QFi Flight loads

[freepyjamas]

I know QF11 is full up front today because my son missed out on the offered upgrade on a non upgradeable Y ticket.
A chockers J and PE flight means something good for QFi.

School holidays? They began in Vic private schools on Friday.

 

[amaroo]

School holidays? They began in Vic private schools on Friday.

As has QLD.....

 

[Jeffrey O'Neill]

Qantas has to compete against:

Emirates / Etihad - they pay no tax on their profit ie 30% advantage over QF. They also have Government backing - lower interest rates for aircraft purchases. Their base airpot costs are far lower. what SYD airport gets to charge the airlines is riduculous, and since QF has to perate out of SYD so much that's another cost disadvantage to them. Staff for the Middle eastern carriers pay no tax, so a $60K annual pay is like $80K in Australia.

Singapore Airlines - Government controlled which allows them to see the revenue of tourism as part of the economic equation - QF says why add capacity if I make $10 a seat, SQ says I make $10 a seat and the passenger spends $1000 on their stopover / holiday so it's worth while for the economy to add the capacity. SQ also pays minimal tax on their profits, and their staff wages are also cheaper, and income taxes are low as well.

Malaysian / Thai Airways - both Government supported and basically been bankrupted for years but keep getting Government subsidies while having low wage costs.

So to be honest it is quite surprising that with minimal Government help QF has remained profitable for so long.

I do agree that the unions need to get realistic with their work practices, I also feel management are far to adversarial and pay themselves obscene amounts of money while continually harping on about the need to cut costs. Until there's trust between both sides QF wont be able to compete.

 

[freepyjamas]

If its ok for the Victorian taxpayer to pour money into the privately-owned Formula 1 circus, in the name of tourism and branding the state of Victoria as a destination, then why isn't it ok for the Australian taxpayer to do likewise with Qantas.

We've screwed ourselves by forcing Australian businesses to compete on a mythical international level playing field. As the post above shows... There is no such thing.

 

[AnonymousCoward]

We've screwed ourselves by forcing Australian businesses to compete on a mythical international level playing field. As the post above shows... There is no such thing.

Not really. It's Malaysian, Thai, Singaporean taxpayers that are getting screwed. They're subsidising their airlines to fly foreigners to other countries for cheap fares.

 

[trippin_the_rift]

While booking a trip to NCE last week I was finding it incredibly difficult to find 'A' availability between SYD/MEL/LHR. Given that upgrades are not processed this far out - clearly this means it's full of paid up First fares.
This is almost always the case when I book long haul travel so QF is still obviously filling these premium seats...at a premium.

Agree it would certainly be adventurous to QF if the sale act was amended as to not disadvantage the company, because at the moment it's hurting the country.

 

[Moopere]

QF prices are at the high point when ever i am doing comparisons for International travel.

I do understand that the flight crews are being paid Aust wages and not lower wage structures but it does make it hard to be loyal when there is such a price disparity.

I'm not sure if this is really about wages. Like you, I invariably find QFi flights in the top percentile price wise, a long way from the middle and a long long way from cheap (full service) carriers generally speaking. But first world carriers are fairly well represented down here, and even if some of those use codeshares to fly pax out of australia to a more populous hub the overall fares are still many thousands of dollars different. Are all the Euro and US carriers losing money to transport Aussie pax? I find it hard to believe they'd bother if they were.

 

[rechoboam]

If its ok for the Victorian taxpayer to pour money into the privately-owned Formula 1 circus, in the name of tourism and branding the state of Victoria as a destination, then why isn't it ok for the Australian taxpayer to do likewise with Qantas.

We've screwed ourselves by forcing Australian businesses to compete on a mythical international level playing field. As the post above shows... There is no such thing.

It could be argued that we, especially people for whom travel is expensive and difficult to afford, should just enjoy the Gulf's largesse and have cheap flights at their expense rather than use the tax paid by average Australians to compete with foreign Governments. They are harming themselves rather than us.

If we believe a "national" carrier delivers intangible benefits to the nation that's another issue and perhaps it is justified to tax people (some of whom can't afford to go overseas) to keep it going internationally. I dont have a particular view either way. But our Govt competing with the Singaporese to deliver uneconomic businesses is a race to the bottom financially.

 

[freepyjamas]

I've always believed that a national carrier can and should be an important part of a nation's tourism strategy. Not to mention and important part of a nation's infrastructure.

But that boat sailed a long time ago, when State and Federal Governments drank the privatisation Kool Aid and sold off everything they possibly could for short-term gain.

Pretty sad that something as vital to the nation's transport strategy as our airports are now privately run businesses, with the sole aim of extracting as much revenue as they possibly can from users.

I've owned businesses, I'm an avowed capitalist... but privately-run airports, prisons, water 'retailers'... it's an absurd situation brought about by the failed logic that if capitalism is good, then clearly more capitalism will be even better.

