Qantas Biggest Oops !!
 

Qantas encircled by 777 operators

May 11, 2011 – 6:27 pm, by Ben Sandilands


About 10 years ago the then Qantas CEO James Strong said that one of the keys to its historic success as a carrier was getting its choice of jets right.
Strong was right. Qantas avoided the Comet, the DC-10, the MD-11 and A340s, all of which inflicted competitive harm on carriers that tried to use them against Boeing 707s and the 747 family in their heydays.
But this morning Qantas finds itself surrounded on the once lucrative routes between Australia and the US by airlines that are capitalising on the biggest fleet blunder it ever made, in choosing NOT to buy Boeing 777s.
Air New Zealand, Virgin Australia and Delta Airlines have brand new 777s that cut the heart out of the operating costs of aged Boeing 747s, and overnight the US Department of Transportation has approved Virgin Australia adding a wide ranging trans Pacific alliance with Delta to one that it already has with Air New Zealand for trans Tasman connections.
Qantas has no answer to this, short of urgently getting some 777s, for as far ahead as anyone can see with clarity. Qantas has Airbus A380s, which despite the QF32 incident, perform exceptionally well and are very popular with travellers. But it chose to use Boeing 787s, which may not be usable as non-stop Pacific jets for many years, to set up a two brand shuffle of fleet with its Jetstar brand that would have retired, several years ago had they been built as promised, the ancient and costly to run 747s that supplement the A380s.
The 787 failed. Something that is hard for many analysts to come to grips with. It failed. It will take years to fix the ‘plastic fantastic’ jet to a standard where 787 Dreamliners can fly the Pacific non-stop, and even then, possibly not any more economically than the 777.
Both the dual brand strategy and the fleet planning strategy have combined to put enormous pressure on an airline that seems to have a child-like trust in Boeing being able to produce a super light ultra long range plastic jet that is in fact a calamity that has delivered on none of its promises, something that any prudent airline would have worked out about two years ago when the gaps between game-changing rhetoric and the dismal reality widened alarmingly.
The 777s are a different proposition. They are a reliable and highly efficient supplement to the A380, as Singapore Airlines and Emirates, the two most formidable competitors Qantas faces on its network, have proven in abundance in recent years with a commonly demonstrated profitability and flexibility that shames the Australian flag carrier.
The approval of anti-trust immunity for the Virgin Australia-Delta alliance doesn’t however automatically make Qantas poor and its Australian Virgin competitor rich at its expense. It signals instead the end to super profits on the US routes where Qantas had earned its dominance and now finds its commercial alliance with American Airlines under efficient challenge from the Virgin-Delta combination, just as the Virgin-Etihad alliance that took effect earlier this year adds to the problems Qantas has on the kangaroo routes to the UK with Singapore Airlines and Emirates.
When Qantas ordered the 787s in 2005 it saw them as restoring its competitive capacity on those routes, a strategy that has evolved into basing Jetstar configured 787s in Singapore to reclaim those supposedly leisure routes to the likes of Amsterdam and Manchester where full service Emirates thrives but Qantas helplessly regards as impossible to make money out of with a full service product.
But the 787s were due in 2008! Qantas/Jetstar has no idea when it will get any that can fly a useful load non-stop to anywhere relevant in Europe.
While Qantas dithers with dreams of a two brand off-shored plan to expand Jetstar, and translate its lower costs and standards to Qantas, its former executive general manager John Borghetti, is expanding Virgin Australia as a single branded national alternative carrier onto routes for which Qantas doesn’t have the jets to serve, now, or any time soon.
Qantas can’t have been surprised by the approval of the Virgin-Delta deal. Yet it doesn’t have an answer. It isn’t paying dividends. And it is under real pressure from industrial action from its engineers and pilots.
Something has to give.
This is what happens when you have people who dont have the right skillset running an airline.Qantas management are recognized as being the least educated of any corporation in Australia.
Its shows day in ,day out in the decisions made or not made.~poster's comments,not Sandilands

True ooooooh sooooo true

I think alot of people are sitting here saying I told you so...

But then it's easy when playing at home!! (not advocating anything just saying)

The beginnings of another Ansett?

Yes, that oopsis far bigger than the wallabies promotional aircraft being NZ registered and crewed.

