ytz
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DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 6:04 pm

This is going to sound like a silly noob question. But I've always wondered by QF (or any other Australian airline) never cultivated DRW as a Kangaroo hub. Seems like an ideal location for a cheap hub that they could to all the major Australian cities on the East and South-East coasts.

If you look at gcmap, it's only at the most 100nm out of the way on routes from LHR to BNE, MEL and SYD and usually a max of about 150nm out of the great circle distance from BOM or DXB. One would think, this would be a solid place for any Aussie airline to base its long haul fleet to serve South Asia, Europe and the Middle East and then run frequent short-haul service to the East Coast.

This would seem to me to be wiser in the long run than further bolstering Singapore, as QF is doing now with JQ.
 
jetsetter629
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 6:14 pm

JQ uses DRW to serve several cities in Asia - DPS, SIN, MNL, and SGN
 
ytz
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 6:16 pm

Quoting jetsetter629 (Reply 1):
JQ uses DRW to serve several cities in Asia - DPS, SIN, MNL, and SGN

But why not Europe, South Asia, and the Middle East?
 
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 6:17 pm

Quoting YTZ (Thread starter):
This would seem to me to be wiser in the long run than further bolstering Singapore, as QF is doing now with JQ.

The population of Darwin is 127,500 and the city has nothing going for it - no international business hub, no mining... nothing that would attract passengers.

Singapore has a population of about 5,000,000 (not to mention being a major Asian economic area) as do both Sydney and Melbourne, with Brisbane not far behind.

I think that speaks for itself really.
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ytz
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 6:33 pm

I get that Singapore is an economic centre. But that also means that SIN has SQ.

In the USA, airlines sometimes have hubs which make geographic sense but aren't necessarily as significant economically. Heck, this happens internationally. DXB is far more valuable geographically than economically.

I would think that an airline could use DRW specifically as an LH/ULH hub to Europe, ME, SA while treating SIN as a focus city with more frequent service from SYD, MEL, BNE on smaller aircraft. The advantage being that the airline gets a hub that they virtually own. Heck, I would think the authorities in DRW would give them the airport for pretty close to as free as possible, and with as few restrictions (noise, environmental, etc.) to make this scenario happen.

[Edited 2011-10-01 11:37:00]
 
steex
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 7:11 pm

Quoting YTZ (Reply 4):
In the USA, airlines sometimes have hubs which make geographic sense but aren't necessarily as significant economically.

I can't think of any examples of this today, really. Successful airlines only hub in cities that are economically viable, and regardless of that fact, geographic advantages within the USA are usually are at a regional level, not a worldwide level. The closest example I can think of is ANC for AS - though Alaska has a vibrant economy, so it's not purely a geographic consideration. Regardless, ANC should theoretically have a huge geographic advantage over larger cities in the lower 48 for flights to Asia - however, they are still long flights, and Anchorage isn't big enough to support regular scheduled service. The true strength of ANC is as an ideal hub for intra-Alaska service, where there is significant O&D, and as a sensible location to funnel traffic to and from the lower 48 (particularly Seattle) due to the O&D to both support the flight on a yield basis and provide a large enough volume to support many flights.

Comparatively, Darwin is even smaller than Anchorage and doesn't have as many economic advantages. Any DRW-Europe flight would be much longer than an ANC-Asia flight, yet would actually have even less demand to support the flight. Given how extremely difficult it is to make money on the Kangaroo route, the airlines need to rely on high yield and high demand for the intermediate destinations (i.e., SYD-SIN and SIN-LHR) to help prop up the service. It would be virtually impossible to collect high yield passengers DRW-LHR and there would be no fare premium or benefit to pax for routing SYD-DRW-LHR instead of SYD-SIN-LHR, so the economics just wouldn't work.

