Seat occupancy lower

[wannabeinvestmentbanker]

At the end of the day it is yield that determines viability over pax numbers. There was a recent AFR article quoting brokers who worked out breakeven yields for the airlines and QF only needed to fill around 49% of seats where VA was far higher.

As a regular on a golden triangle route in J, one of my seats fills 2.5 VA J seats.

We all know yield is a dark art but VA seem to really be going aggressive on getting BIS

 

[Harrison_133]

But I'm not going to try to say my experience is what everybody is experiencing nationally.

And neither am I. We obviously have different viewpoints here and that’s totally fine. I’ll leave it at that…

There was a recent AFR article quoting brokers who worked out breakeven yields for the airlines and QF only needed to fill around 49% of seats where VA was far higher.

There was a version in the SMH too, justinbrett linked it above. They don’t actually say how they’ve calculated those figures and they came from just one analyst. What sort of data are they going off to calculate the break-even LF%? John Sharp is quoted saying they’re wrong by a large margin (if we can believe what he says). While there’s probably some accuracy to their calculations, it’s probably not the full picture…which us armchair CEO’s will never get.

 

[Melburnian1]

Virgin can't afford to fly empty planes. Simple. Qantas can.

Half-empty planes are bad news for Qantas, but worse for its rivals

Qantas can turn a profit while flying far emptier planes than its rivals thanks to its aggressive pandemic cost-cutting drive, which analysts say will help shield it from competitors Virgin Australia, Rex Airlines and new challenger Bonza.

www.smh.com.au

It'd also make the point, taking a sample of traffic volumes in a week when large parts of Brisbane and Sydney are flooded is obviously flawed.

It's a myth that 'QAN can afford to fly empty planes'.

The company is mired in massive, increasing debt, and even though it's 90 per cent hedged for oil until June 30, it has a lesser level of hedging (half) beyond that and only apparently for three months. QFd/QFi is losing money daily (as presumably are VAd and ZL) so how can it afford to throw shareholders' money away?

I bet this '49pc' figure doesn't take into account QF's massive overheads, far more for example than the much smaller ZL. QF has also sold most of its assets, such as that large amount of land around SYD. Its net tangible assets are negligible at best.

 

[Inlander]

It's a myth that 'QAN can afford to fly empty planes'.

The company is mired in massive, increasing debt, and even though it's 90 per cent hedged for oil until June 30, it has a lesser level of hedging (half) beyond that and only apparently for three months. QFd/QFi is losing money daily (as presumably are VAd and ZL) so how can it afford to throw shareholders' money away?

I bet this '49pc' figure doesn't take into account QF's massive overheads, far more for example than the much smaller ZL. QF has also sold most of its assets, such as that large amount of land around SYD. Its net tangible assets are negligible at best.

Its madness in the market at present, with addition of Rex and Bonza to come. They have to watch every cent carefully, ive just had a flight in May changed from BNE- CNS. They cancelled QF710 and put us on the later dept of QF714.

 

[Melburnian1]

On Wednesday 9 January 2022, QFi's midmorning SYD - BKK, QF23, looks to have only 51 booked in whY class but the A333 has 269 economy class seats, so seat occupancy is 18.95 per cent.

The latter is marginally lower than PR to MNL this morning (c.21pc) and GA on an infrequent trip to CGK (19pc).

The QFi BKK flights northbound seem regularly to have very few passengers in whY. Even though we have to take account of what it's carrying southbound, plus lucrative freight and a bit of mail/parcels, it's surprising that QF hasn't reduced the frequency on this route to a couple of times a week.

 

[Melburnian1]

At the end of the day it is yield that determines viability over pax numbers. There was a recent AFR article quoting brokers who worked out breakeven yields for the airlines and QF only needed to fill around 49% of seats where VA was far higher.

As a regular on a golden triangle route in J, one of my seats fills 2.5 VA J seats.

We all know yield is a dark art but VA seem to really be going aggressive on getting BIS

No one doubts that you're paying a far higher fare than anyone, on any airline, travelling in whY. Most people would regard A$1600 one way ADL - SYD (admittedly not a 'golden triangle' route) as extortion.

However, to 'support' you, QFd/QFi has had to establish separate ground (lounges) infrastructure that aren't cheap to lease space for from the airports, fit out and operate. Your J seat takes up more real estate in aircraft than a whY seat, and while food offerings domestically are spartan, there's more in J than whY. So it's not all profit for the airline.

