AR To Abandon Oceania, LA/QF Monopoly

PDPsol · Sat Nov 09, 2013 8:06 pm

I have no clue whether this topic was already discussed in the ex-SQ A340-500 thread. AR has, apparently, decided to drop its routes to AKL and SYD, leaving the entire market to oneworld members, LA and QF, effective April 2, 2014:

http://envivodesdescl.blogspot.com/2...as-argentinas-dejara-de-volar.html
http://envivodesdescl.blogspot.com/2...-de-santiago-se-convertira-en.html

En vivo desde SCL is a well-known regional blog covering commercial aviation in Chile and the southern cone region.

I would be [pleasantly] shocked if AR were actually focusing on financial criteria when making commercial decisions, rather than following directives from its controlling shareholder, the Argentine Republic.

There is an official announcement from AR as well:

http://www.aerolineas.com.ar/es-AR/Prensa/ComunicadosPorA%C3%B1o/2013

The announcement lays out plans for 2014

[Edited 2013-11-09 12:38:50 by SA7700]

MIflyer12 · Sat Nov 09, 2013 8:35 pm

Quoting PDPsol (Thread starter):
I would be [pleasantly] shocked if AR were actually focusing on financial criteria when making commercial decisions, rather than following directives from its controlling shareholder, the Argentine Republic.

Executive teams that ignore the wishes of shareholders have poor longevity in position.

AR's announcement, along with SAA's long-haul cutbacks, just shows that ULH flying is difficult, especially for carriers that lack economies of scale.

VCy · Sat Nov 09, 2013 9:01 pm

Shame to see EZE losing another long haul service! After SAA, Malaysian and QF now AR decides to abandon their longest route too. Who would of thought a route operated by 2 carriers up until recently would now not be served by any! Surely the market hasn't dried up all of a sudden.

LatinPlane · Sat Nov 09, 2013 9:13 pm

Sad news. AR has been flying its famous transpolar route since June of 1980.

http://www.youtube.com/watch?v=gqxLe8OPwvE

An old video showing one of AR's 742 making its regular tech stop in Rio Gallegos before continuing on to Auckland and Sydney circa 92/93.

AR385 · Sat Nov 09, 2013 9:37 pm

Quoting MIflyer12 (Reply 1):
AR's announcement, along with SAA's long-haul cutbacks, just shows that ULH flying is difficult, especially for carriers that lack economies of scale.

That route used to be extremely successful for AR. I guess the end of their monopoly on the route really hurt them.

Quoting VCy (Reply 2):
Surely the market hasn't dried up all of a sudden.

It hasn´t. Rather the offer has increased and AR can´t compete.

zkncj · Sat Nov 09, 2013 9:41 pm

Quoting PDPsol (Thread starter):
leaving the entire market to oneworld members, LA and QF, effective April 2, 2014

NZ has been planing on entering the South American market for a while now, this could be there chance to start the route.

Sydscott · Sat Nov 09, 2013 11:17 pm

Quoting VCy (Reply 2):
Who would of thought a route operated by 2 carriers up until recently would now not be served by any! Surely the market hasn't dried up all of a sudden.

Don't forget QF dropped EZE in favour of Santiago because of LAN's hub at SCL. Also the Argentine Govt didn't allow QF to interline with LAN Argentina.

It will be interesting to see if QF/LAN move to increase services. QF is already operating a 4th weekly service over the Christmas period and with the withdrawl of AR there is probably some more traffic to be captured. If the Argentine Govt also allowed QF to code with LAN Argentina they may find QF returning to EZE as well.

LAXdude1023 · Sat Nov 09, 2013 11:23 pm

Quoting zkncj (Reply 5):
NZ has been planing on entering the South American market for a while now, this could be there chance to start the route.

NZ could leap frog everyone and fly AKL-GRU. GRU is the ultimate prize in the South American market and with AKL's geographic position, it wouldnt be that much of a stretch to get there.

PDPsol · Sat Nov 09, 2013 11:48 pm

Quoting zkncj (Reply 5):
NZ has been planing on entering the South American market for a while now, this could be there chance to start the route.

NZ is, indeed, carefully evaluating launching a route to South America. However, as a Star Alliance member, neither EZE nor SCL offer good alliance connections. AR is a new Sky Team member, while LA is, of course, a founding member of oneworld.

LIM may offer NZ the best alternative, as it is home to Avianca Peru [formerly TACA]. Avianca offers non-stop connections to all major markets in Latin America from LIM, including BOG, EZE, MVD, GRU, ASU, VVI, UIO, GYE, SJO, SAL, HAV, CCS, POA, GIG and even SCL via H2.

Developing LIM is a major focus for Avianca and its subsidiary carriers and could offer NZ the best option for a route to South America. It would be wonderful to have non-stop flights to Oceania from both SCL and LIM...

zkncj · Sat Nov 09, 2013 11:58 pm

Quoting LAXdude1023 (Reply 7):

NZ could leap frog everyone and fly AKL-GRU. GRU is the ultimate prize in the South American market and with AKL's geographic position, it wouldnt be that much of a stretch to get there.

The main limiting factor would be the aircraft the 772/789 can't do it, the only aircraft that could do it are the 77W and 744s. The 744s are leaving in April and Sept and the 77W are fully used up on AKL-LAX-LHR and AKL-LAX and soon to be AKL-SFO with the extra 2x 77W arriving.

The only real option for for a 2014 start would be to keep the 744 in service, until they could get another 2x 77W.

Milesdependent · Sun Nov 10, 2013 12:06 am

If trying to get an award seat on QF is any indication of how successful a route is... SYD-SCL must be very good for Qantas. Absolutely impossible to find an award seat on the SYD-SCL. QF just do not release them, even 12 months out on day of release - nothing. With AR pulling out of SYD, I imagine it will get even worse.

Do QF have the rights to go daily?

PDPsol · Sun Nov 10, 2013 12:33 am

Quoting MilesDependent (Reply 10):
If trying to get an award seat on QF is any indication of how successful a route is... SYD-SCL must be very good for Qantas. Absolutely impossible to find an award seat on the SYD-SCL. QF just do not release them, even 12 months out on day of release - nothing. With AR pulling out of SYD, I imagine it will get even worse.

Do QF have the rights to go daily?

Hi Miles, QF and LA have a very tight relationship, with SCL offering excellent connections throughout the continent. QF is increasing frequencies from 3x to 4x, effective next month, for the southern summer season, while LA offers 6x, practically daily service, on the SCL-SYD route.

Now, with AR leaving the scene, QF will most likely want to increase service on the route, perhaps keeping 4x year-round, or even 5/6x. SCL is growing, very, very quickly, creating bottlenecks for existing infrastructure. There is a major expansion plan currently underway, expected by 2020, which will enhance capacity to 16MM passengers annually, followed by a further expansion to 34MM by 2034, excellent video here:

http://www.youtube.com/watch?v=TTRQ62iMcTs

http://envivodesdescl.blogspot.com/2...on-del-aeropuerto-de-santiago.html

Quoting LAXdude1023 (Reply 7):
NZ could leap frog everyone and fly AKL-GRU. GRU is the ultimate prize in the South American market and with AKL's geographic position, it wouldnt be that much of a stretch to get there.

GRU is, of course, the largest and most important market in Latin America. However, this facility is already capacity-controlled and a bit of a stretch for AKL. LIM may be the best option for NZ, as I described earlier.

LAXdude1023 · Sun Nov 10, 2013 12:44 am

Quoting zkncj (Reply 9):
The main limiting factor would be the aircraft the 772/789 can't do it,

Whats the range? I would think the 789 could easily do it even if the 772 couldnt. Its under 7500 miles. ORD-HKG is longer and it does the route. Perhaps its the polar nature of the route?

2travel2know2 · Sun Nov 10, 2013 1:06 am

If AR is leaving its transpacific route and NZ wants to jump into that market.

