Simpilicity
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QF Response To OzJet Busines Class?

Thu Nov 10, 2005 7:14 am

How will QF respond to OzJet business class at full economy fares?

QF won't have a lot of room to move. They make a lot of money out of business types who pay full Y & they can't drop these fares.

Will they thrown f.f. points around or give away f.f. seats (at times when they f.f. seats are always available) or give away limited QF club entry?

OzJet who should be launching this month in Australia between SYD/MEL will allow 15 minute check in with up to 3 pieces of carry on baggage.

How can they do this? Easy, they're aiming at business market or those current paying fully flexible economy fares (business types/public servants) on the "big red rat" (QF) & will only have 60 C seats 2-2 x 15 rows on each 737.

OzJet's overheads will be incredibly low, so QF would be nuts to try & take them on price wise. QF could try & make a big deal about how old OzJets 732's are, but they have to be careful as some of their 743's are early 80's models.

Or might QF do a Southwest & give away a bottle of booze or something else with a reasonable perceived value?

Can anyone suggest how QF might respond?

One things for sure it's going to be interesting, especially as OzJet have said they should have 12 x 732's flying by mid-2006 & will be flying to all Australian capitals inc. PER (only nonstop from ADL initially) it certainly wouldn't be hard to find more if required. Apparently if non peak hour flights aren't busy they'll just park them for a few hours, as they are not paying any leasing fees (except maybe on paper) on the European (EAAC) aircraft.
 
YUAMB
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 7:34 am

I dont think QF has a problem until OzJet gets the planes to fly enough frequencies to compete with them. What frequencies will they be flying SYD-MEL at? I highly doubt they would be able to match the cityflyer service of flights every 30 minutes. I would say this would appeal to the business traveller.

On top of that, what about reliability? If an OzJet plane needs to go to maintenance, they dont exactly have much to step in. Qf would have no problem however.

In the end, i think people are going to look at the two and when they see a fancy business class seat on a unknown new airline flying every few hours compared to
a normal economy (which isnt that bad anyway) seat on a proven reliable safe airline, then QF (or even VirginBlue) will be chosen, but thats just me.

Id still give OzJet a shot just to fly on the 732. Apart from that, unless they happen to have a flight at the time i want at a price much lower than Qantas or VirginBlue, then i dont think ill bother.
 
HKGKaiTak
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 7:39 am

My guess is they won't really respond, they don't really need to ... but, I suspect if they have to they could:

- Promote their more frequent schedules - Ozjet might have business class seats and late check-in etc, but they don't have nearly as frequent schedules as does QF.

- Promote their newer aircraft - I think both QF and DJ will find it irresistible to get mileage out of the fact that it runs 737NGs as opposed to Ozjet's much older 732s.

- More FF points - perhaps full economy on Cityflyer routes will get more FF points or some sort of extra sweetener here, although whether any of the FFs can redeem these extra points is another matter.

- Higher Commissions - Ozjet made a song and dance about how they were going to pay travel agents whereas QF pays nothing meaningful - I can see both QF and DJ waiting and seeing how much business corporate agents are giving Ozjet and then respond with added commission, perhaps again only on full econ?

- Sweeter corporate deals - perhaps QF can offer sweeter overrides on corporate bookings that they get cheaper fares the more they book QF, this can make corporates / agents think twice before booking Ozjet. Although with the way QF has been treating agents, I think this is unlikely unless Ozjet really is a success.
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mNeo
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 7:39 am

I think that that could work but if the flight was a little longer. SYD-MEL is not long enough to justfiy a customer to swtich his airline just to fly buisness.
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Simpilicity
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 7:57 am

Quoting YUAMB (Reply 1):
On top of that, what about reliability? If an OzJet plane needs to go to maintenance, they dont exactly have much to step in. Qf would have no problem however.

In the end, i think people are going to look at the two and when they see a fancy business class seat on a unknown new airline flying every few hours compared to
a normal economy (which isnt that bad anyway) seat on a proven reliable safe airline, then QF (or even VirginBlue) will be chosen, but thats just me.

OzJet will have plenty of back up aircraft, including Bae146-300's.

Hardly unknown, Stoddart's been running European for quite a while & doing vry well out of it.

QF economy inc. middle seat, just won't stack up against 2-2 business seating.

If QF even mentions how old OzJet's 732's are, there will be a photo of QF's dodgy old 743 in major newspapers.

I think QF are going to be in trouble, with very little room to move. Apparently, OzJet will start with 2 aircraft doing 8 flights a day in each direction MEL/SYD.

I do however, think they will eventually go 2 class, with maybe say 30 C class & 60 Y or something a similar, which give them a lot more flexibility.

Lastly, the aircraft will be available for charter at reasonable rates never before seen in Australia !!!
 
aussie_
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 9:20 am

Qantas already dropped their business class fares on major routes a couple of months ago in anticipation of Ozjet. The new rates are very close to the Full Economy fare level.

Simplicity - how much do you know about this aircraft charter side of things? Could you perhaps email me if you have further info? I am interested!
 
antares
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 10:12 am

I am not convinced Oz Jet understands who its customers will be.

The frequent (but no longer as high yielding as before) business traveller is predominantly drawn from corporate accounts, have little or no control over choice of carrier, and are largely unavailable to Oz Jet.

The rich individual market who already flies in domestic business class with Qantas and has club status and FF points is both very small in proportion to the rest of the market, and can't be prised out of the Qantas Club longes even with a crowbar.

The sole trader or SME independent traveller, the ones largely enticed to fly more often than before by the dramatic fall in fares in real terms since 2000, is a potential target for Oz Jet, but they currently have an FFP option with Qantas and will get one with Virgin Blue no doubt by the New year.

I doubt this last sector is sufficiently large to support Oz Jet, and it is price sensitive. It will pay a premium as it does now to fly Virgin Blue rather than Jetstar but it is difficult to see Oz Jet collecting a sufficiently high 'premium' over the current range of Y fares to survive.

Remember. Oz Jet will be stalked by the estalbished carriers using as much information they can extract from all distribution channels as possible, plus the inevitable 'spy' with a hand clicker working the gates when Oz Jet comes and goes.

Using such information the incumbents will selectively price against Oz Jet.

It is difficult to work out whether this is a dumber project than Rekkof's un-dead Fokkers. Probably not, At least it has some airliners to play with.

Antares
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 1:20 pm

Quoting Antares (Reply 6):
I am not convinced Oz Jet understands who its customers will be.

Think they know EXACTLY who their customers are:-

1) public servants who aren't at high enough level to fly business class at QF fares, but can on OzJet (wank value)

2) business types who fly a lot but in economy & sometimes get stuck in middle seat.
 
antares
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 2:29 pm

Simplicity,

If so they have identified people who will want to fly Oz Jet, or at least seriously think about so doing.

But both groups predominantly have no power over their choice of airline. Public servants largely fly how QBT (Qantas Business Travel) tells them to, just ask Virgin Blue and REX!

There is a pool of truly independent domestic business purposes travellers for Oz Jet to seek. A sub set of that group never bothers asking how much the fare costs because it doesn't matter to them and they usually fly in business class and will not be moved, be assured, out of their Qantas Club rooms.

The others can be won over if the price and schedule is right. But let us look at the nature of the market. There are no detailed impartial breakdowns of domestic travellers available. What we often do is set a line, say at $200 including all taxes etc, below which the customer is by far most likely to be a bargain hunting, seldom flying leisure traveller.

Above $200, the customer is more likely flying for professional reasons and far less likely to tolerate the conditionality of the very cheapest fares.

These genuinely independent business oriented travellers, largely self employed or working for the very few firms in the country who aren't counting every cent of their business travel budgets, may struggle to represent 5-6% of total passengers boarded country wide.

Oz Jet would find it hard to survive if it won 100% of that sector. Because of its limited network, it can only address about 50% of them anyhow, predominantly in the golden triangle.

It will be competing against Qantas Clubs, Blue Rooms and Suit Zones and barely concealed Qantas plans to offer upgrades galore to full Y passengers anyhow to remove them from the Oz Jet temptation.

So out of that notional 5-6% of the total business oriented market, Oz Jet will struggle to get a third, or about 2% of the total domestic market, if it lasts long enough.

I respect Mr Stoddart for having a go and risking his and his associates money. And they will loose it, all of it, every last dollar.

Antares
 
PhilSquares
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 2:31 pm

Quoting Simpilicity (Reply 4):
Hardly unknown, Stoddart's been running European for quite a while & doing vry well out of it.

I suggest you do a little more fact finding before you make a statement like that! Stoddard ran EAC into the ground. If his track record is to be used as a guide, he will do the same with OzJet.
Fly fast, live slow
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 2:35 pm

Quoting PhilSquares (Reply 9):
Quoting Simpilicity (Reply 4):
Hardly unknown, Stoddart's been running European for quite a while & doing vry well out of it.

I suggest you do a little more fact finding before you make a statement like that! Stoddard ran EAC into the ground. If his track record is to be used as a guide, he will do the same with OzJet.

From what I understand, he sold EAAC to a management company who stuffed it up & then, as they couldn't make 3rd progress payment, he took the compaany & aircraft back !!!
 
PhilSquares
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 3:51 pm

Quoting Simpilicity (Reply 10):
From what I understand, he sold EAAC to a management company who stuffed it up & then, as they couldn't make 3rd progress payment, he took the compaany & aircraft back !!!

That is totally incorrect. Stoddard had been trying to sell EAC, but no one would buy it for the price he wanted. He's the one that stuffed it up. I'm sure the same will happen at OzJet. He needs to decide if he wants to run an airline or F1 cars!
Fly fast, live slow
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 4:12 pm

Quoting PhilSquares (Reply 11):
From what I understand, he sold EAAC to a management company who stuffed it up & then, as they couldn't make 3rd progress payment, he took the compaany & aircraft back !!!

That is totally incorrect. Stoddard had been trying to sell EAC, but no one would buy it for the price he wanted. He's the one that stuffed it up. I'm sure the same will happen at OzJet. He needs to decide if he wants to run an airline or F1 cars!

He sold Minardi a while ago for USD$35 Million.

He sold EAAC, with 3 progress payments. They paid #1, #2, then asked for an extension on #3, which he gave, but they couldn't do it, so he took it all back.

That's the story, we 've been told & in the media here. I'm sure if it wasn't accurate, someone in the media, would have picked up by now.

Sounds like you have a grudge against him or EAAC? Did u used to work for them?

I think it's going to be hard to OzJet to not succeed. They'd have to try hard to fail, with his overheads so low. Lowest in Australia by far !!! & that's the name of the game, keeping costs LOW !!!
 
antares
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 4:22 pm

Simplicity,

If they were keeping costs low in the current fuel environment they wouldn't be using the 732 or as occasionally mentioned the BAe146.

If costs are to be kept low in maintenance and support they wouldn't be using either type of jet.

If they are to succeed despite those handicaps, they need to overcome the grip of the established brands and break the hold of corporate accounts over the selection of the carrier in which the overwhelmingly large proportion of frquent business travellers travel.

There are simply not enough people with the freedom of choice and price/value inclinations to feed Oz Jet.

Our discussion would be more meaningful if we were all allowed an insight by Mr Stoddart into his exit strategy.

Antares
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 4:54 pm

Quoting Antares (Reply 13):
If they were keeping costs low in the current fuel environment they wouldn't be using the 732 or as occasionally mentioned the BAe146.

If costs are to be kept low in maintenance and support they wouldn't be using either type of jet.

for 732's OzJet have got no aircraft leasing costs & have plenty of spares themselves.

As mentioned earlier, they can park aircraft for a few hours in the middle of the day, whereas QF & DJ must keep theirs moving due to leasing costs & overheads.

What would you rather do, fly in a nice new business class seat, with easy check in & carry on 3 bags, or sit in QF economy & have to wait at baggage carosel for bags to appear hopefully eventually.

Many people will give OzJet a go & many more have choice than you think, especially if it means spending less of the company they work for's money !!!

It took DJ a while but they now carry a good number of corporates, but they're always looking for more.
 
PhilSquares
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 5:38 pm

Quoting Simpilicity (Reply 12):
That's the story, we 've been told & in the media here. I'm sure if it wasn't accurate, someone in the media, would have picked up by now.

Sounds like you have a grudge against him or EAAC? Did u used to work for them?

Sorry to tell you it's not true. EAAC was on the block for over a year. The books never were fully audited because of problems at EAAC.

No, never worked for them, never knew anyone who did. However, I did live in the UK and knew all about them. If OzJet is anything like EAAC, you're in for a heap of trouble.

Stoddard will do things on the cheap. He will promise anything he thinks people want and will deliver nothing!

Quoting Simpilicity (Reply 14):
for 732's OzJet have got no aircraft leasing costs & have plenty of spares themselves

He might not have any leasing costs, but there are ownership costs. If he's not leasing the aircraft then he's tied up capital, not his own I guarantee you, to purchase the aircraft. Starting any airline with 737-200 is the most idiotic thing I've ever heard. Even a 3/4/500 makes more sense than that.

Low overhead? Maybe, but his direct operating costs are going to be sky high. Just take a look at what is CASM will be. Again, I think OzJet is probably the biggest joke in the world!

Sounds to me as if you have been drinking his coolaid. Perhaps a little too much of it!
Fly fast, live slow
 
6thfreedom
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 5:56 pm

Quoting Antares (Reply 13):
Our discussion would be more meaningful if we were all allowed an insight by Mr Stoddart into his exit strategy.

I suspect Stoddart's exit strategy will be to sell Ozjet in whatever shape or form its in to either SQ or EK.

Neither of these carriers would then need to fart around with the Australian authorities.

Pick up an 'australian' carrier for next to nothing, and use the Ozjet name for longhaul into North America. The name Ozjet would be appealing in the market...

Just imagine what 'Ozjet' would do as an 800 seat A380 outfit operating LAX-SYD for EK!
 
antares
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 6:29 pm

6thfreedom,

Interesting thoughts. But if my mail is correct, the low cost long haul subsidiaries of SQ and QF will have implimented large capacity long haul 'value' product jets long before Oz Jet, should it implausibly survive and expand.

Be absolutely assured, SQ and EK would have nothing to do with Stoddard.

The rules allow 100 % foreign ownership of a domestic Australian carrier by a carrier that doesn't already fly to this country, and up to (memory fade) around 35% equity if they already do. There is no issue with the authorites as you put it, the only issue being fitness to fly with an AOC (which is specific as to type) and how deep your cash reserves are in a market with two very profitable and well established groupings.

Antares
 
ANother
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RE: QF Response To OzJet Busines Class?

Thu Nov 10, 2005 6:29 pm

Quoting 6thfreedom (Reply 16):
I suspect Stoddart's exit strategy will be to sell Ozjet in whatever shape or form its in to either SQ or EK.

Correct me if I am wrong but I believe to operate in Australia you need to be owned, and controlled, by Australian (or New Zealand) citizens.

If EK or SQ wanted domestic feed operations, they would have found some way of doing so before now.
 
6thfreedom
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 5:42 am

Antares,

You may be right. i'll double check my facts.
perhaps i'm confusing it with the whole SQ/VS/DJ structurem which I think gave VS/DJ the first right to operate new routes ex-Australia with the DJ name.

But even with a 35% ownership, I think it would still be an attractive options for SQ should the Aust Govt keep up the barriers for SQ to operate to North America.

Also interesting to read that the whole Pacific access issue has caused such as a sh*t fight in Cabinet earlier this week.

No doubt that Costello and Vaile are supporting greater competition.

I wonder which pollies with QF Chairman Club access are against it??
 
antares
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 6:00 am

6thfreedom,

The important thing about SQ is that it was able to con Qantas massively over its interest in starting a domestic airline following the Ansett collapse.

Qantas was far more worried about that than Virgin Blue at the time, which only had 7 jets not the 51 flying today. So it gave SQ the most amazingly cheap pro-rata deals ever seen in Australia to connect secondary cities to SQ's Australian gateways. These were so cheap that QF oneworld partner CX has been vomiting ever since. But they also removed the 'threat' hollow that it was, that SQ would throw another $500 million on the barbie after already burning something like that amount of money on its error riddled tilt at effective control of Air New Zealand/Ansett as it then was.

I can't read the feral cabinet. I know what I'd like to see happen. Which is to on one hand open up Qantas to more competition where this is in the national interest, and on the other, repeal the Qantas sale act and allow it to capitalise on its good name and business plan and get the cheap cash it needs to compete fairly against SQ and EK.

Sadly, such neat solutions are often a pipe dream and the real world will no doubt bite us on the backside in various ways, but I hope not to the unfair detriment of Qantas.

Antares
 
gardermoen
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 10:06 am

Ozjet confirms schedules with flight set to start Nov 29 between MEL and SYD.

No matter who ends up flying them, good luck and I hope they last!

all details on their web site www.ozjet.com.au
 
Lufthansa
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 10:52 am

Quoting YUAMB (Reply 1):
On top of that, what about reliability? If an OzJet plane needs to go to maintenance, they dont exactly have much to step in. Qf would have no problem however.

The 732 is a good workhorse of a plane even though it is old. Guys this is going to be somewhat like the NWA DC0-9 situation. JT8D maintenance isn't too expensive because of the very big production run, so that shouldn't be too expensive. Also, the fuel burn of the 732 isn't THAT much more than the 735. Think of it like this. If fuel represents 20% of my CASM, and i bring a new aircraft onto the market that is 20% more efficient, my total fuel saving may be 20%, but my total operating costs saved is only 4%. This is the reason freight companies often use older aircraft, because they don't get the same kind of daily flying time, the financing costs (for newer aircraft) become more expensive and aren't offset by fuel savings.

Also think of it like this. Studdard is going to be employing young 20somethings F/A's who probably only make $27K per year, and who probably fly back to their base each night so they've got no hotel bills. Actually their wages could be lower than that again because they may only be needed part time, but it would be a similar hourly rate to $27 K per year. He could probably afford to offer business class at somewhere around the $160 mark for Syd-Mel. I wouldn't be surprised to see 'advance purchase' type tickets offered at these rates... Now if he stuck new interiors in these 732s, nobody would even notice their age. Anybody who has been on the NWA DC-9s can tell you passengers think they're on a new plane.

Ozjet may not need lounges... it could turns its gates or gate (they may only need 1) into a virtual lounge at each end, with italian furniture, drinks etc there and then.

Basically although i think this market is small...their may actually be some room for it provided they don't try and get too big.
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 11:24 am

thank you Lufthansa. Finally someone who knows what they are talking about.

As I said earlier OzJet's overheads will be incredibly low, but there will be a lot of public servants, who can't fly QF business & so could get stuck in middle seat in economy, who will be able to fly OzJet at their lower fares.

Plus there's a lot of business types who fly QF fully flexible economy, who would much rather fly OzJet business.

Have you seen the ridiculous queues at QF economy checkin lately especially in BNE. That's enough reason alone NOT to fly QF.
 
jupiter2
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 11:45 am

Simpilicity,

You would appear to be the one with the beef.... with QF. All your posts seem to be anti QF.

Anyway, I wish Ozjet well, but I give them 6 months, I hope I'm wrong.

Why do you think Public servants get a choice ??? Government is like any other business and has been mentioned they are either tied to QF or DJ and the individual rarely gets to choose.

I just hope for Ozjet that one of their you beaut, dirt cheap to own and operate 732's don't break down in the first couple of weeks of service. If one did and they are down to one aircraft for a couple of days, cancelling half their flights, the competition and the media will have a field day, not that I will believe it will affect all that many passengers.

RL
 
antares
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 11:54 am

Simplicity,

If you knew what you were talking about you would know that there are almost no public servants who get to choose who they fly with.

This is also true of private company business travellers to the extent that the larger the firm and the more frequent the individual flies, the more likely he or she does so as part of a business travel management system.

Now check these out. They aren't just there to book flights, they track expenditure, log GST inputs, record FBT liabilities, and produce data that can be analysed to a variety of criteria. If Oz Jet doesn't make itself part of these systems they are not in the hunt. Air travel per se is treated as a part of the total travel and entertainment expenditure component of doing business, and the new systems including so called self booking tools, which manage your executive employees bookings, rebookings, unsued e-tickets, refunds, expenses claims reconciliation and so forth save the corporations concerned huge costs in terms of accounting.

To them, Oz Jet isn't even in the dictionary. It took Virgin Blue a long time to work out how to go about being accepted by corporate accounts. Oz Jet needs to have a whole task force out their kicking down doors to deliver the same automated benefits to the major business travel generators, in the learning institutions, major law firms, retail giants, agricultural companies, and so on, to participate in any adequate manner in its target market. So far, it hasn't shown even a scintilla of evidence of understanding what it has to do to survive.

I agree about the queues. They are ridiculous. I like the kiosks but they don't always work.

Antares
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 11:58 am

Jupiter2 if OzJet had to they could change to 2 class very VERY quickly (for 3 aircraft talking a couple of days or nights), then they could do plenty of weird & wonderful fares/deals. (remember Southwest were on of Texas's biggest booze distributors at one stage).

Initially they don't have a tight schedule, yet they could probably do the famous Southwest 10 minute turn if they had to. They also have a spare aircraft sitting at MEL, so if required it could be in SYD in 90 minutes. (QF had a problem on one of 1st BNE/LAX nonstops QF175 & IT WAS 36 HOURS (YES 36 HOURS !!! ) before they got passengers finally on way to LAX.

Many business's travel policies have changed recently, including many public service departments, where they now must travel on cheapest fare. Public servants got around this, by saying they MUST travel at a time when opposition (DJ) didn't have a flight, but now many will prefer to fly OzJet than very ordinary QF Y class.
 
kiwiinoz
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 12:00 pm

My prediction, Ozjet will fail.

Sounds negative I know, but working in the travel industry, I am fairly confident in saying there is nearly zero interest from punters thus far. Not only are they suspicious of the company, (the average joe thinks the planes are too old), but they don't have strong enough distribution channels established yet.

They won't get the volume to remain profitable. Max 2 years.
 
jupiter2
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 12:26 pm

Simiplicity,

They currently have 2 aircraft, their schedule released today indictaes 8 daily flights on each of SYD/MEL and v.v. Now if another aircraft arrives between now and start up date they should be fine, but if there are only the 2, as I said before, a breakdown will be disasterous for the schedule.

If Ozjet could get a spare aircraft to SYD from MEL or the reverse in 90 mins they are going to be absolutley fantastic. Having the spare crew sitting around waiting for the hotline to ring, having the aircraft prepped, flight plans filed and of course slots arranged if it is peak times in SYD, will all point to one very slick operation, which obviously doesn't give a stuff about overheads of having, 1) an aircraft sitting idle for the occasional break down and 2) a very expensive crew sitting around playing solitaire on the crew lounge computer. So much for those low overheads.

As for the QF incident in BNE, they got caned for it, and rightly so.

However while it may be relatively easy for QF to find a 737 that is spare to cover for an aircraft break down, a 747 is another story. If you were to pull one off another route for example, then it has stuffed scheduling up for at least 36 hours for it flying the BNE/LAX route. The sensible thing to would have been to fly them down to SYD or better still, had one of the SYD/LAX flights stop in BNE, but even then seats would still have needed to have been available on those flights and since QF didn't, there probably weren't.

Anyway, probably wasting hot air over a company that will probably grace our skies shorter than Compass mark II. I'll just make sure I get my shots of those lovely 732's while I can.

RL
 
TBCITDG
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 1:12 pm

One must also look at FFP that will not be offered by the likes of Ozjet. They have no International affiliation with another airline and above all they will start off with a meager schedule.
I say all these things, because irrespective of whether or not there is a long queue to fly QF economy, they still have the schedule and the FFP.
I realize that things are expensive over at QF, but they do have the little 'extras' most business types are looking for!
 
PhilSquares
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 1:29 pm

Quoting Simpilicity (Reply 23):
As I said earlier OzJet's overheads will be incredibly low,

I don't think they'll be quite as low as you might think. I raised the issue of "ownership" costs v. leasing with you and you chose to ignore that. However, with a small fleet OzJet will not realize any economy of scale that is associated with a critical mass.

One other thing OzJet has to realize is the dispatch reliability of the 732. It's an old plane and things do break. I personally think the delays will give him so much bad press OzJet will never be able to overcome that alone!

Stoddard has tried to make do with "low overhead". It didn't work with EAAC and it's not going to work with OzJet.
Fly fast, live slow
 
Marara
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 2:33 pm

As aussie_ has said QF have already intro'd near Y fares, but from what ive read these are only available at off peak times.

DJ are about to launch their long awaited frequent flyer program and upgrading their blue rooms.

It will be interesting to see what happens when Ozjet start. They are going to be paying 5% commission + overides, they will be loaded in the CRS (much easier to book and compare than w/ DJ). I will be deff. be offering O7 to my corp clients. Only other thing they need is a good Frequent Flyer program and lounge access

Btw. just check the fares - Ozjet fully flexi fares are 100 dollars cheaper than the QF D class. Could be interesting
I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
 
antares
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 3:45 pm

Marara,

DJ fares have been accessible by the GDS for a while now, although not the web specials. If your agency uses ARNOLD technology, our own homegrown and very good booking tool, your clients can book and pay any combination of single sectors on JQ,DJ and QF to assemble a return trip with only a single transaction.

So the computer res system advantage you speak of has already been shot down, in so far as people are using ARNOLD. Look it up, there is quite a few.

I'd agree about the value pitch Oz Jet is making to potential customers, and good luck to them. My beef is that the pool of potential customers able to make those choices for themselves, and who are regular frequent travellers is very shallow.

Winning over the occasional 'novelty' value customer who is only going to fly several times a year is dead useless in terms of Oz Jet surviving.

Oz Jet will win a lot of respect including from me if it can totally overturn the existing anti-competitive road blocks in the corporate travel distribution system. But that is not only a daunting task, I don't think Stoddart even realises yet that it is a task critical to his own survival.

He needs to file a reference for action against the relationship between big corporate and government accounts and the GDS and the incumbent carriers with the ACCC. The legal resources required, and the general reluctance of the competition watchdog to bite hard enough to draw blood makes this problematical.

Really what we are looking at is an interesting idea, using old jets that need intensive care and heaps of fuel, for a business case based on a set of false assumptions, in a very small market where his competitors are rolling in dough.

Antares
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 3:52 pm

I think OzJet gates will be "lounges". They are talking 10-12 aircraft by middle of 2006.

Re f.f. points.
Another major downgrade of QF's programme is in the wind. The U.S. legacy carriers want to wind back their progrmmes without pissing off too many people, but many Australians are already pissed off with QF's programme as many aren't getting the points from their credit cards that they used to.

QF even charges a credit card surcharge !!!

Besides many businesses now offer cash discounts, when NOT using credit cards & that area is growing, with the enormous explosion in the cash economy since GST came in or about 12 month after, when people realised how easy it is to fiddle the system. (those who kept cash in the past now keep the same cash +10%).

So people in a lot of cases are paying extra for goods & services by using their credit cards, to get points they can't use when they want to. They don't understand or care, that QF wants to provide f.f. seats when they otherwsie can't sell them anyway.
 
Marara
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 4:20 pm

Simpilicity,

if you are paying cash at a travel agency you are able to get a 1% discount, the agent just needs to know about the entry - most dont ( but it wont make up for the service fee). There is no way to fiddle the GST with airfares though. -- Not that i know of yet haha

Antares,

I have seen DJ (and JQ) in the CRS for a while now and it is good for comparing but if you book through the CRS the fares are approx 20$ more expensive and as you said the specials arent loaded, we often compare or WPNI a fare in sabre and then book the fare through the DJ agents page. But it is a pain to try and get the PNR details from the agents page to tramada or other back office systems. What takes three keystrokes in Sabre takes 5-10 minutes typing through DJ and the back office system. It can be a total night mare if a client needs to combine Qantas, Jetstar and Virgin.

The fact that you will be able to mix and match carriers on one PNR will be great - I'd say O7 will go for a 24hr TTL same as QF which will make life easy.

I have had a look at the Arnold system, and agree that it has been well though out. Downside is that it is quite pricey - i havent looked to see if it 'talks' to Tramada or any other back office system.

That said, as long as DJ continues to support us I will push their fares over the QF alternative. DJ also have VERY VERY helpful and friendly staff - dont you wish you got DJ service everywhere LOL.
I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 4:30 pm

Quoting Marara (Reply 34):
if you are paying cash at a travel agency you are able to get a 1% discount, the agent just needs to know about the entry - most dont ( but it wont make up for the service fee). There is no way to fiddle the GST with airfares though. -- Not that i know of yet haha

Sorry I wasn't referring to domestic airfares, but rather general retail etc.
 
antares
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 5:09 pm

Marara,

Thanks for the feedback on DJ. I quite like them too, although I'm not sure who is going to end up with control or what that group, if there is a change, might do with it.

