AirNiugini From Australia, joined Mar 2010, 274 posts, RR: 0 Posted (4 years 5 months 1 week 6 days 3 hours ago) and read 15197 times:
Qantas holds a very special place in my very Australian heart. I often get into heated discussions with many friends and family members who bag out QF about its safety issues and other negativities raised. But that’s another story.
Recently as I’ve been perusing the news and various other aviation related sites, and I have noticed that the Australian airports have reported record passenger growth especially from China. Cathay Pacific have also announced that they are going to start flying 4 times daily into Sydney, 10 times weekly into Perth and 3 daily into Melbourne etc etc.
Obviously CX has a competitive advantage as HK is a large hub smack in the middle of Asia which allows their customers to access their global network very efficiently.
I understand that obviously Qantas will only fly to places where it can do so profitably, but is there any chance that one day we would see a Qantas double the size of what it is now internationally? (Not including JQ) If not double the size, what about a Qantas with a “redtail” market share of 30%?
Is the Qantas board too conservative with the growth of QF vs JQ?
Would they need to develop the HGK hub even further? Perhaps turn Bangkok into a hub too?
Who knows I guess… I’d just really love to see a Qantas with a bigger network. A network which touches Delhi, Moscow, Beijing, Dubai, Tel Aviv, Guangzhou, Seoul and maybe even Mexico City.
jetfuel From Australia, joined Jan 2005, 2260 posts, RR: 0
Reply 1, posted (4 years 5 months 1 week 6 days 3 hours ago) and read 15180 times:
The real truth is QF's operating costs are too high to effectively compete with many Asian based carriers. Even the likes of EK have lower operating costs. i.e. QF cabin crew mostly earn VERY handsome salaries, EK/SQ salaries are significantly less.
QF is in the same boat as many legacy carriers from the USA locked in higher salary deals. I am not saying this is wrong but it's not a level playing field where Australians expect higher incomes
This is why JQ is so desperate to get the 787 and start expansion. JQ's lower cost base means other routes will become viable. Reality is when you think QF you must also think JQ
There is also some left over issues from past QF management depending on the 744 for the core long haul routes. WE have had the "they should have ordered the 777 debate" before but perhaps QF would be a different airline with a fleet of 777.
IMO QF is far too SYD focused, but with 744's to fill operating out of many other Australian cities is risky.
As for safety, QF is still one of the safest airlines. Most of the hype is all union based propaganda
Where's the passion gone out of the airline industry? The smell of jetfuel and the romance of taking a flight....
ANstar From United Kingdom, joined Nov 2003, 5350 posts, RR: 7
Reply 2, posted (4 years 5 months 1 week 6 days 2 hours ago) and read 15075 times:
Quoting jetfuel (Reply 1): There is also some left over issues from past QF management depending on the 744 for the core long haul routes. WE have had the "they should have ordered the 777 debate" before but perhaps QF would be a different airline with a fleet of 777.
But they have the 330 which fulfils the 777's need in alot of cases - especially Asia.
QF are also quite conservative and quick to chop a route when unproftable - hence why they have been profitable while others have lost $$$
SexyAdonis From United States of America, joined Mar 2010, 122 posts, RR: 0
Reply 4, posted (4 years 5 months 1 week 5 days 23 hours ago) and read 14766 times:
The number one factor working against the QANTAS Group, more then the high operational costs, is the END OF THE LINE factor. It is why in the long term the development of both brands will be linked with the continue development of Singapore-Changi as a hub. The QANTAS Group needs that geographic position so they can continue to channel in flights from all over Australia into Singapore-Changi and then connect to services in South East Asia, the Indian sub-continent, and Europe.
The strength of the Group is in the diversity and flexibility that having two main brands (QANTAS and JETSTAR) brings. One can shift and develop one or the other according to changing market conditions and trends.
At the moment, given the current economic climate and market trends, it has been said that future growth is being looked under the JETSTAR arm and the Boeing 787-8 and Boeing 787-9 will be the backbone of the growth. Mind you that it has been argued that the Boeing 787-8 will not be able to deliver its promises of a one-stop over (in Singapore) on the Australia to Europe routes, without heavy penalties. This is part of the reason why airlines like Vietnam Airlines have recently started changing their orders from Boeing 787-8 to the Boeing 787-9. The problem is that the Boeing 787-9 is not due until 2014, that is still 4 years away, which is a long time for the speed of how things move in aviation.