Quoting PDPsol (Reply 8):
LIM may offer NZ the best alternative, as it is home to Avianca Peru [formerly TACA]. Avianca offers non-stop connections to all major markets in Latin America from LIM,

And if NZ keeps its B767-300ER for a while more, AKL-LIM could be flown via RAR with no ETOPS issues.
There's little reason for NZ to fly to SCL or EZE as those aren't Star Alliance hubs.
Although GRU market has massive draw, NZ AKL-GRU may not be route possible to fly for the next years.
Best thing to do for NZ right now is to fly to LIM and offer immediate connections to/from GRU.

willzzz88 · Sun Nov 10, 2013 1:15 am

LAXdude1023,

The South Pacific route between South America and Australia/NZ has ETOPS problems with a polar routing. It's pure ocean unlike ORD-HKG which has some Russian and Canadian/American (Alaska) cities for diversion. For ETOPS the route would require routing north via RAR/PPT as a possible ETOPS diversion point.

willzzz88 · Sun Nov 10, 2013 1:26 am

And I TRULY believe Chile with the way its going it maybe the first South American country to achieve 1st world status (it already has a very high HDI). This route can only grow and allows QF/LA to capture on-ward connections to Asia.

A friend recently send me this:
http://www.youtube.com/watch?v=sXrUIFOh2zA

RyanairGuru · Sun Nov 10, 2013 1:32 am

Quoting willzzz88 (Reply 14):
The South Pacific route between South America and Australia/NZ has ETOPS problems with a polar routing

Exactly, there is literally NOTHING the entire way from Invercargill to Punta Arenas. Work on the basis that a twin isn't going to be flying these routes anytime soon.

Over the northern route there are quite a few diversion airports in Siberia, Alaska and far north Canada, which makes ETOPS basically a non-issue up there.

This is SYD-SCL with ETOPS 180:

Even a hypothetical ETOPS 240 would require a significant detour:

And finally, AKL-GRU at ETOPS 240:

You'll need a quad to fly this. Sorry to break it, but I doubt this route will happen.

(copyright Karl L Swartz)

LuisKMIA · Sun Nov 10, 2013 1:59 am

I thought ETOPS 330 has been approved for the 777 family and eventually the 787 family, which would solve this gap. I think that in addition to Oceania-South America, South Africa-Oceania is the other remaining ETOPS gap.

RWA380 · Sun Nov 10, 2013 2:13 am

Quoting LuisKMIA (Reply 17):
I thought ETOPS 330 has been approved for the 777 family and eventually the 787 family, which would solve this gap. I think that in addition to Oceania-South America, South Africa-Oceania is the other remaining ETOPS gap

This is about the Australian and New Zealand Governments rules on ETOPS rather than the planes capabilities.

Well so much for AR getting 345s to fly SYD/AKL .... where will those birds be flying to now? Everyone was so convinced. Wow!

[Edited 2013-11-09 18:15:49]

PDPsol · Sun Nov 10, 2013 2:14 am

Quoting LuisKMIA (Reply 17):
I thought ETOPS 330 has been approved for the 777 family and eventually the 787 family, which would solve this gap. I think that in addition to Oceania-South America, South Africa-Oceania is the other remaining ETOPS gap.

Yes, Boeing announced two years ago its 77L, 77W and 77E [with GE engines only initially, with RR and PW to follow] would be granted ETOPS 330 designation. Therefore, I do not see how this would be a problem for NZ, or even LA if they had to swap a couple 77W from their affiliate LATAM carrier, TAM/JJ.

http://boeing.mediaroom.com/index.php?s=20295&item=2070

A bigger issue for both NZ and LA will be when the 787-8 and 787-9 receive ETOPS 330 designation. That could truly make the South America-Oceania market a competitive one.

[Edited 2013-11-09 18:34:06]

willzzz88 · Sun Nov 10, 2013 2:56 am

LuisKMIA,

The South Africa-Brasil route (South Atlantic) from Johannesburg to Sao Paulo is fully compatible with ETOPS with SAA flying on some days a A332 by flying 30 minutes north to comply with ETOPS regulations. The continents of South America and Africa and quite close (it's the Atlantic after all). Emirates and Qatar fly a northern version of this route that completely transits African airspace.