BTW, as an even larger example, some might consider SLC to be a primarily regional/geographic hub for SLC. Salt Lake City (and surrounding area) is orders of magnitude larger than Darwin, yet the hub's purpose is largely to connect the greater DL network with the intermountain west and west coast. Despite a much larger city and significant hub banks, SLC still is only able to support limited intercontinental service (CDG and less-than-daily, seasonal NRT), and even that service is reliant on having major SkyTeam hubs on both ends. Darwin would have none of these benefits, but would need to support even longer (read: harder to make profitable) flights if Europe were served.

One could create a lengthy list of shorter routes than DRW-Europe that have much greater demand and no non-stop service. That pretty much demonstrates why DRW-Europe is not happening anytime in the near future.
 
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 8:11 pm

I visited Darwin last year. While it's a cool little city with a lifestyle and an appearance unlike any other place I saw in Australia, it definitely feels like a provincial town... the biggest thing it has going for it is that it's the capital of the NT. A lot of the people who live there work for the Territorial government.

I expect we'll see JQ continue to launch some markets from DRW with narrowbodies, as they've done with SGN and MNL (perhaps Kota Kinabalu or Surabaya will come next?) but it's just too small of a city to support a full-sized scissor hub that relies completely on connecting traffic. What's more, the current DRW terminal is already too small and would require pretty significant investment. When I was there, there were two Qantas 767s parked in the domestic sector (one to Sydney, one to Adelaide) and the departure lounge was wall-to-wall people.
 
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 10:34 pm

Quoting steex (Reply 5):
Quoting YTZ (Reply 4):
In the USA, airlines sometimes have hubs which make geographic sense but aren't necessarily as significant economically.

I can't think of any examples of this today, really. Successful airlines only hub in cities that are economically viable

DL has a hub in Detroit, the economy of which is not stellar to say the least.

As to the OP's question, since I believe carriers like QF have 5th freedom rights on BKK/SIN/HKG-Europe, it makes far more sense to stop there. That way they don't have to fill up a plane out of Australia with pax going to Europe - they can fill it with pax going to Europe or BKK/SIN/HKG (and there will be more of those than pax going to DRW), then pick up additional pax going from BKK/SIN/HKG to Europe and have a full flight for the second leg.

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steex
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 11:15 pm

Quoting Mir (Reply 7):
DL has a hub in Detroit, the economy of which is not stellar to say the least.

My point wasn't that the economy of each individual city that is home to a hub is great, but that the hub's performance must hold its own. Obviously, there is a vast difference between the ability to support longhaul ops at a city the size of Detroit and one the size of Darwin.

Regardless, while many portions of the economy in Detroit are in dire straits and the city proper suffers from severe poverty, the automotive industry still generates a large amount of air traffic and some areas outside Detroit are among the wealthiest in the country. It's not an accident that the only flight from the mainland USA to Nagoya is to Detroit rather than somewhere like San Francisco or Los Angeles (or that DL has continued to utilize DTW as its premiere Asian gateway).
 
mandala499
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 11:26 pm

Quoting YTZ (Reply 2):
But why not Europe, South Asia, and the Middle East?

Errr... no market and....

Quoting YTZ (Thread starter):
If you look at gcmap, it's only at the most 100nm out of the way on routes from LHR to BNE, MEL and SYD and usually a max of about 150nm out of the great circle distance from BOM or DXB. One would think, this would be a solid place for any Aussie airline to base its long haul fleet to serve South Asia, Europe and the Middle East and then run frequent short-haul service to the East Coast.

This would seem to me to be wiser in the long run than further bolstering Singapore, as QF is doing now with JQ.

In the days when QF built SIN as it's Roo route scissor hub, DRW was out of the question because it would require 1 extra stop. What aircraft could do, say, LHR-DRW non-stop on a financially feasible payload? Answer: None, until the last 10 years at least... even then, the amount of extra fuel one would have to carry... it is just cheaper to make the stop in SIN.
All else being equal, it is cheaper to stop at a mid-point of a long city pair if one cannot do it non-stop... and after a certain distance (depends on the aircraft, and wind, etc), it's cheaper to make a 1 stop even if you can go non-stop.

And then, you got the nice temperatures and cyclones in Darwin... Sorry, even Yangon could do better than DRW as a Roo-stop/scissorhub.