We've lost a balance here, in a world that is quite happy to have public involvement and support for private businesses. How do you think UK online retailers can afford all that free shipping overseas? Because the Govt. owned postal service subsidises private UK online retailers, to help them kick cough.

Sorry, going off topic a bit.

 

[Jeffrey O'Neill]

...

If we believe a "national" carrier delivers intangible benefits to the nation that's another issue and perhaps it is justified to tax people (some of whom can't afford to go overseas) to keep it going internationally. I dont have a particular view either way. But our Govt competing with the Singaporese to deliver uneconomic businesses is a race to the bottom financially.

I suppose the question is, what industry / business do we have left if we allow the bankrupting of well run business that cannot compete against foregin companies SIMPLY due to the fact that the compteitiors are subsidised.

It's similar issue to the way a lot of countries subsidise or restrict the importation of basic food crops. Half the EU budget is farm subsidies. It's amazing that there's any aussie farming left with the unfair world trade system.

If the airline industry was run rationally, then I'd say QF would have a pretty decent chance of competiting. When governments are pumping hundreds of millions of dollars to keep poorly run flag carriers in the air - MH has received 1 billion MYR, TG around the $300 million mark, when other carriers pay no tax which is another form of subsidy - should we let QF die? If QF was poorly run I'd say let them be replaced with more efficient carriers. But when the free market has been corrupted, do we looose more by not stepping in?

I woudl hazzard a guess that after wages and tax are some of the top costs for QF.

 

[markis10]

...If we believe a "national" carrier delivers intangible benefits to the nation that's another issue and perhaps it is justified to tax people (some of whom can't afford to go overseas) to keep it going internationally. I dont have a particular view either way. But our Govt competing with the Singaporese to deliver uneconomic businesses is a race to the bottom financially.

I suppose the question is, what industry / business do we have left if we allow the bankrupting of well run business that cannot compete against foregin companies SIMPLY due to the fact that the compteitiors are subsidised.

It's similar issue to the way a lot of countries subsidise or restrict the importation of basic food crops. Half the EU budget is farm subsidies. It's amazing that there's any aussie farming left with the unfair world trade system.

If the airline industry was run rationally, then I'd say QF would have a pretty decent chance of competiting. When governments are pumping hundreds of millions of dollars to keep poorly run flag carriers in the air - MH has received 1 billion MYR, TG around the $300 million mark, when other carriers pay no tax which is another form of subsidy - should we let QF die? If QF was poorly run I'd say let them be replaced with more efficient carriers. But when the free market has been corrupted, do we looose more by not stepping in?

I woudl hazzard a guess that after wages and tax are some of the top costs for QF.

Your post talks about how QF is being left to compete against state run carriers yet fails to acknowledge the fact that QFi has only ever done well when it was getting capital injections from the government, in other words being propped up the same way as many of its competitors are being done today. Other flag carriers are doing OK without any government support such as CX, do we follow like sheep and pour money into a black hole as a country like we have done in the past or do we let a private company be private? Long term I suspect government injections are not sustainable, as a country we have happened to just find this out earlier than others because we started earlier.

 

[Jeffrey O'Neill]

Your post talks about how QF is being left to compete against state run carriers yet fails to acknowledge the fact that QFi has only ever done well when it was getting capital injections from the government, in other words being propped up the same way as many of its competitors are being done today. Other flag carriers are doing OK without any government support such as CX, do we follow like sheep and pour money into a black hole as a country like we have done in the past or do we let a private company be private? Long term I suspect government injections are not sustainable, as a country we have happened to just find this out earlier than others because we started earlier.

I never said QFi was only able to compete with Government capital injections. I've consistently said they are a financially well run airline. Certainly up there with SQ and CX. They've made a profit for every year since they listed on the ASX. I'd say no other fully commercially run airline would have as good an economic record.

My question is do we let well run companies in Australia get bankrupted purely because they can't compete against international competitors that are supported by their Governments? Should we maybe take a view more similar with Singapore where the total spend of a tourist is factored in capacity planning, and that revenue is shared with QF? Maybe QF gets a "bounty" for every tourist they bring into the country.

The average trip expenditure of International holiday visitors in Australia was $2,411, Backpackers’ average trip expenditure in Australia was $5,423. In the year ending 30 September2011, international visitors spent a total of $18 billion within Australia. During the 12 months to September 2011, international visitors consumed around $24 billion of Australian goods and services. Some financial assistance to QF to increase the economic benefits of international tourism seems like a reasonable investment.

Yes Australia was a first mover towards reducing the tariff walls supporting uncompetitive industries. We also saw that even making the changes without reciprocity from our trade partners still left us better off. While QF has a lot of issues that management and the unions / workers need to sort out pretty soon, it does strike me as being short sighted to let them sink from a purely economic rationalist view of the world when it's easy to see that they are trying to compete against airlines that get significant market distorting support from their Governments.

