27th February Big Qantas announcement

[hutch]

I wouldn't be surprised to see QF9/10 axed to enable the A380 to move on to DFW route. I'd also expect QF5/6 to be axed - this route is often operating as A332 after starting as 744 last year.

Both these moves would allow an extra 3-4 B744 to be retired.

The issue you have, as I understand it, is that QF's current A380 stock cannot do SYD-DFW non-stop without payload restrictions. They would have to do SYD-AKL-DFW which reduces the appeal of DFW. QF should bring forward 4 of their A380 orders (which I understand will be able to do SYD-DFW) and then cancel the remaining A380's on order (or delay them another indefinitely), cause I no longer see them having any need for 20. They could then retire all non-refurb 747's along with a significant number of staff.

 

[amaroo]

Transcript look pretty tame ... was it sanitised?

Virgin CEO slams Qantas debt guarantee - ABC News (Australian Broadcasting Corporation)

It doesn't read like a dummy spit to me.

Whenever I see a child gorging on three slices of cake and then starts whinging that someone else would like a slice - I call that a dummy spit!

 

[dk4]

Whenever I see a child gorging on three slices of cake and then starts whinging that someone else would like a slice...

The only dummy spit I see, is coming from the QAN side.

They are the one who have been gorging the cake (at our, the flying publics', expense): And when little Virgin has wanted to take a small piece, Qantas has tried to muscle it out of the way, by inviting over two friends for every one that Virgin has invited to the party, hoping to ensure that Virgin can't even get to the cake!

IMO the Liberal Party and Joe Hockey should take a look at the staff in his office, with a view to a retrenchment... Because the advice he is getting is not in the national interest!

Robust competition is in the national interest, not supporting 2 for 1 strong arming tactics!


No support for Qantas, other than removing the QSA I say.

 

[Brettmcg]

JOHN BORGHETTI: He is wrong in the sense that it isn't just Qantas now that can come to the needs of the Australian people. You know, the thought that Qantas is the only carrier that can come to the rescue of the nation is bizarre because we not only have the capability but have helped the Government - and by the way free of charge, as opposed to being charged by Qantas.

PETER RYAN: So is Qantas wrong when they say that they effectively have a universal service obligation to cover rural and regional Australia and that, without Qantas, that would be in the balance?

JOHN BORGHETTI: Without Qantas we would be there in a heartbeat.

JB and VA are absolutely kidding themselves if they think they could step into the breach if QF were to go under.

 

[JohnPhelan]

No support for Qantas, other than removing the QSA I say.

That's great - but the problem is that the ALP and Greens won't axe the QSA, so any Bill will fail in the Senate. So what do you suggest, given the reality of that situation?

 

[yohy?!]

JB and VA are absolutely kidding themselves if they think they could step into the breach if QF were to go under.

they seemed to do alright when Ansett went bust which would have been a much bigger task than the VA of today having to grow in a hurry

 

[dk4]

they seemed to do alright when Ansett went bust which would have been a much bigger task than the VA of today having to grow in a hurry

Absolutely!

And even if QAN went to the wall, unlike Ansett (which took ages to extract Rex & Skywest) there are parts of Qantas that are extremely viable, like Jetstar domestic, which I would expect any competent administrator to keep flying and spin off overnight (especially with a 100% foreign sale). Even Qantas domestic has legs (or wings) if competently managed through administration.

Anyway, if domestic capacity is too high, and unprofitable at the moment, a Qantas collapse would be a great way to fix that! :shock:

And should Qantas International fail, and be wound up, most Australians have voted with their feet (and wallets) today, and don't fly Qantas internationally. It would seem a rather pointless airline to continue to operate in a commercial environment, in the manner that it has been?

To answer the other question, put a bill to the senate, after July, and see what happens: IMO that's the place decisions should actually be made.

In the interim, the government should do ABSOLUTELY nothing. The Qantas board and management have driven (flown) the company into the wall, and they should be responsible for fixing it. Shareholders have allowed them enough rope already, and they have hung themselves, this is a problem for the market to fix, not government.

 

[Brettmcg]

they seemed to do alright when Ansett went bust which would have been a much bigger task than the VA of today having to grow in a hurry

On AN's last day of trading they had a fleet of around 130 active aircraft. QF held a fleet of around 195 aircraft at the same time.

Currently (excluding JQ) the Qantas Group has a fleet of around 202 aircraft at its disposal. According to VA's website they have approx. 80 aircraft in operation.

It's almost unfathomable that VA would be able to fill that void with any kind of urgency. During the AN collapse DJ were successfully able to supplement supply of seats to the market, but not at anywhere near the percentage or rate they would be forced to under a QF collapse.

Regardless of what you might think of QF management/product/service etc. one has to concede that it plays a very significant role in the Australian transport landscape and that an aviation sector without QF is a very grim prospect.

 

[Brettmcg]

And should Qantas International fail, and be wound up, most Australians have voted with their feet (and wallets) today, and don't fly Qantas internationally. It would seem a rather pointless airline to continue to operate in a commercial environment, in the manner that it has been?

Sorry, but based on what evidence are you making this claim?

The last statistics I saw from BITRE showed that QF holds 17% of the market for pax departing on international services. Admittedly, this is nowhere near the lofty heights of the 1990s and early 2000s, but it is still almost double that of its closest competitor.

 

[dk4]

The last statistics I saw from BITRE showed that QF holds 17% of the market for pax departing on international services.

My maths says that equates to 83% of people who choose not to fly Qantas from Australia?!

(Now even being generous, and allowing for a larger proportion of those 17% of people who actually do fly QF being Australian, still most Australians choose not to fly Qantas internationally!)

 

[codash1099]

It doesn't read like a dummy spit to me.

The intonation certainly sounded like a dummy spit

 

[markis10]

The issue you have, as I understand it, is that QF's current A380 stock cannot do SYD-DFW non-stop without payload restrictions. They would have to do SYD-AKL-DFW which reduces the appeal of DFW.

Subject to winds, there are no issues going over for the A380, similar issues coming back with the exception the A380 can do a full load to BNE, the 747 is restricted.

Assuming a tailwind of 50 knots on the way over, and a headwind of the same on the way back...

Going over is easy and could be done by the 380 with a full payload. Coming back, it looks like you'd need to have a reduced payload, down to about 420 pax to make it to Sydney, with minimum legal reserves. Looking at Brisbane, and you're back to full payload.

Every 10 knots that the average wind increases from that 50, is going to take about 40 pax off the load.

 

[ric_melb]

I agree with codash1099. The transcript is no doubt correct, but i listened to the interview on ABC, and it sounded very much like a dummy spit.
However Virgin should have expected that at some stage setting up their company structure that allowed foreign airlines to own some three quarters of their capital would come back to haunt them one day.
Similarly, Qantas have done some things right, but many wrong in the last few years (just read AFF!), and i have reservations over any debt guarantee. Seems a management refresh is overdue.
For the sake of the shareholders i think directors of both Qantas and Virgin also need to stop what appears to be this senseless pursuit of domestic capacity, and focus on making sensible profits from their duopoly.

 

[dajop]

Sorry, but based on what evidence are you making this claim?

The last statistics I saw from BITRE showed that QF holds 17% of the market for pax departing on international services. Admittedly, this is nowhere near the lofty heights of the 1990s and early 2000s, but it is still almost double that of its closest competitor.

One suspects the biggest impact of a QFi failure would be largely for flights between Australia and the 3 regions where QF probably have around 50pc or more of the direct capacity - namely North and South America and Southern Africa, and possibly NZ. For Asia and Europe existing carriers probably could easily absorb QF capacity.

 

[JohnK]

The other suggestion from a QCCA crew member was to "severely cut back 747 flying to enable retrenchments of a bunch of the QAL crew whilst keeping 380 on QCCA and dual endorsing them on the 330 to keep Asian routes then start from scratch!"

As I said, it's just galley gossip, but I thought I'd share it nevertheless.

Understand it is only gossip but it would be a silly move to service Asia with A330s only.

 

[Brettmcg]

Understand it is only gossip but it would be a silly move to service Asia with A330s only.

The suggestion wasn't necessarily to change ALL Asian services to A330s, but rather to make them more viable by dual-endorsing QCCA crew on the 380/330. Currently the 330 flights are crewed by QAL crew who command significantly higher wages through their EBA than QCCA. For example, I'd suggest there is probably no need to send an A330 and a 747 to SIN ex-SYD every day?!

It's fine for QF to want to cut costs out of the international business, but to make blanket statements about their ''inability'' to invest in new aircraft for QFi until such time as it returns to profit is ludicrous. By investing in more fuel-efficient aircraft and streamlining types there MUST be some benefits to be had!

 

[ABC1]

Lets add this to the mix.. DBX-LHR-DBX to go..

 

[markis10]

Lets add this to the mix.. DBX-LHR-DBX to go..

We can write that off pretty quickly, no point cutting LHR and your low cost staff base off, not to mention QF making new arrangements re passenger facilities at LHR this week.

 

[serfty]

Subject to winds, there are no issues going over for the A380, similar issues coming back with the exception the A380 can do a full load to BNE, the 747 is restricted.

Further on JB goes to indicate with a few sums that the reduced payload needed for DFW-SYD on a 388 would not be 'particularly viable'.

...

I have a further question. Given the same parameters, approximately how many tonne of fuel would be required (for comfort reserves - not minimum) each way?

For the more limiting trip back to Oz, with reserves of 12 tonnes, you'd need to order about 240 tonnes. It would leave a payload of about 42 tonnes.

Whilst it could be done, it doesn't strike me as particularly viable, whereas the established route to Brisbane would be more reliable and have better payload.

As an aside, it appears a 777 can generally be more economical on routes of over 7 hours flying due to the greater need to carry fuel just to carry fuel: http://www.australianfrequentflyer....380-versus-b777-comparison-airline-35564.html

 

[markis10]

Further on JB goes to indicate with a few sums that the reduced payload needed for DFW-SYD on a 388 would not be 'particularly viable'.

As an aside, it appears a 777 can generally be more economical on routes of over 7 hours flying due to the greater need to carry fuel just to carry fuel: http://www.australianfrequentflyer....380-versus-b777-comparison-airline-35564.html

The current 744 is restricted to BNE so it's still better which was the hypothesis under discussion, I don't think anyone is arguing a 777 would be better still