match those of the no-frills competitors.

However, travellers would continue to pay a premium to travel on a full-service network and advantages such as Heathrow departures, pre-assigned seating and backup aircraft.

"The question is how big a premium will they pay and are your respective cost bases such that you can earn a living off that premium," he said. "You've got to get your costs aligned in an intelligent, sensible way."

Steve Creedy travelled to London courtesy of BA.

===========================================

Wondering why Eastern and Sunstate have not been involved thus far. I think if QF are trying to get away from an entrenched culture that the regionals would be a great source of potential.

Does AIPA know that QF actually operates other aircraft than the 747?

It's simple to see why the turbo prop regionals are not included. We can't fly jets. They are way too fast for us.

QF
 

Flew on QF few days ago , service was better and good value for money ,


Prop

Good one Waldo :ok: but I think that may go over some peoples heads and taken in true belief.
Should have it as a "quote" , as that's how I've heard it from them.:}
To overlook constantly their own fully QF S.O.P.'d and Sim'd (and Entry Level Tested @ Easterns) Turbo-Prop Regional brothers is at their own peril. Many having changed guernseys already and are actively looking elsewhere, not to mention being already at the starting gate for this new LCC puppy.:=

Forget about using the 717's as they lack the range/flexibility of the 737s.
Secondly you can forget about Qantas 'opening the floodgates' to say,employees of Impulse as they protect their pilot recruitment criteria as surely as the nazi's tried to protect their so-called "aryian superiority".
Last point is that if guys have to resign from QF to join this LCC whats stopping QF selling it off a few years down the track?

Hugh Jarse - I normally enjoy reading your posts but your inference that AIPA only looks after B744 pilots shows an ignorance of the facts. The role of a professional organisation is to 1. Preserve jobs for its members, 2. Preserve conditions for its members and then 3. Improve conditions for its members. Examples of AIPA adhering to these principles are:-

The last two EBA's have significantly addressed a lot of the rostering problems that B767 crews have suffered for a number of years.

The A330 has been introduced with a large amount of flexibility between short haul & long haul awards with a good pay structure (more than B747 classic).

When Australian Airlines was being developed, AIPA acted to preserve jobs for its members resulting in pay and conditions on AA's B767's that are very appealing to many QF pilots and continued promotion opportunities.

Significant gains on the B737 (especially for F/O's) have been achieved in recent EBA's despite management insistance on "convergence" with DJ B737 costs. Also, jobs on the B737 were saved when pressure from AIPA caused GD to purchase B737-800's in lieu of A320's flown by cheaper non QF pilots (rumoured to have been NJS).

Perhaps it is this last issue which caused you to be bitter about AIPA. Their actions to preserve jobs for their members caused you to miss out on flying a shiny new A320. If NJS, Impulse, Eastern, Sunstate pilots were able to be members of AIPA you would see the full resources of AIPA working for them also.

Look forward to your usual balanced posts. GB

The whispers seem to be more and more of Impulse to be the 'new' LCC. Probably very wrong but how I see it,

QantasLink Turboprops - EAA/S'state DHC8-2/300 (Fleet renewal)
QantasLink Jets - NJS 146/possibly ERJ 170's
LCC - Impulse 738/A320
Mainline - A330/767/747/737
Aussie - 767
Jetconnect - 737

:confused: :rolleyes:

Seems that the Impulse guys are keeping their cards close to their chest. Whats the rumours on the inside of the 'pulse'?? :ok:

Qantas are a funny lot; they reject people saying they don’t meet their standards, then purchase the company paint the planes in Qantas colors and say they are ok to fly jets for that company but not the real one. Dont forget these pilots were once turbo prop pilots also so yes turbo prop pilots can fly jets.

I understand that many attempts have been made by the regionals to join AIPA but have been turned away for what ever reason, I bet if the LCC grows out of Impulse AIPA will be there in a hurry.

Is it true that the AFAP and AIPA are merging?
:cool:

Somewhere out there someone has lost the plot. Who said jets are hard to fly. You will find that the average piston twin with vapor locks and dodgy equipment is the hardest gear to fly.

It gets easier as you go!!

Cheers DM. P.S pete have you " left for Asia " yet?

