When will Qantas absorb Jetstar?

[ChrisCunard]

It seems to me that one day QF Mainline will have to absorb JQ (international) in order to save it's international business. With costs spiralling for QF it seems to make sense that they will re-organise JQ to offer the QF branded service (any one else agree?) at a far lower cost than the traditional QF offering.

I noticed recently that BA offer a number of different styles of service - including "Euro Traveller" which is quite different from the long haul BA offering. These aircraft are fitted out very differently from the domestic and / or long haul aircraft, yet still fly with the BA brand. No one seemed confused as to what the "Euro Traveller" offering was as at the time of booking BA make it quite clear.

I wonder if QF have thought of "Asia Traveller" (or similar) with QF branded JQ operated aircraft offering a similar solution as to what BA has for their "Euro Traveller" options? Star Class / Domestic Business Class Style and Economy would be fine for these given a lower price point than the Skybed equipped aircraft.

It really seems less and less relevant for QF to be pushing the dual brand strategy when it's obvious that QF International Mainline is in strife. Surely one strong QF brand is the ultimate goal for the group given it's the brand that has had (historically) such loyalty.

Anyway, food for thought. I'd hate to see Jetstar survive at the expense of Qantas.

 

[concorde71]

Unfortunately it will happen. And sooner rather than later
QF need to change their business model to modern times, and unfortunately, Jetstar model is the new model. People would not accept a QF that was pay as you go.

 

[ChrisCunard]

I don't know if it would have to be a "pay as you go". A simple tweak to the JQ International model (and an extra few $ at booking) could result in a meal service and IFE. The real cost savings for JQ's model has to be the lower staffing costs rather than food and TV?

On the BA Euro-Traveller, there was a basic drinks & snacks service, and no IFE, and everyone seemed ok with that.

 

[notzac]

Wouldn't it be the other way around .. JQ absorbing QF?? :mrgreen:

I can just see it now .. A380s with a massive orange star and 700 seats crammed inside.

Qantas - a Jetstar group airline

 

[ftm]

Wouldn't it be the other way around .. JQ absorbing QF?? :mrgreen:

I can just see it now .. A380s with a massive orange star and 700 seats crammed inside.

Qantas - a Jetstar group airline

Exactly what I was thinking.

That said, JQ would not be as successful without QF. All the routes and passengers it was gifted, all the policies and procedures they didn't need to establish from scratch (their PA's do sound familiar!). There are a whole range of areas where JQ's costs aren't necessarily accurately represented.

Why, for example, when I was delayed out of Hobart the other month on a JQ flight did the apology letter and notification of compensation come on a QF letterhead?

They are complementary brands, but one relies more on the other. Depends how you look at it.

 

[yohy?!]

If QF really wanted the international business to survive they would stop trashing it at every opportunity.

Doesn't seem likely to me they will be absorbing JQi anytime soon - more likely JQi will continue to absorb routes from it.

They want to rid themselves of the legacy costs associated with QF not preserve them.

 

[Andyzx]

I would have thought it was more about what the market wants. QF a (almost) full service airline vs. JQ a low cost.

With the number of full service airlines that fly from Oz it is difficult to see that QF would let this competition take over in favour of a low cost pay as you go product. Try getting a good J seat on most weekly flights from SYD to SIN, BKK and HKG is worse via any of the good airlines. J pays the bills Y is not much better than freight but you have to fill the plane with something.....

Even V flying to the USA run a full service - there is just too much money to give away if they move from full service.

Until we run out of iron ore, hit another 2-3 GFC's and at A$ falls to under US$0.60 and whatever against the RMB, QF will still be there carrying poly's, business and the SF Retirees (& a few SFFF's) around the globe. It just has a internal cost issue at the moment which it will fix in time

 

[ChrisCunard]

If QF really wanted the international business to survive they would stop trashing it at every opportunity.

Doesn't seem likely to me they will be absorbing JQi anytime soon - more likely JQi will continue to absorb routes from it.

They want to rid themselves of the legacy costs associated with QF not preserve them.

I was thinking that any "absorption" would result in JQ operating costs presented in a QF livery. JQ can't be the future of QF, especially when VA is gearing up and other carriers are taking greater and greater pieces of the premium traffic pie.

 

[Sifor]

My belief is that JQ will become the main airline and QF the small "premium brand". Just take a look at the many routes QF is passing on to JQ....

 

[DC3]

Re:

My belief is that JQ will become the main airline and QF the small "premium brand". Just take a look at the many routes QF is passing on to JQ....

Perhaps a thread: When will Jetstar absorb Qantas?

 

[Saab34]

My belief is that JQ will become the main airline and QF the small "premium brand". Just take a look at the many routes QF is passing on to JQ....

Why do people keep saying this? What routes in the last 2 years has Qantas passed over to Jetstar??? Barely any...Melbourne to Singapore? Last time I checked QF were still there. Come back in a year and you will find its becoming the other way around.

Jetstar International is as much a failure as Qantas International. Jetstar Asia has been a basket case since creation, and those were about the best words that ever came out of Dixon's mouth. Jetstar in Vietnam is not even worth talking about, not sure what or who is running it, corruption seems to have taken over.

AirAsia X do it right because they have a cost base comparable to Tiger and have a higher density seating arrangement, Jetstar has a CASK 3 times that of AK/TR.

 

[Airbumps]

I agree that the JQ model will eventually take over as the norm. I give it another 10 - 15 years and the only place we'll see QF is on the LHR and perhaps LAX routes. They can't afford to keep it up.

JQ are becoming more and more like Ryanair - you pay to check in, must print your own boarding card, you pay for everything on board, restrictive airfares....pathetic.

 

[straitman]

Re:

Perhaps a thread: When will Jetstar absorb Qantas?

I agree entirely.

I find it quite interesting that all the news these days from Qantas is negative and all the news from Virgin is positive.

 

[LiamR]

AirAsia X do it right because they have a cost base comparable to Tiger and have a higher density seating arrangement, Jetstar has a CASK 3 times that of AK/TR.

A major contributor to that is out high labour costs, and constant problems from the unions demanding better pay/whatever else.

These asian countries have much lower standards than we do in Australia, and it all means out airlines have a much high cost base. I can't remember where, but I read recently.

Excluding Fuel, QF's expenses are 200% high than SQ, 400% high than EK.

Sadly, there isn't much we can do about it right now, its very hard to compete with the other airlines that hire cheaper, poorer, less experienced staff. Particually those like Air Asia and TT.

 

[Sifor]

Don't forget the militant Unions.... Joyce may actually speak the truth when he says the Unions are putting the future of the company at risk.

 

[dajop]

Where is it all leading? Who knows. It's actually not too much of a stretch to see a dual branded aircraft plying the skies. QF first (if offered), business and premium economy, operated by QF staff. The rest of the plane JQ economy operated by JQ staff. Not sure who would fly the plane though.

 

[yohy?!]

Don't forget the militant Unions.... Joyce may actually speak the truth when he says the Unions are putting the future of the company at risk.

QF has seen this on the horizon for a loong time now and some say has allowed the FA and Engineer EBAs to expire to force a final confrontation.

As they say interesting times.