Beautifully written.
b.

The Party is Over.
The funny thing we all saw it coming I guess they didnt

Naaah! None of you understand!:=

The B777 is simply "old technology".....[:uhoh: just how big IS Boeing's order book for the type??:confused:]

G'day ;)

PS reminds me of the old adage; Never fly [buy?] anything that doesn't have the paint worn off the rudder pedals!

Feather #3

The B777 is simply "old technology".....[http://images.ibsrv.net/ibsrv/res/sr...lies/worry.gif just how big IS Boeing's order book for the type??

I was at boeing last year , The Boeing 777 production line was at full steam cant produce enough to satisfy customer demands

Old technolgy ??? you obviously havnt worked the 777-300ER
I dont think so

Opal

opalops

I think you missed the sarcism of Feather #3.

opal., Feather, (who was one of the most talented and congenial operators I ever worked with) was just restating the immortal words of Dixon, who IMHO was one of the least 'smartest guys in the room' CEO's that QF was ever saddled with. (Although, AJ is giving him a run for his money.)
The executive management of Qantas have done far more than any worker has, to bring the Roo to its knees.

at last, something I fully agree with, Trent...hear hear re. the man on the beach....what a role model and inspiration.......

Cheers.

And the 777 is such a winning airliner that Delta is making a $380 million loss for the last quater ($280 million loss last year) and Virgin set for an $80 million loss for the year. With Air NZ forecasting a loss also this half it makes Qantas the only profitable airline on the route.

Sorry Feather #3. I did miss the sarcism and now that you reminded me I do remember Dixon uttering those words.

I think you need to do some research on "cause and effect" relationships, 43Inches.

Hint: none of those losses have even the slightest thing to do with the 777. And Qantas would have made an even bigger profit on that route with the 777. It still would've had the same pax numbers and its ticket prices on a given route are identical no matter whether they take you in a 747, A380, or a hot air balloon, but the 777 is far more economical to run.

Dutchroll,

The point is Qantas is exposed to all the same factors as the operators involved. Natural disasters, high fuel prices etc... Qantas remain profitable on diversity. The reason the others are not profitable is that their management have made far worse decisions than for not choosing an aircraft that is a fit for only one route in the network. The 330 is a better all-rounder within the Asian region (JB knows this), the 380 maximises capacity and passenger comfort on european routes, as well as being competetive trans pacific.

The 787 promised to do all the 777 does and more to be competetive on shorter routes which would allow it to fill the shoes of the 330 and 777 at a lower operating cost.

Why would they not trust boeing to deliver on the 787, they did with the 777? (and the 747) The fact that its not working out is more boeings problem than Qantas poor management.

The downside at Qantas right now is obvious in the other threads to do with staff issues, which is going to be more of a concern than aircraft types in coming years.

wrong 43 inches
 

if you analyse the planning-development-delivery and delays of new aircrafts brought to the market you find that as a buffer most premium airlines order what is being brought new to the market to hedge against uncertainty. It also gives them a "true picture" of performance specs and "acceptance by the travelling public". Whatever aircraft works best they usually keep and in a timely manner dispose the other aircrafts.(including changing buy/options packages). As pointed out on many occassion the trippler would have saved a bucket load during the GFC and on many thinnner routes.The reason Geoff D did get the A333/2 is because of delays to the A380 he got them cheap(as a side note he was told when they decided to get the A333/2 he should not put the rockwell collins IFE in the A333/2 as it has a very high failure rate. again given that QF had so many problems on the 747 with the rockwell collins IFE he got a very cheap deal). SHORT term management mentality-LONG term pain to the company!!!:ugh:

Better than cheap .... the A330s were free.

They came in the "Buy one A380, get one A330 free" deal.


N

43 Inches

I think you're being a bit selective.

QF longhaul is widely acknowledged as not profitable at this stage. I think Joyce has even said so.

AirNZ is loss making becuase so much more of its smaller business was exposed to Japan and Christchurch.

Nothing to do with the 777.

The sad fact that is missed by QF management, is that whilst making aircraft/ife purchasing decisions. QF engineers where already working on this equipment (QF used to be contracted to provide engineering support for operators of these types). If they had just trusted and asked their line engineers, they could have got some decent, in service, first hand knowledge. :ugh: