OzJet NO MORE???
Thread Starter
Join Date: Jan 2005
Location: Brisbane
Posts: 36
Likes: 0
Received 0 Likes
on
0 Posts
OzJet NO MORE???
Can anyone put any truth to the rumour? The techies are already talking about it in other forums, can we get a Cabin Crew perspective? Very sad if it's true, very sad. I know some of those guys are ex AN... chin up! 
yes, the news is true.. the crew got calls tonight, media release at 8pm, its now confirmed in the media... news.com.au has it in breaking news.
to all the cabin crew there, best of luck. you guys did a great job!
and yes, couple of ex ansett girls there...
to all the cabin crew there, best of luck. you guys did a great job!
and yes, couple of ex ansett girls there...
Join Date: May 2004
Location: all over the shop
Posts: 986
Likes: 0
Received 0 Likes
on
0 Posts
I hope Australia's other carriers are welcoming to those Ozjet staff who wish to continue flying
They are ceasing scheduled ops, keeping 2 a/c and about 30% of staff. Operating charters and ad-hoc only...
Join Date: Feb 2006
Location: Planet Zog
Age: 66
Posts: 34
Likes: 0
Received 0 Likes
on
0 Posts
Join Date: Jan 2006
Location: East Coast
Posts: 54
Likes: 0
Received 0 Likes
on
0 Posts
Very sad for the small amount crew that had taken up jobs with OZ. The concept was good on paper but using 30 yr old a/c in a market dominated by brand new 737 & A320 was never going to stick. Before anyone lays blame lets just think about those who this morning are now unemployed!!!! I know some of them and I truly wish you all the very best of luck.
Join Date: Apr 2004
Location: Sth America
Posts: 255
Likes: 0
Received 0 Likes
on
0 Posts
Sad
So unfair that the same people keep losing their jobs again and again.
Compass I to II to Ansett to Ozjet dear God give them a break!
We are thinking of you guys, so very sorry.
Hang in there, out of something bad will come something good.
Compass I to II to Ansett to Ozjet dear God give them a break!
We are thinking of you guys, so very sorry.
Hang in there, out of something bad will come something good.
Join Date: Apr 2004
Location: DONT KNOW
Posts: 58
Likes: 0
Received 0 Likes
on
0 Posts
we did tell you guys about mr stoodart!!!! doesnt surprise me at all, he well deserve it after all he did over here in england, sorry about the crew overthere, but not simpathy for another stoodart robery.
Last Update: Monday, March 13, 2006. 12:27pm (AEDT)
OzJet ... 50 to 60 workers will lose their jobs. (Inside Business)
OzJet's failure 'not surprising'
A travel management company says OzJet was never a viable option for travellers and it is not at all surprised the specialist airline has failed after only four months.
At least 50 people will lose their jobs after the business class airline grounded its fleet overnight, because of poor ticket sales.
The managing director of Corporate Travel Management, Jamie Pherous, says OzJet's travel schedule was not flexible enough.
"OzJet doing once or twice a day just obviously doesn't give enough flexibility because things happen," he said.
"Meetings change, meetings finish earlier or later, and the advantage of say, Qantas in the afternoon where flights go every half hour, you can easily move.
"Whereas OzJet - if you miss your flight you miss your flight, it's just not viable for travellers."
OzJet chairman Paul Stoddart has told the ABC's AM program he misjudged the market.
"It's very sad, very sad for our staff who've put in so much effort and for the passengers that were travelling with us, but sadly there wasn't enough of them," he said.
"We've given it four months and we said we'd give it six months.
"Clearly, we can see the forward bookings and the trend that traditionally comes after the Australia Day holiday when business goes back to work - it just hasn't happened for us."
The airline will continue as a charter service, but Mr Pherous says that may not save the business.
"I think once bitten, twice shy," he said.
"But there's clearly a demand in this country for chartering flights, but then again it's very hard to charter a flight every day isn't it?
"I mean to charter a 100-seat flight every day for somebody, I'm a bit unsure of their future."
Print Email
OzJet experiment fails
Australia's newest domestic airline has suspended its flights.
The budget airline OzJet offered a business class service between Sydney and Melbourne when it began four months ago.
The company has been losing money ever since, and now 50 to 60 workers will lose their jobs.
OzJet chairman Paul Stoddart has told the ABC's AM program he misjudged the market.
"It's very sad, very sad for our staff who've put in so much effort and for the passengers that were travelling with us, but sadly there wasn't enough of them," he said.
"We've given it four months and we said we'd give it six months.
"Clearly, we can see the forward bookings and the trend that traditionally comes after the Australia Day holiday when business goes back to work - it just hasn't happened for us.
"We thought we had a different plan but unfortunately it didn't translate into that all important 'bums on seats'," he said.
"As for staff, well to lose one member of staff is one too many, but we're probably going to have to lose 50 or 60, which is really, really sad."
But Mr Stoddart says some staff will be kept on so the airline can provide charter flights.
Qantas spokesman Rob Guerney says Qantas will take care of passengers affected by the cancellation of flights.
"For OzJet passengers that have already started their journey and are stranded up until and including the 24th of March, Qantas will carry those passengers free of charge if they've already commenced their journey, if they let us know by this Friday the 17th of March," he said.
"We'll make an arrangement to book them on Qantas flights free of charge."
Last Update: Monday, March 13, 2006. 12:27pm (AEDT)
OzJet ... 50 to 60 workers will lose their jobs. (Inside Business)
OzJet's failure 'not surprising'
A travel management company says OzJet was never a viable option for travellers and it is not at all surprised the specialist airline has failed after only four months.
At least 50 people will lose their jobs after the business class airline grounded its fleet overnight, because of poor ticket sales.
The managing director of Corporate Travel Management, Jamie Pherous, says OzJet's travel schedule was not flexible enough.
"OzJet doing once or twice a day just obviously doesn't give enough flexibility because things happen," he said.
"Meetings change, meetings finish earlier or later, and the advantage of say, Qantas in the afternoon where flights go every half hour, you can easily move.
"Whereas OzJet - if you miss your flight you miss your flight, it's just not viable for travellers."
OzJet chairman Paul Stoddart has told the ABC's AM program he misjudged the market.
"It's very sad, very sad for our staff who've put in so much effort and for the passengers that were travelling with us, but sadly there wasn't enough of them," he said.
"We've given it four months and we said we'd give it six months.
"Clearly, we can see the forward bookings and the trend that traditionally comes after the Australia Day holiday when business goes back to work - it just hasn't happened for us."
The airline will continue as a charter service, but Mr Pherous says that may not save the business.
"I think once bitten, twice shy," he said.
"But there's clearly a demand in this country for chartering flights, but then again it's very hard to charter a flight every day isn't it?
"I mean to charter a 100-seat flight every day for somebody, I'm a bit unsure of their future."
Print Email
OzJet experiment fails
Australia's newest domestic airline has suspended its flights.
The budget airline OzJet offered a business class service between Sydney and Melbourne when it began four months ago.
The company has been losing money ever since, and now 50 to 60 workers will lose their jobs.
OzJet chairman Paul Stoddart has told the ABC's AM program he misjudged the market.
"It's very sad, very sad for our staff who've put in so much effort and for the passengers that were travelling with us, but sadly there wasn't enough of them," he said.
"We've given it four months and we said we'd give it six months.
"Clearly, we can see the forward bookings and the trend that traditionally comes after the Australia Day holiday when business goes back to work - it just hasn't happened for us.
"We thought we had a different plan but unfortunately it didn't translate into that all important 'bums on seats'," he said.
"As for staff, well to lose one member of staff is one too many, but we're probably going to have to lose 50 or 60, which is really, really sad."
But Mr Stoddart says some staff will be kept on so the airline can provide charter flights.
Qantas spokesman Rob Guerney says Qantas will take care of passengers affected by the cancellation of flights.
"For OzJet passengers that have already started their journey and are stranded up until and including the 24th of March, Qantas will carry those passengers free of charge if they've already commenced their journey, if they let us know by this Friday the 17th of March," he said.
"We'll make an arrangement to book them on Qantas flights free of charge."
Join Date: Nov 2003
Location: About 3000 below Midhurst SID I reckon
Posts: 691
Likes: 0
Received 0 Likes
on
0 Posts
Stoddart should leave business management to the experts. Not only has he trashed European into a mess, fumbled around in F1 as Minardi which has amounted to little more than a training school, but now has messed up Ozjet.
He has no regard for the peoples lives he is playing with, in his failed attempts to be succesful and get rich quick. maybe he should try a smaller project.
I hear McDonalds are recruiting.......
He has no regard for the peoples lives he is playing with, in his failed attempts to be succesful and get rich quick. maybe he should try a smaller project.
I hear McDonalds are recruiting.......
In the UK he committed EAAC to contracts which needed 3 a/c, then pulls two of the a/c out of the programme, reducing down to only 1!! How can any market in any business trust someone who carries on like this?
I just hope he stays out of aviation now. If he doesn't then there are now a growing band of people who will tell everyone............ 'Do not work for this man' it will end in tears
I just hope he stays out of aviation now. If he doesn't then there are now a growing band of people who will tell everyone............ 'Do not work for this man' it will end in tears
Join Date: Apr 2004
Location: DONT KNOW
Posts: 58
Likes: 0
Received 0 Likes
on
0 Posts
from the australian newspaper
AND MR STOODART HAS ALWAYS THE SAME SPEACH, HE DID IT ONCE, HE DID IT TWICE AND HE WILL CONTINUE DOING THE SAME FARSE UNTILL SOMEONE PUTS HIM IN THE RIGHT PLACE.
Another crash landing
The forced landing of Ozjet has cost its founder millions and shown that Australia will remain an airline duopoly for the time being, writes Steve Creedy
--------------------------------------------------------------------------------
March 14, 2006
WHEN Ozjet founder Paul Stoddart flew into Melbourne late last week to look at the company's books, he quickly realised that his pet enterprise was bleeding to death.
The time had come to stop the rot. He had no choice but to shut down the business class airline's services between Sydney and Melbourne. "The operating losses on a bad week were a million dollars and on a good week they were three-quarters of a million dollars," Stoddart says. "That's the kind of money it was blowing."
As word went out on Sunday and Stoddart began fielding calls, he sat absorbed in his other great passion, Formula One racing televised from Bahrain.
Most people had given the start-up six months before it failed, depending on the depth of Stoddart's pockets. But virtually no one outside the airline was convinced its all-business class format would find the niche it was so desperately seeking or that it could break the Qantas-Virgin Blue stranglehold on the market.
Ultimately, the travelling public agreed. Australian travellers ignored the start-up to the extent the experiment has cost Stoddart, 50, an eight-figure sum before he ended it.
Up to 70 per cent of the airline's 100-strong work force will lose their jobs as it moves into its new charter role with just two aircraft.
The warnings came as early as last July when Singapore Airlines chief executive Chew Choon Seng said the carrier's study of the Australian domestic market had shown it could support only two domestic airlines and the regional carriers.
Most experts agree that the Qantas decision to set up low-cost offshoot Jetstar has made it even harder for another carrier to enter the market. To do so would mean competing for market share against two robust carriers, Virgin and Jetstar, with low operating costs.
"I think that's really made this market virtually impregnable now for the two carriers," Centre for Asia-Pacific Aviation executive chairman Peter Harbison says.
Ozjet's executives, however, believed they could tap into a niche market by luring 1 per cent or 2 per cent of well-heeled travellers to defect from the established airlines. They would do this by offering business class service at full economy prices.
The new airline would use ageing 737-200 aircraft configured to offer 60 comfortable business class seats with a 20kg cabin luggage allowance that would allow travellers to avoid wasting time checking in and picking up their baggage. It chose Australia's busiest route and the third busiest in the world, Melbourne-Sydney, to launch its inaugural service. It was immediately at a disadvantage; pitting eight return services a day against half-hourly peak departures by Qantas and Virgin.
A TURBULENT BUSINESS
Ansett is founded in 1935. Acquires Australian National Airways in 1957. Prospers under two-airline duopoly until poor business decisions, competition and maintenance irregularities leave it short of cash. Voluntary administration in September 2001. Ansett marktwo collapses in February 2002.
Trans Australia Airlines (later Australian Airlines), government-owned domestic carrier under two-airline policy, is established in 1950. By 1955 it has 56 per cent of the market. Absorbed into Qantas in the late 1990s.
Compass operates for two periods, under different managements, in the early '90s. Compass I is Australia's first low-cost airline. Collapses after a year.
Compass II, conceived as Southern Cross Airlines, collapses in 1993.
Impulse begins services in 1994. Sold to Qantas in 2001. With Virgin Blue, started in 2000, Impulse triggers restructuring of the industry. Qantas's low-cost Jetstar starts operations in May 2004. Impulse brand is replaced by Jetstar.
Delays in regulatory approvals also meant it had to launch in late November as the industry entered the quietest time of the year for business travel. By mid-December, Ozjet was cutting services after flying with as few as three people on its planes and was cutting prices to attract travellers.
Ozjet executives say they went into the Christmas launch with their eyes open and expected to lose money during the break. They used the period to iron out bugs in the system and prepare for the return in business traffic after the Australia Day long weekend.
Stoddart says historical and other data showed a huge 65 per cent surge in business traffic after Australia Day. "And for us that just didn't happen," he says. "We were carrying the same passengers in February, and projected through March that we were carrying, as we were in January."
The airline's decision to cut fares also bumped up its break-even load factor, the level at which it fills enough seats to cover costs. The original break-even of 50 per cent had been set with one-way fares of $325.
Stoddart says the airline's decision to lower fares pushed the break-even to 75 per cent to 80 per cent. "And we were only seeing, at best, the sort of mid-30s," he says.
So what went wrong? Stoddart rules out the anti-competitive practices blamed for the demise of previous entrants such as Compass.
"I have to be honest, we didn't find problems with the environment," he says. "We didn't have problems with Civil Aviation Safety Authority, they were fantastic, and we were very proud of getting our approval on the first go. We certainly had no problems with Sydney and Melbourne airports, and I'm certain we wouldn't have had with any other of the airports.
"And Qantas - all right [Qantas chief executive] Geoff [Dixon] and I go back a while - but we had no real problems with Qantas and none with Virgin.
"It failed because it simply was getting 25per cent of the revenue that was predicted and it just wasn't getting the bums on seats."
Stoddart points to two factors that contributed to the airline's problems.
"In going for business customers, we didn't have a frequent flyer program which, it became clear, was incredibly important," he says. "And we certainly didn't have the Australia-wide network."
He also acknowledges that launching on the highly competitive Sydney-Melbourne route, with its short flying time and half-hourly peak departures by Qantas and Virgin, also appears to have been a mistake. "Obviously we did have good support from a loyal bunch of people, but I don't think people necessarily felt the need to move to Ozjet because of the services we were offering," Stoddart says.
Harbison agrees. "I didn't see how it could work because we have a price-sensitive market and price dominates on sectors of an hour," he says. "People just aren't that fussed about comfort and Australia's not really that big on prestige and being seen to be travelling business class. If they can save 50 per cent on the fare, they'll save 50 per cent on the fare."
How much Ozjet will cost Stoddart in total remains to be seen. The former Minardi Formula One team boss estimated in 2004 that it would cost him $70 million to set up the airline and said last August that 75 per cent of that money had already been spent.
Add to that losses of $750,000 to $1 million a week during the 15-week life of the carrier and it's easy to see why the losses are hurting.
"If I've got any regrets about this it's because I spent most of the last year when this was happening ... with Minardi and was seeing management reports and listening to people who were highly optimistic about what potential loads were going to be," he says.
"Indeed, I was told repeatedly that our biggest problem coming into this was that we didn't have enough seats in the market and we were not going to have the capacity for the demand. Quite the opposite was true."
