Qantas Systematic Cancellation of Flights

[Seat0B]

I see it somewhat differently. Delaying 180 pax for 4 hours each, or 360 pax for 2.5 hours each? I think delaying more people for a little less is probably worse, but that is very subjective. You're correct on the arrival time, but the majority of pax in Australia or Europe are single trip short haul, not affected by connections.

Conceptually yes, they should look at each individual passenger, but it's simply too many people to look at in limited time period. They rely on automated systems algorithms to identify risk in the system. But the point being is that many European airlines have developed models to account for potential EU261 costs and optimise around that. Sometimes paying the compensation can be their most profitable solution, but other times they're effective at avoiding it, often by canceling flights two weeks out if they perceive the risk exceeds the reward.

Starting to get into Ford Pinto territory though not a safety issue, but a serious disdain for the rights of the customer and an abuse of the mismatch of power between an airline an an individual passenger.

 

[MEL_Traveller]

As my weekly VA flights are delayed due to weather ATC, the Rex plane leaving at the same time seems to depart on schedule! They could become a real contender if weather patterns continue to decline.

 

[Seat0B]

Well, of course we'd all rather NOTHING was cancelled, but if something has to give, I'd rather something like that.

I sort of agree with you but it’s the way QF do it that gets my goat. Sure shift me to a flight that’s an hour later and downgrade me to Y but don’t then nickel and dime me on a refund on the fare and do it proactively, don’t wait for me to request the refund and then don’t make me wee so it months while you decide whether you will refund me when it was your stuff up/cancellation that necessitates the refund. And how about some compensation for delays - even short
ones are inconvenient - so sling me a few FF points to sweeten the deal. FF points are a currency that QF controls, so they could certainly do a bit of quantitative easing if they wanted to.
It’s all so one way. They really don’t exercise any patience or empathy if it’s the customer wanting to change flight time or day no matter what the reason but expect customers to suck up waits and forfeit fare differences. It’s pretty sharp practice at a minimum.

 

[evanb]

As my weekly VA flights are delayed due to weather ATC, the Rex plane leaving at the same time seems to depart on schedule! They could become a real contender if weather patterns continue to decline.

As abstract as this sounds, airlines with fewer flights get affected the least. It'll always be the large slot holders that get affected the most or first.

 

[evanb]

I definitely believe the (ongoing) ATC staffing issues causing effects (as described so well already) has been a major factor in flight consolidation by QF on a busy route like MEL-SYD v.v. - it makes a lot of sense, specially when at peak times there's a 15 minute frequency. Now, it bites if you're on the one cancelled (and I'm pretty sure I'm booked on a prime candidate in a few weeks ) and then get shafted to a poor seat on the next one, or in the case of wanting J, potentially waiting more time (or being downgraded) to get you there.

Of course ATC is not the only issue - throw in some real weather going on (the other day, for example, MEL generated its own delays with some fairly gnarly winds affecting ops), but it's a consistent factor and has been for some time. No doubt, training up more ATC folks is neither fast nor cheap so who knows when the issues will be potentially resolved. I was also listening to a podcast recently, I think PCDU, regarding consolidation of ATC resources themselves - iirc basically two installations handle pretty much the whole country iirc? I'm sure @evanb or someone else can correct me on that, but, as I understood it, for example, ADL is pretty much run out of MEL (for example). However, still need enough controllers to handle the various areas, approaches, departures etc - and to do it safely.

Whatever the causes, I think if you're a pax, you'd rather it was a high frequency route (like a triangle flight) that copped it, rather than a SYD-HBA or SYD-DRW or something for all sorts of fairly clear reasons. Well, of course we'd all rather NOTHING was cancelled, but if something has to give, I'd rather something like that.

The irony of it all is that the authorities and airports are putting pressure on airlines to use the slots and place significant constraints on their ability to manage them, especially when the system is under pressure. The effect is limiting the flexibility of airlines to be more proactive in managing the constraints. The decision makers are not the ones who deal with the fall-out.

 

[MEL_Traveller]

As abstract as this sounds, airlines with fewer flights get affected the least. It'll always be the large slot holders that get affected the most or first.

