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Australian Aviation Thread Part 104

Wed Aug 20, 2014 6:30 am

Hello and welcome to the 104th edition of the Australian Aviation Threads.

Link to part 103 Australian Aviation Thread - Part 103 (by EK413 Aug 5 2014 in Civil Aviation)
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Sydscott
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RE: Australian Aviation Thread Part 104

Wed Aug 20, 2014 6:59 am

From Tullamarine in the previous thread;

I guess it is a bit circuitous to argue whether VA copied QF or just did what an any airline wanting to be seen as a serious business carrier would do but I take your point. Hiring JB was a sign VA wanted a head start is chasing QF down given much of the product decisions of the prior 10 years at QF belonged to him. That neither are making money (or enough money to get anywhere near the cost of capital in QF's case) is a problem for both.

I agree it's a problem for both, but in Virgins case the only reason they are alive right now in their current form is our very relaxed, by world standards, airline ownership laws. VA wouldn't have been able to do what they have done, in the manner they have done it, in just about any other jurisdiction. So in QF's defence how do you defend against that? Where QF and VA have both gone wrong domestically is on the capacity front. We have already seen them pull it back in intra-WA and we're now seeing it in the Transcon markets where some sense is returning. So we'll see what happens on the East Coast as the year progresses but a good year or two of flat capacity would go along way to fixing both of their problems.

From Tullamarine in the previous thread;

You are probably right. Back in the '90s QFi was a profit powerhouse and enabled QF to turn around TN and ultimately crush AN. Following that QFd became a powerhouse and the decline in QFi was masked with QFd making $1Bn + p.a. Poor management, hubris, call it what you like, during this period meant the whole QF business wasn't prepared for another paradigm change which saw both sides of the business off their peaks at the same time. For QFi, it is arguable if the current situation is cyclical or flat-line.

I don't think it's arguable that QFi are at anything other than a flat-line moment. I think the trick for QF is actually breaking QFi out of the malaise it is currently and you can't do that by constantly cutting. As I said in the other thread if there are actually 1/3 of costs that can be cut from QFi then that is an appalling indictment on Management HOWEVER it really does depend on what is included in those costs. The problem QF have is, in my opinion, is that in order to break QFi out of where it currently is requires a capital investment in new aircraft and new destinations. It requires 789's and expansive codeshares in places like India and China to bring people to QF planes. It also requries investment in carriers like 3K and GK and expanded interline arrangements with allied carriers. In other words it requires a vision of the future and a commitment to spend some capital to get QFi there. That's what is lacking from QF at the moment. The strategy of re-building premium lounges and focusing on core routes is a good one, but it only gets you so far. QFi needs a vision for the future and a program to execute that vision with. If they can do that, QFi will break out of the malaise. If Management cant' do that then realistically they need to move aside for people that can.
 
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RE: Australian Aviation Thread Part 104

Wed Aug 20, 2014 2:03 pm

Quoting Sydscott (Reply 1):
Back in the '90s QFi was a profit powerhouse

On this, did QFI and QFD exist from a business management perspective? Or did they blend and mix such that one was not really different to another?
 
JQflightie
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RE: Australian Aviation Thread Part 104

Wed Aug 20, 2014 2:15 pm

Quoting Sydscott (Reply 1):

I agree with Sydscott... JB copied the QF strategy.
But remember.... JB was apart of the management that has QF where it currently is  
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RE: Australian Aviation Thread Part 104

Wed Aug 20, 2014 9:59 pm

Some sense from Qantas in relation to retaining the FF Program:

http://www.smh.com.au/business/aviat...an-put-on-ice-20140821-106hwj.html
 
tullamarine
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RE: Australian Aviation Thread Part 104

Wed Aug 20, 2014 10:38 pm

Quoting Sydscott (Reply 1):
The problem QF have is, in my opinion, is that in order to break QFi out of where it currently is requires a capital investment in new aircraft and new destinations. It requires 789's and expansive codeshares in places like India and China to bring people to QF planes. It also requries investment in carriers like 3K and GK and expanded interline arrangements with allied carriers. In other words it requires a vision of the future and a commitment to spend some capital to get QFi there. That's what is lacking from QF at the moment.

You are correct that they need significant investment but the fact is that they do not have the capital to do everything so they will need to pick. In economics this is called Opportunity Cost. QF does not have access to unlimited debt and it is capital constrained by its poor share price so AJ (or whoever is in the chair post next week) needs to work out what the key strategies to turn around the business are.

Personally I hope that the strategy concentrates or reinvigorating the mainline businesses and giving the the fleet they need to remain internationally relevant. Given capital limits, I think that they should downsize or walk away from the Asian experiment. The various Jetstar franchises are all loss making or break-even and the competitive situation means it will be years before this changes.

Quoting QF2220 (Reply 2):
On this, did QFI and QFD exist from a business management perspective? Or did they blend and mix such that one was not really different to another?

Initially the domestic business (ex TN) was very separate from int'l but under James Strong's leadership the businesses came together typically with the ex-TN staff gaining the ascendancy at management levels. There was much bitterness on the QF side during this time.

Quoting Sydscott (Reply 5):
Some sense from Qantas in relation to retaining the FF Program:

Fairly ambivalent about this but I do wonder if QF have an international partner in the wings who will inject capital into the business in the short term. Without the sale of FF, a friendly capital injection would appear to be the only way the business can access the funds to reinvigorate the business through fleet acquisitions etc. I just hope the decision to retain FF doesn't mean other important decisions are being deferred again.
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 1:06 am

Quoting tullamarine (Reply 6):
You are correct that they need significant investment but the fact is that they do not have the capital to do everything so they will need to pick. In economics this is called Opportunity Cost. QF does not have access to unlimited debt and it is capital constrained by its poor share price so AJ (or whoever is in the chair post next week) needs to work out what the key strategies to turn around the business are.

That's where we differ because if you look at it, the domestic market is suffering from over-supply so QF could do with a couple less widebodies in there. At the same time, International could do with a couple more widebodies to give it a shot in the arm and more directly reach into places like North Asia, India, the Middle East and even North America. So it's really about redeploying what they have and making sure they're used properly. I'd also take delivery of those last 4 788's that JQ deferred and stick them into QF mainline.

Quoting tullamarine (Reply 6):
Personally I hope that the strategy concentrates or reinvigorating the mainline businesses and giving the the fleet they need to remain internationally relevant. Given capital limits, I think that they should downsize or walk away from the Asian experiment. The various Jetstar franchises are all loss making or break-even and the competitive situation means it will be years before this changes.

The question for the Jetstar Asian Franchises is to what extent they require finance from QF and what the QF exposure is to that. To me it seems that 3K, from a cash sense, pays for itself while GK is very much on the way to being the same. So as long as they are breaking even or better on a cash basis and aren't sucking up group cash to keep them afloat I'd say leave them in place. They'll do alright eventually and QF can use the local feed, not to mention the lower costs in them, to compete against the Southeast Asian majors.

Quoting tullamarine (Reply 6):
Fairly ambivalent about this but I do wonder if QF have an international partner in the wings who will inject capital into the business in the short term. Without the sale of FF, a friendly capital injection would appear to be the only way the business can access the funds to reinvigorate the business through fleet acquisitions etc. I just hope the decision to retain FF doesn't mean other important decisions are being deferred again.

I'd hope that on August 28th, when QF announces their results, they will give some clarity on if they'll be ordering the 789. That will be the key decision which will drive just about everything else. No 789 order, or no conversion of the deferred A380 order into A330NEO's or A350's would tend to indicate a QFi that doesn't have a future. (Much the same as it is now) It'll also be very interesting to see Managements comments about the changes they have made on LHR-DXB-MEL and SYD-DFW and how bookings etc are tracking on them.
 
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 2:42 am

Quoting Sydscott (Reply 7):
I'd also take delivery of those last 4 788's that JQ deferred and stick them into QF mainline.

That's an idea but would once again raise the question why JQ got the 788s in the first place.

Quoting Sydscott (Reply 7):
It'll also be very interesting to see Managements comments about the changes they have made on LHR-DXB-MEL and SYD-DFW and how bookings etc are tracking on them.

I'm not expecting too much here. The changes are fairly new and, at best, I'd expect a fairly generic statement like "tracking positively in a challenging environment". QF has been pretty reticent to own up to problems and defending the EK alliance is a cornerstone if the CEO and BoD are going to retain any investor respect.

Quoting Sydscott (Reply 7):
The question for the Jetstar Asian Franchises is to what extent they require finance from QF and what the QF exposure is to that. To me it seems that 3K, from a cash sense, pays for itself while GK is very much on the way to being the same. So as long as they are breaking even or better on a cash basis and aren't sucking up group cash to keep them afloat I'd say leave them in place. They'll do alright eventually and QF can use the local feed, not to mention the lower costs in them, to compete against the Southeast Asian majors.

I think it is more than just cash. It is the fundamental question as to whether the Asian franchises constitute the core business of QF. If the answer is no, then selling or shuttering (varies according to location) would seem to be the better solution. It will be years before any of these get near to covering their cost of capital and dedicating management attention to them means diverting it away from the core.
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 3:00 am

Quoting tullamarine (Reply 8):
That's an idea but would once again raise the question why JQ got the 788s in the first place.

I don't necessarily think it does because the reality is that both have a use for them. We can argue the toss about which one should have got them first but what I would say it that to me it makes eminent sense for those last 4 788's to be delivered to QF group and be used by one of the QF group airlines. It would also send a signal that 789's are still front of mind when it comes to the future QF fleet.

Quoting tullamarine (Reply 8):
I'm not expecting too much here. The changes are fairly new and, at best, I'd expect a fairly generic statement like "tracking positively in a challenging environment". QF has been pretty reticent to own up to problems and defending the EK alliance is a cornerstone if the CEO and BoD are going to retain any investor respect.

I think the re-timing of the QF LHR flight actually demonstrates, and hopefully partly fixes, one of the problems in the alliance and that is the limited connecting opportunities that the QF fligths had given their timing. So I would expect more than a generic statement and I'd also expect analysts to maybe ask some more preceptive questions than they generally do about what's going on.

Quoting tullamarine (Reply 8):
I think it is more than just cash. It is the fundamental question as to whether the Asian franchises constitute the core business of QF.

And if they don't form part of the core business the next questions is the extent to which they support the core business. If you take away components of feed and inteline arrangements at particular points, ie SIN, what effect does that have on the core JQ business.

Quoting tullamarine (Reply 8):
If the answer is no, then selling or shuttering (varies according to location) would seem to be the better solution. It will be years before any of these get near to covering their cost of capital and dedicating management attention to them means diverting it away from the core.

I think we all agree that for all intents and purposes 3K is managed out of MEL. So as much as 3K does carry local Singaporean traffic it is also somewhat shielded from what has happened in Southeast Asia because of all of the interline arrangements it has with other carriers. (Arrangements that AirAsia and Tiger do not have) So again, even if it's not core QF business the question is the level of support and opportunity 3K provides by being where it is and what it gives to the core business. Is it a real loss leader or does it make a positive overall contribution to the network? If it makes a positive overall contribution then as long as it's not too much of a drain on a standalone basis then it's worthwhile. I think of GK on the same basis although I think GK needs to hurry up and start marking out its territory in Japans International routes before Peach and Vanilla Air can get too entrenched. That, again, is another questions I hope analysts ask Jane Hrdlicka - when is GK going to fly International and on what routes?
 
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 3:29 am

Quoting Sydscott (Reply 9):
So I would expect more than a generic statement and I'd also expect analysts to maybe ask some more preceptive questions than they generally do about what's going on.

Maybe this year...in prior years the timidity and innocuous questions of the analysts and their acceptance of "nothing" answers has been a cause of constant amusement and frustration.

Quoting Sydscott (Reply 9):
Is it a real loss leader or does it make a positive overall contribution to the network?

If QF has to have a loss leader, I don't know that LCCs in SIN is where it should be. The exact stats of what sort of QF oncarriage goes onto these services would determine the answer here but I'd have thought getting the mainline services into SIN at a decent level from all Australian gateways would be more deserving of some loss-leading in the short term.
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 6:03 am

Quoting tullamarine (Reply 9):
If QF has to have a loss leader, I don't know that LCCs in SIN is where it should be. The exact stats of what sort of QF oncarriage goes onto these services would determine the answer here but I'd have thought getting the mainline services into SIN at a decent level from all Australian gateways would be more deserving of some loss-leading in the short term.

I think the problem for QF in SIN specifically is that once they withdrew the Europe services they had a whole lot of nothing to fall back on. Local demand wasn't there for their services and they had way too much capacity into the market. They have basically spent the time ever since floundering around trying to find a way to fill their aircraft when what they should have done is to have been more prepared to start with and cut capacity harder, sooner and faster than what they did. There was also not the co-ordination that there needed to be between QF and 3K to allow for transfers so alot of the work QF management have done has been essentially spinning the wheels trying to fit the cogs together into something cohesive. Those sorts of hard questions have not been asked of QF Management by analysts or others and, again, this lack of planning is what has really cost QF.

Quoting tullamarine (Reply 9):
Maybe this year...in prior years the timidity and innocuous questions of the analysts and their acceptance of "nothing" answers has been a cause of constant amusement and frustration.

I tell you this, if a loss of $700 million to a $1 billion doesn't get the analysts out asking some serious questions then what would? But I agree with you and generally I find the questions analysts ask of QF management uninsightful.
 
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 6:25 am

MEL's July traffic results have been released today. Very impressive International numbers, with a decent boost from the AIDS 2014 conference, whilst domestic is drying up after the capacity war of the last few years, with only +0.2% growth. Not unexpected on that front.

In comparison SYD achieved a -1% Int result and a 0.3% domestic growth figure in July, further illustrating the challenges in the domestic market.

--------


Melbourne Airport achieved 10 per cent international growth in July compared to the same period last year, to reach 725,489 international passengers.

Melbourne Airport CEO, Chris Woodruff, said that July was a record month for total passengers.

“Popular holiday destinations, Japan and Indonesia led growth for the month with both recording increases of more than 60 per cent on the previous year while the earlier start to Ramadan also saw strong growth in passengers arriving from Indonesia as well as Malaysia and Singapore,” said Mr Woodruff.

“Combined with strong growth from all regions, our total passengers hit a new monthly record of more than 2.77 million.”

People travelling through Melbourne Airport on international (non-Australian) passports increased by 15 per cent during July while Australian passport holders grew by 6 per cent compared to the same period last year.

“Melbourne continues to be a global destination for events with world leading conference such as the recent 20th International AIDS Conference held at the Melbourne Convention and Exhibition Centre during July. As the largest medical conference ever to be held in Australia, it attracted around 14,000 delegates.”

http://melbourneairport.com.au/news-...assenger-traffic-results-1551.html
 
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 7:38 am

In signs of further capacity sense returning to Southeast Asia Airlines, confirmation that Citilnk, a subsidiary of Garuda, is focusing on its domestic market and will not be entering the international market while confirming that it has also deferred A320 deliveries.

http://centreforaviation.com/analysi...arket-as-fleet-growth-slows-183231
 
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 7:54 am

I have no problem with the placement of Dreamliners with Jetstar, but I do have a problem if the -9s for Qantas itself are deferred or dropped and no alternate Airbus plan announced. They have been the cornerstone of the fleet moving forward for what, 8 or so years now. Yes, during that time the A350 and A330neo have appeared and the 777 refined and redeveloped, but to move away (or drift away, as it seems) from such a longstanding and very public strategy to refleet with the Dreamliner is a bit dramatic from a strategic point of view. Will the 14 787-8s become an orphan sub fleet in the Qantas Group? I hope not and don't think so. Will whatever financial arrangement was done with the 787-9 options be switched to MAXs or (dare I say it...) 777Xs? Will the final 8 A380s be switched to an order for A350s and/or A330neos (which I feel is increasingly likely)? Wll some of the A32Xneo orders be switched to other types or placed with QF as 737-800 replacements? I doubt the Boeing order 'switch' but see the Airbus 'switch' more likely.
Whatever eventuates, it will be a watershed moment in the history of Qantas.
August 28? Maybe that is when the 'moment' will happen, maybe not. But it needs to happen soon.
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IndianicWorld
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 9:21 am

QF have made it very clear that it will not be buying new aircraft until it can get QFi back to a more profitable position.

If you expect a big announcement about fleet purchases on the 28th Aug I think its going to be a letdown.

Making mult-billion dollar investments at this time is unlikely to play out well when announcing a substantial loss, even if that new fleet would be a big bonus for the airline's medium term operations.
 
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 10:54 am

Quoting IndianicWorld (Reply 14):
Making mult-billion dollar investments at this time is unlikely to play out well when announcing a substantial loss, even if that new fleet would be a big bonus for the airline's medium term operations.

I really don't see how the 787-9 will be a saviour for QF. There are limited opportunities for it to operate on the existing network (BNE-LAX) that the already purchased A330 can't do. Routes like CGK, MNL, SIN, MEL/BNE-HKG, PVG, BKK they are struggling to fill profitably with the A330 if rumours are correct, so I don't see how a similar size aircraft is going to dramatically change things across the board. Yes, more fuel efficient, but the A330 isn't bad and is operated by most of QF competitors in Asia, so its not like the case of the 747 vs 777 on TPAC where QF is operating the older, more fuel hungry option, here they are on a level playing field. While inevitably the likes of SQ will move to newer aircraft into Oz eventually, I would think QF would be better off sticking it out with the A330 on the majority of these routes and save themselves the cost of a new aircraft. If anything, purchase A330neos as these should be cheaper, offer equivalent savings and reduce the cost of switching to a different aircraft type.

Saying that, routes like SYD-NRT/HKG, BNE-LAX are crying out for a halfway aircraft, something between the A330 and 747/A380, but whether its worth investing in a new a/c type just for these routes, I'm not sure.

Also, I realise I left off SCL and JNB. If CASA changes their mind then I will gladly see reason to order the 787-9 or A350 for QF mainline. Until then, Im not so sure.
 
timtam
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 2:58 pm

Quoting tullamarine (Reply 7):
It is the fundamental question as to whether the Asian franchises constitute the core business of QF. If the answer is no, then selling or shuttering (varies according to location) would seem to be the better solution. It will be years before any of these get near to covering their cost of capital and dedicating management attention to them means diverting it away from the core.

Jetstar is a core business of Qantas. Its worth significant value and represents the future for Qantas internationally. QFi is a liability and has no real prospect of ever becoming a business of any material value to Qantas.

The glory days for QFi are gone.
 
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qf2220
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RE: Australian Aviation Thread Part 104

Thu Aug 21, 2014 4:02 pm

Quoting tullamarine (Reply 5):
Initially the domestic business (ex TN) was very separate from int'l but under James Strong's leadership the businesses came together typically with the ex-TN staff gaining the ascendancy at management levels. There was much bitterness on the QF side during this time.

Perhaps why international was paid little attention for so long? A lack of interest and/or a lack of skills?
 
JQflightie
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 2:57 am

On some more good news for Qantas....

19 months in a row we have been the most on-time airline in australia! Which is key to bringing our customers back!
Well Done!  

A new dining experience for our customers in Economy which include Lindt Chocolate Balls .... so im sold, id be happy with just that 
When is my next holiday?
 
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777Jet
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 3:45 am

Quoting TruemanQLD (Reply 15):
Routes like CGK, MNL, SIN, MEL/BNE-HKG, PVG, BKK they are struggling to fill profitably with the A330 if rumours are correct

Regarding BKK - a few months ago I picked up SYD-BKK return on QF for $580 AUD! What a bargain as I usually have never paid less than $850 AUD for SYD-BKK return on a full service airline or whatever you want to call the likes of QF, TG, MH... I saw the same fare available for quite some time after I booked it so if tickets are going that cheap to places (which was even cheaper that Air Asia and Scoot at the time!) then I can understand why they are finding it hard to make a profit. I heard the 744s used to do well to BKK so I can't see how a 333 struggles but then again BKK used to be a stop on the way to LHR for QF metal amongst other cities...
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allrite
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 4:00 am

Quoting 777Jet (Reply 19):
I heard the 744s used to do well to BKK so I can't see how a 333 struggles but then again BKK used to be a stop on the way to LHR for QF metal amongst other cities...

I think the situation in Thailand may have dissuaded a few travellers...

But I do see sale fares with Qantas that aren't much off the base fares for the regional LCCs for some other destinations.

*Sigh*
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JQflightie
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 5:05 am

to further cement QF International Flying....

Boosting services to the US and South America ......

.Qantas will boost services between Melbourne and Los Angeles, and between Sydney and Santiago, from early 2015, and introduce a new schedule providing the flexibility of morning, midday and evening departures between Australia and the US.

From 21 January next year, Qantas will increase its Melbourne to Los Angeles service from a daily service to ten per week and from 20 February will increase its Sydney to Santiago service from three to four per week.

Qantas International CEO Simon Hickey said Qantas is the lead carrier for Australians travelling across the Pacific, with an extensive flight schedule and premium customer experience on-board its A380 and B747 aircraft.

“The US is one of our most important markets and we will now offer our customers 45 return services per week to North and South America,” said Mr Hickey.

[Edited 2014-08-21 22:23:55]
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Bluebird191
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 5:39 am

Quoting JQflightie (Reply 21):
to further cement QF International Flying....

Boosting services to the US and South America ......

.Qantas will boost services between Melbourne and Los Angeles, and between Sydney and Santiago, from early 2015, and introduce a new schedule providing the flexibility of morning, midday and evening departures between Australia and the US.

From 21 January next year, Qantas will increase its Melbourne to Los Angeles service from a daily service to ten per week and from 20 February will increase its Sydney to Santiago service from three to four per week.

Qantas International CEO Simon Hickey said Qantas is the lead carrier for Australians travelling across the Pacific, with an extensive flight schedule and premium customer experience on-board its A380 and B747 aircraft.

%u201CThe US is one of our most important markets and we will now offer our customers 45 return services per week to North and South America,%u201D said Mr Hickey.

Link - http://www.qantasnewsroom.com.au/med...rvices-to-the-us-and-south-america

In a nutshell -
- QF107/108 gets renumbered to QF17/18 and the LAX-JFK tag is dropped
- LAX-JFK-LAX tag moves to QF15/16 on 1 Feb, so it becomes BNE-LAX-JFK vv
- QF11/12 and QF93/94 has a minor retiming
- New QF95/96 flight, MEL-LAX, 3x weekly from early next year (afternoon arrival into LAX)
 
Sydscott
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 5:52 am

Quoting JQflightie (Reply 21):
to further cement QF International Flying....

Boosting services to the US and South America ......

Interesing in that the new services effectively means less ground time for the 744 fleet in LAX. Less ground time = higher utilisation so it's exactly what they've done in LHR.

http://www.qantasnewsroom.com.au/med...rvices-to-the-us-and-south-america
 
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 5:57 am

Quoting Sydscott (Reply 23):
Less ground time = higher utilisation so it's exactly what they've done in LHR.

Not really. They've just shifted the ground time from LAX to SYD/MEL.
 
bwwt
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 6:06 am

Could mean faster 747 retirements then?
 
TN486
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 6:07 am

Welcome back a scheduled QF 747 at MEL (QF95/96).
remember the t shirt "I own an airline"on the front - "qantas" on the back
 
Sydscott
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 6:25 am

Quoting qf002 (Reply 24):
Not really. They've just shifted the ground time from LAX to SYD/MEL.

If they're cutting the total number of 744's at the same time, which they are, that means less ground time for the 744's. So while they are shifting what ground time there is to SYD/MEL there will be less of it.
 
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 6:41 am

Quoting qf002 (Reply 24):
They've just shifted the ground time from LAX to SYD/MEL.

Reading between the lines, this absolutely is an increase in utilisation to get this down to 9 lines of flying. I'm just going to post verbatim what I wrote in the other thread:

On reflection, the QF17/18 times dovetail perfectly with QF63/64 to JNB. Considering the need to operate QF95/96, and the expedited retirement of the non-9 747s, I'd suggest that this announcement all-but-guarantees that QF21/22 is going to be either down-gauged to A330 or re-timed to reflect the JQ and JL timings.

Looking ahead, with the newly announced flying program it looks like the 9 747s are going to be used thus:

QF15/16: 2
QF17/18/63/64: 3
QF27/28: 1
QF95/96: 1
QF21/22: 1
QF127/128: 1
= 9

Either QF21/22 is going A330 to leave one operation spare, or they are going to seasonally down-gauge either QF21/22 or QF127/128 to A330 to cover 747 maintenance.

EDIT: Thinking again, I am absolutely convinced that seasonal up-gauge/down-gauge between 333 and 744 on QF21/22 is what we are going to see, similar to them moving to full A380 utilisation over Southern Summer and Chinese New Year by up-gauging QF127/128 back to 388. We are going to see much more of this going forward, where QF might schedule almost continuous utilisation for the 747 and 388 fleets for a month or so over the summer, but then drop back to lower utilisation the rest of the year. It is a smart strategy, and further reinforces what we have been discussing over the past month or so about QF finally getting its act together in this arena and using its capital-intensive resources more effectively on the one hand, and flying around less fresh air in the off season on the other.


Assuming that I'm not too far off the mark, under this scenario the 7 aircraft I've accounted for QF15/16, QF17/18, QF63/64, QF21/22, QF127/128 are going to have almost 24/7 utilisation. The only down time is between QF95/96 and QF27/28.

Quoting bwwt (Reply 25):
Could mean faster 747 retirements then?

They were going to be down to 9 by 1Q15, and I don't think it will be any faster (due to the additional Christmas LAX flying), but that target surely isn't going to slip because of that.

[Edited 2014-08-21 23:44:59]
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 7:04 am

Quoting RyanairGuru (Reply 28):
Either QF21/22 is going A330 to leave one operation spare, or they are going to seasonally down-gauge either QF21/22 or QF127/128 to A330 to cover 747 maintenance.

Can I suggest that what they could do on QF 127/128 is, once the A330 refurbs are underway, make it twice daily using a mix of A333 and A332 with a seasonal upgrade to A380 during peak travel periods. That would also mean SIN-SYD would also become a mixed A333/A332 route while CGK and MNL would be A332 routes. That would mean higher utilisation of the overall A330 fleet on the back of higher utilisation of the A380's and 744's.

Does that seem logical?

Edit: That also means they can leave 21/22 as year round 744 to allow for consistent 3 class service and with a re-timing it could only use 1 744 rather than having the 744 sit on the ground all day in NRT.

[Edited 2014-08-22 00:05:49]
 
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 8:28 am

I've been perusing the BITRE data for May, and it makes for some very depressing reading.

I know that May is one of the slowest months for international travel for Australia, and that's why I thought it would be interesting (to see how bad it gets) and the load factor figures are pretty horrific.

In passing I should give a shout out to Qantas to Philippines, the single largest load factor across the month. Qantas recorded a 96% load factor to MNL, made all the more incredible by PAL only achieving 72%.


Now for the fun part:

Below 50%:

Air Niuguini - PNG
Solomon Airlines - Solomon Islands
United Airlines - Guam
Virgin Australia - PNG
Virgin Australia - Solomon Islands

(for the record, the last three are actually below 45%!)

Below 55%:

Air India - India
Air Vanuatu - Vanuatu
Jetstar - Japan
Qantas - PNG
Thai Airways - Thailand

Below 60%:

Air New Zealand - Cook Islands
Air Vanuatu - Vanuatu
Garuda Indonesia - Indonesia
Malaysia Airlines - Malaysia
Qantas - New Caledonia
Royal Brunei - Brunei
Virgin Australia - Tonga

Below 65%:

Air Caledonie - New Caledonia
Air Mauritius - Mauritius
Emirates - New Zealand
Qantas - Indonesia
Qantas - Singapore
Scoot - Sinagpore
Silk Air - Sinagpore
South African Airlines - South Africa
Virgin Australia - Indonesia
Virgin Australia - Thailand
Virgin Australia - Tonga

Below 70%:

Air Asia X - Malaysia
China Airlines - New Zealand
China Airlines - Taiwan
Indonesia Air Asia - Indonesia
Jetstar - Indonesia
Our Airline - Nauru
Qantas - China
Qantas - New Zealand
Qantas - South Africa
Qantas - Thailand
Virgin Australia - UAE
Virgin Australia - Vanuatu
Virgin Samoa - Samoa


What is fascinating here is that with a couple of exceptions (South Africa, India) the low load factors are exclusively within the Asia-Pacific region.

A lot is written about Asia on here, so I'm going to start with the Pacific. And aren't those numbers atrocious! