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Was QF Wrong In Blowing Out BA Tie Up?  
User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Posted (2 years 4 months 4 days 4 hours ago) and read 12305 times:

Considering QF's current problems would a tie-up with BA be a possible part solution and could the idea be back on the cards ?

http://www.telegraph.co.uk/finance/c...riend-could-ease-Qantass-pain.html


Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
55 replies: All unread, showing first 25:
 
User currently onlineRyanairGuru From Australia, joined Oct 2006, 5742 posts, RR: 5
Reply 1, posted (2 years 4 months 4 days 3 hours ago) and read 12253 times:

Quoting mikey72 (Thread starter):

Hmm, ultimately I think a merger is inevitable for QF. However I'm not sure that BA is the right candidate. Rather an Asian or (less ideally Middle East) carrier would be preferable.

A merger with BA would effectively keep QF in its current form from an operational standpoint. It is not clear to me that the synergies that a merger would bring would be sufficient to keep the current model viable.

The likes of EK have muscled QF out of Europe and they Chinese carriers (especially CZ) are EK-ing them to North Asia, and in particular China. They are definitely the secondary carriers to HKG and SIN with CX and SQ utterly eclipsing them in terms of frequency. While I think that QF have greater penetration into SE Asia than most people give them credit for, they are not well positioned for the Asian Century and the gradual moving north of Australia.

Therefore what the airline really needs is a very close partnership with an existing Asian hub carrier which would allow them the presence in Asia which they require via that hub and also more links to continental Europe than QF currently offer.

I don't think that RedQ could really be the answer here. They should be aiming for the sort of comprehensive network which would take years to develop, and also many markets which it would be good to connect to wouldn't be viable on Australian connections alone. Therefore they need an already established carrier which has that sort of presence and can feed secondary markets from all over the world.

Obviously CX is out of the question, SQ is about as unlikely as a merger between DL and UA, Japan is simply too far north/east to be a convenient hub from Australia (albeit perfect from North America).

Who is a "realistic" candidate I don't know. But either way I think if one were to materialise then they would be a better partner for QF than BA could ever be.


Just my 2c



Worked Hard, Flew Right
User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Reply 2, posted (2 years 4 months 4 days 3 hours ago) and read 12115 times:

Quoting RyanairGuru (Reply 1):
Who is a "realistic" candidate I don't know. But either way I think if one were to materialise then they would be a better partner for QF than BA could ever be.

I think so too.

That ship has sailed.



Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
User currently offlineSkidMarque From United Kingdom, joined Jun 2006, 87 posts, RR: 0
Reply 3, posted (2 years 4 months 4 days 2 hours ago) and read 11975 times:

Quoting RyanairGuru (Reply 1):
Obviously CX is out of the question

Just out of interest, why do you consider CX to be out of the question ?



DUCK !
User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Reply 4, posted (2 years 4 months 4 days 2 hours ago) and read 11929 times:

Quoting SkidMarque (Reply 3):
Just out of interest, why do you consider CX to be out of the question ?

They're too 'up themselves' maybe ?



Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
User currently offlineAndrensn From New Zealand, joined Jun 2012, 80 posts, RR: 0
Reply 5, posted (2 years 4 months 4 days 1 hour ago) and read 11712 times:

Maybe MH because they are joining OW soon and are well positioned in SE Asia
What do you think?
Andrensn


User currently onlineRyanairGuru From Australia, joined Oct 2006, 5742 posts, RR: 5
Reply 6, posted (2 years 4 months 4 days ago) and read 11575 times:

Quoting SkidMarque (Reply 3):
Just out of interest, why do you consider CX to be out of the question ?

CX and QF don't go out of their way to disguise their mutual hatred of each other. Remember what they say about keeping your friends close and enemies closer?  

TBH, I think a relationship between SQ and either QF or CX is more likely than CX and QF!

I'm not entirely sure what burned those bridges down, but I don't think that they are reparable.

Also there would be anti-trust issues on the HKG-Australia routes given that they are the only two operators (also SQ-QF to SIN)



Worked Hard, Flew Right
User currently offlineEK413 From Australia, joined Nov 2003, 4980 posts, RR: 4
Reply 7, posted (2 years 4 months 4 days ago) and read 11556 times:

Quoting SkidMarque (Reply 3):
Just out of interest, why do you consider CX to be out of the question ?

Considering the lack of co-operation between QF and CX I highly doubt a merger between the two carriers is on the cards and this was clearly indicated with the joint venture with MU and the launch of JetStar Hong Kong..

Quoting Andrensn (Reply 5):
Maybe MH because they are joining OW soon and are well positioned in SE Asia
What do you think?

Agreed and not to mention QF is currently assisting MH by training their A380 pilots  

           

EK413



Good evening, ladies and gentlemen. We are tonight’s entertainment!
User currently offlineqf002 From Australia, joined Jul 2011, 2987 posts, RR: 2
Reply 8, posted (2 years 4 months 3 days 23 hours ago) and read 11269 times:

I don't see a cross border merger on the cards... I don't think it would work at all, given QF's geographical and legal constraints. It's very hard to seek out operating efficiencies when the two airlines would be based at least 8 hours apart, and while QF is limited by the Sale Act.

I think there are three options:

1. Nationalisation. It really wouldn't cost all that much for the government to buy back the airline, but it would be crucial for it to continue to operate as a business. Nationalisation would allow for the large domestic profits to be used to offset losses incurred in a further reaching and more comprehensive international network. QFF would need to be spun off as a private business.

2. A merger with NZ. Makes very little sense, yet a lot of sense. The two airlines would remain distinct, operating individual brands and based out of their respective nations, but a lot of costs could be streamlined and saved. The high fixed costs (which is what overwhelms small airlines) would be drastically reduced and the two could continue to compete across the Tasman if the ACCC felt a merger would monopolise that market. That said, I think it's unlikely to happen. But it would be a good thing for both airlines if it did.

3. A close partnership with an Asian airline. It makes sense, but QF seems to be struggling, preferring to hang on with BA and try to crack the market themselves. I'm not sure who or how such a relationship would work, but QF needs to be investing more in the higher end Asian market rather than throwing everything behind JQ.

And just to mix things up, a fourth option:

4. Switch to Star. Sounds radical, but it makes sense to me. Oneworld offers virtually nothing in the region that QF needs to be investing in, Asia. I don't count CX given the complete lack of cooperation, so really all OW offers is JL, and soon, MH. JL is all wrong geographically, and MH is small and unstable.

Star would offer QF half a dozen local regional partners. It would offer UA and US in the United States (would only require a small change from the existing strategy, ie move from DFW to IAH or ORD and return to SFO), a decent African network and TK/LH towards Europe. The only issue could be South America...

Having said that, they have just finished alligning themselves closely to their partner hubs (ie SFO for DFW, EZE for SCL) so I seriously doubt it. But it could lay a very different path for QF if it happened.


User currently onlineRyanairGuru From Australia, joined Oct 2006, 5742 posts, RR: 5
Reply 9, posted (2 years 4 months 3 days 23 hours ago) and read 11240 times:

Quoting qf002 (Reply 8):
Switch to Star. Sounds radical, but it makes sense to me.

I've thought of that before. To me it makes perfect sense with NZ, SQ, TG and CA, not to mention LH et al to offer decent connections to Europe via a centrally located hub. UA and AA are interchangeable, and - honestly - I'm not sure that LatAm is a big enough market from Australia to loose too much sleep over.



Worked Hard, Flew Right
User currently offlineLOWS From Austria, joined Oct 2011, 1168 posts, RR: 1
Reply 10, posted (2 years 4 months 3 days 23 hours ago) and read 11144 times:

Quoting qf002 (Reply 8):
Switch to Star

Wouldn't SQ have something to say about that?

[Edited 2012-06-23 05:33:34]

User currently offlineFerminios From Canada, joined Apr 2011, 106 posts, RR: 0
Reply 11, posted (2 years 4 months 3 days 22 hours ago) and read 11079 times:

Quoting EK413 (Reply 7):
Quoting Andrensn (Reply 5):
Maybe MH because they are joining OW soon and are well positioned in SE Asia
What do you think?

Agreed and not to mention QF is currently assisting MH by training their A380 pilots  

           

EK413


In all honesty, I think MH have first to sort themselves out. Their net loss was $783 million dollars (2.5 Billion Ringgit) in 2011. I don't see that improving quickly given that they don't really have a lot of markets to fly their new toy the A380 to. Their 744 fleet was already well underutilized.  


User currently offlineEK413 From Australia, joined Nov 2003, 4980 posts, RR: 4
Reply 12, posted (2 years 4 months 3 days 22 hours ago) and read 10985 times:

Quoting Ferminios (Reply 11):
In all honesty, I think MH have first to sort themselves out.

In all honesty, I believe MH need QF... Not QF need MH...

I believe QF was in talks with MH well over 12 months ago, unfortunately it didn't materialise...

EK413



Good evening, ladies and gentlemen. We are tonight’s entertainment!
User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Reply 13, posted (2 years 4 months 3 days 20 hours ago) and read 10290 times:

If only BA and QF could cook up some arrangement with a middle eastern consort.....

[Edited 2012-06-23 08:10:49]


Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
User currently offlinelaca773 From United States of America, joined Nov 2004, 4050 posts, RR: 2
Reply 14, posted (2 years 4 months 3 days 20 hours ago) and read 10088 times:
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Quoting qf002 (Reply 8):

4. Switch to Star. Sounds radical, but it makes sense to me. Oneworld offers virtually nothing in the region that QF needs to be investing in, Asia. I don't count CX given the complete lack of cooperation, so really all OW offers is JL, and soon, MH. JL is all wrong geographically, and MH is small and unstable.

S

I believe you make a very good point, qf002. It may seem radical when you first think of it, but then again, it's really not. QF transferring, changing to Star would be a huge investment in the right direction for QF. Many of the areas where they lack connectivity, would be cleared up quite expediciously, help QF where they need it the most. It would also throw a wrench into the middle eastern airlines increasing presence in the South Pacific and allow all Star carriers to strengthen themselves respectively in areas where they lack, most importantly, QF in Europe and the strengthening they would garner in Asia would be quite remarkable.
Now that I think about it, I have to wonder why QF hasn't made a move, or sat down with Star. It seems very odd, the extreme dislike QF and CX have for one another considering they are a part of the same alliance and yet won 't work together.
QF definitely needs to make some changes and perhaps this is one of those hidden, obvious ones they need to seriously look at and consider.


User currently offlinegoosebayguy From United Kingdom, joined Sep 2009, 406 posts, RR: 0
Reply 15, posted (2 years 4 months 3 days 19 hours ago) and read 9580 times:

QF is probably a classic case of where well intentioned protectionist law designed to protect the main carrier has ultimately created a situation where that carrier is weakened. Unable to merge and be stronger QF is now left fighting its battles alone which will end in tears. Meanwhile BA has grown, has options and is able to be fleet footed if needed.

User currently offlinepoLot From United States of America, joined Jul 2011, 2261 posts, RR: 1
Reply 16, posted (2 years 4 months 3 days 18 hours ago) and read 9443 times:

Quoting goosebayguy (Reply 15):
QF is probably a classic case of where well intentioned protectionist law designed to protect the main carrier has ultimately created a situation where that carrier is weakened. Unable to merge and be stronger QF is now left fighting its battles alone which will end in tears. Meanwhile BA has grown, has options and is able to be fleet footed if needed.

The problem with QF isn't Australia's "protectionist" law, they don't differ all that much from other countries and in fact are more liberal than most when it comes to the domestic market. The problem is simple geography. Australia is a dead end in the world, it is not really in a favorable position to capture connecting traffic except to other parts of Australia and NZ. It is an isolated part of the world that needs long range jets and long (re: expensive) flights to major population centers in Europe and North America. Coupled with the fact that Australia is a rather small country (in terms of population) it means that new routes typically have to become viable due to more efficient aircraft rather than growing traffic on the route. It also in the end means that a merge with QF becomes less favorable to another carrier, because they end up bringing little to the table that they can't do themselves.

Compare that to BA, which is located in a country that can easily take advantage of the large transatlantic market with medium haul jets and is in a favorable location for capturing Americas-Middle East/India/Parts of Africa and Asia traffic. That is why BA has been able to grow with a large and flexible fleet, not because of protectionist laws or the lack thereof. And that is not taking into account the fact that London is a much much much larger market than Sydney.

[Edited 2012-06-23 09:44:10]

User currently offlinegoosebayguy From United Kingdom, joined Sep 2009, 406 posts, RR: 0
Reply 17, posted (2 years 4 months 3 days 18 hours ago) and read 9267 times:

Quoting poLot (Reply 16):
London is a much much much larger market than Sydney.

Probably because the London area population is larger than all of Australia?


User currently offlinepoLot From United States of America, joined Jul 2011, 2261 posts, RR: 1
Reply 18, posted (2 years 4 months 3 days 18 hours ago) and read 9188 times:

Quoting goosebayguy (Reply 17):
Probably because the London area population is larger than all of Australia?