Agree, and makes perfect sense. People scoff at Rex, but it could become a viable alternative if they have good punctuality.

 

[evanb]

Agree, and makes perfect sense. People scoff at Rex, but it could become a viable alternative if they have good punctuality.

Agreed. I've taken then and found them to be just fine. But it also explains why they make such a big deal about their OTP. They know they're going to win, purely from a structural perspective. But it'll change as they grow and they will start to find it affecting them more.

 

[RooFlyer]

I did warn that mine was a leading question, and I know you aren't defending the current practices, but to this:

Slots must be utilised in order to be "returned" (the term used when you retain the slot in the next season). If they cancel before the ATFM flow rate reduction it counts as the service not being operated for the purposes of slot utilisation. Once they receive ATFM flow rate reduction and a request to reduce volume, that then gets taken into account in terms of the 80/20 slot usage rule.

... I say exactly! Rather than cancel & consolidate services well ahead of time, knowing that the on-going problems will be, well, on-going and allowing their customers to fly with more confidence, they keep scheduling them, people keep buying them and people keep getting shifted at the last minute. You've explained clearly why the situation is what it is. but for consumer it seriously sucks.

Has there been any discussions about temporarily suspending the slot usage rule (use em or lose em) so the airlines will retain their precious slots and so be able to schedule short term services more realistically (under the present circumstances)?

 

[evanb]

I did warn that mine was a leading question, and I know you aren't defending the current practices, but to this:


... I say exactly! Rather than cancel & consolidate services well ahead of time, knowing that the on-going problems will be, well, on-going and allowing their customers to fly with more confidence, they keep scheduling them, people keep buying them and people keep getting shifted at the last minute. You've explained clearly why the situation is what it is. but for consumer it seriously sucks.

Has there been any discussions about temporarily suspending the slot usage rule (use em or lose em) so the airlines will retain their precious slots and so be able to schedule short term services more realistically (under the present circumstances)?

We both knew what we were doing

It's been an ongoing debate. Ultimately, the whole slot system is defined by legislation. There is little that anyone can do without a legislative reform. This process has been going on for several years, but stuck in the typical bureaucracy of reports, studies, etc. Everyone from the government, ACCC, Productivity Commission has been involved has had its say.

Airlines like Qantas and Virgin want more flexibility, other airlines want a system that invariably gets them more slots even if it means less capacity, Sydney airport want the system that earns them the most money, NSW government wants to protect regional slots, etc. Federal government want a grand bargain.

Notably, everyone is avoiding the real problem which is that slots are scarce. Just like London, we use slot management as an allocation tool rather than a planning tool. We have an option to reduce scarcity, which is build more runways. Call it the American solution. While it may seem counterintuitive, a lot of the resources goes into managing the scarcity (think: how to fit 10 flights into 7 slots) whereas the same resources can effectively manage far more than 10 flights if you don't have to spend so much time and effort fitting them into those 7 slots (just making up some numbers here).

 

[kangarooflyer88]

Getting back to the question at hand, what is unclear from the OP’s experience is the specific cause of the cancellation which I would argue matters. If it was weather or ATC, that’s one thing but if it was due to maintenance or staffing issues at QF that’s another. Where something like EU261 or APPR comes into play is it holds the airlines accountable for their cancellations. They must justify why they needed to do it rather than just dump it on the passengers and walk away.

-RooFlyer88

 

[snabbu]

Super interesting insights @evanb thank you for sharing.

 

[RichardMEL]

Some truths but a bit mixed up.

Probably accurate for many aspects of my life!

thanks for the explanation and break down of where it's at. Appreciated.

 

[stm1sydney]

I suspect that QF is being very aggressive with its flight rationalisation, to not only resolve crewing issues but also to maximise profits. ... however the latest incident has really made me question the sanity of QF's (perceived) strategy.

Well, Qantas' strategy of maximising profits to the detriment and inconvenience of its customers is working because you (and many others) are still flying with them.