I have no idea if the WTO has jurisdiction for the Airline sector, but maybe the Australian Government needs to take some action that stops the unfair competition before thousands of people loose their jobs.

 

[amaroo]

I never said QFi was only able to compete with Government capital injections. I've consistently said they are a financially well run airline. Certainly up there with SQ and CX. They've made a profit for every year since they listed on the ASX. I'd say no other fully commercially run airline would have as good an economic record.

I agree.

My question is do we let well run companies in Australia get bankrupted purely because they can't compete against international competitors that are supported by their Governments? Should we maybe take a view more similar with Singapore where the total spend of a tourist is factored in capacity planning, and that revenue is shared with QF? Maybe QF gets a "bounty" for every tourist they bring into the country.

My reading of the tea leaves is that the SIN Government is pretty relaxed about air-rights & allows anyone with a decent operation to set up & bring walking $$ into their coffers.

The average trip expenditure of International holiday visitors in Australia was $2,411, Backpackers’ average trip expenditure in Australia was $5,423. In the year ending 30 September2011, international visitors spent a total of $18 billion within Australia. During the 12 months to September 2011, international visitors consumed around $24 billion of Australian goods and services. Some financial assistance to QF to increase the economic benefits of international tourism seems like a reasonable investment.

Going by these numbers & given QF only have an Int market share of 18% - maybe it's better that we have multiply & cheaper airlines flying into OZ. A key part of the formula for a successful tourism industry seems to be as simple as increasing the numbers.....IMO, the more airlines that bring in the tourist $$ the better.

Yes Australia was a first mover towards reducing the tariff walls supporting uncompetitive industries. We also saw that even making the changes without reciprocity from our trade partners still left us better off. While QF has a lot of issues that management and the unions / workers need to sort out pretty soon, it does strike me as being short sighted to let them sink from a purely economic rationalist view of the world when it's easy to see that they are trying to compete against airlines that get significant market distorting support from their Governments.

I have no idea if the WTO has jurisdiction for the Airline sector, but maybe the Australian Government needs to take some action that stops the unfair competition before thousands of people loose their jobs.

Unfortunately, the price to improve QF's bottom line has/& will continue to cost many thousands of jobs.....no different to any other industry that models it's future via reducing services & utilising improved technology.

Can't see any sensible Government biting the hand that feeds many key parts of the economy. IMO, more airlines servicing OZ the better!

The days where the QF sale act was imperative are long gone - the world has changed.

They should change the act and let the beast run free. If it goes pear shape just take it back and start again....just because a Government sold something doesn't mean that can't change their mind-----just look at the Telstra-NBN fiasco

 

[rechoboam]

If you want cheap airfares to get tourists out here it really doesn't make any difference whether we pay billions in subsidies or we let the Singaporean or Dubai governments spend the money for us.

 

[Sprucegoose]

Are u suggesting a QF staff buyout would result in change in work practices given that they now own the company?
Practices requested by the company are surprisingly turned on.. and lower cost options utlised?
Current demarkacations, foreign ownership laws, QF staff, their benefits are OUTDATED. Something must change.. the cross subsidiation from their domestic business and shielded through limited competition. This is all changing.. govt allowing etihad,dnata, emirates, sq into playing field.. Is the RED Kangaroo on the same path as Ansett? Matter of time.. Jack Bower the clock is ticking!

I am suggesting there would be a greater willingness to look at all cost inputs, work practices, understand and isolate the cross subsidization of the domestic business.

Why they could even charge a fee for delivering a pax to the domestic network!

 

[AnonymousCoward]

it does strike me as being short sighted to let them sink from a purely economic rationalist view of the world when it's easy to see that they are trying to compete against airlines that get significant market distorting support from their Governments.

The Australian government can spend it's tax revenue on defence, universities, welfare payments, or it can put it into an airline. There's no magic pot of never ending money, so some hard choices would need to be made. Personally, I'm inclined to let other governments waste money rather than ours...

 

[gibbo8]

What I have difficulty understanding is that with an average load of 81% on QFi how can you be loosing money. Although cheap seats jumps to mind my recent trips to MEL-SIN-LHR suggest that the premium cabins are also full (i.e next flight MEL-SIN-FRA on 26/6/12; still have fingers crossed for an upgrade on points) is completely full except forr 2 F seats that can still be booked). Given the A380 has 14 F and 72J and 32W as well as whY how can the business possibly be loosing money. QF have been closing "unprofitable" routes for a while and the main, most frequent services (LHR/LAX etc), are typically full. Perhaps the biusiness model is flawed?

 

[Sprucegoose]

It could be management rather than the business model, being flawed.

 

[Isochronous]

I wonder how well the QF127 A380 is going for them - quite a few seats left at the back from what I could see.

 

[amaroo]

I wonder how well the QF127 A380 is going for them - quite a few seats left at the back from what I could see.

I'm guessing there is only one reason they fly the A380 to HKG (the few days they do), it starts with a C & ends with an X