Mandala499
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mariner
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RE: DRW: Why No Kangaroo Hub?

Sat Oct 01, 2011 11:34 pm

Quoting Mir (Reply 7):
DL has a hub in Detroit, the economy of which is not stellar to say the least.

I wouldn't put Detroit and Darwin in the same sentence for a comparison.

Darwin is one of my favorite cities in Australia - and more so before Cyclone Tracy when it was a wild - fun - frontier town of 45,000 people.

But it has problems and not just of size or lack of industry. You can't swim in the sea (lethal jelly fish) for several months of the year and summer is oppressively hot and sticky to the point that it is called "silly season" or "escort season" by the cops. The cops get to "escort" people who have gone "silly" from the heat to places with a better climate.

It has some virtue as a potential hub, but mainly to get to other parts of Australia or nearer Asia. It's the easiest jumping off point to get the mines of Kunnanurra or even, from points north, to the vast mining riches of the Pilbara.

So:

Quoting jsnww81 (Reply 6):
I expect we'll see JQ continue to launch some markets from DRW with narrowbodies, as they've done with SGN and MNL (perhaps Kota Kinabalu or Surabaya will come next?) but it's just too small of a city to support a full-sized scissor hub that relies completely on connecting traffic.

  

I can add a few more besides Kota Kinabalu and Surabaya, but they are all lower volume, A320 size/range places.

Now, if Broome - BME - had a full-on international airport that might be a different story. For my money, Broome is one of the most desirable places in the country, with one of the world's greatest beaches.

http://www.outback-australia-travel-secrets.com/australia_beaches.html

mariner

[Edited 2011-10-01 16:54:07]
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jsnww81
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RE: DRW: Why No Kangaroo Hub?

Sun Oct 02, 2011 2:22 am

Quoting mariner (Reply 10):
Darwin is one of my favorite cities in Australia - and more so before Cyclone Tracy when it was a wild - fun - frontier town of 45,000 people.

After visiting the Cyclone Tracy exhibit at the Northern Territory Museum I have a real appreciation for the fact that Darwin even exists today. What happened to Darwin makes Hurricane Katrina look like a small summer thunderstorm by comparison. I'd heard the city was hit by a storm in the 1970s, but I had no idea that it basically wiped the city off the map. Apparently there were serious proposals to relocate the entire city further inland, but the fact that the DRW runway survived the storm was a major factor in the decision to rebuild the town on the same site.

I spent about a week in the Top End - in Darwin and at Litchfield and Kakadu national parks. I think the whole area is really underrated, but the fact that the beaches are basically useless for most of the year is a big problem. But I digress...

Even back in the days of shorter-range aircraft, Qantas didn't really use DRW for much - route maps from the 1960s and 1970s show there was just a single stop on the way to and from Southeast Asia, and many of the Kangaroo Route flights bypassed it altogether, even in the days of 707s and DC8s. The terminal in those days - indeed, right up until the present building opened in the 1990s - was a converted hangar.
 
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RE: DRW: Why No Kangaroo Hub?

Sun Oct 02, 2011 2:39 am

To me its the same reason as why Canadian airlines dont have a hub at St Johns Newfoundland or American carriers at Bangor. Comparable cities or regions to Darwin. Great geographical locations but thats about it...
There is way way way to little local O/D to make any hub remotedly profitable.

Scissor hubs dilutes profits if there isnt a sizeable O/D factor.

Australia is high cost, Darwin might be possible to use for lowcost destinations where people only care about price. But it wouldnt be a hub for those that were travelling for business etc.
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mariner
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RE: DRW: Why No Kangaroo Hub?

Sun Oct 02, 2011 2:49 am

Quoting MillwallSean (Reply 12):
Australia is high cost, Darwin might be possible to use for lowcost destinations where people only care about price. But it wouldnt be a hub for those that were travelling for business etc.

As noted above, I think DRW could be extremely useful for flights to BKI or AMI and there is some Australian traffic to BPN, especially from the oil industry.

I seriously doubt any of those could support a widebody from MEL or SYD, but might support the A320 from DRW, if less than daily.

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RE: DRW: Why No Kangaroo Hub?

Sun Oct 02, 2011 9:10 am

Another problem is that Darwin is that even though it has came in range in last couple of years it requires very specific aircraft which was limited payload capabilities compared to the 747/A380 and you're still looking at a 5 hour flight from the East to Darwin then a ~20 hour flight to Europe. It's just much easier for everyone (except for 100K odd people) to transit in Asia.
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TN486
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RE: DRW: Why No Kangaroo Hub?

Sun Oct 02, 2011 11:10 am

This is from the Darwin Airport website, and interesting reading. Also a good look at the website may be informative.
http://www.darwinairport.com.au/property/master-plan
There are numerous reasons why you will never see a QF hub in Darwin, and the above is one of them, but I think you will see Darwin expand as an LCC hub, once the politics and economics sorts itself out.

Quoting mariner (Reply 10):
Now, if Broome - BME - had a full-on international airport that might be a different story. For my money, Broome is one of the most desirable places in the country, with one of the world's greatest beaches

Virgin and their tie-up with SIA may bring this to fruition in the medium term.
http://www.theaustralian.com.au/busi...dala/story-e6frg906-1226146194454.
(the last 2 para's are interesting reading).
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RE: DRW: Why No Kangaroo Hub?

Sun Oct 02, 2011 12:15 pm

Quoting YTZ (Reply 4):
In the USA, airlines sometimes have hubs which make geographic sense but aren't necessarily as significant economically. Heck, this happens internationally. DXB is far more valuable geographically than economically.

But the United Arab Emirates is deliberately building up DXB via EK for economic reasons. They know the oil won't last forever, so they want to develop Dubai as a major regional economic and tourist centre. They are taking advantage of DXB's location to do this, but the fact that so many other airlines are able to fly to DXB shows that it is developing along the lines the UAE government want.
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ytz
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RE: DRW: Why No Kangaroo Hub?

Sun Oct 02, 2011 3:23 pm

Quoting FlyCaledonian (Reply 16):
But the United Arab Emirates is deliberately building up DXB via EK for economic reasons. They know the oil won't last forever, so they want to develop Dubai as a major regional economic and tourist centre. They are taking advantage of DXB's location to do this, but the fact that so many other airlines are able to fly to DXB shows that it is developing along the lines the UAE government want.

Right. But I grew up in the UAE in the 80s when that airport hosted but a smattering of aircraft and EK had a handful of A300/A310s. When we moved to Canada in 1990, I actually had to show my school teacher where the UAE was in an atlas. Nobody cared or knew where it was. Even after the Gulf war.

So now if DXB could be built up by pretty much employing geographic significance why not DRW?

Keep in mind Dubai has never had that much oil to begin with. So it's not like they get tons of traffic servicing the oil sector. They have pretty much built up that city on the backs of an air hub, that was built largely because of geographic location.

Quoting MillwallSean (Reply 12):
To me its the same reason as why Canadian airlines dont have a hub at St Johns Newfoundland or American carriers at Bangor. Comparable cities or regions to Darwin. Great geographical locations but thats about it...
There is way way way to little local O/D to make any hub remotedly profitable.

Except that no Canadian airline needs to stop on the way to Europe. There have been aircraft that could fly from central Canada to Europe for decades now. The days when Gander was a fuel stop have long passed. But in the case of Australia, if you're going from the East or South-East, you still have to stop somewhere.

I am just wondering if local O/D makes that much of a difference. Especially where there's strong competition (like SQ). Does QF get that much fifth-freedom traffic from SIN?

[Edited 2011-10-02 08:47:34]
 
mandala499
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RE: DRW: Why No Kangaroo Hub?

Sun Oct 02, 2011 5:31 pm

Quoting YTZ (Reply 17):
So now if DXB could be built up by pretty much employing geographic significance why not DRW?