 

[serfty]

So tomorrow's ATFM is out. Perfect weather in SYD expected, yet due to staffing issues inbound flow rate will be a max of 38 per hour. So even in the best blocks, they'll have to cut 2 arrivals per hour. This is small, so they may be able to counter with cascading delays to allow some of the free space in the evening to be used instead, so pushing an 8am to 9am, a 9am to 10am, etc and escalating throughout the day. But this has its limits. This is probably enough not to cancel too many, but simply delay. International operators and regional operators will not be asked to cut, just pure domestic arrivals.

Glad I'm on the 1pm ...

 

[RooFlyer]

Notably, everyone is avoiding the real problem which is that slots are scarce.

Thanks again for those detailed and for me very informative replies.

I guess or I hope that Western Sydney Airport will hopefully alleviate some of the issues at SYD. I have opined before, even though people in Sydney may not wish to use WSI, airlines will more or less force many flyers to there by mechanisms of scheduling and price.

 

[evanb]

Getting back to the question at hand, what is unclear from the OP’s experience is the specific cause of the cancellation which I would argue matters. If it was weather or ATC, that’s one thing but if it was due to maintenance or staffing issues at QF that’s another. Where something like EU261 or APPR comes into play is it holds the airlines accountable for their cancellations. They must justify why they needed to do it rather than just dump it on the passengers and walk away.

Broadly agree. My one concern with many people wanting these sorts of solutions is that most advocates for them don't acknowledge the externalities and focus on the compensation rather than design. The original purpose of EU261 was less about cancellations and delays and more about denied boarding linked to overselling, but it became more about an exploitative industry of businesses setting up to assist people getting compensation taking huge cuts of the compensation.

The genesis of overselling was in the US where so much traffic was through short haul hub-and-spoke networks with high frequencies. The high frequency operations gave plenty of redundancy to use overselling to maximise capacity utilisation and yield generation. Overselling became rife in the EU but without the same degree of redundancy and a stronger effort of revenue maximisation. So rather than using it for network redundancy, you had Ryanair selling tickets for 99p (primarily for marketing purposes) and then overselling and bumping those pax when they could sell a higher priced ticket closer to departure.

The idea behind EU261 was to generate a sufficient penalty for the likes of Ryanair to avoid the practice of overselling, rather than actually being a mechanism of compensation. The challenge is that the parameters (i.e., time, distance, penalty, etc) isn't updated to evolve around changing industry practices. So instead of being the incentive for changing specific practices/behaviours, it's just another cost that airlines can optimise around by doing things like cancel flights exactly two weeks before (hence the negative externality). It disproportionately affects smaller airlines that don't have the same capability to optimise (see their view)

Notably, the European Commission have studied it and noted an increase in cancellations and hasn't reduced delays (actually increased, but shorter as airlines have simply pushed longer delays into a greater number of slightly shorter delays). Yet it has reduced (or at least maintained) the level of denied boarding. EU261 doesn't deal with the underlying problems due to poor design, monitoring and evaluation.

 

[elanshin]

I would imagine any regulatory change at this point especially in SYD would come into play close to when WSI would launch which I can see changing the dynamics a bit. I'd guess a fair few slots currently used in SYD would move over to WSI be it Int'l or domestic as well as letting more airlines into "Sydney".

 

[evanb]

I would imagine any regulatory change at this point especially in SYD would come into play close to when WSI would launch which I can see changing the dynamics a bit. I'd guess a fair few slots currently used in SYD would move over to WSI be it Int'l or domestic as well as letting more airlines into "Sydney".

Nobody is giving up any SYD slots to move to WSI. Anything to/from WSI will be additional, although this will certainly increase overall capacity which is great. Maybe the odd international carrier (maybe a long haul LCC or one from the Pacific), but none of the local players.

 

[MEL_Traveller]

Broadly agree. My one concern with many people wanting these sorts of solutions is that most advocates for them don't acknowledge the externalities and focus on the compensation rather than design. The original purpose of EU261 was less about cancellations and delays and more about denied boarding linked to overselling, but it became more about an exploitative industry of businesses setting up to assist people getting compensation taking huge cuts of the compensation.

