27th February Big Qantas announcement

[jetlagger]

Those flights go via DPS and only serve VB and warmish pies? 

Try VA in J.. Pleasantries all the way to DPS.. Nil evidence of any bogans enroute & at destination yesterday.
Tourism & more importantly spend is up 20% in Bali, realistic figures from past calendar year.
Contrary to popular belief.. Quality is where the demand & sustainability is nowadays. ;-)

 

[Happy Trails]

Just searched for SYD-SIN flights in March and it appears both services are now operated by an A332? (Used to be A333.) Would that be the internationally configured A332?

This probably belongs in another thread, but I had a look on EF at a couple of random dates in March and it was the international version.
It's still showing 333s and 744s on various other days.

 

[Cool Cat Phil]

Now that the dust is beginning to settle on the announcement and some hacks have done the historical perspective, I wonder how Simon Hickey is feeling - going from QFF doyen to QFi where his only win so far has been finalising the EK partnership.

I wonder how how long before the economic situation might mean QF start to think of bringing back some routes? 2-3 years is my best guess.

I believe your right with regards to QFi route expansion. A few more adjustments yet before routes get put back on.

It was interesting watching AJ on ABC 'a 7:30 report on Thursday night, when questioned about the so called unprofitable routes to South America & South Africa, I couldn't 'to happen to notice how quick the response was to the reporter, that "you don't know how profitable these routes really are."

Hmm..... Mixed messages I believe, as the old clapped out 747's that service these routes are going, it will be interesting to see any changes to the schedule of these two routes as a result of retirement of old aircraft.

It will also be interesting to see if any plan changes occur to the seasonal PER > AKL service, by all accounts this was quite successful , but with PER losing the PER > SIN route, nothing's guaranteed that QF may continue this seasonal route?.

Which brings me to Jetconnect.

Jetconnect Was recently reported in providing a profit back to QF, what about expanding its role?

Appreciate thoughts on this one.

 

[Ansett]

Jetconnect staff are already being used on the A380 and other aircraft. Have spoken to a number of them over the last 12 months.

 

[ajw373]

Jetconnect Was recently reported in providing a profit back to QF, what about expanding its role?

Appreciate thoughts on this one.

That would upset the xenophobes, who want Australian aircraft, Australian crew, but of course don't want to pay the fare to cover this luxury.

The other alternative is to paint the Jetstar aircraft white with a red tail and call them Qantas and along side Qantas operate as two tiered one brand airline, but like Virgin Australia is doing. That would cut any argument that Jetstar isn't Qantas.

 

[Cool Cat Phil]

Jetconnect staff are already being used on the A380 and other aircraft. Have spoken to a number of them over the last 12 months.

Can't read too much into that atm, but a very interesting observation nonetheless.

On a side note, I have always found Jetconnect flight Attendants to be outstanding when flying across the pond.

 

[QF WP]

I believe you're right with regards to QFi route expansion. A few more adjustments yet before routes get put back on.

It was interesting watching AJ on ABC 'a 7:30 report on Thursday night, when questioned about the so called unprofitable routes to South America & South Africa, I couldn't 'to happen to notice how quick the response was to the reporter, that "you don't know how profitable these routes really are."

Was he deflecting further criticism or could he be telling the truth? I know nothing about flight other than SYD/JNB (is there a MEL/JNB? - know there isn't PER/JNB) but how could that be hugely profitable??

Similar thoughts on Sth America - never really thought about that route. Minimal competition?

 

[Cool Cat Phil]

Was he deflecting further criticism or could he be telling the truth? I know nothing about flight other than SYD/JNB (is there a MEL/JNB? - know there isn't PER/JNB) but how could that be hugely profitable??

Similar thoughts on Sth America - never really thought about that route. Minimal competition?

In all honestly I don't really know what to think.

With regards to Deflecting further criticism , changes to routes /schedules were not discussed fully in the interview, no doubt this news is yet to come sometime soon.

 

[amaroo]

Too true, imaroo. I judge a bogan by the company they keep.

LOL no real surprise there then ...

 

[amaroo]

This probably belongs in another thread, but I had a look on EF at a couple of random dates in March and it was the international version.
It's still showing 333s and 744s on various other days.

MMB is still showing a 747 for a QF52 flight we're doing later this year......no doubt it will change.

 

[Pukka]

Too true, imaroo. I judge a bogan by the company they keep.

And by the size of their TV if I remember

 

[serfty]

Was he deflecting further criticism or could he be telling the truth? I know nothing about flight other than SYD/JNB (is there a MEL/JNB? - know there isn't PER/JNB) but how could that be hugely profitable??

Similar thoughts on Sth America - never really thought about that route. Minimal competition?

