Rex to fly between Australian capital cities

[Melburnian1]

ZL42, the 1000 ho9urs nicely timed for the leisure traveller from MEL to SY had seven in business class today and 45 in whY, meaning a load factor of under a third.

But a friend was on a QFd SYD - HBA flight recently at a similarly pleasing time for non-business travellers who don't like rising early. There were fewer than 20 patrons.

 

[Melburnian1]

Fridays should be a busy day for domestic airlines most weeks with leisure travellers going away for the weekend and businessmen returning from a week's work interstate (in 'normal' times).

On Friday 4 February, an EF check suggested ZL31, the 0930 hours from SYD to MEL had two J travellers and 128 in economy.

The 1230 hours ZL105 was better with six J and 125 in whY.

In the other direction, ZL42, the 1000 hours from MEL had all eight seats taken in J but only 88 in whY.

All up, this is 357 passengers for aircraft totalling 504 seats, or a load factor of 70.33 per cent. This is almost certainly lossmaking given ZL's low median fares in both classes.

On Fridays ZL operates three flights a day each way on this route, a higher frequency than on most other days.

 

[Mattg]

I've said this before, but the number of J seats occupied doesn't really tell us anything about their actual J ticket sales because Rex regularly gives free upgrades.

 

[Platinum737]

Mattg, fair point - but are we a tad conditioned to upgrades being unachievable with the likes of QF/VA?

In the absence of an official FF program (for now), wouldn’t a $69 flight with an upgrade be something to be celebrated?

 

[jakeseven7]

Mattg, fair point - but are we a tad conditioned to upgrades being unachievable with the likes of QF/VA?

In the absence of an official FF program (for now), wouldn’t a $69 flight with an upgrade be something to be celebrated?

I get upgrades with QF - or do you mean unpaid (not using your own $ or points)?

 

[Platinum737]

I get upgrades with QF - do you mean unpaid ($ or points)?

Platinum with QF - for that price I’m anyones…

 

[jakeseven7]

Platinum with QF - for that price I’m anyones…

So?….

 

[Melburnian1]

I've said this before, but the number of J seats occupied doesn't really tell us anything about their actual J ticket sales because Rex regularly gives free upgrades.

With QFd, every time a mate travels, he observes QF staff in uniform travelling in J. There may also be QF staff in casual clothes occupying some seats, so there's no fares being collected by QFd either.

 

[Harrison_133]

In the absence of an official FF program (for now), wouldn’t a $69 flight with an upgrade be something to be celebrated?

As a passenger, of course an upgrade from a $69 economy seat would be celebrated. Would Rex management be celebrating? Probably not. Filling the J cabin solely through free upgrades wouldn’t be cheap. At least VA & QF can fill up their J cabins through bids and points, rather than just giving them away. A $75 bid to upgrade to VA J? That’s better than the $0 Rex get for their upgrades.

 

[Platinum737]

You lot are hard to please!

 

[PineappleSkip]

Filling the J cabin solely through free upgrades wouldn’t be cheap.

Not much more expensive than flying with an empty J cabin.

Cheers skip

 

[dajop]

Not much more expensive than flying with an empty J cabin.

Cheers skip

Yeah, the marginal cost would be what $10 for food and beverages per pax per flight?

 

[Harrison_133]

Not much more expensive than flying with an empty J cabin.

Cheers skip

Which goes to the question itself of whether they can sustain a J product if they’re relying on free upgrades to fill those seats. At least VA & QF have other ways to claw back something rather than leaving the J cabin empty, meanwhile Rex are getting nothing. They might get some word of mouth advertising from the people wowed by their ‘free’ business class experience, but how sustainable is that? Maybe Rex could look at a bidding system too?

In the absence of a FFP, why keep J? And would a FFP improve their successes in both J and Y on the Golden Triangle? ZL seem to be finding a niche as a Tiger replacement on leisure markets like OOL. If they focus on providing a good Y product, there’s no reason they can’t continue to fill the Tiger gap and get a few loyal fliers too - but the way to that isn’t through chasing J customers. VA & QF have the J market well covered.

 

[Saab34]

True. They don’t really need J. I assume they sort of have it because that’s what the Virgin aircraft came with.

The issue is when they have constantly full Y cabins and empty J cabins. Lost revenue on the Y front if that’s what the model is, purely Y only day in day out. Rex’ has bigger issues in that they have empty Y cabins and J cabins with free upgrades. I think J removal is not at the top of the list.

I was thinking when perhaps Virgin might introduce some Y only cabins. JetBlue does this, has mint on selected markets only.

 

[MooTime]

True. They don’t really need J. I assume they sort of have it because that’s what the Virgin aircraft came with.

The issue is when they have constantly full Y cabins and empty J cabins. Lost revenue on the Y front if that’s what the model is, purely Y only day in day out. Rex’ has bigger issues in that they have empty Y cabins and J cabins with free upgrades. I think J removal is not at the top of the list.

I was thinking when perhaps Virgin might introduce some Y only cabins. JetBlue does this, has mint on selected markets only.

Off topic, but hybrid VA must have J.
Anything else would be LCC budget carrier. QF would have 180% of the market then, I used to think 101% of the market was impossible......
Full Stop.