DXB, as you know, was traditionally a stopover point (along with competing places like BAH, AUH), and supported by economic policies to encourage people to invest, or just transit there.

Now, what's the geographic significance of DRW? You actually answered it yourself but it appears you're not seeing it.

Quoting YTZ (Reply 17):
Except that no Canadian airline needs to stop on the way to Europe. There have been aircraft that could fly from central Canada to Europe for decades now. The days when Gander was a fuel stop have long passed. But in the case of Australia, if you're going from the East or South-East, you still have to stop somewhere.

Australia to where? East Asia? No need to stop somewhere...
So we're back to Australia to Europe. Remember one thing, fuel, has to carry itself. The more fuel you carry, the more you burn just to carry it so you can burn that amount later.

Let's say, LHR-SYD... and let's not use the damn great circle line, and just the airways...
9400NM eastbound, 9337NM westbound.

LHR-DRW-SYD, eastbound: 7696NM + 1780NM = 9466NM, westbound: 1764NM + 7670NM = 9434NM, average: 9450
LHR-SIN-SYD, eastbound: 5496NM + 3449NM = 8945NM, westbound: 3409NM + 5923NM = 9332NM, average: 9138.5

Well, have a look at, say for the 777-300ER:
http://www.globalsim.web.id/publicservice/773PLDRange.jpg
Go and figure out, which of LHR-DRW-SYD and LHR-SIN-SYD can carry more payload?

We haven't even put wind into account here (headwind heading west) which could significantly increase the air distance with headwind... and the longer you go, the more severe the increase proportion of air distance comparing with shorter legs... therefore further hampering the payload capability numbers!

Long haul ops without cargo is DAMN EXPENSIVE! (and can make the ticket literally, out of reach). Cargo contribute significantly to the revenue, and helps a lot in making the ticket prices affordable. QF has fifth freedom cargo and pax rights out of SIN... go and figure why they picked SIN instead of DRW.

Why do you think cargo airlines still stop at the middle east? Simple answer: better payload capability... Emirates, benefits from that particular fact... and it was the basis for its ability to expand into secondary markets from DXB, turning DXB into a hub as we know today.

Now, tell me, how can you make a non-stop LHR-DRW with significant payload? (take into account the wind, which a 50kt average headwind will make that 7700NM leg to be 8600NM or so, and a 25kt headwind into 8200NM or so)

Mandala499
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ytz
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RE: DRW: Why No Kangaroo Hub?

Mon Oct 03, 2011 6:24 pm

@Mandala499

Thanks for that very detailed response. It fulfilled my curiosity. It's these kinds of posts that make a.net worthwhile.
 
RyanairGuru
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RE: DRW: Why No Kangaroo Hub?

Tue Oct 04, 2011 1:19 am

Quoting mandala499 (Reply 18):
Long haul ops without cargo is DAMN EXPENSIVE! (and can make the ticket literally, out of reach). Cargo contribute significantly to the revenue, and helps a lot in making the ticket prices affordable. QF has fifth freedom cargo and pax rights out of SIN... go and figure why they picked SIN instead of DRW.

Why do you think cargo airlines still stop at the middle east? Simple answer: better payload capability... Emirates, benefits from that particular fact... and it was the basis for its ability to expand into secondary markets from DXB, turning DXB into a hub as we know today.

Similarly, why the majority of EK flights from the East Coast to Dubai still stop in BKK, KUL or SIN. Yes the (newer) 77Ws plus the A345s and A380s can make it non-stop, but EK like to fill their planes to the absolute gunnels which isn't always possible flying 15 hours westbound.

Quoting TN486 (Reply 15):
Virgin and their tie-up with SIA may bring this to fruition in the medium term.

Interesting. Thanks for that. I would also suggest DRW, possibly even KTA or PHE for mining. And can the 738 make it SIN-CNS? Surely that must be #1 if it can: given the number of British tourists who go to CNS and the fact that there is no one-stop service to Europe should mean that with VA's (relatively) low cost base that it could be done.
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