Hmmm
 

Gidday Going Boeing,

It seems that AIPA are doing their job according to your evidence. However, my remarks are based upon a combination of discussions with friends and former work colleagues who now fly B737/767, and what I read on Qrewroom. I realise people who post on BBS's often are having an "internet whine", but it seems not everyone is convinced AIPA is going far enough to protect (in particular) the incumbents against companies such as JitConnict, etc. I'm not having a go, just expressing my observations over the last couple of years. Not quite true, GB. I'm under no misapprehensions what career path I have in my current employ, after several years of repeated disappointments :E. We were never in the running for 'French Chainsaws'.

Regionals being represented by AIPA? You'd be surprised how often thar topic is raised in the crew room...

Have a good day:ok:

Thanks Hugh

I understand that one of the reasons that AIPA does not represent the regional pilots (illegal to poach them) is that most of the AFAP's income is from QantasLink pilots and thus the AFAP would be decimated if they were to lose these pilots. A merger between the two organisations is impossible because of litigation outstanding from the "Great War". Personally, I would like all QF pilots represented by the one organisation as it would reduce QF managements ability to divide and conquer.

Apologies to all for going off topic. GB

The only reason the QF Regional Pilots are not covered by AIPA is that they, as a group, have not approached AIPA for representation.

AIPA cannot approach them under section 118 law as it would be deemed poaching and significantly bolster the coffers of the AFAP under legal challenge.

If the Regional Pilots as a group decide they want a career path into mainline and are prepared to sort out their seniority issues as a cohesive group, then I am sure AIPA would be delighted to take them on board.

It's the only way forward and must happen IMHO.

DM - Keep an ear out :-)

My 2 cents worth....
 

Fly jets in the States, used to work and live in Australia...

"We must all hang together, or surely, each of us will hang."

-Benjamin Franklin


The days of THE pilots dispute seem to linger as more than a distant memory in all that read these posts. There was a captain at Qantas, named Geoff Westwood that believed that union representation between the international brotherhood should remain separate to that of domestic. At the time, the employers were very divided in their assumed roles of service to the general public, a case that no longer exists.


Somehow, the Australian workforce must take back control of the skies! Pay for training and other forms of indentured servitude that have long plagued GA are now spreading like a cancer in the airline ranks. This will, in time, take it's toll on contract negotiations and even safety as compromises on standards follow the power of the almighty dollar.


Since airline deregulation in the United States, more than 130 airlines have gone out of business!! Unless the Australian workforce takes control of the level of business ethics that upstart operators must abide by, you too, may find yourself ineligible to apply for a home mortgage when the bank finds out that you have worked for three bankrupt employers in the last five years.


The Air Line Pilots Association, (yes I do know how to spell "airline") has been a complete failure at reaching across the ranks of the industry. We have had airlines who were owned by the same employer vote in a different union because they felt at such contrary views over conflicts of interest concerning "regional" routes or "mainline" routes.

In the end, the regional jet has forced many mainline pilots to accept large pay cuts and the endless supply of pilot factories in Florida have turned out even more "airline pilots", some who are featured in Flying Magazine advertisements saying they couldn't even fly eighteen months prior. The consequences of these actions may not be known for many years until it comes time to upgrade.

If you want a sustainable lifestyle as a pilot, you simply must be unionised. You must not allow pay-for-training to undermine your collective bargaining abilities. You must change with the times and embrace both domestic and international sides of the industry, so that you can stand with one voice against a common foe.

The enemy should not be us. The enemy should be corporate greed, that compromises the job security of it's employees and the safety of the general public at large.


Cheers,

Chris

Well said Chris!
And so true.
:ok:

news.com.au

Qantas eyes Asian take-off
October 31, 2003

LOW-COST airlines have a good chance of succeeding in Asia because of rapid urbanisation in the region, Qantas chief executive Geoff Dixon said yesterday in Singapore.

"Asia has some of the largest and fastest growing urban concentrations in the world, with 130 cities having a population of more than one million," Dixon said during a lunch speech organised by the Asia Pacific Aviation Media Association.

"The population ... geographic, and income characteristics of the region are ideally suited to the development of low-cost carriers," he said.

Compared with Europe and North America, Asia was a late starter in the no-frills airlines business, with Malaysia-based AirAsia about the only carrier that had managed to successfully carve out a niche in the market.

Qantas recently announced it would launch a domestic low-cost carrier next year.

Dixon said he believed the budget airline model would eventually succeed in Asia.

"While it may not yet be universally accepted in the Asia Pacific region that low-cost point-to-point airlines are the way of the future, we at Qantas certainly foresee a day when they will be a powerful force in this part of the world, particularly on shorter haul, international routes," Dixon said.