QANTAS mainline, on the other hand, will concentrate on continuing to serve the traditional trunk routes (AUSTRALIA – USA/UK/GERMANY/SOUTH AFRICA and high yield Asian destinations). As far as South America goes, as it has been discussed in order post, the SYD-EZE-SYD will only survive if a code-share agreement is reached with Lan-Tam that would feed from RIO and GRU into EZE. The other alternative being that QANTAS withdraws completely from South American and code-shares with Lan-Tam on an eventual nonstop SYD-SCL with connection to RIO and GRU and a second flight linking says BNE or MEL to AKL and then SCL with connections to RIO and GRU, also in Lan-Tam metal.
But given the growing competition in the aviation market and the rise of LCC, it seems that over the next 20 years or so, Qantas will slowly dwindle into nothing while other full service carriers such as Emirates, Cathay Pacific, Thai Airways and Etihad for example will continue to grow and prosper.
Would having a "Jet-connect" operation out of Bangkok or Mumbai be of any help to try and drive down costs? I understand that customers may expect Australian crew, but as Qantas is operating in a global market, i see nothing wrong with a cultural mix of crew. Would this sort of arrangement run into any issues? Obviously a Asian based Jetconnect operation would be used more to staff new routes rather then replace current Aussie based crew.
Are there any other ways to gain efficiencies rather then focusing on labour costs?
Also, is Singapore the best location for a hub? What about Hong Kong or Bangkok? Obviously Hong Kong would be a great hub as its so close to China, Japan and Korea. And Sydney might be a nice place to stop over on the way to South America from Asia too...
I flew recently to Honolulu with JQ and must admit i was pretty happy with both flights so i can see JQ being exceptionally well received by the leisure market, which has been proven already. So I'm certainly not anti JQ.
allrite From Australia, joined Aug 2007, 2277 posts, RR: 5
Reply 6, posted (4 years 5 months 1 week 5 days 17 hours ago) and read 14276 times:
Quoting AirNiugini (Reply 5): But given the growing competition in the aviation market and the rise of LCC, it seems that over the next 20 years or so, Qantas will slowly dwindle into nothing while other full service carriers such as Emirates, Cathay Pacific, Thai Airways and Etihad for example will continue to grow and prosper.
I have also wondered how some other airlines can sustain so many flights to Australia when Qantas can manage a single flight, but Australian operations *are* different to the hub operations of the SE Asian and ME airlines. For starters, each one of our capital cities is basically an international terminus - you generally don't use them as transit points to anywhere other than the tiny South Pacific market or domestic flying. And that's another difference. SE Asian and most ME airlines have small numbers of or just non-existent domestic operations. Many Asian operations are short-haul between very large populations centres with potentially high loads, enabling all sorts of interesting aircraft usage patterns and traffic feeds.
In contrast, the majority of Qantas group's operations are domestic between small population centres (even 1 million people isn't that large). Keep domestic operations in mind both when thinking about Qantas' size in contrast to the Asian carriers (they *don't* have much access to our domestic market) and also when trying to manage salaries - they have no choice but to employ many staff on (hopefully) decent Australian wages.
I'm not certain of the detailed arguments for Singapore vs Hong Kong (someone, please?), although now with Jetstar Asia based in Singapore to provide Asian feeds/from to Qantas (this has been stated as a plan) it makes sense to use it as a hub. Compared with Bangkok, Singapore is politically/socially more stable and a more prominent business centre than Bangkok. More expensive, but probably easier.
It will be very interesting to see what Qantas does once it gets the 787 and any other future long haul orders.
QANTAS is in talks over new alliances for its Jetstar brand, in a push to further expand its rapidly growing pan-Asian networkJetstar recorded revenues of $2.2 billion last financial year and carried almost 15 million passengers. Mr Joyce said it was growing at a rate of 20 to 30 per cent annually across its domestic and international operations.Mr Joyce said the airline was talking to parties interested in seeing Jetstar expand into their territories and this included governments and "private parties".
