QF Low Cost Carrier

[Flying_Sarah747]

Just a thought...Is there the chance that there could possibly be too many low cost carriers in the end, and the amount of passengers flying on them will not be enough to cover costs etc?

What makes them think that all the people who now fly Virgin Blue will want to swap over and fly 'Skimpy'? And surely 'Skimpy' will now be a competitor to QF mainline, cause why would people fly mainline if they can fly cheaper on 'Skimpy'? Or does 'Skimpy' only fly to destinations that QF mainline doesn't?

I have no idea...just a thought that came to mind!

[Wirraway]

Flying_Sarah747

Look at the quote in my post above as the possible answer
to your question.

25 new aircraft for 'Skimpy' in, and the 21 old 737s out from SH gives
you an increase of only 4 aircraft, not much increase in capacity
at all.

Wirraway

[ShesGreatintheGalley]

you would have to also consider the fact that the average business traveller, Frequent Flyer and Oneworld member will still fly mainline. People will always want to fly business and first class.. Citiflyer will still operate as usual, so in effect those pax wanting a really cheap airfare from bris- syd will prob only be able to book onto one of 2 flights operated by skimpy that day, the rest will be citiflyer @ normal prices.
LH flights will still be mainline; and qflink flights (i hope) will still do mostly normal tassie/nqld destinations but be complemented by mabye 1 skimpy service per day for those that wish to fly that way.

(thats what i am hoping anyway)

[Mr Seatback 2]

She'sGreatInTheGalley

Yes! I did miss flying with you - we had a great trip (such a pity you couldn't make it). Hope you're feeling better!

As for this LCC thing:

1) It would make a lot of sense - particularly in the start up phase - to cross train Impulse Crews (not everyone, but those where the operation will start from)

Think about it. Say, for example, operations started out of SEQ. Cross train the SEQ guys to operate on 737's (for example), then whilst they run the show, train a whole new group of new guys. Once they are all trained, etc, slowly send our guys back to Impulse flying.

2) Australian, as I understand, seconded some Cabin Crew into AO for a period of time to assist with training, etc. Something similar may happen with Skimpy.

3) As for the operations being based in somewhere other than SYD, funny how SEQ is expanding like mad right now isn't it? Even funnier is the fact it could be held in the same state as VB's HQ. Guess we'll have to see which state offers the best tax incentives to determine who wins what!

Wirraway:

For the most part, I agree with you. I would not be surprised in the slightest if the majority of crew were either contracted or MAM casuals. I do however hope they at least offer some form of security in the realm of full time employment to crew in this new carrier.

As for the 717's, they are on the Impulse AOC. Reading it right now in front of me.

Interesting times ahead people.

[Wirraway]

Mr SB2

For the most part, I agree with you. I would not be surprised in the slightest if the majority of crew were either contracted or MAM casuals. I do however hope they at least offer some form of security in the realm of full time employment to crew in this new carrier.

Yes, I agree for the type of pay likely to be on offer, I think
after the normal probation period the job should be permanent
with no contracts, I have only flown 4 sectors with Impulse
when they first started, but like DJ found the cabin crew happy
and content, and think that knowing that they won't get the
boot at the end of a contract period makes for happy camp.

'Skimpy' crews as Mr Dixon mentioned would have their own
EBA to the rest of the subsidiary's, and by the sounds of it, will
be truly independent. The pilots could well come from mainline
but the rest, F/As, check-in, ramp rats etc would be all new and
trained in the art of no-frills flying, 'Skimpy' has hired ex Ryan Air
execs to guide it, and Ryan Air is nothing like Impulse.

Wirraway

[saloon]

So that the average flyer does not even realise they are flying on QANTAS group aircraft, QF will want to establish the LCC as an entirely separate airline. In order to achieve this, they are going to have to 'give' this new airline a strong, independant brand from day one. Different procedures, different systems, different culture. This, I would imagine, also applying to staff/recruitment.

However, if this carrier actually grows to 20+ aircraft by 2006, then there are going to be a lot of surplus 'human resources' at QF (could you hear my skin crawl when i wrote human resources? Shudder). For some reason, i can't see how the market is going to be able to sustain that many more seats on a daily basis. Perhaps, as a means of negating this, QF will ask for volunteers from current CC ranks to join the airline. Hopefully, this will be the case.

What is the general consensus in all the different flying units, given the distinct lack of info provided about the new venture?

[SydGirl]

Ok having had 24 hours to think about this.. I've come up with the following conclusions.

Qantas don't do anything purely for the travelling public. It's all about their bottom line and how much money they are going to make!! (I already knew this but thought I'd throw it in anyway)

The new airline will definitely be formulated with a new identity and market strategy. There will always be a percentage of the travelling market that will want the full service given by QF. What QF will have to do is create a new airline with a new market. Ideally they don't want to entice away customers from their full-service carrier. They want to create either a) a new market or b)an alternative to VB.

My crystal ball tells me that the setup will be akin to Australian Airlines. The initial routes will be those that are high volume, low yield.. eg. SYD-OOL - not a lot of full fare paying pax on that route and a perfect starter for Skimpy. How convenient too that Skimpy, being still a part of QF can feed pax to the regionals!

I agree with Wirraway's perception of the cabin crew being mainly MAM casuals or even possibly contractors. I do sincerely doubt there will be much recruitment in QF mainline shorthaul (sorry to those on the shortlist!) and thus zero progression from the regionals (which also sucks!).

The new airline will need a new culture, as mentioned by saloon. However this culture is not going to come from established QF crew - that is just the kind of culture they do not want! They want fresh, young and most importantly... cheap - the airline will be based on the Ryanair model so FA's base salary will be low, but as some compensation they will receive share options, great opportunity for promotion and a percentage of the bar/product sales on board. Ryanair FA's also fund their own cabin crew training and (I believe!) also their uniforms! No offence intended but I cannot see many QF crew relishing the offer of a job at Skimpy.

Anyway all of the above is just pure speculation - and just my thoughts.

SG

[Wirraway]

Hi SG

If you can believe what you read that DJ has blondes running
out of its ears, maybe 'Skimpy' can reply by hiring brunettes
and redheads to even things up a bit, your crystal ball not
looking too bad from here. :-)

Wirraway

[GalleyHag]

Mr Seatback - What you say makes a lot of sense, but from everything Dixon and the company has put out the LCC will be a totally new operation and he stressed yesterday that they will be under a new EBA and the operation will be cheap and lean. Therefore even though you guys are cheaper than DJ I think QF wants to be even cheaper.

QFSkywalker - I know what you are saying I was there once. I think the only option apart from LH is Australian they are growing rapidly and will announce more routes next year and they have a real future and they earn good money unlike im afriad the new LCC. But you guys at regional should express your idea to FAAA so at least they can put it to QF as an option.

If QF did retire its 737-300 fleet that would make a lot of SH f/a's unemployed.

QF have been saying for well over a year now that labour costs have to come down and they need to compete on a level footing with DJ and this is how they are going to get around the unions and reduce labour costs. I have a bad feeling that the market is just not there to sustain all operations SH, the LCC and the 717 operation and you can bet that if there is an oversupply the first to go will not be the LCC.

[Q-T]

WELL THE SHORTHAUL TO LONGHAUL TRANSFER LIST IS ALIVE AND KICKING AGAIN!!!!

SHORTHAUL CREW HAVE BEEN PHONED AND OFFERED POSITIONS, THEIR CONVERSION TRAINING STARTS NOV 4TH
DOES ANYONE KNOW ANY NUMBERS???
TA Q-T

[QF skywalker]

galleyhag - when the time comes what do you think you will do, what are the s/h crew saying about the LCC ? are many looking at L/H, AO or the LCC as an option ?

I don't see the retirement of the 733 fleet as a big deal. QF now only have about four 733's left in the fleet as the rest have been sold off to airlines like comair in south africa.

I also heard today that January is the month we will see the first A330-300 arrive which should hopefully shake things up in longhaul in terms of the s/h to l/h tsfr list and also external recruitment.

[GalleyHag]

I think everyone is just playing a waiting game no one at short haul wants to see their job go but I think most are realistic. Obviously if there was a huge oversupply of crew Qantas would be obligated to find jobs for us be it with LH or other divisions but that is down the track. I think though I will be putting my name on the LH transfer list anyway, it cant hurt to keep my options open.

Most people that were talking about the LCC today tend to think it will effect the 717 operation first than us as the LCC will initially fly leisure routes and we at SH dont have many of those.

[Mr Seatback 2]

It probably will affect Pulse just as much as it does Short Haul - maybe?!?

For example, Pulse is taking SYD-CNS, SYD-OOL, BNE-CNS, and I believe BNE-TSV flights in addition to Short Haul operations (if not in exchange for, in some circumstances).

A final decision either way will be in 6 weeks time - so not long before we all find out the true intentions.

I agree with you GalleyHag, and would not be surprised if QF thought they could go cheaper than they already have with us. Guess it all depends on what 'incentives' (related to performance I presume, like Ryanair) they can offer to round out what may well be a pittance of a base salary. Fingers crossed that my cyncism is unfounded!

You have to also consider what QF considers 'leisure'. Sure, the Pulse operates a majority of leisure flying, but what of SYD-ASP or SYD-AYQ? MEL-BME? There's leisure on both sides of the fence - whose flying gets pillaged by the LCC remains to be seen.

As for making crew pay for their training (I needn't insert my opinion on this...it's beyond my level-headed comprehension), and their uniforms (not unusual in the states, but still... ), I only hope they get something in return, other than the stock standard response of: "You should be glad to have a job!"

All I hope for at the end of the day is this:
a) No Short Haul crew are made redundant
b) No Impulse crew are made redundant
c) The LCC goes ahead and creates employment in a very difficult field to gain entry
d) The conditions at Skimpy (or whatever it's called) aren't so bad that people are exploited

Of course - my hopes may all come to nothing. Fingers crossed that most of my list comes true. For everyone's sake!

[qfmike737]

Bring on more 717s!!!!!! I luuuurrrrrve them!!!! But it'd be nicer if you were allowed to flush the lavs when they're on bay.

[Wirraway]

Mr Seatback

Check the other thread, a couple of analysts think the
14 717s will be going to 'Skimpy'

Wirraway

[sirjfp]

I reckon that it is a strange move by Q.f to set up an airline that is going to cannibalise it's own market. I reckon that it is the first step in a calculated move to eventually have this " low cost" domestic operation cannibalise the entire domestic operation.
Perhaps it is the cynic in me to think that Q.F management would stoop so low....They just wouldn't ....would they??/

Fasten seat belts we may be encountering turbulence soon.

Stay safe, stay united.

[ShesGreatintheGalley]

Qantas said on Thursday the new airline would fly at least 23 aircraft by mid-2005 but there was speculation yesterday this could include 14 Boeing 717s already operated by its Impulse Airlines subsidiary.
A decision about whether to start the airline using Impulse or as a greenfield operation is due to be made within six weeks.

"They're not going to put 23 new aircraft in the market - that would be a less than sensible idea," said Macquarie Equities analyst Ian Myles. "I think they will use 14 717s, they'll use eight new 737-800s and they'll use one from the existing fleet."

[saloon]

mixed fleet of 717s and 737s, and a thought

It is really quite sad that i am playing aviation analyst on a Sunday morning (note to self: must get a life), but...

Isn't 'commonality' the key word, particularly when talking about a fleet of only 25 aicraft? The 717 is a good aircraft, but is it really suited to LCC service? You can't fit that many people into it and it is range challenged (or so i read). I know AirTran in the US use it, but i think they have a slightly different focus than what the proposed LCC is slated to have.

I just don't see how this prediction really fits the traditional LCC mould.

For my closing thought... These new companies are undoubtedly a way of lowering costs. In 25 years time, do you think that the jetBlue's and Virgin Blue's of the world will be announcing at their annual GM the setting up of a new low cost airline?

'We've got to reduce costs', an aged Brett Godfrey said. 'There is no way we can compete with a competitor with a cost base 30% less than ours. Our costs are too high.'

Where will it end?

[Qwannas]

Hmmmm

I can remember watching/listening to Geoffrey the last time he was interviewed on Business Sunday. (Early Sept, I think) It was right at the end of the interview and the questions were revolving around "where would this 'proposed' new LCC be flying to?" (IF it is approved!) They were discussing 'leisure routes' and Geoff made the illusive comment of "how exactly do you define what is a leisure route is, anyway?"

I can distinctly remember thinking "What's that got to do with the price of Tia Maria?" and wondering what the relevance of such a comment was. Hindsight is a wonderful thing.

I'd have to agree with your guess, sirjfp

I think that is just where QF is heading (and I think it will all happen at a million miles). The only competition that Short Haul has is another LCC, flying to all destinations. Wouldnt you be aiming at largely doing the same? I think that is what Geoff was implying way back then. A 'leisure route' could be any or even all of their flying destinations - it just depends on how you look at it.

[UpperDeckRight]

Have heard a rumour yesterday..

- Impulse crew will be too costly to work for the LCC - they want even cheaper.

- Almost all crew will be casual

- it will be crewed without assistance from any current qf operations.




Personally, I have a theory - and it is wild speculation on my behalf, but feasible a few years down the track.

QF could eventually become a purely International Carrier again, just operating SYD-BNE-MEL-PER full service sectors domestically. Qantas will have only one division of 'Qantas mainline' crew, who would fly mostly International, and the few domestic full service sectors. The LCC would do the rest of domestic operations.

As I said, purely speculation on my behalf, but it would make sense for QF to let the LCC do most of the domestic sectors(cheaper = more profit !!). It would also make sense for QF to have only one division of mainline crew for EBA/rostering/admin/training/ purposes.


Just some thoughts !