Qantas to focus staff & operations in Sydney (details of NSW deal revealed)

[justinbrett]

Highlights:
Paid $50M - but got a lot in return (in comparison QLD paid $200M for Virgin - but that was an investment rather than a deal)
The conditions included Qantas remaining in NSW until at least 2051
Commit to no net job losses and the creation of at least 2000 full time-equivalent jobs over the first five years.
Run its new ultra long-haul flights (Sunrise) exclusively out of Sydney for five years.
Qantas loyalty staff had to be relocated from Melbourne to Sydney
Establish a simulator centre and a centre for service excellence for pilots and cabin crew within the state.

NSW Treasurer tables secret $50m bid to keep Qantas in Sydney

The NSW government has put millions of dollars in taxpayer funds on the table to keep the flying kangaroo in NSW, according to a confidential letter.

www.smh.com.au

 

[kpc]

I would have called AJs bluff and let them relocate elsewhere...that wouldn't have been efficient, easy or cheap for Qf!

 

[dajop]

Run its new ultra long-haul flights (Sunrise) exclusively out of Sydney for five years.

So despite the thought bubbles and AJ spin, i take this as meaning MEL ULH flights were never really on the table.

 

[ChrisMars]

I find strange that sunrise would be locked for 5 years from Sydney.The other conditions seems fair considering the investment.

 

[Flying Fox]

Looks like NSW paid QF $50M to stay in SYD. In exchange they bought certain commitments.

NSW Treasurer tables secret $50m bid to keep Qantas in Sydney

The NSW government has put millions of dollars in taxpayer funds on the table to keep the flying kangaroo in NSW, according to a confidential letter.

www.smh.com.au

 

[dajop]

I find strange that sunrise would be locked for 5 years from Sydney.The other conditions seems fair considering the investment.

The exact quote (and is also on Australian Aviation) indicates:
"A commitment that Project Sunrise would be based exclusively in Sydney for at least five years, following its commencement;"

What does "based exclusively" mean? Crew base ? Maintenance base? Or all flights must go to/from SYD?

 

[Lynda2475]

Or all flights must go to/from SYD?

This! NSW will want to reap the benefit of SYD being the only east coast city offering direct LHR flights. MEL passengers will need to tack on a domestic connection.

 

[justinbrett]

The exact quote (and is also on Australian Aviation) indicates:
"A commitment that Project Sunrise would be based exclusively in Sydney for at least five years, following its commencement;"

What does "based exclusively" mean? Crew base ? Maintenance base? Or all flights must go to/from SYD?

I doubt you’ll see SYD-MEL-JFK/LHR flights if that’s what you’re floating.

 

[dajop]

I doubt you’ll see SYD-MEL-JFK/LHR flights if that’s what you’re floating.

No, not suggesting that at all. rather paxing crew from SYD for any MEL service. Also wondering does it mean that these flights won't be worked by LHR based cabin crew?

 

[RAM]

Looks like NSW paid QF $50M to stay in SYD. In exchange they bought certain commitments.

NSW Treasurer tables secret $50m bid to keep Qantas in Sydney

The NSW government has put millions of dollars in taxpayer funds on the table to keep the flying kangaroo in NSW, according to a confidential letter.

www.smh.com.au

and I wonder how much they managed to solicit from the other State Govts for those facilities? Add to the $2 bn from the Federal Govt.

Shame the Fed Govt didn't just nationalise it last July - it would have been much cheaper for Australian tax payers.

 

[justinbrett]

No, not suggesting that at all. rather paxing crew from SYD for any MEL service. Also wondering does it mean that these flights won't be worked by LHR based cabin crew?

Wouldn't be ideal - crew couldn't fly in same day due to the already massive crew duty on those routes, they'd have to fly in the day before. And too bad if the jet breaks.

The routes are going to be a bit of a commercial risk as it is, makes sense to start it from Sydney and then expand once proven (similar to how the 787 started with the Melbourne base).