Singapore Airlines has said it would not convert its regional SilkAir into a no-frills carrier, and was due to announce before the end of the year whether it would launch a separate budget airline.

============================================

Ahhh, Going Boeing, thou should remember that AIPA was definately only for the 400 brothers until not long ago they got the wiff that 73/76 and classic were all about to resign from the union because of their lack of services but still accepting the money out of the ol paypacket each and every month.
"Well now, this is not part of the script, we may actually have to start supporting the rest of the boys and girls". That is the only reason AIPA got off their incompetent a@se and did all you seem to suggest.!!! They were about to lose a sh*t load of business.

Who said the 737 was a guarantee?

Airbus are trying very hard with super cheap deals.

Gday Pete. Hows "Asia" ?

An interesting post on 'Cabin Crew' from Peanut Pusher who
seems to be in the know:

http://www.pprune.org/forums/showthr...5&pagenumber=5

Sorry for the delay...I have another life away from pprune
Ok, I will do my best in point form to answer some questions posted during my absence.
* Yes, I'am concerned for short haul flying as it stands.
* Yes, I think there will be job losses over a long period of time.
* Yes, MAM will conduct some classes in the new year or earlier to cover the new dropping of hours for s/h as of Jan 2004. Currently there is not enough casuals in SYD or MEL to cover the estimated amount of hours released.
*BNE or ADL is still the favorite for the new LCC withh both state governments pitching hard.
*Many decissions are still to be made as Service Development has just got it's first brief this week.
*People on the short list will be used if crew are required especially language speakers. There is no current requirement for fulltime crew
*Three names are doing the executive rounds at the moment, all sound good. Board approval in Nov.
*Am I worried for my long term employment. yes, in it's current state and the money I earn.
*All LCC recruitment will be run by seperate company same as Australian, who run there own show with there own selection standard "lets not go back there"
*MAM casuals will probaly get preference in new LCC recruitment process.
*Do I think the BNE s/h base will be around in 5 years, No but thats just me looking at the business model unfolding in front of me.
*Do I think there will be progression into s/h for linkers, No I think it's a thing of the past as there will be no where to progress to in 3 years. They are looking to shrink not inflate s/h in current enviroment.
*L/H union is already talking about the removal of divisional transfers as there will be no where to transfer to the way things are playing out.
*Sorry for any short listers that have been waiting for so long, the market has changed so much in the last 12 months with Virgin going from 12% to 30% so the qantas expasion plans a year ago don't mirror the cost model of compertition today.

I must be careful how much I give away here as people are openly asking me at work if I'am Peanut Pusher. It's not hard to work out once you start putting some info I put up for your information plus my profile. Once I breech the confidence of people who give me inside info as they come across it, I'll loose there contact forever.
Then you cop a spray for being busy and actually working, so you then ask yourself "is it worth getting in trouble from both sides of this fence" ? , I think you know the answer

Good bye & good luck to everybody, hope to see you in the air
Remember never give up on your dreams

DM - your point is? May see you up that way in a few years when the 717's go. :-)

http://www.citywire.co.uk/

Ryanair unstoppable
Published: 09:52 GMT, Mon 3 Nov 2003
By Rodney Hobson, Larger Companies Correspondent

Low fare airline Ryanair continues to confound the sceptics and as long as chief executive Michael O'Leary can turn any adversity into positive publicity it will thrive.

Results for the half year to September have beaten expectations with a 16% rise in pre-tax profits to €176 million (£120 million). Traffic was up 45%, which does draw attention to the one concern: O’Leary admits that fares are being driven lower.

In the latest period Ryanair fares were 12% lower, so total revenue, up 28%, failed to keep pace with the 32% rise in costs. Still, 11.3 million passengers were carried compared with 7.8 million in the same period last year.

O’Leary said the record profits had been achieved in ‘adverse market conditions across Europe‘. His low fares model ‘delivers extraordinary growth and exceptional profitability in an industry more often characterised by losses’.

The war in Iraq, high oil prices and the sluggish European economy were all overcome with panache. Ryanair has taken delivery of 18 new Boeing aircraft, acquired, restructured and relaunched Buzz, opened two new bases and launched over 50 new routes.

Some routes, mainly from Stansted and Stockholm, have under performed but this will be dealt with in decisive Ryanair fashion. We can expect those that fail to come up to scratch to be ditched early next year. Ryanair now has so many destinations, and is talking to 50 more airports about setting up new routes, that it can mix and match to maximise passenger numbers.