Stoddart now has the unpleasant job of making redundant much of Ozjet's work force, but it is not the first time he has faced the situation. In 2002, he had moved to sell European Aviation Air Charters, the air charter company he started in Europe using aircraft and spares bought from the RAAF. In 2004, he stepped back in to save the company, but had to sack 585 staff.
Last year, he told reporters he had subsequently hired back more than 300 staff and the company was trading profitably.
He is confident the Australian charter operations will also work, probably with one aircraft converted back to a 100-plus seater and keeping the other with existing configuration. In addition to traditional charter work with mining companies, it will seek to attract entertainers, sporting teams and businesses wanting to take staff to conventions.
But having been bruised by Ozjet, he is not going to fall for the same trap twice and says the charter operation will be lean and mean and grow only through hard work.
"This is a market I've personally been in for 13 years so it's not new to me," he says. "You're very much controller of your own destiny because you're only flying when you have the demand.
"Because we own the assets and we don't have massive overheads we can take a soft start to it and I have to say I've been rather encouraged this morning.
"Thanks to Qantas we've had no passenger issues whatsoever that I'm aware of - and certainly I've been monitoring the call centre myself this morning - and all we have had is people making inquiries for charter."
While Ozjet is another lesson to people besotted with starting a domestic airline in Australia, it will probably be only a matter of time before another attempt is made.
CAPA's Harbison says the chances of success remain small. "It's fairly telling to say that there have been 55 years of aviation in Australia where there's never been more than two airlines that have been able to keep a hold on the market on a national scale," he says.
Stoddart isn't about to disagree.
"Would I recommend anybody else try it? Not particularly," he says. "It has certainly proven to me that Australia is a duopoly and it always has been."
Steve Creedy is The Australian's aviation writer.
Last landing for Ozjet
March 13, 2006
AUSTRALIA'S traditional preference for a two-airline system had proven too tough for Ozjet to crack, the airline's chairman, Paul Stoddart, said today.
Insufficient business forced the budget business class airline yesterday to suspended its scheduled flights between Melbourne and Sydney after just four months of operation and to foreshadow "50 or 60" redundancies.
Mr Stoddart said the outcome suggested there was no room for a budget business class airline in Australia.
"I think Australia's traditionally been, domestically anyway, a two-airline operation," he told ABC radio.
"There's always been two main players in the marketplace and any new entrants have struggled.
"We thought we had a different plan. Certainly the industry, the agents and so on, gave it enormous support before it started up (and) made us very confident.
"But unfortunately it didn't translate into that all-important 'bums on seats'."
He agreed there had been a major misjudgement of the market.
"It's fair to say the support was overwhelming in the 12 months before we started, but it just didn't translate into bookings," Mr Stoddart said.
"It doesn't matter what the reasons are. They're just the facts."
He said ticket-holders were completely protected and Qantas had offered to carry any passengers who had already begun their journey back to their origin.
Redundancies were inevitable, Mr Stoddart said.
"Even to lose one member of staff is too many, but we're going to lose 50 or 60, which is really, really sad," he said.
"Certain areas of the business, namely the base at Sydney and the call centre are areas that we won't be taking forward."
Mr Stoddart, the former owner of Formula One racing team Minardi, said any staff not retained would be paid their full entitlements.
Just last month, OzJet announced Perth would become the airline's third destination.
The announcement came amid speculation OzJet would go belly-up.
The airline had struggled to attract customers in the tough Melbourne and Sydney markets, with reports some flights were carrying only three passengers.
OzJet slashed its prices and revised its flight schedule only a week after it began its Sydney-Melbourne service in December last year.
Mr Stoddart said OzJet would downsize to concentrate on earning income from ad hoc and VIP charters.
The carrier will retain its Air Operators Certificate, a minimum of two Boeing 737 aircraft for charter work and about 30 per cent of its staff.
OzJet flights grounded after three months
Steve Creedy and Elizabeth Gosch
March 13, 2006
BUSINESS class airline OzJet has axed its domestic service just three months after launching a bold push to take well-heeled customers away from Qantas and Virgin Blue.
The airline said last night it was cancelling services between Sydney and Melbourne and would not proceed with planned flights to Perth, unveiled last month.
OzJet chief executive Hans van Pelt said about 70 of the airline's 100 employees would lose their jobs as a result of the decision.
OzJet, founded by Australian Formula 1 investor Paul Stoddart, plans to keep at least two aircraft operating in Australia and to pursue charter work.
Mr van Pelt said OzJet customers who had already travelled one leg of a journey would be transferred without extra cost to Qantas flights between now and March 24.
Those who had not started their journey would get a full refund or could get a Qantas seat at the same price if they contacted the airline by the end of the week.
Mr van Pelt said OzJet had not attracted enough customers to make the service viable.
"It just comes down to could we get the numbers to make it work," Mr van Pelt said.
"And the reality is we just can't see where it's coming from and for whatever reason we can't get the support to operate in this environment.
"We just can't go on losing money. It's fair to say we gave it a go and it's become clear we weren't going to achieve it in the immediate future."
OzJet has brought four aircraft into Australia, and Mr van Pelt said the company was working through its future.
He said some staff would become redundant but the airline would honour all its commitments.
"But the reality is we will probably downscale to a minimum of two aircraft and about 30 per cent of the staff," he said.
