The question I guess then, is if the market supports QF as it claims, why is QF finding it so hard to make a profit on the routes?
IMHO you would need to sanity check whether they have the right:
1. product
2. price
3. brand/marketing
On product, clearly, they have no idea about the Japanese market. Many folk here said that the LCC wouldn't work for that market. QF have a history of trying to dumb down product in/out of Cairns, both domestically (they tried removing domestic business class a few years ago) and internationally (the Australian Airlines experiment) and now their products are so totally confused it's no wonder they can't market a clear message.
They have also been running ageing 767s with inferior international business class service (old Dreamtime seats). There's nothing classy like a Skybed to get you to your 5 star Sheraton Mirage, or Lizard Island resort.
Why remove BOTH daily QF flights - why not leave one and see what happens???
On price the rules are simple. You have to price any product at a price the market will withstand. When your product is over-priced it doesn't sell. Jetstar is over-priced and has a reputation for unreliability and bad customer service. It is failing on many routes. Similarly, QF is over-charging for its business class on many routes (eg to Japan) for an inferior product (old aircraft and seats) - there's no point is flying with empty seats if you could have sold them by lowering the price!!!!!
On brand/marketing, the QF service is being run on old aircraft with tired cabins. The full service product is blurring into the LCC product.
Crucially, QF is failing to work WITH local business/industry to create unified messages to lure customers. The two should go hand in hand. People won't travel to Cairns unless it's assets are attractively branded/marketed AND there are seats to fly on!
I also think that local business could be doing more - I don't see that they have an integrated campaign to promote the city/region. Recent government marketing campaigns have also been lacklustre (the infamous Lara Bingle one for example).
I also think it is just part of the QF grand scheme. They want to emasculate the full sevice brand on all but the most profitable routes in favour of Deathstar (which is principally about screwing staff onto lower wages, he most recent deals being 25% more hours for 30% less pay). The fuel price has provided the excuse they have been waiting for to destroy the Cairns services. We know that Deathstar is the favoured child, after all it's getting the new 787s first!!!
Hand in hand with that goes QFs very shortsighted concept of a "holiday destination" - the mindset is that once a place is so defined the only possible product is LCC, which is nuts given that many places offer upmarket options (see discussions on Deathstar failure to Honolulu)!!!!!
QF is so obsessed with short term profit it is talking itself into very simplistic strategies, which clearly (based on Deathstar's failing routes) are shortsighted in the extreme. It also has a complete disregard for the impact of its decisions on other people and businesses, which could come back to bite it in many ways.
IF it really is all about fuel costs, they might as well just run a few premium routes and forget the rest since they will easily talk themselves into deciding everything just became unprofitable rather than making the effort to get the price, product and brand/marketing correct. (Talk about giving up - look at the KL route being dumped just when AirAsia is taking up the fight to the rude roo).
QF have been losing the plot for some time and now with a little pressure the cracks are wide open...
