Qantas: non-stop Australia (Perth)-Europe (London) Boeing 787 flights set to soar

[Melburnian1]

...Hardly any airline nowadays will start a new route without government support in some form or another...

I doubt that this is true in much of southeast Asia. For instance, Cebu Pacific's huge expansion has largely occurred without government support, except where needed to make runways capable of night operation such as at what I gather is a resited CDO airport on the island of Mindanao.

The real reason for the WA government's 'assistance' is simple: there's an election in about three months. Logic may often go out the window with politicians, but that especially applies when an election is about to occur.

From a low base, the WA economy may improve with the upswing in some commodity prices. If the WA government can successfully sell 51 per cent of Western Power to institutionals and mums-and-dad shareholders, that will also be a boon for the WA economy, just as Jeff Kennett in 1999 cleverly managed to extract what turned out to be high prices (practically at the top of the market if I recall) for the Victorian electricity market privatisation and deregulation, which until the disaster that is the forthcoming shutdown of the Hazelwood brown coal-fired electricity generator saw Victorian consumers with the cheapest energy prices in Australia and an ability to fairly easily switch between competing providers of energy.

 

[QFflyermelbourne]

Therefore whats in it for WA? If most passengers are merely transferring between Domestic & International flights then the benefits seem little to WA, certainly doesn't justify the taxpayer subsidising the service.

You're thinking way too small. If this does eventuate and grows to further destinations as QF have said they would like that would mean at least a mini 787 maintenance facility would be needed at Perth, meaning highly skilled engineers would need to be employed. PER is a long way from anywhere if you require spares. You would also need to open a long haul cabin crew base in Per and likely a pilot base too.

This all means jobs for the local economy (not to mention additional work for crews cleaning and catering for these flights). That can only be good for local tax coffers and potentially a number of high dollar earners contributing to the local scene.

Furthermore, even if it is a low percentage of O&D traffic, east coast people may decide to split their journey in Perth with a stop over.

There is also huge potential I would have thought from direct marketing opportunities to international visitors to visit the WA tourist areas who these days probably miss out by buying their ticket from EU to AUS via Asia or the middle east and then doing the east coast and heading home. It's very expensive to add an additional run to the west coast in.

 

[Cheatah]

You're thinking way too small. If this does eventuate and grows to further destinations as QF have said they would like that would mean at least a mini 787 maintenance facility would be needed at Perth, meaning highly skilled engineers would need to be employed. PER is a long way from anywhere if you require spares. You would also need to open a long haul cabin crew base in Per and likely a pilot base too.

Agree with the potential benefits if the additional flights occur. However that will only happen once the new QF terminal is built on the International side of the airport. QF will not be operating more Perth - Europe flights before the early/mid 2020s.

The current issue is around WA gov subsiding infrastructure changes for 1 flight per day, with minimal benefits to WA.

This all means jobs for the local economy (not to mention additional work for crews cleaning and catering for these flights). That can only be good for local tax coffers and potentially a number of high dollar earners contributing to the local scene.

Additional job based on Tourism are mostly low paid. Same for cleaning and catering. A few engineers may need to be employed but the additional tax the government will get from these tax receipts will hardly compensate for the millions they are talking about spending to upgrade he current QF domestic terminal.

Furthermore, even if it is a low percentage of O&D traffic, east coast people may decide to split their journey in Perth with a stop over.
There is also huge potential I would have thought from direct marketing opportunities to international visitors to visit the WA tourist areas who these days probably miss out by buying their ticket from EU to AUS via Asia or the middle east and then doing the east coast and heading home. It's very expensive to add an additional run to the west coast in.

No one is denying some additional people may decide to have a stop over - the question is how much more of this is net new visitors, and does the benefits from those net new visitors offset the money being invested by the government? Or could the government get better value for scarce taxpayer funds elsewhere?


The answer is almost certainly that this will be a bad deal economically for the WA gov, with only margin return. If subsiding flights were such a boon then every government would be doing it for a lot more flights.


I still posit there are very few tourists or business people not coming to Perth today because they cant fly direct to/from London.

FWIW I think the WA gov will eventually step in and subsidise given the pending election, and that was QFs plan all along. The "prestige" will swing the decision for the government even though they would know economic benefits would be marginal.

Expensive prestige!

 

[Himeno]

You would also need to open a long haul cabin crew base in Per and likely a pilot base too.

Nothing stopping them from using AKL based Jetconnect cabin crew and running them through AKL-PER flights and on to Europe after a layover.

 

[MEL_Traveller]

Nothing stopping them from using AKL based Jetconnect cabin crew and running them through AKL-PER flights and on to Europe after a layover.

Or UK based crew... cheaper salaries, cheaper Aussie hotels, no London hotels needed.

 

[esseeeayeenn]

Or UK based crew... cheaper salaries, cheaper Aussie hotels, no London hotels needed.

I believe the jet connect crew are cheaper and they're already crewing PER-SIN this way.

 

[exceladdict]

I still posit there are very few tourists or business people not coming to Perth today because they cant fly direct to/from London.

There is a perception among some, rightly or wrongly, that Perth hosts a large number of ex-UK residents. It would be very difficult to measure, but being "no stop" or "one stop at LHR" could make it more appealing to visit rellies / emigrate.

 

[MEL_Traveller]

There is a perception among some, rightly or wrongly, that Perth hosts a large number of ex-UK residents. It would be very difficult to measure, but being "no stop" or "one stop at LHR" could make it more appealing to visit rellies / emigrate.

Most of my non-London friends prefer one-stop on a carrier like KL direct to their UK city without having to pass through LHR.

 

[Altair]

Will this only be for the PER-LHR or will QF also move the other international flights over eg. PER-SIN, PER-AKL (when operating) and the JQi flights as well to better leverage this investment?
From what I have read and seen I would never trust the airport authorities to deliver any infrastructure invests on the publicly announced timeframe.
As for QF asking for assistance from the airport and government, well why should they not ask? It is all part of the way business is run just as much it is the right for the airport to say that they would not receive a sufficient return to agree to it.
OT Our local airport is pressuring government to invest hundreds of millions into a runway extension to allow long haul flights for pax and freight. As this would provide hundreds of millions of economic benefits to the region which would belong to the local and national governments not the airport, WIAL has asked that the government funds this not the airport. I do not agree with the extension as I do not see sufficient demand for it and a very rosey business case, but if the government does agree to fund it I feel they should at least receive an equity stake in the airport.

 

[MEL_Traveller]

From what I have read and seen I would never trust the airport authorities to deliver any infrastructure invests on the publicly announced timeframe.

i dunno... they seem to move pretty quick if they can get rent out of shops... (yes you, Melbourne airport!!)

 

[ComeFlyWithMe]

I still highly doubt the viability of a PER-LHR service. This would mean QF have to get back in bed with BA - something I doubt will ever happen due to the amount of bad blood there, and for east coast pax to want to transfer at PER - again, nobody in their right mind would do so. It would also require significant extra capacity from a feed-in perspective on xx_-PER routes.
QF have heavily invested in the EK a partnership and I can realistically still only see a QF PER-DXB service then on to a secondary EU port such as FRA or another destination EK is not permitted to fly.
PER as a market could easily justify more through pax to DXB but a direct LHR service would severely limit the appeal.
The to and fro over PER airport terminals is probably a distraction and my money is on there being a QF PER-DXB-xx_ service, not a PER-LHR service.
Just because the equipment can, doesn't mean it will.

 

[esseeeayeenn]

I still highly doubt the viability of a PER-LHR service. This would mean QF have to get back in bed with BA - something I doubt will ever happen due to the amount of bad blood there, and for east coast pax to want to transfer at PER - again, nobody in their right mind would do so. It would also require significant extra capacity from a feed-in perspective on xx_-PER routes.
QF have heavily invested in the EK a partnership and I can realistically still only see a QF PER-DXB service then on to a secondary EU port such as FRA or another destination EK is not permitted to fly.
PER as a market could easily justify more through pax to DXB but a direct LHR service would severely limit the appeal.
The to and fro over PER airport terminals is probably a distraction and my money is on there being a QF PER-DXB-xx_ service, not a PER-LHR service.
Just because the equipment can, doesn't mean it will.

First, why would a direct PER-LHR flight require QF getting "back in bed with" BA?
Direct flights would use slots available to AU carriers - they would not be "fifth freedom" flights.
Second, the QF-EK agreement explicitly prevents QF from operating it's own flights PER-DXB (or ADL-DXB or BNE-DXB) as you suggest is more likely.
Third, the longer term proposal is to use PER as a hub for direct flights to other European destinations.
Fourth, I don't think QF has invested much actual capital in the EK deal. I think a better analysis is that QF has used the EK partnership to avoid other, more capital intensive investments.
As profitability improves and thus more capital becomes available more cheaply, I would expect them to explore other options.

 

[ComeFlyWithMe]

First, why would a direct PER-LHR flight require QF getting "back in bed with" BA?
Direct flights would use slots available to AU carriers - they would not be "fifth freedom" flights.
Second, the QF-EK agreement explicitly prevents QF from operating it's own flights PER-DXB (or ADL-DXB or BNE-DXB) as you suggest is more likely.
Third, the longer term proposal is to use PER as a hub for direct flights to other European destinations.
Fourth, I don't think QF has invested much actual capital in the EK deal. I think a better analysis is that QF has used the EK partnership to avoid other, more capital intensive investments.
As profitability improves and thus more capital becomes available more cheaply, I would expect them to explore other options.

To address your first point, because not all traffic from PER will have LHR as a final destination.
QF already have LHR slots they lease out so I realise that is not an issue.
The QF-EK agreement is a fluid agreement. If EK get access to traffic to FRA for example, they may reevaluate the current terms.
Unless you are in ADL, I think the pax inclination to travel via PER would be overstated.
The commercials around this are still suspect.

 

[dajop]

To address your first point, because not all traffic from PER will have LHR as a final destination.

Whilst that is undoubtedly true, LHR seems to still seems to be the destination of choice from everywhere east of Europe, over anywhere else in Europe. Just compare how many services the middle eastern carriers have to London compared to other European cities.

QF of course axed other Europe services, but maintain 2xdaily to LHR, as did MH. UL also axed their services rest of Europe, but maintain LHR. SQ operate 4 x daily to LHR vs single daily dedicated services to everywhere else in Europe (noting second daily FRA service continuing on to JFK). PR - recently back to Europe - LHR only. GA - also recently back to Europe, but the only other port (so far) other than AMS with its colonial ties to Indonesia, is of course LHR.

So whilst commercial viability remains a question, I think if they are going to make anywhere in Europe ex-PER, it would have to be LHR.

 

[esseeeayeenn]

To address your first point, because not all traffic from PER will have LHR as a final destination.

That would be no different to the current situation with QF flying their own metal to LHR only.
If I try to book flights with money from any AU city into CDG on the QF website I will currently be offered:

1. flights via DXB into CDG on QF codeshares on EK metal;
2. flights via DXB into CDG on EK flight numbers and EK metal;
3. flights with QF flight numbers on QF metal or a combination of QF & EK metal to LHR with connecting flights on BA (or perhaps IB) into CDG.

Surely PAX flying PER-LHR direct will simply be offered connecting flights as in (3) above?
With other options on AB, AY or IB or other codeshare or interline partners depending on their destination.

 

[ComeFlyWithMe]

That would be no different to the current situation with QF flying their own metal to LHR only.
If I try to book flights with money from any AU city into CDG on the QF website I will currently be offered:

1. flights via DXB into CDG on QF codeshares on EK metal;
2. flights via DXB into CDG on EK flight numbers and EK metal;
3. flights with QF flight numbers on QF metal or a combination of QF & EK metal to LHR with connecting flights on BA (or perhaps IB) into CDG.

Surely PAX flying PER-LHR direct will simply be offered connecting flights as in (3) above?
With other options on AB, AY or IB or other codeshare or interline partners depending on their destination.

The difference is that a lot of those pax do not fly to LHR and instead fly to other destinations via DXB. All other DXB services feed in to the existing LHR services to make up for the pax not travelling SYD-LHR and MEL-LHR all the way.

I think it highly unlikely that QF will skip DXB to fly direct to LHR thereby moving a large chunk of their connecting traffic on to BA, while simultaneously continuing to send their other international pax on all EK metal to other northern hemisphere destinations.

While this may upset the PER based folk, there really is a diminishing market in this port, and those in the east will not see much benefit in flying via PER to LHR for a minimal or negligible time advantage and an extremely long sector for the poor suckers in the back of the bus (or the front for that matter). It would also probably upset EK who would lose traffic to this new venture and they may reconsider the JV which is clearly in QF's favour more than EK's.

Point to point travel has been shown economically to be unsustainable. Hub and spoke is the only way to make an airline profitable, otherwise you would see point to point flights everywhere. You must consider base costs for crews, equipment, maintenance, etc.

In reality, my bet is these birds will be deployed on SYD-SFO, SYD-SCL, and potentially into longer Asian routes.

I'm happy to be proven wrong, but I still seriously doubt the viability of PER-LHR direct. It just doesn't make any sense.

 

[dajop]

Point to point travel has been shown economically to be unsustainable. Hub and spoke is the only way to make an airline profitable, otherwise you would see point to point flights everywhere. You must consider base costs for crews, equipment, maintenance, etc.

Tell that to Ryanair and Easyjet. Who seem to do very well out of point to point travel. But obviously not long haul.

Which perhaps is one reason why LHR is such a good destination. Obviously a good business destination in its own right. But for leisure travellers, fly into LHR, spend a day or two there then fly off to elsewhere out of the overall London six-airport "hub", using the likes of these two airlines, BA or the plethora of other airlines that fly to all sorts of weird and wonderful places in Europe.. If travelling to secondary/tertiary points then need to have three flights (or two flights + train/car) anyway, so a PER-LHR flight may be OK.

 

[mviy]

If QANTAS is serious about this they should build Int J and F lounges in PER, but if anything they'd build one combined premium lounge. If they want east coast passengers with WP or above status to go via PER they should provide a F lounge like they'd get in MEL/SYD

 

[hossein_au]

If QANTAS is serious about this they should build Int J and F lounges in PER, but if anything they'd build one combined premium lounge. If they want east coast passengers with WP or above status to go via PER they should provide a F lounge like they'd get in MEL/SYD

Do they even have F on 787?

 

[Ansett]

No just Y PE and J