OzJet hit turbulence as recently as last week when it announced the delay of its proposed Perth services because of lack of support for a proposed red-eye flight.
The aviation industry had been highly sceptical of the start-up's chance of survival, particularly when it chose to begin operations over Christmas, a traditionally quiet period for business travel.
Mr van Pelt said the decision to axe the airline services had been a tough one.
"It's disappointing, what else can you say," he said. "It's with great regret that we have to do it, and it's just really unfortunate.
OzJet chairman Paul Stoddart said the airline had been unable to compete against Australia's other established carriers.
"Unfortunately, for whatever reasons, we have not had the support we needed to operate in that environment against big established carriers," Mr Stoddart said in a statement.
"It's very, very disappointing, particularly, I'm sure, for those people who had started travelling regularly with us between Melbourne and Sydney and many of our very diligent and loyal employees. Sad to say, there have not been enough of the regular customers."
The Melbourne-based airline struggled from the start, delaying its launch last year from July to October and then to November because it took longer than expected to obtain approval to operate from the Civil Aviation Safety Authority.
OzJet then cut prices and revised its schedule just a week after launching and struggled to attract customers, with reports some flights were carrying just three passengers.
However, in February Mr Stoddart said things were looking up, with the airline's load factors hitting 50 per cent.
"The bookings over the last couple of weeks have really, really picked up," he told the Nine Network.
Yesterday he said "no paying passenger booked on OzJet" would be disadvantaged from the cancellation of the service.
"They can either receive a refund from OzJet or transfer without any additional cost to Qantas, which has kindly offered to assist in transporting people who have booked and paid for tickets with OzJet," he said.
Another crash landing
The forced landing of Ozjet has cost its founder millions and shown that Australia will remain an airline duopoly for the time being, writes Steve Creedy
--------------------------------------------------------------------------------
March 14, 2006
WHEN Ozjet founder Paul Stoddart flew into Melbourne late last week to look at the company's books, he quickly realised that his pet enterprise was bleeding to death.
The time had come to stop the rot. He had no choice but to shut down the business class airline's services between Sydney and Melbourne. "The operating losses on a bad week were a million dollars and on a good week they were three-quarters of a million dollars," Stoddart says. "That's the kind of money it was blowing."
As word went out on Sunday and Stoddart began fielding calls, he sat absorbed in his other great passion, Formula One racing televised from Bahrain.
Most people had given the start-up six months before it failed, depending on the depth of Stoddart's pockets. But virtually no one outside the airline was convinced its all-business class format would find the niche it was so desperately seeking or that it could break the Qantas-Virgin Blue stranglehold on the market.
Ultimately, the travelling public agreed. Australian travellers ignored the start-up to the extent the experiment has cost Stoddart, 50, an eight-figure sum before he ended it.
Up to 70 per cent of the airline's 100-strong work force will lose their jobs as it moves into its new charter role with just two aircraft.
The warnings came as early as last July when Singapore Airlines chief executive Chew Choon Seng said the carrier's study of the Australian domestic market had shown it could support only two domestic airlines and the regional carriers.
Most experts agree that the Qantas decision to set up low-cost offshoot Jetstar has made it even harder for another carrier to enter the market. To do so would mean competing for market share against two robust carriers, Virgin and Jetstar, with low operating costs.
"I think that's really made this market virtually impregnable now for the two carriers," Centre for Asia-Pacific Aviation executive chairman Peter Harbison says.
Ozjet's executives, however, believed they could tap into a niche market by luring 1 per cent or 2 per cent of well-heeled travellers to defect from the established airlines. They would do this by offering business class service at full economy prices.
The new airline would use ageing 737-200 aircraft configured to offer 60 comfortable business class seats with a 20kg cabin luggage allowance that would allow travellers to avoid wasting time checking in and picking up their baggage. It chose Australia's busiest route and the third busiest in the world, Melbourne-Sydney, to launch its inaugural service. It was immediately at a disadvantage; pitting eight return services a day against half-hourly peak departures by Qantas and Virgin.
A TURBULENT BUSINESS
Ansett is founded in 1935. Acquires Australian National Airways in 1957. Prospers under two-airline duopoly until poor business decisions, competition and maintenance irregularities leave it short of cash. Voluntary administration in September 2001. Ansett marktwo collapses in February 2002.
Trans Australia Airlines (later Australian Airlines), government-owned domestic carrier under two-airline policy, is established in 1950. By 1955 it has 56 per cent of the market. Absorbed into Qantas in the late 1990s.
Compass operates for two periods, under different managements, in the early '90s. Compass I is Australia's first low-cost airline. Collapses after a year.
Compass II, conceived as Southern Cross Airlines, collapses in 1993.
Impulse begins services in 1994. Sold to Qantas in 2001. With Virgin Blue, started in 2000, Impulse triggers restructuring of the industry. Qantas's low-cost Jetstar starts operations in May 2004. Impulse brand is replaced by Jetstar.
Delays in regulatory approvals also meant it had to launch in late November as the industry entered the quietest time of the year for business travel. By mid-December, Ozjet was cutting services after flying with as few as three people on its planes and was cutting prices to attract travellers.
Ozjet executives say they went into the Christmas launch with their eyes open and expected to lose money during the break. They used the period to iron out bugs in the system and prepare for the return in business traffic after the Australia Day long weekend.