For your edification, here is post #1244 again:

Interesting interview with AJ on the 7:30 report this evening. There is one particular part that I found interesting and indeed directly refutes what many 'pundits' have been quoted: (Qantas chief gives no guarantees on keeping jobs in Australia - 27/02/2014)

SARAH FERGUSON: ... the response of many analysts today is that this announcement of yours was not strong enough. If we look, for example, just at the international arm, part of the business which is losing huge sums of money, you haven't taken the hard decisions to cut the loss-making routes. Why should you get handouts if you're not prepared - you and your board are not prepared to take those decisions?

ALAN JOYCE: But we have. I mean, if you think of the routes that we have taken out, we've withdrawn two of our services to London, we've withdrawn from Frankfurt, we've withdrawn from Auckland, LA. I could keep on listing...

SARAH FERGUSON: Yes, but you haven't attacked the big loss routes in South America, in South Africa.

ALAN JOYCE: But you don't know the route profitability of Qantas. And can I tell you that every route that's left generates cash for us. ...

Their are two things possible - one is the remaining routes indeed generate cash (and hence are profitable) so there are no "big loss routes" remaining (after PER/SIN) - or AJ is not telling the truth.

Given the context, I doubt the latter.

 

[davidj]

Don't worry - if need be I'll save a spot for you in the Bogan section :mrgreen:

You, me, and Bill Shorten.



Accordingly Mr Shorten was able to re-arrange his affairs and hastily boarded the last Jetstar flight from Melbourne to arrive in the Top End late Friday.


Welcome back: PM greets diggers in Darwin

 

[dk4]

Their are two things possible - one is the remaining routes indeed generate cash (and hence are profitable) so there are no "big loss routes" remaining (after PER/SIN) - or AJ is not telling the truth.

The other thing to remember is that he was talking about the recent past.

In the future, the SYD-JNB flight will no longer have SA codeshare passengers on it, indeed, SA will be funnelling all its east coast passengers onto VA over to PER, to connect to its own metal there.

So in the future, QF's SYD-JNB may not be as "cash generating"*

* but I disagree with your assertion that "cash generating" means "profitable", you can generate cash when selling something at a loss as well. His words were scripted, pre-coached, spin-speak, otherwise he would have said "every remaining route is profitable" :idea: However, if every route remaining once PER-SYD is axed makes a profit, then the question is, how come QFi made such a huge loss?

 

[davidj]

So in the future, QF's SYD-JNB may not be as "cash generating"*

* but I disagree with your assertion that "cash generating" means "profitable", you can generate cash when selling something at a loss as well. His words were scripted, pre-coached, spin-speak, otherwise he would have said "every remaining route is profitable" :idea: Because, if every route remaining once PER-SYD is axed makes a profit, then the question is, how come QFi made such a huge loss?

I think Alen was tying to use non-finance language "cash generating" to convey the idea of profitability, potentially of being cash positive (ie. more cash coming in than out), or being positive after non-cash items. If he was really talking about cash generation in the pure sense, he could say the entire business is cash generating, he just needs to sell one seat per aircraft to meet that criteria (a point which obviously wouldn't be made)

 

[serfty]

...

* but I disagree with your assertion that "cash generating" means "profitable", you can generate cash when selling something at a loss as well. His words were scripted, pre-coached, spin-speak, otherwise he would have said "every remaining route is profitable" :idea: However, if every route remaining once PER-SYD is axed makes a profit, then the question is, how come QFi made such a huge loss?

I considered that - carefully, but decided that all in all, due to the context of the discussion about profitability and his reference to it in direct refutation of a statement "big loss routes" that he was stating the remaining routes indeed 'pay (for more than) their way'.

 

[Falcs]

I considered that - carefully, but decided that all in all, due to the context of the discussion about profitability and his reference to it in direct refutation of a statement "big loss routes" that he was stating the remaining routes indeed 'pay (for more than) their way'.

Personally I think he was just responding in a way that would make a politician proud.

 

[Jean Prouvaire]

To corrupt a phrase, there's lies, damned lies and management accounting. The true profitability of a route would depend on the way costs are allocated back to them.

I don't know anything about airline industry-specific accounting practices but would assume it's fairly straightforward to identify and quantify direct costs for a given route, such as fuel and on-board staff.

It gets more tricky when deciding what to do with indirect costs such as brand marketing or executive salaries. Inevitably some costs will be allocated back to a route - using various techniques that can vary in their arbitrariness - and others lumped into a corporate overhead bucket, separate from the route's profit centre accounting entity entirely.

It's possible therefore that a route might be defined as profitable on the Qantas books even if they're actually not, based on either a limited allocation of costs (ie, by excluding indirect "corporate overheads" entirely) and/or as a result of some flawed method of allocating various indirect costs back to a route.

If Qantas continues to run up losses in the future, even after cutting every ostensibly loss-making route, that might be one reason why. (Changed business environment might be another.)

 

[davidj]

And why not create a separate Jetstar forum? They are not the same entity as Qantas regardless of what people think.

Not sure about that one!

 

[codash1099]

Not sure about that one!

Nice pic, considering he's effectively canned extra A380's and the A330's are heading back to QF. So not a big rap for the future.