QF CEO speech - dom fare restructure/profit update/RR settlement& Int Route changes?

[lsmi4126]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

I'm sure this has been covered ad-nauseum previously, but I take very little notice of segmented QF and QFF numbers - particularly the comparison of the QF and J* segments.

My no doubt oversimplified opinion is that QF (int and dom) and QFF are complimentary businesses in their current form and can't be considered at independant segments (IMHO). QF no doubt pays far more to QFF for points than QFF pays QF for redeemed flights / upgrades in any one period (i'm talking in absolute terms here, not on a per point basis) and as such there is always going to be a revenue bias to QFF (even removing non-QF sourced point revenue - perhaps a reason QFF never made it to the ASX floor?). If you then try and bring J* into the picture, the bias is only further exacerbated by the even larger J* point 'purchase' to QFF redemption (ie. QFF point redemptions for J* flights are no doubt far in excess of the QFF points awarded for J* flights). Furthermore, if you then try and bring the larger OW FF network into it the picture becomes even less rosier for QF (particularly QFi).

My prediction, is that as QF routes are diverted to J*, and QFF redemptions for those J* routes increase, QFF profitablity will fall as QFF revenue from QF routes falls (ie the QF to QFF revenue bias will tip the other way).

 

[JohnPhelan]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

Good points from The Age writer about SYD-centric focus.

Agree, except I'm sure all The Age would care about is more MEL flights! There is more to Australia than SYD and MEL.

 

[JohnPhelan]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

Here comes QF int being purely SYD \ MEL \ SIN \ LHR \ LAX... JQ will take over the rest... (I hate making airline predictions as I've had a 100% success rate with DJ\VA so far, and I don't much like my prediction)

Probably because your prediction is baseless rubbish.

[redacted by mod]

Newsflash - QF mainline will not drop any route on which it makes a profit.

 

[Misha]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

Whining? Rubbish? Surely people have the right to comment - especially those who regularly fly this airline - they may be attacking the airline or its senior management, but fair go mate - they're not having a go at you :shock::shock::shock:

... when they know 1% of sweet FA! :evil:

I know a few sweet Flight Attendants - dare I say perhaps even more than 1% of them all... Anat0l and Harvyk fly much more regularly than I do - I am sure they have met a lot of cabin crew during that time, including many sweet ones - so it may be fair to say they know anywhere up to 20% of sweet FA

*couldn't help self* :mrgreen:

 

[JohnPhelan]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

Can't help but think for a start MNL, CGK, NRT & HNL are gone.

Joyce has noted on mutiple occasions that the HNL route makes a profit for QF mainline, as well as for JQ.

I repeat - QF mainline will not drop any routes on which it makes a profit!

As for MNL and CGK, I don't know, but it wouldn't surprise me if they went. NRT I would tip to stay. But we shall see!

 

[anat0l]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

Newsflash - QF mainline will not drop any route on which it makes a profit.

That ain't news, and that's fine.

Now - what are the routes which are making profits?

 

[markis10]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

Joyce has noted on mutiple occasions that the HNL route makes a profit for QF mainline, as well as for JQ.

I repeat - QF mainline will not drop any routes on which it makes a profit!

That they have an aircraft for, we will find out in August but I suspect you are wrong and so do a lot of the QF pilots, who know a thing or two about profitability, QF will kill any remaining 767 route and move the A330s to JQ that are not serving SIN/BKK/HKG.

 

[orac]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

The speech at the press club left more questions hanging out there then answers IMO.

I think we will have to wait to August to find out fact from rumour and supposition.

Over the years regardless of what groups I have been a member of - frequent flyer - or others, the benefits have diluted over time. I do not expect the August enlightenment to be any different

 

[medhead]

My prediction, is that as QF routes are diverted to J*, and QFF redemptions for those J* routes increase, QFF profitablity will fall as QFF revenue from QF routes falls (ie the QF to QFF revenue bias will tip the other way).

I'm not sure I really understand what you're saying, even though it sounds reasonable. Clearly QFF profit comes from QF and it is hard to see how they can be separated. I'm not sure that the bias can ever be reversed if we consider the transactions taking place.

QFF is selling points that QF and all the other partners are paying to buy. When points are redeemed QFF then buy the goods from the partner. So in the case of a QF flight, QF charge QFF a certain amount for that flight QFF make money by charging points with a value greater than the cost of the flight. (this is obvious, sorry for restating it)

So if QF charge more for a flight, it is a simple matter for QFF to increase the number of points required and maintain their margin. In theory, if QF set the cost of an award seat to cover their costs without profit then they don't lose money. Of course, they also don't make money. That pricing/profit equation is highly dependent on management's agenda.