 

[jakeseven7]

Off topic, but hybrid VA must have J.
Anything else would be LCC budget carrier.

Mmmmmm interesting but I’m not convinced VA2 really need it anymore with their lack of interest in pursuing the corporate market these days.

At the moment they’ve just heavily discounted the publicly available retail rate which means people who would never normally be able to/choose to pay for it are.

It’s been discussed VA2 aren’t making any money / breaking even at very best from the current cabin and pricing on FT, so if that is true I guess why would Bain persevere….

Perhaps they intend to change tack later and and go after the QF business / corporate crowd (again) in which case to your point may well be correct - they would need a premium domestic cabin for that….

Does Star Alliance membership require a premium cabin?

 

[Harrison_133]

Off topic, but hybrid VA must have J.

They have a very solid footing in the J market, even on routes you’d assume don’t need J. It would be silly to add the fleet complexity of having Y-only 737s and go against the transformation towards a hybrid.

Mmmmmm interesting but I’m not convinced VA2 really need it anymore with their lack of interest in pursuing the corporate market these days.

I think this is slightly overstated. I’m not saying VA hasn’t lost corporate contracts since pivoting, but they’re still there. And over the last few months, they’ve become a much more compelling option for a lot of corporate travellers on both price and service. The amount of QF QTags starting to appear in the lounge is no coincidence.

People discredit VA’s ability to compete, but flying them multiple times a week, you see it’s not really the case. T3 at Tullamarine is always bursting at the seams, priority boarding and check-in lanes are always well used, lounges are well patronised and all 8 J seats are consistently filled - without giving free upgrades at the gate. And they have no problem filling Y to capacity on the quieter days - something Rex struggles with.

It’s been discussed VA2 aren’t making any money / breaking even at very best from the current cabin and pricing on FT, so if that is true I guess why would Bain persevere….

Borders have opened and closed more times than we can remember. It’s hardly surprising they wouldn’t be at the point in the turnaround Bain would have expected by now, but it doesn’t mean they won’t get there. In terms of pricing, have you seen last minute VA fares? They can be astronomical…

Back to topic, because this is a Rex thread after all. They aren’t established in the J market and aren’t really doing much to find a footing. They’d have the least to lose by abandoning it. Creating a FFP is a huge investment that I’m not sure will provide much return. How many people are really going to shift over when VA & QF have very strong offerings, and Rex have limited trunk routes and frequencies?

I still think focusing on an excellent Y product (which their jet operations provide IMO) is the way forward. I do want ZL’s jet experiment to be successful because I have enjoyed my flights with them, but I really hope they’re not trying to be a carbon copy of VA & QF through a plan predicated on VA disappearing. Maybe they need to learn some lessons from how it turned out for VA trying to be QF for all those years.

 

[HS-TQE]

Mmmmmm interesting but I’m not convinced VA2 really need it anymore with their lack of interest in pursuing the corporate market these days.

At the moment they’ve just heavily discounted the publicly available retail rate which means people who would never normally be able to/choose to pay for it are.

It’s been discussed VA2 aren’t making any money / breaking even at very best from the current cabin and pricing on FT, so if that is true I guess why would Bain persevere….

Perhaps they intend to change tack later and and go after the QF business / corporate crowd (again) in which case to your point may well be correct - they would need a premium domestic cabin for that….

Does Star Alliance membership require a premium cabin?

Star Alliance Connecting Partners does not require a 'J', and it's 'cheaper', does not require 'approval' from all members and allows those affiliates to use the CapEx to connect to what 'they need' without the CapEx requirement to 'connect' to everyone and/or 'enemies' *cough*NZ*cough*.

 

[HS-TQE]

Back to topic, because this is a Rex thread after all. They aren’t established in the J market and aren’t really doing much to find a footing. They’d have the least to lose by abandoning it. Creating a FFP is a huge investment that I’m not sure will provide much return. How many people are really going to shift over when VA & QF have very strong offerings, and Rex have limited trunk routes and frequencies?

I still think focusing on an excellent Y product (which their jet operations provide IMO) is the way forward. I do want ZL’s jet experiment to be successful because I have enjoyed my flights with them, but I really hope they’re not trying to be a carbon copy of VA & QF through a plan predicated on VA disappearing. Maybe they need to learn some lessons from how it turned out for VA trying to be QF for all those years.

Getting back on topic here, surely REX could look at the Spirit modeal of 'BIG Front Seat' to some extent. To a lesser extent, VA as well on the non Capital Routes. That fare model is based on paying for a extra comfy seat only, however with VA it could just incorporate a bag, maybe lounge access and that's pretty much it on the non-capital routes.

 

[dk4]

...whether they can sustain a J product if they’re relying on free upgrades to fill those seats.

I think turning Business into an "upgrade class" is the way to go (but they need a frequent flyer program to do it), plus convert 2 of the extra legroom economy rows to Business, for a total of 4 J rows! (i.e. configure like they do in North America)

I have played "the upgrade game" in the USA, and it is addictive!

You don't take Qantas on by playing the game the same way - you need to exploit its weaknesses and downplay your own (like network/frequency/lounges). The business model for "free upgrades" is there, some of the largest airlines in the world use it, and it is the antithesis of the way Qantas does business, AND in my opinion, it WILL poach frequent flying high value economy customers from the competition.