JQ expansion - with props!?

[defurax]

I have no idea what routing they would take, but I believe BNE-NLK-AKL would be within the range of a Q300.

Would make sense, Wikipedia says the following on NLK:

[h=2]Light aircraft transit[/h]Norfolk Island is an important transit and refueling point for light aircraft flying between Australia, New Zealand, and thePacific Islands.
Located 852 km (529 mi) southeast of Norfolk is Kaitaia Airport the most northerly airfield in New Zealand, 754 km (469 mi) north is Nouméa Airport in New Caledonia, and 900 km (560 mi) west is Lord Howe Island Airport which is 600 km (370 mi) to the Australian mainland.
These distances are within the range of many light aircraft when fitted with long range tanks, while the direct distance without using Norfolk Island as a stepping stone, is usually beyond their capabilities.
From New Caledonia other Pacific Islands such as Vanuatu and Fiji are within range and can be used as further 'stepping stones' to the other South Pacific and North Pacific destinations.

 

[gaz0303]

Wonder where the repaint will happen?

I thought that Tamworth had the capacity. Recall a NZ pilot telling me about it as we shuttled on the ferry with our bikes up Queen Charlotte Sound.

 

[samh004]

Norfolk Island would seem to be the best bet, but here's an interesting route too... HBA-IVC

http://www.gcmap.com/mapui?P=NLK-AKL,NLK-BNE,NLK-MEL,NLK-SYD,HBA-IVC&MS=bm

Actually, perhaps a Q300 with an orange star isn't that interesting :!:

 

[sydstar]

Good to finally see some real competition on the regional NZ routes - some of the pricing is just ridiculous

Wonder if there will be any attempts by QF Loyalty to further develop QFF in NZ as well. I don't know if much can be read into the recent status match that was held in NZ as a carrot to get NZ loyalists onto the JQ domestic network?

Considering EK codeshare on quite a few JQ domestic flights in NZ, it will be interesting to see if this happens on the regionals as well

 

[ReLoad]

This move is going to cost Jetstar hundreds of millions of dollars and may even go so far as to hit the QF bottom line so hard it may never recover.

The renaming to Propstar really doesn't make any sense.......

 

[eastwest101]

Good to finally see some real competition on the regional NZ routes - some of the pricing is just ridiculous

Downward effect on prices, certainly good for customers, no doubt about that. I am guessing that the JQ Dash-8 300's will be competing essentially against the Air New Zealand subsidiary Mt Cook ATR-72 fleet. A couple of immediate operational and competition questions spring to mind regarding this.

Will the Dash 8 300s be economic and reliable enough to compete in NZ's back yard?
Once competition is happening and fares drop - how profitable will the JQ NZ business be?
Will they have to undercut the NZ prices? Do they know the cost base of the competition? DO they think they can go lower than that?
Given the choice of lower fares and similar products I can still see a lot of NZ customers loyally sticking with flying Air New Zealand for a variety of reasons.
Do they know what the response of Air New Zealand will be? What will they do then?

Wonder if there will be any attempts by QF Loyalty to further develop QFF in NZ as well. I don't know if much can be read into the recent status match that was held in NZ as a carrot to get NZ loyalists onto the JQ domestic network?

If they cared about loyalty, Qantas would be flying their own Dash 8 - 300s under a NZ company shell/subcontractor in red and white paint on these routes (such as a hypothetical Jetconnect Link NZ banner). The fact that they aren't indicates that this is all about hurting the bottom line of Air New Zealand, and therefore - by natural extension - JQ NZ's and the Qantas Group bottom line as well.

As we have seen before, in other JQ franchise/iterations overseas, setting up JQ clones in other peoples backyards is a sure fire way of pissing off your competitors, attracting union attention plus government and regulatory pressure, polarising locals around their "own" airline and losing a fair bit of money in the proccess. I can forsee this being an expensive frolic that distracts QF management and resources from what they should be thinking about - such as how to maintain and improve QFi and QFd mainline and ordering some equipment for the QFi fleet while they still have options.

 

[dajop]

Downward effect on prices, certainly good for customers, no doubt about that. I am guessing that the JQ Dash-8 300's will be competing essentially against the Air New Zealand subsidiary Mt Cook ATR-72 fleet. A couple of immediate operational and competition questions spring to mind regarding this.

Will the Dash 8 300s be economic and reliable enough to compete in NZ's back yard?
Once competition is happening and fares drop - how profitable will the JQ NZ business be?
Will they have to undercut the NZ prices? Do they know the cost base of the competition? DO they think they can go lower than that?
Given the choice of lower fares and similar products I can still see a lot of NZ customers loyally sticking with flying Air New Zealand for a variety of reasons.
Do they know what the response of Air New Zealand will be? What will they do then?




If they cared about loyalty, Qantas would be flying their own Dash 8 - 300s under a NZ company shell/subcontractor in red and white paint on these routes (such as a hypothetical Jetconnect Link NZ banner). The fact that they aren't indicates that this is all about hurting the bottom line of Air New Zealand, and therefore - by natural extension - JQ NZ's and the Qantas Group bottom line as well.

As we have seen before, in other JQ franchise/iterations overseas, setting up JQ clones in other peoples backyards is a sure fire way of pissing off your competitors, attracting union attention plus government and regulatory pressure, polarising locals around their "own" airline and losing a fair bit of money in the proccess. I can forsee this being an expensive frolic that distracts QF management and resources from what they should be thinking about - such as how to maintain and improve QFi and QFd mainline and ordering some equipment for the QFi fleet while they still have options.

Aren't all your arguments 5+ years too late? JQ has already set up a franchise in NZ's backyard. This is just an extension to this, in a sector that seems to be extracting monopoly rents if you believe NZ passengers. Seems to be a fundamental tenet of capitalism, that companies will seek to share in the spoils of monopolies, especially if start up costs are low (using existing brand and existing equipment).

 

[eastwest101]

Aren't all your arguments 5+ years too late? JQ has already set up a franchise in NZ's backyard.

Yes - a fairly unsuccesful franchise of dubious to zero profitability, with a poor reputation using brand new equipment which has really not bothered Air New Zealand at all.
I don't know what throwing old clapped out Dash-8s is going to do to make things any better but we shall see in the future.

 

[amaroo]

Air New Zealand earnings to fall due to Qantas moves

Forsyth Barr analyst Andy Bowley said he expected the first four routes to be targeted by Jetstar would include Auckland-Nelson, Auckland-Palmerston North, Nelson-Wellington and Auckland-Napier, based on revenue potential. He said the Jetstar revenue objective would be around $NZ60 million, which is 4 per cent of Air NZ's domestic revenue base.

Craigs Investment Partners said it was not unreasonable to expect Air NZ would lose between $NZ30 million and $NZ50 million in revenue – or 4 to 7 per cent of EBIT – as a result of Jetstar's entry on the monopoly routes.

 

[JohnK]

Glad to see JQ expanding, and will be interesting to see the Q300's with an orange star...

I don't necessarily think that's a great idea. If they are successful they could start chipping away at Australian regional routes.

What is the range of a Q300 and what routing do they take to get from Aus to NZ?

I vaguely recall seeing direct flights on QF website of ~2.5 hours. I suspect they could go further without any load.

 

[Mattg]

I don't necessarily think that's a great idea. If they are successful they could start chipping away at Australian regional routes.

I'm personally not too worried about that at this stage. The NZ and Australian regional air travel markets are markedly different. NZ has a monopoly in New Zealand and airfares are often extortionate. So there's quite an opportunity there to provide some competition. In Australia we already have competition, airfares are not (with some exceptions, I will admit) extortionate and in any case QF Link already has a low cost base, so the Jetstar model would be somewhat superfluous here on regional routes.