There are so many things wrong with this arrangement I could go on forever. But I won't. (I'm also probably not making a lot of sense)

 

[Captain Paul]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

QF international has the wrong fleet(767's needing replacement with new Boeing Dreamliner), the wrong configuration(no first class out of Perth) and the wrong routes(PER-SIN and PER HKG do not work when it is quicker to go to Europe via the middle east.)
I would introduce PER-BOM or make Jordan QF's middle east transit point.
First class only needs 6 seats and there is a lot of money in Perth that would fill them over J class.
I would also re-introduce PER-NRT(a route with no competition offering easier connections to North America than domestic layovers via SYD and LAX).
I think QF international's biggest problem is its marketing. Does it spend any money on international marketing? I see large 1/4 - full page adverts in the AFR and in the West Australian offering domestic business class service/experience to SYD and MEL from PER but next to nothing about QF international.

 

[dajop]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

As for MNL and CGK, I don't know, but it wouldn't surprise me if they went. NRT I would tip to stay. But we shall see!

One thing we may see added though is KUL perhaps? ( In fact would even see QF31/32 being routed via KUL instead of SIN as it would work well with MH's Europe flights in both directions and allow connections from LHR to BNE/PER/MEL on MH's day flights that it can't atm via SIN)

 

[Nigelinoz]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

OK,this may need a thread of it's own but in his speech Mr Joyce mentioned

"new domestic fare structure" would include "more flexible fares" and will be "more rewarding for frequent flyers".

so does anyone have any comments about what sort of changes they either foresee or would like to see?
and given that the domestic operation is making good profits for them are QF at risk of "Killing the goose that layed the golden egg' for the presumed sake of being seen to respond to VA's revamped fares? (My assumption-and possibly wrong).
Cheers
N'oz

 

[oz_mark]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

OK,this may need a thread of it's own but in his speech Mr Joyce mentioned so does anyone have any comments about what sort of changes they either foresee or would like to see?
and given that the domestic operation is making good profits for them are QF at risk of "Killing the goose that layed the golden egg' for the presumed sake of being seen to respond to VA's revamped fares? (My assumption-and possibly wrong).
Cheers
N'oz

I would argue that they have already responded to the VA revamp - you hardly see SuperSavers at all in the search results (a smattering, but not many). Flexi-Savers seem to have come down in price. The down side is that it looks untidy the way it is.

It just needs to be properly formalised!

Just guessing - but supersavers may formally be chopped off!

 

[markis10]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

OK,this may need a thread of it's own but in his speech Mr Joyce mentioned so does anyone have any comments about what sort of changes they either foresee or would like to see?
and given that the domestic operation is making good profits for them are QF at risk of "Killing the goose that layed the golden egg' for the presumed sake of being seen to respond to VA's revamped fares? (My assumption-and possibly wrong).
Cheers
N'oz

He did say its starting tomorrow from what I remember!

 

[Nigelinoz]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

I would argue that they have already responded to the VA revamp - you hardly see SuperSavers at all in the search results (a smattering, but not many). Flexi-Savers seem to have come down in price. The down side is that it looks untidy the way it is.

It just needs to be properly formalised!

Just guessing - but supersavers may formally be chopped off!

Ok ,fair point
guess we have to wait and see what else they come up with.
Cheers
N'oz

 

[medhead]

(In fact would even see QF31/32 being routed via KUL instead of SIN as it would work well with MH's Europe flights in both directions and allow connections from LHR to BNE/PER/MEL on MH's day flights that it can't atm via SIN)

There are also MH flights to ADL. Not sure if they are daily.

 

[macca172]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

Firstly IMO to be competitive on the international routes, Qantas has to have a serious look at their fare structures and the cabin service offered to thier paying passengers. I fly to LHR on an annual basis and up till five years ago, I flew with Qantas on every occasion. Regretfully, their fares went up and cabin service declined, hence I now fly with other carriers who's fares and all round service are excellent value. If I was Alan Joyce right now, I would be seriously looking at the positions vacant columns in Saturdays papers. To me, he just doesnt cut the mustard and gives me the feeling that he is way out of his depth.

 

[justinbrett]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

Qantas should merge with another major airline. Personally, I was disappointed it didn't merge with BA. The KLM / Air France model is a good one. As for domestic ops, hopefully they don't change the FF earn rate (such as BA's 0.25 points per mile for discount Y) or SCs.At least with VA lifting their game QF has some competition now.

 

[markj23]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

hopefully they don't change the FF earn rate (such as BA's 0.25 points per mile for discount Y) or SCs.

reading what AJ said, the earn rate will change .. "more rewarding for frequent flyers" i believe the wording was

 

[justinbrett]

Re: QF CEO speech - dom fare restrucure, profit update, RR settlement, Int Route chan

reading what AJ said, the earn rate will change .. "more rewarding for frequent flyers" i believe the wording was

Well that's probably the status bonus increase which has already happened.