Well yes, but I was pointing out other things that also work in BA's favor but not QF that have nothing to do with laws of the country. I didn't point out population size differences because that should be rather obvious to anyone, I was giving reasons on why QF has found it difficult to grow and find a partner to merge with. Population is important but not the only factor. The London metro area, for example, has a large population that the UAE, but that hasn't stopped EK from growing.

[Edited 2012-06-23 10:16:31]

User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Reply 19, posted (2 years 4 months 3 days 18 hours ago) and read 9131 times:

Quoting poLot (Reply 16):
Compare that to BA, which is located in a country that can easily take advantage of the large transatlantic market with medium haul jets and is in a favorable location for capturing Americas-Middle East/India/Parts of Africa and Asia traffic. That is why BA has been able to grow with a large and flexible fleet, not because of protectionist laws or the lack thereof. And that is not taking into account the fact that London is a much much much larger market than Sydney.

I agree with that except the bit about medium haul jets.

Most of BA's transatlantic capacity is on 'capacity' enabling jets which are obviously long-haul jets. The high premium loads on UK-USA flights make this possible whilst also enabling BA to send the same jet on a 6 hour trip to JFK one day then on a 14 hour trip to EZE the next etc etc

Last time I checked very few TATL routes on BA are 767 ?

(even those are -300ER so whilst smaller are not exactly medium haul either)

QF can only dream of this kind of simplicity.

[Edited 2012-06-23 10:20:31]


Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
User currently offlinepoLot From United States of America, joined Jul 2011, 2261 posts, RR: 1
Reply 20, posted (2 years 4 months 3 days 18 hours ago) and read 9026 times:

Quoting mikey72 (Reply 19):
Most of BA's transatlantic capacity is on 'capacity' enabling jets which are obviously long-haul jets. The high premium loads on UK-USA flights make this possible whilst also enabling BA to send the same jet on a 6 hour trip to JFK one day then on a 14 hour trip to EZE the next etc etc

I meant that BA has a large market within medium haul range, jets was a poor choice of words on my part, which are less costly to operate and allow for more flexibility for the airline in terms of aircraft choices. Because of the size of the market though, BA generally uses high capacity jets which as you pointed out, happen to be long range.


User currently offlinespud757 From United Kingdom, joined Nov 2007, 340 posts, RR: 0
Reply 21, posted (2 years 4 months 3 days 15 hours ago) and read 7890 times:

As OW alliance partners why doesn't BA-QF-MH sit down and work out how to set up a new JV using KUL as the new scissor hub (i.e. to replace the JV hub in SIN)? Why continue to use SIN as their hub with a new OW hub airport just a hop away on the Malaysian peninsula? BA and QF could still serve SIN from their LHR & SYD hubs should they so wish as a terminating destination rather than as a hub.

MH could provide regional feed along with a possible JefStar base at KUL into the BA-MH-QF longhaul network. The JQ base serving less premium orientated international regional routes where cost is more the issue.

On the kanagaroo routes BA terminate all Oz/NZ bound passengers on BA metal in KUL. Let QF/MH carry the pax onto Oz & NZ. QF terminate Europe (and possibly other west bound bound) pax in KUL letting MH-BA carry them onwards.

MH could also hand over to QF in SYD pax travelling onwards to N&S America.


User currently offlinepoLot From United States of America, joined Jul 2011, 2261 posts, RR: 1
Reply 22, posted (2 years 4 months 3 days 14 hours ago) and read 7460 times:

Quoting spud757 (Reply 21):
MH's are a big problem though. They killed the Air Asia tie up due to fears of job cuts, and they will do the same in any partnership with BA/QF. They definitely wouldn't welcome a JQ base.

Quoting spud757 (Reply 21):
MH could also hand over to QF in SYD pax travelling onwards to N&S America.
SYD is completely out of the way for passengers heading to North America, all major Oneworld customers will just go via HKG with CX. It is over 2000 miles shorter and CX serves more destinations. Qantas only serves SCL in South America, MH is not going to provide much traffic to that region.

[Edited 2012-06-23 14:36:47]

User currently offlineBA174 From United Kingdom, joined Oct 2009, 761 posts, RR: 0
Reply 23, posted (2 years 4 months 3 days 12 hours ago) and read 7049 times:

Quoting mikey72 (Reply 19):
Last time I checked very few TATL routes on BA are 767 ?

Depending on the season, there's a fair amount.