The genesis of overselling was in the US where so much traffic was through short haul hub-and-spoke networks with high frequencies. The high frequency operations gave plenty of redundancy to use overselling to maximise capacity utilisation and yield generation. Overselling became rife in the EU but without the same degree of redundancy and a stronger effort of revenue maximisation. So rather than using it for network redundancy, you had Ryanair selling tickets for 99p (primarily for marketing purposes) and then overselling and bumping those pax when they could sell a higher priced ticket closer to departure.

The idea behind EU261 was to generate a sufficient penalty for the likes of Ryanair to avoid the practice of overselling, rather than actually being a mechanism of compensation. The challenge is that the parameters (i.e., time, distance, penalty, etc) isn't updated to evolve around changing industry practices. So instead of being the incentive for changing specific practices/behaviours, it's just another cost that airlines can optimise around by doing things like cancel flights exactly two weeks before (hence the negative externality). It disproportionately affects smaller airlines that don't have the same capability to optimise (see their view)

Notably, the European Commission have studied it and noted an increase in cancellations and hasn't reduced delays (actually increased, but shorter as airlines have simply pushed longer delays into a greater number of slightly shorter delays). Yet it has reduced (or at least maintained) the level of denied boarding. EU261 doesn't deal with the underlying problems due to poor design, monitoring and evaluation.

I think the arguments about firms coming in to manage compensation for delays or cancellations and taking a cut I've a bit of a red herring. The level of compensation does not increase because these firms are involved it stays at 600 euros it's just the passenger gets less.
It might be easier for a passenger to use a claim firm but that's because the airlines make it so hard. Also worth noting that because it is now when no fee these claims firms actually weed out anything which doesn't have merit potentially saving the airline a lot of work.

 

[kangarooflyer88]

Broadly agree. My one concern with many people wanting these sorts of solutions is that most advocates for them don't acknowledge the externalities and focus on the compensation rather than design. The original purpose of EU261 was less about cancellations and delays and more about denied boarding linked to overselling, but it became more about an exploitative industry of businesses setting up to assist people getting compensation taking huge cuts of the compensation.

I would argue that the law is the law. If the EU wanted the legislation to focus specifically on overselling they would have framed the law that way. But they did not and through numerous decisions in European courts the full intent of EU261 was discovered - namely to reimburse and compensate passengers who face delays, cancellations and denied boarding in all but the most exceptional of circumstances which I would argue is fair.

The idea behind EU261 was to generate a sufficient penalty for the likes of Ryanair to avoid the practice of overselling, rather than actually being a mechanism of compensation. The challenge is that the parameters (i.e., time, distance, penalty, etc) isn't updated to evolve around changing industry practices. So instead of being the incentive for changing specific practices/behaviours, it's just another cost that airlines can optimise around by doing things like cancel flights exactly two weeks before (hence the negative externality). It disproportionately affects smaller airlines that don't have the same capability to optimise (see their view)

Any scheme legislators put in place will be gamed by impacted parties. Airlines as you correctly pointed out, will figure out how to avoid having to pay out EU261 whereas clever passengers will book itineraries where the chances of receiving EU261 are greatly increased. The key question is whether the outcomes for stakeholders is better or worse under the new regime versus the old one and whether that is inline with the stated policymaking.

Notably, the European Commission have studied it and noted an increase in cancellations and hasn't reduced delays (actually increased, but shorter as airlines have simply pushed longer delays into a greater number of slightly shorter delays). Yet it has reduced (or at least maintained) the level of denied boarding. EU261 doesn't deal with the underlying problems due to poor design, monitoring and evaluation.

An argument could be made that the amount and length of delays has decreased since the introduction of EU261 when considering the fact that passengers are now being compensated for their time (whereas before they weren't). So sure, a passenger might be delayed by 4 hours but if they now must be provided with 600 Euros compensation, then the delay is effectively 0 hours (supposing you value an hour of an individual's time at 150 Euros which I suspect many would say is more than fair). Additionally, the requirement to provide meals and hotels (for overnight delays) means that passengers are not incurring any out of pocket expenses for the delay (whereas before they were).

-RooFlyer88