Qantas to increase fleet utilisation

[Mattg]

This slide in last week's Qantas investor presentation caught my attention:



Basically, Qantas plans to increase the number of block hours flown each day per aircraft to over 100% of 2019 levels in the final quarter of this financial year (April-June).

Genuine question: does this not risk a return to high delays & cancellations if QF tries to run its fleet too tightly?

For full context, here's the slide in its entirety:

 

[lovestotravel]

Recession
Housing crisis
Lack of staff

yeah good luck with that QF

 

[pauly7]

Genuine question: does this not risk a return to high delays & cancellations if QF tries to run its fleet too tightly?

They could do well ask Virgin Australia - it has certainly caught them in a spot of trouble the last few months, and as Virgin’s management team have discovered - hard to unwind from quickly!

Qantas must be feeling more confident and comfortable to do so is the short answer.

 

[justinbrett]

Is that graph definitely per aircraft? I can't see anywhere it says that. It could be total block hours across the fleet.

Also the way I read those bars is they are cropped (I assume that's what the white bar means, and also lack of scale apart from 100% on the axis) - so they could be in the high 90s, or 50s, we don't know (and they probably don't want us to know). Not a terribly useful graph.

 

[Mattg]

Is that graph definitely per aircraft? I can't see anywhere it says that. It could be total block hours across the fleet.

The graph refers to aircraft utilisation rates. I can only assume this means the rate at which each aircraft is being utilised on average (measured by block hours, compared to pre-COVID). Otherwise they wouldn't use the word "rate".

Also the way I read those bars is they are cropped (I assume that's what the white bar means, and also lack of scale apart from 100% on the axis) - so they could be in the high 90s, or 50s, we don't know (and they probably don't want us to know). Not a terribly useful graph.

Yes, the lack of scale on the Y axis is a bit annoying. I suspect you're right about that.

 

[justinbrett]

The graph refers to aircraft utilisation rates. I can only assume this means the rate at which each aircraft is being utilised on average (measured by block hours, compared to pre-COVID). Otherwise they wouldn't use the word "rate".



Yes, the lack of scale on the Y axis is a bit annoying. I suspect you're right about that.

I'd assume the same if this was an internal product - but the fact this is made for investors means there's no doubt to be a large dose of spin.

Is it per operational aircraft? Do aircraft in deep level maintenance count? What happens if aircraft are used for freight or charters?

It gets a bit messy. I'm not convinced it's all that meaningful without further clarification - which is data that would be commercial in confidence.

Edit - Found another QF product that had a glossary - it is average block hours per aircraft per day

https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/data-book/2020qantasdatabook.pdf

 

[Sprucegoose]

A presentation written to restore investor faith and clearly aimed at the fund managers and K markets.

Gotta love corp spin...........' unwind productivity inefficiencies'................. 'technology to safeguard against operational risks'.........dear oh dear.

 

[Mattg]

A presentation written to restore investor faith and clearly aimed at the fund managers and K markets.

Gotta love corp spin...........' unwind productivity inefficiencies'................. 'technology to safeguard against operational risks'.........dear oh dear.

Indeed. What would that technology be, exactly? And where was it this time last year?

 

[jrfsp]

Considering this is domestic, how do they propose to do this, SYD for instance is curfew limited.

Shorten turnaround times?

 

[Mattg]

Considering this is domestic, how do they propose to do this, SYD for instance is curfew limited.

Shorten turnaround times?

The only things I can think of are:

• More "back of the clock" flying
• Less time spent on aircraft maintenance
• Removing slack from the schedule (i.e. fewer "spare" aircraft on standby)
• They're scheduling more flights than they can actually operate reliably, and will therefore have to cancel a bunch at short notice
• The fleet was under-utilised in 2019 due to crew constraints which no longer apply, although I find this unlikely

I don't think they're scheduling shorter turnaround times from April. That would be quite a major change.

 

[Sprucegoose]

Indeed. What would that technology be, exactly? And where was it this time last year?

So what are they proposing to do now that they ought to have been doing before?

It's called doing your job!!

 

[wannabeinvestmentbanker]

I’m already noticing a lot of cancellations back on the syd mel route with the uptick in capacity. My last 3 flights have been impacted and had to fly later frustratingly.

 

[RooFlyer]

The only things I can think of are:

• More "back of the clock" flying
• Less time spent on aircraft maintenance
• Removing slack from the schedule (i.e. fewer "spare" aircraft on standby)
• They're scheduling more flights than they can actually operate reliably, and will therefore have to cancel a bunch at short notice
• The fleet was under-utilised in 2019 due to crew constraints which no longer apply, although I find this unlikely

I don't think they're scheduling shorter turnaround times from April. That would be quite a major change.

“Fewer spare aircraft” - from the presentation. Gosh, I wonder what will happen - run the fleet harder, fewer in reserve

Fasten your seatbelt everybody, it’s gonna be a bumpy ride as AJ keeps the profit up prior to his departure.

 

[exceladdict]

I’m already noticing a lot of cancellations back on the syd mel route with the uptick in capacity. My last 3 flights have been impacted and had to fly later frustratingly.

Yes, noticed a cancel on the board on SYD<>MEL from the SYD QP yesterday, and this was early in the day.

 

[RooFlyer]

Yes, noticed a cancel on the board on SYD<>MEL from the SYD QP yesterday, and this was early in the day.

Canceled flight means they have your money and will fly you along when they can. Filling empty seats in another aircraft. They save by not flying the first aircraft, and increase margins on the second. Win!

 

[love_the_life]

Canceled flight means they have your money and will fly you along when they can. Filling empty seats in another aircraft. They save by not flying the first aircraft, and increase margins on the second. Win!

For the passenger it isn't a win.

 

[justinbrett]

That graph is so selective, it could mean increasing the average block hours by 2% of 2019 hours, which would be 15 minutes extra a day for a 12 hour day (which I reckon would be close to average). An extra 15 minutes is neither here nor there.

Investor spin, nothing to suggest there's a fundamental operational shift about to happen.

 

[Quickstatus]

Fewer spare aircraft

I thought the airline is keeping spares for holiday and other busy periods.

Didn't last long...

 

[RooFlyer]

For the passenger it isn't a win.

No, but when the airline is addressing investors, passengers aren’t really in consideration

 

[justinbrett]

Canceled flight means they have your money and will fly you along when they can. Filling empty seats in another aircraft. They save by not flying the first aircraft, and increase margins on the second. Win!

Cancelled flight also means a full refund if you want it