Simplicity,

Sorry if I've been a bit abrupt about Oz Jet. Its good to see people have a go, but compared to Virgin Blue, Impulse and dear old Compass 11 they have the worst business case of all insofar as we have seen any detail.

I still have memories of Compass 11 flogging books of coupons to businesses, and of course they had a business class of from memory 16 or 20 seats in the MD-83s(?). They had some interesting ideas from Sam Coates who ran them during their short life, which is a tale for another time.

Maybe Oz Jet will surprise all of us with some innovative sales ideas. I promise to keep an open mind on that.

Antares
 
PhilSquares
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 9:29 pm

Quoting Simpilicity (Reply 10):
From what I understand, he sold EAAC to a management company who stuffed it up & then, as they couldn't make 3rd progress payment, he took the compaany & aircraft back !!!

Seems as if things aren't too good at EAC right now. Most employees have been made redundant and they're shutting down operations. Apparently Corsair have pulled the plug on the EAC contract due to non-performance on the part of EAC.

Why should OzJet be any different?
Fly fast, live slow
 
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 9:36 pm

Quoting Simpilicity (Reply 33):
Another major downgrade of QF's programme is in the wind.

Oh really?

In relation to credit card points alone, or something else? Do tell.

As long as it's not to status credits, I really couldn't give a damn. QF Gold is well worth it, QF platinum would be even better (I'd be in the lounges all the time on drinking binges! hehehe!)

Trent.
I do quite enjoy a spot of flying - more so when it's not in Economy!
 
7LBAC111
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 9:57 pm

Quoting Antares (Reply 6):
The frequent (but no longer as high yielding as before) business traveller is predominantly drawn from corporate accounts, have little or no control over choice of carrier, and are largely unavailable to Oz Jet.

True, but certainly in the UK, the majority of my accounts have clauses which allow employees to travel on alternate (nonpreferred carriers) IF they are cheaper. OzJet will be aiming for this segment in a big way.

Quoting KiwiinOz (Reply 27):
My prediction, Ozjet will fail.

Sounds negative I know, but working in the travel industry, I am fairly confident in saying there is nearly zero interest from punters thus far. Not only are they suspicious of the company, (the average joe thinks the planes are too old), but they don't have strong enough distribution channels established yet.

They won't get the volume to remain profitable. Max 2 years.

I assume you work in the leisure sector? If so, this isn't a market OzJet are aiming for, hence the lack of interest you refer too!

7LBAC111
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RichardJF
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RE: QF Response To OzJet Busines Class?

Fri Nov 11, 2005 10:45 pm

OZjet will get a very loyal following.
This may well get them past the lower reliability issue.
A lot of people are going to love a 2+2 737 over 3+3.

Just because it's a highly unconventional approach don't be so sure it won't work!
 
antares
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RE: QF Response To OzJet Busines Class?

Sat Nov 12, 2005 5:19 am

RichardJF,

An early problem is broken promises. It promised ad nauseum business class at economy fares. It is on the market as of yesterday at $305 one way SYD-MEL compared to $245 in flexible business friendly Y class on DJ and QF and to my amusement $250 last time someone here looked on JQ.

So the fares promise is stuffed from day one. Now lets see what happens to the reliability of the time table, which is sorta super important to business travellers.

Antares
 
RichardJF
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RE: QF Response To OzJet Busines Class?

Sat Nov 12, 2005 12:54 pm

You can't promote an airline for fat people which is what Stoddart correctly understood.
It's far better to pitch it as a business airline.

Day to day operational management is just a commodity skill.
I'm sure the guy he's got running it will be fine and things are always going to be a bit chaotic when your setting up.
 
antares
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RE: QF Response To OzJet Busines Class?

Sat Nov 12, 2005 12:58 pm

RichardJF,

Please explain the difference between 'a bit chaotic' and telling a porky.

He isn't doing what he promised he'd do. You've chosen an exotic definition of chaotic.

Antares
 
Marara
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RE: QF Response To OzJet Busines Class?

Sat Nov 12, 2005 1:02 pm

Antares

If you look at the fares Ozjet has out they are only the Ozbiz and Ozflexi or something similar. They haven't loaded the Ozsaver fares yet - the only extra condition on these fares is a change fee of $25 by the looks of it (plus the difference in fare) .

KiwiinOz,

I would say that Ozjet will have a better distribution set up than either JQ and DJ. Their inventory will be stored in Sabre and will be available to Amadeus and Gal by thurs this week, they will have a call centre and web booking. There is no extra charge to deal with a human, no credit card surcharge. The more I hear about the airline the more I like.

What O7 really need to do is to hire a heap of sales reps to get out and about and push their product quite a few agents are unfamiliar with whats happening at O7.

Lets just hope that they donate have any huge problems on start up. I would love to see this airline grow and give Qantas a bit of competition on the service front, they have had competition on price for a while now and they seem to have forgotten about the service.