 

[Melburnian1]

Its madness in the market at present, with addition of Rex and Bonza to come. They have to watch every cent carefully, ive just had a flight in May changed from BNE- CNS. They cancelled QF710 and put us on the later dept of QF714.

Everyone I talk to who flies QFd has tales of regularly being shifted due to flight cancellations, but Mattg covered this elsewhere. And yet seat occupancy is still poor on so many QFd flights, even with lower frequencies.

 

[jakeseven7]

Which still show VA flights fuller than QF…which was also the same trend when I looked at traffic volumes a couple of weeks ago, pre-flooding.

I don't know why everyone is so obsessed with seat loads, its about yield - you have to look at things more widely to get the true picture. Now VA2 is a closed book under Bain we don't get insight anymore which is the problem.

VA2 are still aggressively discounting in all classes. Bain have injected big $$ into the Australian entity to keep them alive. There is more to the story here now than % seat load.

We don't get a clear picture of their finances anymore so people on here (not you btw Harrison) claiming insight really don't.... and we won't have a clear 'true' picture until Bain sells VA2 off next year and lists them again - it is that simple.

 

[justinbrett]

It's a myth that 'QAN can afford to fly empty planes'.

The company is mired in massive, increasing debt, and even though it's 90 per cent hedged for oil until June 30, it has a lesser level of hedging (half) beyond that and only apparently for three months. QFd/QFi is losing money daily (as presumably are VAd and ZL) so how can it afford to throw shareholders' money away?

I bet this '49pc' figure doesn't take into account QF's massive overheads, far more for example than the much smaller ZL. QF has also sold most of its assets, such as that large amount of land around SYD. Its net tangible assets are negligible at best.

Three words:

Qantas Frequent Flyer

(And possibly also freight).

(And also also it owns most of its aircraft)

 

[Harrison_133]

You have to look at things more widely to get the true picture.

Agree with your post, seats loads are just one element. At the same time, I can understand the interest in it. Given VA is a closed book and we know about QF’s current losses, seat loads are probably the most visible thing when we fly, so people focus on that. It’s not hard to glance around the cabin and get a sense of how full the plane is – as anecdotal and superficial that may be.

From my recent flights, I’ve found it interesting just how full the VA ones have been and just how empty the QF ones were. That’s obviously anecdotal and not the whole picture as you say, but one takeaway at least is how it’s been good seeing VA very busy, especially considering there could have been no VA at all.

VA2 are still aggressively discounting in all classes.

They certainly have and I’ve capitalised quite well on it, though I’ve noticed a rise in prices recently so this might be starting to change. It’s a lot harder to get discounted tickets closer to departure dates, something covid made a lot easier. I was looking recently for a trip sometime this month. The VA prices were staggeringly high, so I was pushed to Rex for the return leg.

 

[jase05]

And possibly also freight).

In a slight lull currently but the bar has been set very high over the last couple of years so was expected to see a couple of dips.

 

[Melburnian1]

Three words:

Qantas Frequent Flyer

(And possibly also freight).

(And also also it owns most of its aircraft)

Neither of the first two have been sufficiently profitable recently to ensure QF records a net profit after tax.

The domestic fleet is in need of renewal, so if the secondhand market is similar to what some media outlets suggested months ago was 'depressed', these ageing planes aren't worth much. QF has yet to pay Airbus for any of those 100 new aircraft, although IIRC delivery will occur over a decade.

Its international and domestic fleets are not being used (i.e. block hours) as much as was typical pre-COVID. Corporate expenses are spread over a smaller number of passengers and flights.

 

[justinbrett]

Neither of the first two have been sufficiently profitable recently to ensure QF records a net profit after tax.

The domestic fleet is in need of renewal, so if the secondhand market is similar to what some media outlets suggested months ago was 'depressed', these ageing planes aren't worth much. QF has yet to pay Airbus for any of those 100 new aircraft, although IIRC delivery will occur over a decade.

Its international and domestic fleets are not being used (i.e. block hours) as much as was typical pre-COVID. Corporate expenses are spread over a smaller number of passengers and flights.

Nobody said they can fly empty. The article was they could fly more empty in comparison to VA etc.

You seem to have a bit of an agenda here posting all these threads about empty flights. What are you trying to achieve?

 

[Melburnian1]

Nobody said they can fly empty. The article was they could fly more empty in comparison to VA etc.

You seem to have a bit of an agenda here posting all these threads about empty flights. What are you trying to achieve?

Am merely recording history, something increasingly difficult in the internet age given the perishability of records (although the National Library's Pandora and similar try to overcome that).

It's also useful information for AFFers who may prefer to have shadow(s) next to them in whY. Optional for you to read!