 

[dajop]

Wouldn't be ideal - crew couldn't fly in same day due to the already massive crew duty on those routes, they'd have to fly in the day before. And too bad if the jet brakes.

The routes are going to be a bit of a commercial risk as it is, makes sense to start it from Sydney and then expand once proven (similar to how the 787 started with the Melbourne base).

Oh I don't disagree about the commercial risk bit.

Of course, say three years in they decide MEL is viable commercially, a potential roster for a SYD crew base could be SYD-LHR-MEL-LHR-SYD.

I think most of us have been around along enough to know that QF are always very clever in the way the use specific language, and I would expect that wording such as "would be based exclusively in Sydney" does not preclude them from operating services out of other cities.

 

[justinbrett]

Oh I don't disagree about the commercial risk bit.

Of course, say three years in they decide MEL is viable commercially, a potential roster for a SYD crew base could be SYD-LHR-MEL-LHR-SYD.

My gut is post covid they'll be pushing MEL through PER on 787 and SYD direct (for LHR). 5 years is not a long time in aviation. I'm not convinced the A380s will come back on European routes (if Covid is still bubbling away I think people will be paying a premium to bypass third countries).

For JFK I can only see SYD working in the immediate future. We still haven't got a MEL-DFW which would be far more useful (though I think we'll get that. Perhaps even on AA metal).

 

[THR]

I doubt you’ll see SYD-MEL-JFK/LHR flights if that’s what you’re floating.

Surprised that was your interpretation from that comment.

 

[mviy]

If QF doesn’t operate MEL-LHR Sunrise flights they leave the door open for a different airline to get first mover advantage and do it before them. That would be a massive risk IMO. I would be very disappointed if MEL-LHR Sunrise flights are delayed five years. A stopover in Perth at an illogical time in the journey is still a stopover.

 

[jakeseven7]

It will be interesting to see when the '5 year' exclusive period for Sunrise EX Syd starts..... now? Or from the first flight??

 

[justinbrett]

If QF doesn’t operate MEL-LHR Sunrise flights they leave the door open for a different airline to get first mover advantage and do it before them. That would be a massive risk IMO. I would be very disappointed if MEL-LHR Sunrise flights are delayed five years. A stopover in Perth at an illogical time in the journey is still a stopover.

Commercially it’s a very risky route, it requires a specific aircraft and could only really work on one of four airlines - Qantas, Virgin Australia, Virgin Atlantic or British Airways. The UK airlines are much more likely to fly LHR-PER first as it’s much simpler and more profitable, it will be at least 5 years before they consider ULH.

An article in Australian Aviation referring to Alan Joyce “He added Qantas was the only airline in the world with the ability to make ultra-long-haul profitable because other global airlines would only require a handful of aircraft to fly to Australia, whereas an Australia-based airline would require a bigger fleet allowing economies of scale to kick in.”

 

[Lynda2475]

If QF doesn’t operate MEL-LHR Sunrise flights they leave the door open for a different airline to get first mover advantage and do it before them. That would be a massive risk IMO

For AUS-LHR it only makes sense for airlines that are based in Australia or UK. I'm not sure BA would be that interested. Other Asian or ME airlines want you to stop over and spend $ in their home base countries.

I therefore don't think it is that big a risk for QF to run SYD only because for other carriers to get 5th freedom approval the flight would need to have a leg on the same flight number to somewhere else before/after.

SYD-JFK would enable QF to drop their LAX-JFK 5th freedom route something AA would likely be happy about.

 

[justinbrett]

SYD-JFK would enable QF to drop their LAX-JFK 5th freedom route something AA would likely be happy about.

I don’t think AA really care now they have the JV. I think they’d like more flights to DFW, their primary hub.

Interesting now AS are oneworld it’s an absolutely certainty QF will launch AUS-SEA, and that might hurt AA just a little bit (there is now alliance between AA and AS other than both being oneworld members - it’s not like AA and US pre merger)

 

[Gold Member]

“Qantas to focus staff & operations in Sydney”

Hold on a second… Sydney Airways retains its sole focus on Sydney? Never thought I’d see the day.