Antares,

The company I work for handles a number corp accounts, most of them have a policy of taking 'the best fare of the day' but often they end up taking full Y tickets or travel on a more expensive airline (Qantas) because they need to connect to another airline or another flight. Our company provides the reports you mentioned above, as long as O7 is loaded in the CRS they will 'have access' to this market because most of the data in these reports comes straight across from the GDS and the rest if fed in by the consultant - in our system anyway.
I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Sat Nov 12, 2005 1:03 pm

Quoting Antares (Reply 41):
An early problem is broken promises. It promised ad nauseum business class at economy fares. It is on the market as of yesterday at $305 one way SYD-MEL compared to $245 in flexible business friendly Y class on DJ and QF and to my amusement $250 last time someone here looked on JQ.

So the fares promise is stuffed from day one. Now lets see what happens to the reliability of the time table, which is sorta super important to business travellers.

Antares

OzJet won't be competing with DJ or JQ. It's only QF they'll be competing against.

The last minute checkin, 3 bags on board weighing up to 20kgs, as well as if required 20kgs checked baggage is a huge benefit, especially for reps carrying lots of "stuff".
 
antares
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RE: QF Response To OzJet Busines Class?

Sat Nov 12, 2005 2:41 pm

Simplicity,

Being more costly than QF in economy by a large margin and cheaper than QF in J off peak by a small margin is not a very good start, and it wasn't what we were promised.

I don't buy the 'we are not competing with DJ or whoever line either'. I have no difficulty in envisaging either Geoff Dixon or Brett Godfrey or Paul Stoddart pretending to be Grandma when they are really the wolf.

We are about to see a wolf fight. Lots of fur and blood, and one casualty.

Antares
 
QFA001
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RE: QF Response To OzJet Busines Class?

Sat Nov 12, 2005 2:53 pm

Quoting Antares (Reply 46):
Being more costly than QF in economy by a large margin and cheaper than QF in J off peak by a small margin is not a very good start, and it wasn't what we were promised.

How about this chestnut (apologies if I'm repeating):

"Mr Stoddart said there was plenty of room for Ozjet in the local short-haul airline industry following the demise of Ansett, which created a void in the business class market.

"There is more than enough room for a little carrier that is going to offer a niche service looking at 1.8 per cent of market share," he said.

He said a price war would lead to "a downward spiral where there's just no winners".

"If we were looking to take 50 per cent of their (Qantas's) market share in the business market away, then I would expect a fight to the death (but) we have very modest expectations of market share," said Mr Stoddart, who sold the Minardi team to rival Red Bull F1 team."

- OzJet Sees No Qantas Price War, The Australian, 12-Nov-05

Stoddart obviously hasn't read Sun Tzu's Art of War, for he doesn't seem to know his most intimidating competitor at all. OTOH, he might be extending an olive branch in the hope that he isn't smited?

Quoting Antares (Reply 46):
I don't buy the 'we are not competing with DJ or whoever line either'. I have no difficulty in envisaging either Geoff Dixon or Brett Godfrey or Paul Stoddart pretending to be Grandma when they are really the wolf.

We are about to see a wolf fight. Lots of fur and blood, and one casualty.

How long do you think, Antares? OzJet doesn't appear to be capital rich, although they will have very low overheads. By the time it's all over, I don't think that we'll be too far into 2006...

 airplane QFA001
 
antares
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RE: QF Response To OzJet Busines Class?

Sat Nov 12, 2005 3:08 pm

QFA001,

Really don't know the answer. I agree with 'not long' on what we have been told, but we haven't been told if a rich (and ill advised) backer is behind Stoddart, even though I think we can rule out SQ or EK for a multitude of reasons.

I must admit to not being too excited about Oz Jet for the totally selfish reason that I can't see his operations altering the Qantas share price the way fuel, pestilence, and various other wild cards can, and they are the same set of risks that will hit all the players at the same time.

Qantas and Virgin Blue and the likes of SQ,CX, EK have the cash reserves to withstand a really serious hit comparable or even worse than SARS. But Oz Jet is really out there wearing a fig leaf, and that's before we ask outselves how they will get through the business-stops-flying-as-much-as-usual months of December, January, February and April.

The sky warriors they need probably won't even think about Oz Junk until March, and then they'll go away for all of April and come May not even notice that it is no longer there.


Antares
 
Simpilicity
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RE: QF Response To OzJet Busines Class?

Sat Nov 12, 2005 3:16 pm

Quoting Marara (Reply 44):
What O7 really need to do is to hire a heap of sales reps to get out and about and push their product quite a few agents are unfamiliar with whats happening at O7.

That's fine, but reps cost a lot of money.

A lot of reps work can be done via email. Obviously, nothing is better than a personal visit, but it's 2006 & everyone has to use everything they can to keep costs down.

Who said OzJet's peak hour C class fares are higher than QF's fully flexible Y class fares?