 

[justinbrett]

Am merely recording history, something increasingly difficult in the internet age given the perishability of records (although the National Library's Pandora and similar try to overcome that).

It's also useful information for AFFers who may prefer to have shadow(s) next to them in whY. Optional for you to read!

I must have missed your thread in the Virgin forum...

 

[Melburnian1]

I must have missed your thread in the Virgin forum...

Perhaps because whenever I look at VAd flights, they seem close to full, something that others such as Harrison_133 have correctly commented upon. VA's accounts are opaque but it's probably losing money every day, though QF's massive losses and debt dwarf anything flushed down the lavatory by other Australian domestic carriers.

I've established 'seat occupancy lower' for a wide range of international airlines, but not all seem to allow 'EF' access to their seat maps.

In the ZL thread, I and others have highlighted how many of their lossmaking 'non leisure' flights on 'business' routes such as MEL-SYD have been poorly patronised (though that route seems to be doing a little better in the last few weeks).

 

[RichardMEL]

Yes, but where are you getting your data from? looking at EF seat maps and counting? how far out from departure? are you getting official airline capacity stats?

I mean even if one looks at a seat map online say 5 minutes before a flight closes or departs it may not reflect standby pax or other changes.

in essence I read this thread as basically anecdotal evidence - and that's fine - but a sampling of flight observations (for want of a better term) may only be somewhat accurate and certainly doesn't reflect systemwide capacity and occupancy (which of course the airlines are required to report anyway).

 

[jakeseven7]

Yes, but where are you getting your data from? looking at EF seat maps and counting? how far out from departure? are you getting official airline capacity stats?

I mean even if one looks at a seat map online say 5 minutes before a flight closes or departs it may not reflect standby pax or other changes.

in essence I read this thread as basically anecdotal evidence - and that's fine - but a sampling of flight observations (for want of a better term) may only be somewhat accurate and certainly doesn't reflect systemwide capacity and occupancy (which of course the airlines are required to report anyway).

Correct it’s just a goss thread, no one reads into it seriously, just a little fun!

 

[Melburnian1]

Yes, but where are you getting your data from? looking at EF seat maps and counting? how far out from departure? are you getting official airline capacity stats?

I mean even if one looks at a seat map online say 5 minutes before a flight closes or departs it may not reflect standby pax or other changes.

in essence I read this thread as basically anecdotal evidence - and that's fine - but a sampling of flight observations (for want of a better term) may only be somewhat accurate and certainly doesn't reflect systemwide capacity and occupancy (which of course the airlines are required to report anyway).

When EF shows 80 empty seats 'five minutes before departure', there aren't going to be 40 or 60 'standby passengers'.

Sometimes one can look at EF post-departure if an airline still allows access to seat maps.

On a few occasions I have 'cross-checked' its claims with a passenger I know who's on board, who asks the crew for the loadings. Invariably the EF display either matches or is + or -1, so it can be accurate.

You can check on how accurate the sample is in six to 10 weeks after the end of a month by looking at BITRE statistics for overall seat occupancy, and then considering how by all accounts VAd is doing better than QFd in filling its planes. As you may know the BITRE figures only show an overall seat occupancy percentage for routes carrying 8000 or more a month, and only where there's two or more airlines competing, not where one airline such as ZL has a monopoly.

Every suggestion the QF Chief Exec has made since this coronavirus situation commenced about what percentage of pre-COVID flights his airline would be operating has been way out - adverse for the airline - yet he keeps making these forecasts.

 

[justinbrett]

Yes, but where are you getting your data from? looking at EF seat maps and counting? how far out from departure? are you getting official airline capacity stats?

I mean even if one looks at a seat map online say 5 minutes before a flight closes or departs it may not reflect standby pax or other changes.

in essence I read this thread as basically anecdotal evidence - and that's fine - but a sampling of flight observations (for want of a better term) may only be somewhat accurate and certainly doesn't reflect systemwide capacity and occupancy (which of course the airlines are required to report anyway).

Thank you. Exactly my point.

Comparing the financial performance of one airline with another that a. literally went insolvent during the pandemic and has been reduced to a regional/domestic airline with only narrow bodies and b. no longer reports financial results. So I'd love to see the evidence there.

Not to mention factors like freight, loyalty programs, owning most of its fleet (which means not paying lease fees) means making any comparisons based on random seat maps is just ridiculous.

Correct it’s just a goss thread, no one reads into it seriously, just a little fun!

Exactly, but let's not try and pass off these as facts or news.