The Beginning of the End of Qantas

[auriga]

As long as people choose their carriers based on price, Qantas is likely to shift more routes over to Jetstar.

 

[serfty]

As long as people choose their carriers based on price ...

I do this; my last transpacific return purchase was on Qantas for ~$1065*

The routing was LAX-MEL-LAX, this is over $200 cheaper than similar flights and times MEL-LAX-MEL!

*USD925

 

[browski]

Qantas created Jetstar because it wanted to fight Virgin Blue for the low price end of the market. This worked well. But Virgin Blue then changed (you can be flexible when you are young) into a quasi full service airline.
Qantas now has to decide what it represents.
Is it the premium carrier in the class of SQ and EK?
Or is it a lazy mediocre carrier in the class of United, Garuda and Air India?
It looks like they have chosen the latter and will milk a few bucks from the few routes they still have. Ultimately Qantas will become a solid Sydney airline with these useful routes:
SYD-MEL/BNE/SIN/LAX/AKL/HKG.

Jetstar will become the Flagship (it already is, but nobody has publicly stated so)

 

[Blackadder]

JQ will never been the "flagship" of the Qantas group, not even domestically there is still strong support at a domestic level for a full price carrier where you don't have to pay for additionals etc, and that won't be changing anytime soon.
Likewise how can a brand become a "flagship" flying very limited intl routes.
Maybe a cold day in hell before they have the aircraft to expand to Europe and Mainland USA then you could talk about being a flagship.

 

[trippin_the_rift]

Qantas created Jetstar because it wanted to fight Virgin Blue for the low price end of the market.

^ Exactly.

Jetstar was created to undercut Virgin on similar routers so passengers were faced with the age old pricing question.

Jetstar come in super-cheap - soo cheap that they bleed cash. Virgin, a public company can't possibly compete on a price point with Jetstar - but they can't exactly complete in the premium space because QF have lounges/business class/intl all stiched up.

This puts the squeeze on Virgin to always stay somewhere in the middle. They'll never be able to compete at either end of the spectrum and the QF group will slowly tighten the vice from both ends until Virgin is no more.

Sure Jetstar will takeover more routes, but it won't ever impeed on the high value subjective margains the qantas bottom line feeds off.

 

[browski]

Likewise how can a brand become a "flagship" flying very limited intl routes.

Simple really. Because Jetstar have more aircraft and more routes.
Do you think all those Boeing 787's are heading to Jetstar or Qantas?

 

[Jeffrey O'Neill]

I suppose from QF management's POV there's no point having lots of empy F seats zooming at 35000 feet and not earning any revenue.

Not having flown F, but seeing the major improvement in J class seating, is there really much difference between the 2??? I mean, do you get to your destination any better rested in F over J?? Obviously not enough people think so, hence QF deciding there's only a few routers where it makes economic sense.

As for J*, I've flown them internationally quite a few times and been happy with what I got.

To be honest, the lack of IFE is not a big issue for me, tho might become one if i was going to Europe with them, but I'd almost definitely have a stopover on the way, so my MP4 player would b recharged and ready for another 8rs of play time.

I think for most people spending their own money, price and flight time are usually near the top of your list in terms of what you want. I wont chase FF points if the fare is significantly more expensive. I dont fly enough to make the chase for status worth the effort.

 

[harvyk]

Jetstar will become the Flagship (it already is, but nobody has publicly stated so)

No it's not, Jetstar knows exactly what it is, it's a holiday makers airline, nothing more. It is for this reason they don't offer J dom, and J int is not really called business class, it's called star class playing off the whole feel like a VIP emotion.

It provides FF points and lounge access (with exception to OOL) as part of QF, a perk it can milk. Qantas will remain "the brand", for proof of that you need to look no further that aircraft liveries. JQ have "A Qantas Group Airline" underneath their logo, QF don't put "affiliated with Jetstar" anywhere on their livery.

A flagship is the thing people identify with, not the thing they actually use... It is for this reason that QF use photos of A380's and formerly B747's when advertising destinations, even if they only use A330's, B767's or B737's on the routes.

As for QF, well I see it around for some time yet, with exception to Q1 (which I hear they made a loss in) they are still a profitable airline, something which seems to be a rarity these days.

 

[docjames]

Jetstar come in super-cheap - soo cheap that they bleed cash.

I dont think turning a profit every year since inception = bleed cash.

This has been reported in QF Group's annual report every year.
Jetstar has worked well for QF group. So well that most people are losing loyalty and shop on price. This is why QFF is so important to QF - it keeps premium pax on QF and must be flogged to ensure people choose QF and to alesser extent JQ. Those without loyalty they want to chose JQ too hence the "super-cheap" image and prices. Frankly, if QF didnt set up such an airline, someone else would have (hello, Tiger?? Tiger would have grown like crazy without JQ in the market and QF group would have ceded massive amounts of market share.)

I think QF will become a main haul carrier only - think Cityflyer routes, plus add SIN/HKG/LHR/LAX/JFK.

Expect most of the rest of their network to end up on JQ. Sad but true.

 

[markis10]

Even SQ recently mentioned AirAsia X and their chances of ever reaching sustainable profitability were questionable. Actually I remember the D7 said that profits would be alot smaller to London than anywhere else.

I would be betting Virgin see D7 hitting profitability before SQ gets a return on its Tiger investment, obviously big airlines see the wisdom of investing in LCC's much like QF has with the JQ group.

SQ have hardly had a good track record with their airline investments in Air NZ and Virgin Atlantic so I suppose they have become good at spotting poor balance sheets.

 

[JetLagged]

Having flown F as both a paid ticket and as an upgrade, I believe I can answer your question, Jeffrey.

I mean, do you get to your destination any better rested in F over J?? Obviously not enough people think so, hence QF deciding there's only a few routers where it makes economic sense.

Have flown F on both 747 and A380 - and the smaller, quiter cabin plus the lambswool underlay on the bed ensure a much better rest. No, it is not just the turn-down service nor the better drinks, but I find the current seat/bed offering on the 747s to be downright uncomfortable, though the new A380 setas are a fast improvement, as is the quality of the entertainment system in terms of clarity, delivery, etc.

Now the interesting matter to note is that for all the complaints that F is not being utilized, most of the time on the Syd-LHR route when I have been flying, the cabin has been 80-100% full. Sure, most of the time it might have been FF like myself using points to upgrade - but it was a sound investment in rest, comfort and being able to get out at LHR able to be productive for the day.

Unlike many others, I have not had a bad flight on any Qantas flight - though the system at times needs a proper shake-up.

With friends flying other airlines in and out of Australia with a multitude of woes and complaints about their flights, I'll be sticking to the one I know and enjoy. That being said, they need to keep their finger on the pulse of the travelling community and respond properly - did anyone notice the information that the current sdale of cheap seats out of the US had an overwhelming large percentage being booked into Business and First?

 

[anat0l]

did anyone notice the information that the current sdale of cheap seats out of the US had an overwhelming large percentage being booked into Business and First?

Not really.

I did notice an overwhelmingly large number of people who believe they have a dirt cheap QF F flight, though. Whether they will get it or not is a whole different thing. It's an AA stuff-up, really

 

[simongr]

Lastly, decreasing J and removing F from cabins, Qantas effectively broadcasting that it is going down JQ route rather than trying to be premium service provider.

Umm - fully lie flat in all business is planned - how is that lie pay for food JQ?

AY don't have F, CX dont have F flying into OZ - are they not premium carriers? Virgin Atlantic don't have F. NZ don't have F - are either of them non-premium?

Seriously try and come up with a meaningful comparison rather than bandwagoning...

 

[JohnK]

Depends on whether you consider trans-tasman (and Bali) routes international? I am sure CHC & DPS routes have been quite successful.

I guess in a way New Zealand is not true international and Bali is a tourist resort very close to home.

How did JQ go with KUL? How are the Japanese routes performing? How is the Vietnam route performing? How about BKK and HKT?

I have serious question marks whether JQ can make any route to Europe a success. You can almost forget USA and Canada and I am not sure there are many routes left for JQ in Asia.

Domestically they can fly routes to compete with TT and DJ but I cannot see them getting too much share of the CityFlyer market or other important routes.