Actually this route from Chile to NZ/Australia supposedly has higher yields than the other route based on award availability and ticket prices.

koruman · Sun Nov 10, 2013 3:17 am

Quoting LAXdude1023 (Reply 7):
NZ could leap frog everyone and fly AKL-GRU. GRU is the ultimate prize in the South American market and with AKL's geographic position, it wouldnt be that much of a stretch to get there.

I've written elsewhere that the existing AKL-PPT flight should be replaced by Air New Zealand with 789 (or 77E) services as follows via a Papeete scissor-hub:

SYD-PPT-GRU (codeshared with Virgin Australia, Air Tahiti Nui and Avianca Brasil)
AKL-PPT-EZE (codeshared with Virgin Australia, Air Tahiti Nui and Aerolineas Argentinas)

PPT scissor hub

This would allow numerous benefits compared with non-stop services:

1) Sydney's 300 seat aircraft would serve 3 destinations (PPT, GRU and EZE)
2) As would Auckland's (PPT, GRU, EZE)
3) As would Sao Paulo's (PPT, AKL, SYD)
4) As would Buenos Aires' (PPT, AKL, SYD).

Additionally, the yields should be optimised by the fact that a large proportion of tickets would be from SYD/AKL/GRU/EZE to Tahiti. This means that none of the sectors fall into the inefficient ULH domain.

A serious commercial advantage for Air NZ and Virgin Australia is that it would render obsolete the option of flying via Santiago on QF or LA to get to Brazil or Argentina.

Sydscott · Sun Nov 10, 2013 4:51 am

Quoting koruman (Reply 21):
A serious commercial advantage for Air NZ and Virgin Australia is that it would render obsolete the option of flying via Santiago on QF or LA to get to Brazil or Argentina.

Not really. Rather you would have the choice to either fly to SCL or Tahiti depending on your alliance leanings. Also note that the SCL hub services much more in Brazil or Argentina than what you have proposed NZ/VA do so there will still be an additional connection happening if pax aren't flying to GRU or EZE compared to SCL which is virtually a one stop hub. So while this sort of hub may make NZ/VA services viable and even competitive, it won't them superior to the one stop SCL hub option.

koruman · Sun Nov 10, 2013 6:04 am

Quoting Sydscott (Reply 22):
Not really. Rather you would have the choice to either fly to SCL or Tahiti depending on your alliance leanings

Any pax to/from BNE/MEL/ADL/PER would be able to avoid a domestic to international and vvv transfer with my model and could fly straight into Buenos Aires or Sao Paulo.

Sydscott · Sun Nov 10, 2013 6:43 am

Quoting koruman (Reply 23):
Any pax to/from BNE/MEL/ADL/PER would be able to avoid a domestic to international and vvv transfer with my model and could fly straight into Buenos Aires or Sao Paulo.

If you're going to Rio, Brasilia, Montevideo etc you will need to make a transit stop in South America under your model vs making the stop via SYD, of AKL, under the existing QF arrangement. Again, it's a viable alternative depending on your alliance leanings which matches the current offering but I can't see where you have the serious commercial advantage. If you're going from PER you could go PER-AKL-SCL-GRU on QF/LAN or PER-AKL-PPT-GRU/PER-SYD-PPT-GRU on NZ/VA. They're both 4 stops.

However if your ending destination is other than GRU or EZE then the routing from PER is, for example, PER-SYD-PPT-GRU-GIG vs PER-SYD-SCL-GIG. 5 airports vs 4.

Again it would make NZ/VA competitive and would probably maintain pax loyalty and be a neat alternative to QF/LAN.

SCL767 · Sun Nov 10, 2013 7:07 am

Quoting PDPsol (Reply 11):
while LA offers 6x, practically daily service, on the SCL-SYD route.

LAN will increase frequency on the SCL-AKL-SYD route from 6x weekly to a daily service from 01JAN14 through 31MAR14.

Quoting PDPsol (Reply 11):
There is a major expansion plan currently underway, expected by 2020, which will enhance capacity to 16MM passengers annually

Phase 1 of the SCL expansion project commenced earlier this year and the airport will have the capacity to handle 16 million passengers per year by the end of 2014.

dcajet · Sun Nov 10, 2013 8:01 am

Quoting AR385 (Reply 4):
Rather the offer has increased and AR can´t compete.

While it is true that competition on the south pole route has increased with LA and QF joining AR, the reasons for AR leaving the route after 34 years are very much internal to AR.

The A340-200 is the only plane in the fleet that can make it to SYD nonstop year round from EZE, albeit with a 20% penalty in payload. So it is a less than favorable scenario from the get go. Additionally, around 50% of the flights carry additional penalties due to headwinds on the EZE-SYD leg (the SYD-EZE leg has no restrictions), so it creates additional customer service issues.

Those A340-200 are scheduled to start leaving the fleet in 2014 and the airline can't justify keeping an uncompetitive product for the sake of just one route, which on top of everything is not the top revenue producer and at the end of the day the Oceania route was, de facto, dictating the long haul fleet composition. Adding another type (A340-500 or 600) just because of SYD does not make sense so the airline took the painful but correct decision, imo. Sad but such is reality.

WIth the departure of SYD from the route map, AR can now look at twins such as a 777/787/A350 for all its future fleet needs, for the very first time as the reason for "4 engines 4 long haul" will have gone away come 4/1/14.

VCy · Sun Nov 10, 2013 8:52 am

Can't LAN pick up the route and fly EZE-SYD?

AR385 · Sun Nov 10, 2013 9:14 am

Quoting VCy (Reply 27):
Can't LAN pick up the route and fly EZE-SYD?

They do not have an aircraft that would make it nonstop without significant penalties. Moot point though, this Argentine government would not allow it.

dcajet · Sun Nov 10, 2013 9:28 am

Quoting AR385 (Reply 28):
They do not have an aircraft that would make it nonstop without significant penalties. Moot point though, this Argentine government would not allow it.

Only if LA would be the applicant. If 4M would apply, there is technically (and politically) no reason to oppose the application. After all, it is an Argentinian airline. But, back to the first point, they have no aircraft fit to fly the route. And leasing A340-300 from the mothership would be of no use: the 300 does not have the legs to make it to SYD from EZE and the penalties it would be subject to would make any operation inviable.

RAGAZZO777 · Sun Nov 10, 2013 9:37 am

Quoting VCy (Reply 27):
Can't LAN pick up the route and fly EZE-SYD?

Nope. Only LAN Argentina could fly such route and it's only got 2 763s in its fleet.

.

Quoting PDPsol (Reply 8):
LIM may offer NZ the best alternative, as it is home to Avianca Peru [formerly TACA]. Avianca offers non-stop connections to all major markets in Latin America from LIM, including BOG, EZE, MVD, GRU, ASU, VVI, UIO, GYE, SJO, SAL, HAV, CCS, POA, GIG and even SCL via H2.

Developing LIM is a major focus for Avianca and its subsidiary carriers and could offer NZ the best option for a route to South America. It would be wonderful to have non-stop flights to Oceania from both SCL and LIM...

Indeed. Problem is Air New Zealand doesn't really have spare aircraft to operate a hypothetical AKL-LIM-AKL route. The 747s are on their way out and they only have a handful of 77Ws.

In any case LIM would be NZ's best choice as a South American gateway.

Regards,

Sydscott · Sun Nov 10, 2013 9:59 am

Quoting VCy (Reply 27):
Can't LAN pick up the route and fly EZE-SYD?

QF could fly it and LAN could codeshare with LAN Argentina directly feeding. There is no reason not to allow it now that AR has withdrawn from the route. QF has 744's it could deploy to do this and, long term, A380's if the route warrants it so there will always be a quad aircraft to deploy.

Quoting dcajet (Reply 29):
And leasing A340-300 from the mothership would be of no use: the 300 does not have the legs to make it to SYD from EZE and the penalties it would be subject to would make any operation inviable.

Again, QF has 744's and 744ER's it can use to do SYD-EZE direct if the LAN/QF j/v decided they wanted to fly it.

QANTAS077 · Sun Nov 10, 2013 10:00 am

Quoting koruman (Reply 23):
Any pax to/from BNE/MEL/ADL/PER would be able to avoid a domestic to international and vvv transfer with my model and could fly straight into Buenos Aires or Sao Paulo.

or they could fly EK/QR or EY via the middle east and onwards to Latin America.

SQ also do it although two stops is a little more tiring.

SCL767 · Sun Nov 10, 2013 10:20 am

Quoting VCy (Reply 27):
Can't LAN pick up the route and fly EZE-SYD?

Even if LATAM's Argentine affiliate had the right a/c to operate the EZE-SYD route, as well as approval from the ANAC, LAN Argentina would never operate EZE-SYD. LAN's SCL hub is well positioned as South America's gateway to Oceania. The SCL hub provides multiple daily flights to destinations e.g. AEP, COR, EZE, GIG, GRU, LIM, MDZ, MVD, etc.

AR385 · Sun Nov 10, 2013 10:27 am

Quoting dcajet (Reply 29):
Only if LA would be the applicant. If 4M would apply, there is technically (and politically) no reason to oppose the application. After all, it is an Argentinian airline.

Well, "techncically", but you know how 4M has struggled to get even more domestic routes. There´s one they wanted to add internationally and they´ve been getting the run around for three years now. That´s why I said "This government" Maybe after 2015 things may change.

SCL767 · Sun Nov 10, 2013 10:41 am

Quoting AR385 (Reply 34):
There´s one they wanted to add internationally and they´ve been getting the run around for three years now.

The COR-GRU route. However, both LA and LP operate daily flights linking COR to SCL and LIM. LAN Perú used to operate LIM-ROS daily, but the ANAC revoked their operating permits in 2012. LAN Argentina applied to operate ROS-LIM and the ANAC denied that request.

[Edited 2013-11-10 03:02:36]

777ER · Sun Nov 10, 2013 11:52 am

Quoting Sydscott (Reply 22):
Quoting koruman (Reply 21):
A serious commercial advantage for Air NZ and Virgin Australia is that it would render obsolete the option of flying via Santiago on QF or LA to get to Brazil or Argentina.

Not really. Rather you would have the choice to either fly to SCL or Tahiti depending on your alliance leanings

A stop over in PPT/RAR is certainly the route I would happily take, nothing beats a nice 24-48 hour transit stop relaxing on a beach in between flights

qf2220 · Sun Nov 10, 2013 12:30 pm

Quoting PDPsol (Thread starter):

Small point, and I suggest that the thread title is changed, QF and LA will be a duopoly, not a monopoly.

Quoting Sydscott (Reply 6):
It will be interesting to see if QF/LAN move to increase services. QF is already operating a 4th weekly service over the Christmas period and with the withdrawl of AR there is probably some more traffic to be captured. If the Argentine Govt also allowed QF to code with LAN Argentina they may find QF returning to EZE as well.

Subject to aircraft, no doubt it will be considered. But does anyone know the pax nos that AR is carrying? How many extra services per week could it support? Also, do QF and AR have any interline agreement?

Quoting PDPsol (Reply 11):
Hi Miles, QF and LA have a very tight relationship,

They are in oneworld but they dont have antitrust so they dont coordinate. QF will have to make decisions independently of LA until this changes.

patagon · Sun Nov 10, 2013 1:07 pm

This is my opinion about this subject:
1- In term of commerce, Chile, Argentina & Brazil are big dairy producers country.
2- New Zealand companies are own of a lot of local dairy companies in South America.
3- Argentina government is controlling the import & exports of dollars, this is one of the reason why some airlines are leaving the country & some international companies (who know is the government will take control of the dairy farm tomorrow?) are leaving too.
4- Lima & Bogota does not have a New Zealand embassy. Santiago's embassy work also for the consulate in Colombia and Peru.
5- Only Chile, Argentina, Brazil and Uruguay are in the list of the visa waiver for New Zealand.

If you want to compete with LA/QF, SCL will be the the best airport.

NZ will have to schedule their flights in order to connect with CM to PTY, AV to LIM, BOG and GRU (if they open the route)

It will make no sense to fly all the way to GRU if you have to return to SCL or LIM or EZE.

2travel2know2 · Sun Nov 10, 2013 2:52 pm

Quoting RAGAZZO777 (Reply 30):
Indeed. Problem is Air New Zealand doesn't really have spare aircraft to operate a hypothetical AKL-LIM-AKL route. The 747s are on their way out and they only have a handful of 77Ws.

Seems NZ also is getting rid of its B767-300ER which could operate AKL-LIM-AKL routed via RAR (which is sort of a part of New Zealand) or PPT or - less desired - via both RAR and PPT.
NZ already flies AKL-LAX via RAR w/B767-300.

Quoting Patagon (Reply 38):
If you want to compete with LA/QF, SCL will be the the best airport.

If NZ doesn't want to compete w/LA/QF, then Star Alliance hub LIM is the best choice.

PDPsol · Sun Nov 10, 2013 2:57 pm

Quoting dcajet (Reply 26):
Those A340-200 are scheduled to start leaving the fleet in 2014 and the airline can't justify keeping an uncompetitive product for the sake of just one route, which on top of everything is not the top revenue producer and at the end of the day the Oceania route was, de facto, dictating the long haul fleet composition. Adding another type (A340-500 or 600) just because of SYD does not make sense so the airline took the painful but correct decision, imo. Sad but such is reality.

WIth the departure of SYD from the route map, AR can now look at twins such as a 777/787/A350 for all its future fleet needs, for the very first time as the reason for "4 engines 4 long haul" will have gone away come 4/1/14.

There were so many comments from last week's thread on the ex-SQ A340-500 that many assumed AR would simply procure these [high cost] examples to replace its long-haul fleet. It is a shocking and pleasant surprise to learn AR is actually paying attention to financial criteria when making commercial decisions. Dedicating its long-haul focus to key markets in North America and western Europe with efficient, two-engine aircraft is a favorable development, indeed.

Quoting qf2220 (Reply 37):
Small point, and I suggest that the thread title is changed, QF and LA will be a duopoly, not a monopoly.

Quoting qf2220 (Reply 37):
They are in oneworld but they dont have antitrust so they dont coordinate. QF will have to make decisions independently of LA until this changes.

I specifically chose the term, "monopoly" to describe the LA/QF commercial relationship, rather than "duopoly". While the two carriers are separate entities, they coordinate several operational elements on the SCL-ACK-SYD route, including an existing code-share agreement. Of course, they have not [YET] received anti-trust authorization from either Chilean or Australian regulators to operate under a full joint venture agreement with anti-trust "immunization".

Nonetheless, both carriers have acknowledged they are interested in developing their relationship further, including a full JV. The LATAM merger has distracted LA management over the past three years and QF now hopes executives will come to an agreement:

http://www.smh.com.au/business/qanta...for-latam-ties-20130422-2iam5.html

So, while LA and QF are not coordinating PRICES, they are coordinating practically everything else. I would not categorize these carriers as "competitors" on the route...

qf2220 · Sun Nov 10, 2013 3:05 pm

Quoting PDPsol (Reply 40):
they coordinate several operational elements on the SCL-ACK-SYD route, including an existing code-share agreement

As far as I am aware this is the extent of the cooperation. Without antitrust they cannot cooperate on anything. The codeshares I think are hard block codeshares similar to the SA/QF flights between Aust and South Africa. Any ancilliary services such as airport, ground handling etc are likely to be not significant (and i know the lounge offered is the AA lounge). So i still think a duopoly is more appropriate

Your link above is the one im aware of as well. We can hope that when this is sorted out they can work on a detailed codeshare agreement for Latin America.

SCL767 · Sun Nov 10, 2013 3:26 pm

Quoting qf2220 (Reply 41):
Any ancilliary services such as airport, ground handling etc are likely to be not significant (and i know the lounge offered is the AA lounge).

Premium passengers traveling on any oneworld carrier from SCL, as well as passengers with elite status with any oneworld carrier are permitted access to LAN's two VIP lounges at SCL.

qf2220 · Sun Nov 10, 2013 3:53 pm

Quoting SCL767 (Reply 42):
Premium passengers traveling on any oneworld carrier from SCL, as well as passengers with elite status with any oneworld carrier are permitted access to LAN's two VIP lounges at SCL.

Agreed, however the QF promoted lounge is the Admirals Lounge, not Neruda or Mistral (even though they are all essentially the same offering, I have noted no significant differences between the 3). QF Club members can only access the Admirals.

RAGAZZO777 · Sun Nov 10, 2013 4:14 pm

Quoting 2travel2know2 (Reply 39):
Seems NZ also is getting rid of its B767-300ER which could operate AKL-LIM-AKL routed via RAR (which is sort of a part of New Zealand) or PPT or - less desired - via both RAR and PPT.
NZ already flies AKL-LAX via RAR w/B767-300.

I know, but if NZ wants to attract high-yielding pax and promote AKL as a stopover between South America and Australasia, then they should fly AKL-LIM-AKL nonstop.

.

Quoting 2travel2know2 (Reply 39):
Quoting Patagon (Reply 38):
If you want to compete with LA/QF, SCL will be the the best airport.
If NZ doesn't want to compete w/LA/QF, then Star Alliance hub LIM is the best choice.

Indeed. Why on Earth would NZ want to compete directly with LAN and Qantas ? SCL is a Oneworld hub.

yellowtail · Sun Nov 10, 2013 4:33 pm

Quoting dcajet (Reply 26):
Adding another type (A340-500 or 600) just because of SYD does not make sense so the airline took the painful but correct decision, imo.

but they have…they are getting 345s…..

dcajet · Sun Nov 10, 2013 4:59 pm

Quoting yellowtail (Reply 45):
but they have…they are getting 345s…..

No they are not. That turned out to be either a rumor or the planned lease to AR did not materialize. Notice how the airline never said anything about the A345. Right now AR only has 3 A330-200 and 20 738 on order.

Rds,

qf2220 · Sun Nov 10, 2013 5:21 pm

Quoting dcajet (Reply 46):
That turned out to be either a rumor or the planned lease to AR did not materialize. Notice how the airline never said anything about the A345

So no A345s for AR??

RAGAZZO777 · Sun Nov 10, 2013 5:26 pm

Quoting qf2220 (Reply 47):
So no A345s for AR??

Nope. Once the A340 fleet is retired AR will no longer operate four-engine planes.

LipeGIG · Sun Nov 10, 2013 5:42 pm

Quoting RyanairGuru (Reply 16):
You'll need a quad to fly this. Sorry to break it, but I doubt this route will happen.

Correct. No equipment and the competition is too intense.

Quoting koruman (Reply 21):
Additionally, the yields should be optimised by the fact that a large proportion of tickets would be from SYD/AKL/GRU/EZE to Tahiti. This means that none of the sectors fall into the inefficient ULH domain.

Quoting Sydscott (Reply 24):
If you're going to Rio, Brasilia, Montevideo etc you will need to make a transit stop in South America under your model vs making the stop via SYD, of AKL, under the existing QF arrangement.

You guys forget about the Gulf Carriers ? You can fly from Australia to Rio de Janeiro with one stop. From Rio you can reach the Northeast easier and quicker. You can connect quickly to VIX, BSB or CNF, and even to Sao Paulo domestic airport without a lot of traffic to reach the new business district (Faria Lima).
This means more competition and disruptive yields.

Quoting AR385 (Reply 34):
Well, "techncically", but you know how 4M has struggled to get even more domestic routes. There´s one they wanted to add internationally and they´ve been getting the run around for three years now. That´s why I said "This government" Maybe after 2015 things may change.

4M tried to begin EZE-GIG also...

Quoting qf2220 (Reply 47):
So no A345s for AR??

Yes.... no A345's and that's the smart decision they had in years.

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