Citywire Verdict

Ryanair continues to set the agenda for the airline industry in Europe and we can expect further rapid progress. There is no reason to fear that the airline will over extend itself as it copes with expansion without any signs of strain so far.

Chief executive Michael O’Leary has put quite a few backs up but he fights his corner and is likely to succeed in beating down the bureaucrats in Brussels, where his subsidy at Charleroi is still under investigation, and in Ireland, which is exasperating him by its slow progress towards freer competition.

Life is tough in the industry but if the weak go to the wall they will not include Ryanair. Progress may not be so spectacular in the rest of the financial year, but then again O’Leary has managed to beat forecasts often enough to suggest that he can do it again.

©2003 Citywire

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London "Evening Standard"

Ryanair set to overtake BA
Robert Lea, Evening Standard
3 November 2003

UDGET airline Ryanair will be flying more passengers around the UK and Europe than British Airways by Christmas, its chief executive claimed today.

'Of course we will be overtaking BA,' said Michael O'Leary. 'We have already overtaken them in the UK and as for Europe - that depends on the rate at which BA remains in decline.'

Ryanair today reported 45% growth in passengers to 11.3m in the six months to the end of September and latest figures show that it is within a couple of thousand passengers a day of overhauling BA.

However, Ryanair's passenger growth is overshadowed by ever-thinning profit margins. In addition, the rate of profits growth has stalled.

At the interim stage, including the £4.1m exceptional costs of taking over Buzz, rising route costs and the interest charges on its new Boeing aircraft, pre-tax profits rose 11% to e187m (£128m).

O'Leary said the carrier was continuing to grow despite what he believes is 'a concerted campaign of dirty tricks' by traditional full-service airlines.

This is culminating in a European Commission investigation - expected to end this month - into taxpayer-fuelled incentives paid to get Ryanair to fly to Charleroi, near Brussels.

But it has also included challenges to Ryanair's arrangements at other publicly-owned airports including Strasbourg and Pau in France, Niederhein in Germany, Aarhus in Denmark and Haugesund in Norway.

Meanwhile, holidays and weekend breaks for owners of second homes in France were under threat, after the airline warned some of its routes will be cut because they are not making money.

'Some of our new routes from Stansted this summer to the low countries and one or two French destinations have under-performed,' said O'Leary.

'Unless there is significant improvement in load factors [passenger numbers] through the winter, then we will replace a small number of these with alternative destinations and services.'

O'Leary refused to name the airports but those in France include Brest, Clermont-Ferrand and St Etienne.

Low countries services facing the axe may include Ostend-Bruges and Maastricht. 'The simple fact is that some of the airports we are flying to are not just giving the service that we want or that our passengers expect,' added O'Leary.

The arrival of budget airlines resulted in a huge growth in the number of people buying holiday homes. Thousands have bought properties as advertisements for homes in the south-west of France promise: 'Ryanair, 40 minutes'.

In recent months Ryanair has opened up new routes between Stansted and Baden-Baden in Germany, and between Bournemouth and Girona. Last month its new routes included Stansted to Tampere in Finland, Prestwick to Gothenburg and from Birmingham to both Murcia and Girona.

©2003 Associated Newspapers Ltd. All rights

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Dale Carey usually reliable, has posted on the Sydney board
that 'Skimpy' has decided on the A320, this would kill my prediction that Boeing would get the nod.

Source: http://www.vpmag.com/yssy/viewtopic.php?t=4814

Wirraway

Right Choice
 

If Qantas' No-Frills airline is choosing the A320, with CFM56-5 power plants, that would be the right choice of aircraft for the Australian market. However, the risk for Qantas is that it may significantly lower yield for its full service domestic operation, where it is utilising its 737s. The risk is that it may never attract customers back to a full service and may, in fact, give their high value customers more choice to change. I think Qantas is taking quite a risk but then it is their call. Wasn't Qantas proposing mega-carriers as the right way to go?

At least with A320 it could use the old Ansett facility at Melbourne for a maintenance base as it has docking already suited to A320 and 737. In addition, it could do contract work for Air New Zealand on their A320s there. But what of their engine types?

Either way it would be interesting to see how Qantas organises its manpower for the new carrier. To make the savings it wants to it would be better off going for a 737 fleet and transferring its exisitng domestic manpower to the airline purely on the basis that no new licenses are required for flight and ground crew.

It's an interesting problem. I wish them luck.