User currently offlineAirNiugini From Australia, joined Mar 2010, 245 posts, RR: 0
Reply 24, posted (2 years 4 months 3 days 12 hours ago) and read 6885 times:

What are your thoughts on a QF/TG tie-up? Something similar to what DJ and SQ have.

I hear a lot about the strength of SQ and CX, but not too much on TG. I think an alliance with TG would be more beneficial then one with MH. But I might be missing something here...

PX



Its time to fly!
25 qf002 : SIN has much (much) stronger corporate ties to SIN than KUL, meaning that QF needs to sustain a decent level of service to remain competitive against
26 mikey72 : Relative to the 744 and 777 ? I agree with you that there is a fair amount but looking at the bigger picture BA operates 21 767's compared to 100+ 'b
27 mikey72 : All i'm saying is that other airlines that have lost trade to the middle eastern carriers do have core markets that they can retrench to where like EK
28 JQflightie : Dont forget that MH did serve GRU via JNB , so sending passengers down via SYD might just work for South/North America flights, MH currently have a K
29 qf002 : CX sends their South American passengers via AKL on LA, so it obviously makes sense going that way. North America is very different though -- NRT is
30 mikey72 : Not for much longer.
31 MAS777 : Oh do tell... Last I heard BA just announced the closure of their office in Kuala Lumpur which takes effect 30 June.
32 Post contains images col : Codeshare with MH QF really needs to join Star, times have moved on. The reason for BA link nowadays is gone. Star offers them line within the region
33 Post contains images LAXdude1023 : If you think QF and CX are cozy, wait to you see what QF and NZ would look like. Throw SQ into the measure for good fun. Nah, QF is best of where the
34 Post contains links VV701 : Less than a year ago (Auust 2011) QF published a document, "Building a Stronger Qantas": http://www.qantas.com.au/infodetail/...a-stronger-qantas-pres
35 mikey72 : Oh really ? Oh well...lol.
36 mikey72 : I think Oneworld shoud give CX the boot. They're neither use nor ornament. Up there in their ivory tower.
37 EK413 : Considering CX is supporting UL entry into OW I doubt CX would leave quietly... EK413[Edited 2012-06-25 01:13:03]
38 mikey72 : Not leaving the alliance quietly would be about 'the only' thing they would put any effort into then. Great. How......useful.[Edited 2012-06-25 01:09
39 RyanairGuru : Not in Asia which is all that matters right now. IAH and DFW are interchangeable, FRA is preferable to LHR, and there are lots of Star hubs in Asia w
40 LOWS : is there some sort of reason why QF and CX don't get along, or is that just the way CX operates?
41 LAXdude1023 : MH is about to join OW which may be of good help to QF. They will probably be much better than CX at co-operating with other OW members. Don't forget
42 mikey72 : Why is KLM not called Air France ? Why is Swiss not called Lufthansa ? Why did BA and IB wrangle over the split percentages ? Does Australia really w
43 mikey72 : Although the smallest of the three alliances, Oneworld prides itself on connecting what it argues are the world's largest business markets, and there
44 mogandoCI : Star also has that but doesn't gloat about it Both have NRT and NYC Trade LHR for FRA+ZRH+BRU Trade HKG for SIN+BKK+ICN+PEK I'd make that trade off a
45 Mortyman : Would'nt Air New Zealand have a problem with that too ?
46 SCL767 : CX has a great relationship with LA and also routes their passengers traveling to LIM and SCL via JFK, LAX and SFO on LA operated flights. LA in turn
47 mikey72 : Without wanting to get into a classic A.net peeing contest....in the context of the parameters we're discussing i.e connecting the worlds largest bus
48 skipness1E : Their competitveness is constrained by laws preventing foreign investment and built to spread as much of the operation across the country as possible
49 RyanairGuru : MH and QF tried to get something up and running last year, but it looks like MH walked away Unless you are going to Japan (and maybe Korea) NRT or KI
50 Sydscott : Not if they merged with QF. That was the deal that should have been done. Then that merged entity should have combined, note the word "combine" as op
51 Viscount724 : MH has never served GRU. They served EZE via JNB and CPT.
52 fiscal : OK, Here's a tongue in cheek solution. Get the Australian government (or QF if they can raise the funds) to buy a small indian ocean island, or lease
54 Post contains images Sydscott : That will only work if the Red Roo is based in Indonesia and uses boats rather than planes to bring people in.
55 mikey72 : Maybe SQ want to salvage at least a token amount in terms of remuneration from their relationship with the Virgin brand ?
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