Stoddart says historical and other data showed a huge 65 per cent surge in business traffic after Australia Day. "And for us that just didn't happen," he says. "We were carrying the same passengers in February, and projected through March that we were carrying, as we were in January."
The airline's decision to cut fares also bumped up its break-even load factor, the level at which it fills enough seats to cover costs. The original break-even of 50 per cent had been set with one-way fares of $325.
Stoddart says the airline's decision to lower fares pushed the break-even to 75 per cent to 80 per cent. "And we were only seeing, at best, the sort of mid-30s," he says.
So what went wrong? Stoddart rules out the anti-competitive practices blamed for the demise of previous entrants such as Compass.
"I have to be honest, we didn't find problems with the environment," he says. "We didn't have problems with Civil Aviation Safety Authority, they were fantastic, and we were very proud of getting our approval on the first go. We certainly had no problems with Sydney and Melbourne airports, and I'm certain we wouldn't have had with any other of the airports.
"And Qantas - all right [Qantas chief executive] Geoff [Dixon] and I go back a while - but we had no real problems with Qantas and none with Virgin.
"It failed because it simply was getting 25per cent of the revenue that was predicted and it just wasn't getting the bums on seats."
Stoddart points to two factors that contributed to the airline's problems.
"In going for business customers, we didn't have a frequent flyer program which, it became clear, was incredibly important," he says. "And we certainly didn't have the Australia-wide network."
He also acknowledges that launching on the highly competitive Sydney-Melbourne route, with its short flying time and half-hourly peak departures by Qantas and Virgin, also appears to have been a mistake. "Obviously we did have good support from a loyal bunch of people, but I don't think people necessarily felt the need to move to Ozjet because of the services we were offering," Stoddart says.
Harbison agrees. "I didn't see how it could work because we have a price-sensitive market and price dominates on sectors of an hour," he says. "People just aren't that fussed about comfort and Australia's not really that big on prestige and being seen to be travelling business class. If they can save 50 per cent on the fare, they'll save 50 per cent on the fare."
How much Ozjet will cost Stoddart in total remains to be seen. The former Minardi Formula One team boss estimated in 2004 that it would cost him $70 million to set up the airline and said last August that 75 per cent of that money had already been spent.
Add to that losses of $750,000 to $1 million a week during the 15-week life of the carrier and it's easy to see why the losses are hurting.
"If I've got any regrets about this it's because I spent most of the last year when this was happening ... with Minardi and was seeing management reports and listening to people who were highly optimistic about what potential loads were going to be," he says.
"Indeed, I was told repeatedly that our biggest problem coming into this was that we didn't have enough seats in the market and we were not going to have the capacity for the demand. Quite the opposite was true."
Stoddart now has the unpleasant job of making redundant much of Ozjet's work force, but it is not the first time he has faced the situation. In 2002, he had moved to sell European Aviation Air Charters, the air charter company he started in Europe using aircraft and spares bought from the RAAF. In 2004, he stepped back in to save the company, but had to sack 585 staff.
Last year, he told reporters he had subsequently hired back more than 300 staff and the company was trading profitably.
He is confident the Australian charter operations will also work, probably with one aircraft converted back to a 100-plus seater and keeping the other with existing configuration. In addition to traditional charter work with mining companies, it will seek to attract entertainers, sporting teams and businesses wanting to take staff to conventions.
But having been bruised by Ozjet, he is not going to fall for the same trap twice and says the charter operation will be lean and mean and grow only through hard work.
"This is a market I've personally been in for 13 years so it's not new to me," he says. "You're very much controller of your own destiny because you're only flying when you have the demand.
"Because we own the assets and we don't have massive overheads we can take a soft start to it and I have to say I've been rather encouraged this morning.
"Thanks to Qantas we've had no passenger issues whatsoever that I'm aware of - and certainly I've been monitoring the call centre myself this morning - and all we have had is people making inquiries for charter."
While Ozjet is another lesson to people besotted with starting a domestic airline in Australia, it will probably be only a matter of time before another attempt is made.
CAPA's Harbison says the chances of success remain small. "It's fairly telling to say that there have been 55 years of aviation in Australia where there's never been more than two airlines that have been able to keep a hold on the market on a national scale," he says.
Stoddart isn't about to disagree.
"Would I recommend anybody else try it? Not particularly," he says. "It has certainly proven to me that Australia is a duopoly and it always has been."
Steve Creedy is The Australian's aviation writer.
Last landing for Ozjet
March 13, 2006
AUSTRALIA'S traditional preference for a two-airline system had proven too tough for Ozjet to crack, the airline's chairman, Paul Stoddart, said today.
Insufficient business forced the budget business class airline yesterday to suspended its scheduled flights between Melbourne and Sydney after just four months of operation and to foreshadow "50 or 60" redundancies.
Mr Stoddart said the outcome suggested there was no room for a budget business class airline in Australia.
"I think Australia's traditionally been, domestically anyway, a two-airline operation," he told ABC radio.
"There's always been two main players in the marketplace and any new entrants have struggled.
"We thought we had a different plan. Certainly the industry, the agents and so on, gave it enormous support before it started up (and) made us very confident.
"But unfortunately it didn't translate into that all-important 'bums on seats'."
He agreed there had been a major misjudgement of the market.
"It's fair to say the support was overwhelming in the 12 months before we started, but it just didn't translate into bookings," Mr Stoddart said.
