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Skyteam Opportunity Down Under?  
User currently onlineAeroWesty From United States of America, joined Oct 2004, 20637 posts, RR: 62
Posted (9 years 6 months 6 days 6 hours ago) and read 2122 times:

All the talk in other threads recently about Qantas' large profits coming from the SYD-LAX routes, SQ wanting to get in on the deal, NZ expanding at SFO, etc., and the ability of the 777-200ER to fly from the west coast to Australia and New Zealand, prompted me to look up vacant route authorities in this market held by U.S. carriers.

According to the last published list of U.S. Carrier Route Authorities (October 2004) by the US DOT, unused route authorities in the U.S.-Australia market include:


  • AA to SYD from SFO, LAX, and HNL;
  • NW to SYD from HNL; and
  • CO to BNE from GUM and SPN, CNS from GUM, SYD from GUM and SPN, and points in Australia from HNL, LAX and PPG.
To New Zealand, unused authorities are held by AA, CO, and DL.

It's my understanding that it's the DOT's policy to let carriers hold onto vacant authorities seemingly forever, if they had been awarded prior to their new policy of automatic cancellation if left not utilized for 90 days, but another airline may apply to be awarded the dormant routes.

It seems that Skyteam is the only major alliance not in on the lucrative U.S.-Australia/New Zealand market, when there are either frequencies there for the taking, or they already have the right to fly Down Under, while other airlines are chomping at the bit to fly these profitable routes. Currently, I only see limited service (3x per week) on CO from GUM to CNS. I recall reading that LAX-SYD service on NW was lackluster at best, but they were selling a phenomenal amount of tickets to SYD on their former service ex-Japan, until it was stopped by the Japanese government for overselling their allowed capacity.

With the recently expanded partnership in this alliance, wouldn't it make sense for one of the Skyteam partners to reinitiate service to Australia and New Zealand to establish a beachhead on the route before another Star Alliance carrier, Singapore, moves in eventually (if SQ is awarded the routes, that is).

If there's something I'm overlooking in this opportunity, I'd appreciate your comments.

Cheers.


International Homo of Mystery
3 replies: All unread, jump to last
 
User currently offlineEddieDude From Mexico, joined Nov 2003, 7582 posts, RR: 42
Reply 1, posted (9 years 6 months 6 days 3 hours ago) and read 1966 times:

While the slots may be there, I have the impression that competing successfully against UA, NZ and QF would be too hard. SkyTeam's opportunity will come when MH joins the alliance. Only then will SkyTeam connect Oceania with its network more efficiently (KE flies to Australia, but it seems to me that it is kind of inconvenient for North Americans and perhaps for Europeans as well).


Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineGemuser From Australia, joined Nov 2003, 5659 posts, RR: 6
Reply 2, posted (9 years 6 months 6 days 2 hours ago) and read 1935 times:

AeroWesty

ANY US airline that wants to fly into Oz from the US can, provided they get US DOT & OZ DFAT approval. Neither of which would be very hard for an established airline.

The fact that none has suggests that they dont think they can make money on it.

From an earlier thread:

QUOTE
The short answer is: MONEY.

Not just income from the services but the ROI or return on investment. The ROI on US-SW Pacific services would be horriable. All US airlines can make more money by investing in other routes. In fact I would bet that UA would make more money by closing their OZ operation and using their 744 elsewhere.

Why is it such an expensive route to operate?
a) It's l-o-n-g, it requires at least two aircraft per daily frequency. You must do it non stop which means B744 (preferable 744ER), A345/6 or B777, none of which are cheap to buy and very few are on the used market and the 777 has ETOPS issues, although not major ones.

b) It's T-H-I-N. If you draw a line from the equator to the South Pole that passes just east of Madagascar, then from the South Pole back to the Equator that passes just west of the west coast of South America, then back to your start point, staying south of the Republic of Indonesia, then you have just enclosed about 30% of the worlds surface. How many people live in this area?

30 Million, on a good day! About the population of the LA Basin plus the SF Bay Area! Far less than CA's 50 million.

Now given the above stated aircraft types, how many flights a day are going to be profitable? Today QF had five, two SYD-LAX, one each MEL-LAX, SYD-BNE-LAX, SYD-AKL-LAX, UA had one SYD-LAX & one SYD-SFO, NZ had one AKL-LAX. In addation there may have been one NZ AKL-SFO, one TN PPT-LAX and one FJ NAN-LAX, all 744 or A340 and FJ has a 738 NAN-HNL-YVR tonight and NZ may have a 763 on an island hopper to LAX.

Are they all profitable? I don't know but I'd bet not. Do they all earn a commerical rate of return? I doubt it. My guesstimate is that one QF SYD-LAX & NZ's AKL-LAX flights do so. QF's MEL-LAX would be boarderline, all the others, not a hope in hell!

Given the above why would any carrier that does not live here bother?

END QUOTE

The only way I see some potential is what HA is attempting to do out of HNL, ie form a mid Pacific hub and bypass LAX(Yay!)/SFO but for it to work for skyteam, it would require HA to join Skyteam and then some very tight coordination of schedules in HNL.

Then there is the on going rumor of QF to DFW, which would also bypass LAX.


Gemuser



DC23468910;B72172273373G73873H74374475275376377L77W;A319 320321332333343;BAe146;C402;DHC6;F27;L188;MD80MD85
User currently onlineAeroWesty From United States of America, joined Oct 2004, 20637 posts, RR: 62
Reply 3, posted (9 years 6 months 6 days 2 hours ago) and read 1889 times:

Quoting Gemuser (Reply 2):
Are they all profitable? I don't know but I'd bet not. Do they all earn a commerical rate of return? I doubt it. My guesstimate is that one QF SYD-LAX & NZ's AKL-LAX flights do so. QF's MEL-LAX would be boarderline, all the others, not a hope in hell!

If this were so, why would QF state 1/3 of their profits come from Oz-US routes? (I tried searching for the posts that referred to that part of their profitability statements, but couldn't find the exact reference.)

Quoting Gemuser (Reply 2):
The only way I see some potential is what HA is attempting to do out of HNL, ie form a mid Pacific hub

Which Skyteam member CO continues to operate somewhat out of HNL, but they dropped their flights to SYD/AKL in the late 80's/early 90's.



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