Where's the passion gone out of the airline industry? The smell of jetfuel and the romance of taking a flight....
travelhound From Australia, joined May 2008, 1137 posts, RR: 12
Reply 8, posted (4 years 5 months 1 week 5 days 9 hours ago) and read 11694 times:
I think we have to look at business cycles to get a proper understanding of QF's current market share.
I think over the last three - four years QF's market share has decreased from approx. 27% to 19%. Even though a lot of this has to do with QF transferring capacity over to JQ, I'd suggest a fair bit of the loss is associated with
*QF being in transition from an old to new fleet
*new comers (Emirates, Ethiad) and traditional competitors ramping up capacity with new efficient aircraft.
Both of these competitive dynamics relate to the business cycles of the airlines flying in and out of Australia. With the delays to the 787, it would seem QF’s previous business cycle (or product) has dragged on, putting it at a competitive disadvantage.
I was always of the opinion QF's fleet strategy was high risk. If it had panned out as planned, QF today would be flying the most efficient and capable aircraft (or product) available. Unfortunately, with all of the delays associated with getting these latest generation aircraft flying QF are now probably flying a fleet that is the least efficient and capable (in comparison to their competitors).
The Ethiad / Virgin Blue strategy was interesting on a number of fronts. The main one that relates to this thread is that Ethiad was (I think they still are) a code share partner with QF. If I remember correctly shortly after the Ethiad / Virgin Blue announcement, QF stated their long term strategy for the middle east market would be based around JQ, not QF. They seemed to make a fair bit of noise about this.
For arguments sake, if JQ can be successful in securing a fair proportion of the leisure traveler market away from the dominant middle eastern carriers, the competitive advantage (price / frequency) the middle eastern carriers currently enjoy at the front of the plane will decrease. I’m not sure where that line in the sand is or if it will eventuate (that market is growing at a phenomenal rate), but a default of the JQ strategy could well be increased market share for QF.
The 787 is another interesting aspect of the topic. I think it’s fair to say the capability of the aircraft will give QF the gun power to target markets, that until it arrives it has been unable to do so. I think Athens (Greece) and Rome (Italy) are two markets frequently mentioned. If the 787 allows QF to directly secure a good proportion of these markets (and others) by default it will reduce some of the feed traffic of its competitors. If this is correct the 787 strategy could fundamentally change the competitive advantage its Asian competitors (CX, SQ) have by being hub carriers and as a consequence increase QF’s competitiveness in other markets.
At present, it seems the main of QF’s attention is based on JQ and Asia. I think I heard (too long ago) one interview, where an executive of QF stated the JQ Asia strategy is a once in a life time chance. He asserted, once growth of the low cost carrier market stabilizes the low cost carriers would probably consolidate and eventuate with only two dominant players. I think it’s fair to say QF’s attention is to ensure JQ is one of those dominant players.
In all reality I believe the relationship between JQ and QF to be symbotic. Considering the dynamics of the market, I can’t see a successful strategy based solely around QF and its traditional brand image. If we look at what the QF brand traditionally stands for (luxury, safety, Uniquely Australian, full service) there are probably other carriers that do a better job at promoting themselves on these attributes. (luxury – SQ/EK, Safety – Bad QF press, Uniquely Australian – Virgin Blue, Full Service - SQ/EK).
There has also been a fairly significant shift in the way the consumer relates to luxury and as a result the Qantas brand has to evolve. I think The Next-Generation Premium Airline strategy announced by Allan Joyce in November 2009 gives us a bit of an insight in which way QF is heading.
Quote: That does not mean, however, that premium flying will return to business as usual, 1960s style. Modern premium flying is going through an important evolution. Or rather, we believe it should go through an evolution to maximise its position in a more sophisticated and segmented marketplace.
Interesting times for QF. An ever changing and quickly evolving market place. Really strong new and traditional competitors and plenty of programs / business strategies / market positioning being discussed around the board room table. A lot of uncertainty, yes, but also a lot of opportunity for Australia’s iconic airline.
This aircraft is operated via AKL, originating in SYD. Jetfuel is talking about direct flights from Australia to USA and the slim possibility of PER-LHR or at least Australia direct to somewhere in Europe.
I wonder if now that there is some recovery in the market if Qantas could develop the Beijing route. I think NZ continues to operate Beijing from Auckland only twice weekly. Any idea how they are performing?
Also, has QF ever tried their luck in Delhi? I also thought Dubai was on the cards at one stage.
NZ107 From New Zealand, joined Jul 2005, 6493 posts, RR: 37
Reply 13, posted (4 years 5 months 1 week 5 days 2 hours ago) and read 10412 times:
Quoting AirNiugini (Reply 12): I think NZ continues to operate Beijing from Auckland only twice weekly. Any idea how they are performing?
New Zealand is a different market than Australia is to China. From what my friends have said, maybe about 80% in Y? But this has no indication on the flight as a whole as I have no data for the premium classes.
There isn't much of a need for QF to try and wrestle some passengers off EK especially since EK has such an impressive array of destinations and QF would likely only be carrying O&D traffic which is quite pointless for a lot of people who fly QF. EK has basically every major city sewn up and many frequencies to go with that.
AirNiugini From Australia, joined Mar 2010, 274 posts, RR: 0
Reply 15, posted (4 years 5 months 1 week 4 days 22 hours ago) and read 10190 times:
Quoting NZ107 (Reply 13): There isn't much of a need for QF to try and wrestle some passengers off EK especially since EK has such an impressive array of destinations and QF would likely only be carrying O&D traffic which is quite pointless for a lot of people who fly QF
So really, the only way that QF could really grow is if it started its own mega hub somewhere in Asia and ensure that the operations have very low costs so it can compete... hence JQ...
It's obvious that I am in denial when it comes to a bigger QF... LOL, I'll have to settle for seeing the flying Kangaroo logo on the Arrival/Departure screens at airports indicating code-shares instead of on the tarmac.
IndianicWorld From Australia, joined Jun 2001, 3069 posts, RR: 0
Reply 16, posted (4 years 5 months 1 week 4 days 22 hours ago) and read 10170 times:
QF has lost market share for a few reasons.
1/ Continued major focus on SYD, which has an inefficient terminal layout, and the resulting move into markets like MEL and BNE by its competitors, who offer more convenient schedules to many destinations for people in those markets.
2/ Georgraphical disadvantage, as Australia is an end point, not a hub location.
3/ Yields are too low from Australia to justify many routes, other than a few ports in Asia, Europe and the US. The distance of flights, along with the associated aircraft ultilisation requirements which that imposes also, and the ability to charge higher fares to fill seats make it all a very hard mix to make things work.
4/ Higher wages required in this country, which puts the carrier at a disadvantage.
Quokka From , joined Dec 1969, posts, RR:
Reply 17, posted (4 years 5 months 1 week 4 days 22 hours ago) and read 10131 times:
Quoting NZ107 (Reply 13): EK has basically every major city sewn up and many frequencies to go with that
EK certainly offer more destinations than QF, with the added bonus of only requiring one stop. Due to the points raised by IndianicWorld, QF have relied on forming alliances with other carriers. Yet many passengers may prefer to deal with just one airline believing, rightly or wrongly, that there are fewer chances of things going wrong if fewer carriers/ people are involved.
Zeke From Hong Kong, joined Dec 2006, 9481 posts, RR: 76
Reply 18, posted (4 years 5 months 1 week 4 days 6 hours ago) and read 9741 times:
Quoting AirNiugini (Thread starter): Recently as I%u2019ve been perusing the news and various other aviation related sites, and I have noticed that the Australian airports have reported record passenger growth especially from China.
While some growth has been from China, and QF has also expanded services to China, QF is getting competition from many angles.
9V-SVC From Singapore, joined Oct 2001, 1799 posts, RR: 10
Reply 19, posted (4 years 5 months 1 week 3 days 18 hours ago) and read 9402 times:
Just wondering will a full load 77W be able to fly to LHR ? I doubt so, look at the 744 or 380, they have to stop over in Singapore or Hong Kong just to get there, not to mention about 777s.
Yes, you guys maybe love the 777s, but the A330 is a great plane. Why did QF get the A330 instead of the 777s is up to them really. A330 is my favourite plane, but I am like you guys was stunned when QF announced the Airbus orders. Didn't see that coming, but nevertheless. The 787s are coming, and fits the network of Jetstar perfectly but I am wondering for QF, will the 787 be big enough flying long routes such as US. Unless Boeing decides to come out with the 787-10, the A350-900/-1000 may be a good deal for QF!
I think the 787 will be a great vehicle for BNE/AKL to LAX and maybe SFO too... SYD/MEL - LAX and flights to LHR are probably best suited to the A380 which I think is what's planned. The 787's will help with developing Asiapacific.
Maybe the A350's will be useful for South America, South Africa and Asia destinations like NRT and Shanghai.
smi0006 From Australia, joined Jan 2008, 1585 posts, RR: 0
Reply 22, posted (4 years 5 months 1 week 3 days 17 hours ago) and read 9273 times:
How does QF fare with regard to the utilization of their international fleet? Do they have the aircraft to regain their market share at the moment? Or will they have to wait for the 787s before going back on the offensive on the international front?
Quoting IndianicWorld (Reply 16): 1/ Continued major focus on SYD, which has an inefficient terminal layout, and the resulting move into markets like MEL and BNE by its competitors, who offer more convenient schedules to many destinations for people in those markets.
I agree I feel that this is a massive shame, both BNE and MEL along with PER are neglected rather badly! However I hope that more aircraft are delivered into the fleet Alan and his team may change their strategy somewhat recognising the potential that both these cities have.
Quoting IndianicWorld (Reply 16): 4/ Higher wages required in this country, which puts the carrier at a disadvantage.
I actually get the feeling that QF are reasonably well placed with regard to their labour costs. Their position can only improve as time goes on. With the creation of a new subsidiary to handle ground staff employment, along with subsidiaries for cabin crew employment (Qantas Domestic, Jetconnect, Qantas Cabin Crew Australia, Qantas Cabin Crew UK) their labour cost are only going to be reduced as their Qantas direct employees retire over the next decade. Whilst these costs may still not be as low as their Asian or Middle Eastern competitors they are certainly more competitive.
I feel that with some new fresh blood entering the front line ranks along with product improvements (A380 seats and IFE being fitted to the 744 fleet, upgraded domestic product) combined with the fleet refresh QF are reasonably well placed so that if management are innovative and bold enough they can recapture some of their market share. However as always with this industry much of the market influences are far from the control of the airlines and very much in the hands of fate!
mdavies06 From United Kingdom, joined Aug 2009, 392 posts, RR: 0
Reply 23, posted (4 years 5 months 1 week 3 days 12 hours ago) and read 9106 times:
Quoting AirNiugini (Reply 15): Quoting NZ107 (Reply 13):
There isn't much of a need for QF to try and wrestle some passengers off EK especially since EK has such an impressive array of destinations and QF would likely only be carrying O&D traffic which is quite pointless for a lot of people who fly QF
This is true. However, the largest transfer market is the UK, and the largest market for the UK is LHR and BA flies LHR-DXB 3x daily, so there is a possibility of getting some good feeds from BA flights if the flight connection timing can be worked out.
The Coachman From Australia, joined Apr 2001, 1434 posts, RR: 0
Reply 24, posted (4 years 5 months 1 week 3 days 10 hours ago) and read 9037 times:
Quoting mdavies06 (Reply 23): This is true. However, the largest transfer market is the UK, and the largest market for the UK is LHR and BA flies LHR-DXB 3x daily, so there is a possibility of getting some good feeds from BA flights if the flight connection timing can be worked out.
With all due respect this argument does not follow.
QF already flies to LHR with its own metal from SYD (x2 daily) and MEL (1 x daily and a number of times per week via HKG). BA flies to SYD 2 x daily from LHR.
Unless there is traffic that wants to do business in DXB and LHR (of which there probably is a proportion) what your argument propounds already exists.
Your argument sounds a bit LHR-centric to me - which is BA's mirrored problem to QF's SYD-centricity at the Antipodes. EK offers multiple flights ex MAN, BHX and a range of other UK cities without the need to go via LHR which you must do if you use QF/BA. QF tries via its flights to SIN from BNE, PER, ADL but it funnels them into LHR. If you want to go say from PER to BHX, EK is a no-brainer if you only want 1 stop.