"It doesn't matter what the reasons are. They're just the facts."
He said ticket-holders were completely protected and Qantas had offered to carry any passengers who had already begun their journey back to their origin.
Redundancies were inevitable, Mr Stoddart said.
"Even to lose one member of staff is too many, but we're going to lose 50 or 60, which is really, really sad," he said.
"Certain areas of the business, namely the base at Sydney and the call centre are areas that we won't be taking forward."
Mr Stoddart, the former owner of Formula One racing team Minardi, said any staff not retained would be paid their full entitlements.
Just last month, OzJet announced Perth would become the airline's third destination.
The announcement came amid speculation OzJet would go belly-up.
The airline had struggled to attract customers in the tough Melbourne and Sydney markets, with reports some flights were carrying only three passengers.
OzJet slashed its prices and revised its flight schedule only a week after it began its Sydney-Melbourne service in December last year.
Mr Stoddart said OzJet would downsize to concentrate on earning income from ad hoc and VIP charters.
The carrier will retain its Air Operators Certificate, a minimum of two Boeing 737 aircraft for charter work and about 30 per cent of its staff.
OzJet flights grounded after three months
Steve Creedy and Elizabeth Gosch
March 13, 2006
BUSINESS class airline OzJet has axed its domestic service just three months after launching a bold push to take well-heeled customers away from Qantas and Virgin Blue.
The airline said last night it was cancelling services between Sydney and Melbourne and would not proceed with planned flights to Perth, unveiled last month.
OzJet chief executive Hans van Pelt said about 70 of the airline's 100 employees would lose their jobs as a result of the decision.
OzJet, founded by Australian Formula 1 investor Paul Stoddart, plans to keep at least two aircraft operating in Australia and to pursue charter work.
Mr van Pelt said OzJet customers who had already travelled one leg of a journey would be transferred without extra cost to Qantas flights between now and March 24.
Those who had not started their journey would get a full refund or could get a Qantas seat at the same price if they contacted the airline by the end of the week.
Mr van Pelt said OzJet had not attracted enough customers to make the service viable.
"It just comes down to could we get the numbers to make it work," Mr van Pelt said.
"And the reality is we just can't see where it's coming from and for whatever reason we can't get the support to operate in this environment.
"We just can't go on losing money. It's fair to say we gave it a go and it's become clear we weren't going to achieve it in the immediate future."
OzJet has brought four aircraft into Australia, and Mr van Pelt said the company was working through its future.
He said some staff would become redundant but the airline would honour all its commitments.
"But the reality is we will probably downscale to a minimum of two aircraft and about 30 per cent of the staff," he said.
OzJet hit turbulence as recently as last week when it announced the delay of its proposed Perth services because of lack of support for a proposed red-eye flight.
The aviation industry had been highly sceptical of the start-up's chance of survival, particularly when it chose to begin operations over Christmas, a traditionally quiet period for business travel.
Mr van Pelt said the decision to axe the airline services had been a tough one.
"It's disappointing, what else can you say," he said. "It's with great regret that we have to do it, and it's just really unfortunate.
OzJet chairman Paul Stoddart said the airline had been unable to compete against Australia's other established carriers.
"Unfortunately, for whatever reasons, we have not had the support we needed to operate in that environment against big established carriers," Mr Stoddart said in a statement.
"It's very, very disappointing, particularly, I'm sure, for those people who had started travelling regularly with us between Melbourne and Sydney and many of our very diligent and loyal employees. Sad to say, there have not been enough of the regular customers."
The Melbourne-based airline struggled from the start, delaying its launch last year from July to October and then to November because it took longer than expected to obtain approval to operate from the Civil Aviation Safety Authority.
OzJet then cut prices and revised its schedule just a week after launching and struggled to attract customers, with reports some flights were carrying just three passengers.
However, in February Mr Stoddart said things were looking up, with the airline's load factors hitting 50 per cent.
"The bookings over the last couple of weeks have really, really picked up," he told the Nine Network.
Yesterday he said "no paying passenger booked on OzJet" would be disadvantaged from the cancellation of the service.
"They can either receive a refund from OzJet or transfer without any additional cost to Qantas, which has kindly offered to assist in transporting people who have booked and paid for tickets with OzJet," he said.
Join Date: Nov 2005
Location: Sydney
Posts: 98
Likes: 0
Received 0 Likes
on
0 Posts
Good grief!
Let's not get carried away. Ozjet did have good points but so do the other airlines. Ozjet just didn't have enough. One thing it didn't have, it seems, was a well researched business plan. But let's say I am wrong on that score.
Say it did have a business plan and it had succeeded. Would Peter S. from that Melbourne uni be taking the credit? I reckon he would. But now that the airline is trashed, would he take the responsibility for its collapse. I reckon he wouldn't. So was Peter S. behind the collapse and is he to blame? That Melbourne uni wouldn't be to pleased to hear that, I am sure (see Wikipedia).
If, of course, I am right in saying the airline had no well researched business plan then it could be fair to say that Ozjet failed under Paul Stoddart's stewardship and his critics would be vindicated because his reputation appears to built around questionable successes and failures.
Say it did have a business plan and it had succeeded. Would Peter S. from that Melbourne uni be taking the credit? I reckon he would. But now that the airline is trashed, would he take the responsibility for its collapse. I reckon he wouldn't. So was Peter S. behind the collapse and is he to blame? That Melbourne uni wouldn't be to pleased to hear that, I am sure (see Wikipedia).
If, of course, I am right in saying the airline had no well researched business plan then it could be fair to say that Ozjet failed under Paul Stoddart's stewardship and his critics would be vindicated because his reputation appears to built around questionable successes and failures.
Join Date: Jan 2004
Location: USA, UK and the world
Posts: 134
Likes: 0
Received 0 Likes
on
0 Posts
If he goes around sniffing for investments, someone here must say to people in the know, don't touch him with a barge pole. EAAC was a joke, cranky old ex BA 747-200's practically falling apart, engines being taken from one aircraft to another, massive delays and sacking all those people, just like that, a true amateur.
Join Date: Nov 2005
Location: Sydney
Posts: 98
Likes: 0
Received 0 Likes
on
0 Posts
Credibility Schott to Bits
I think you are right. When one has done it several times and it is tainted with controversy, maybe it is time to retreat and do something you really know, and do it well. Sadly, had he marketed that product in a different way with different trimmings and respected the view of his peers, it might have been a winner with the public. It's too late now to restart it. The name, the man, the product are all casulaties of someone who wants to take control of their own destiny. In this day and age, you a bigger man if you invite others to share your dream. But I'm only a pilot. My dream was to fly at age nine. Thanks to those who shared my dream and made it happen. I am forever grateful to the believers who helped me step by step and gave me opportunities along the way. PS should have been able to pull this off but he trod on everyone's toes along the way. Sad to say it has cost him his and his investor's a lot of money.
Good things are done slowly as the Germans would say. I think that if he had planned the execution of this with support from the industry in a timely manner, the outcome might have been different. I think the Vic Govt were led by the nose to believe in this airline when there was really nothing behind it it seems. There is no substitute for good long term planning and getting a raft of propective investors on board. Take a leaf out of Sir Richard's book.
Good things are done slowly as the Germans would say. I think that if he had planned the execution of this with support from the industry in a timely manner, the outcome might have been different. I think the Vic Govt were led by the nose to believe in this airline when there was really nothing behind it it seems. There is no substitute for good long term planning and getting a raft of propective investors on board. Take a leaf out of Sir Richard's book.
Join Date: Nov 2005
Location: Sydney
Posts: 98
Likes: 0
Received 0 Likes
on
0 Posts
Let's Learn from Ozjet
On the contrary, here is an airline that could have been saved, but for the approach.
I read with interest the way this forum believed vehemently in the plan that was to be Ozjet, the grand new Australian. Yet no one was prepared to take the hard ball (sorry - Legal Counsel might be the exception) and analyse the pros and cons of such a venture.
There are good people on this forum and they are not all stupid. Listen to what they are saying, explore the lattitudes of their ideas and learn from it.
Ozjet is a fatality because PS was not prepared to make himself accountable to those who saw the obvious flaws in the way Ozjet was developing.
If you misjudge the market, you will surely pay the price for being ignorant.
I read with interest the way this forum believed vehemently in the plan that was to be Ozjet, the grand new Australian. Yet no one was prepared to take the hard ball (sorry - Legal Counsel might be the exception) and analyse the pros and cons of such a venture.
There are good people on this forum and they are not all stupid. Listen to what they are saying, explore the lattitudes of their ideas and learn from it.
Ozjet is a fatality because PS was not prepared to make himself accountable to those who saw the obvious flaws in the way Ozjet was developing.
If you misjudge the market, you will surely pay the price for being ignorant.
Join Date: Nov 2005
Location: Isle Du Cyber
Posts: 933
Likes: 0
Received 0 Likes
on
0 Posts
No Heart
I believe his main interest was formula one car racing and aviation was a side lide??
There have been so many airlines spring up and fall from a great height not long after, the people behind them do not care about the workers when it goes down the pan and the poor staff may be owed soem or a lot of wages some of us have been in this position before.
Aviation can be a very cruel place at times and yet there are some very nice a good people to work for if you can get in to the right one.
There have been so many airlines spring up and fall from a great height not long after, the people behind them do not care about the workers when it goes down the pan and the poor staff may be owed soem or a lot of wages some of us have been in this position before.
Aviation can be a very cruel place at times and yet there are some very nice a good people to work for if you can get in to the right one.
Join Date: Nov 2005
Location: Sydney
Posts: 98
Likes: 0
Received 0 Likes
on
0 Posts
Absolutely mate.
I think this is the crux of it all. Good planning, a passionate, honest, empathetic leader dedicated to the airline and focussed on making a success -recognising the worth of the individuals supporting it and ensuring the money is always in the bank. I like that. Good point you make GBALU53.
I would look up to the guy that doesn't have a red cent to his name but plans and builds for the benefit of his loyal supporters (like Robin of the Hood) and airline that delivers the message that it wasn't easy to get where it is. I think that's who I would like to work for. Not arrogant or self centred I guess.
Oh well, I suppose one day one will come along.
Investors should look out for people like that. I am sure they would be on a winner.
I would look up to the guy that doesn't have a red cent to his name but plans and builds for the benefit of his loyal supporters (like Robin of the Hood) and airline that delivers the message that it wasn't easy to get where it is. I think that's who I would like to work for. Not arrogant or self centred I guess.
Oh well, I suppose one day one will come along.
Investors should look out for people like that. I am sure they would be on a winner.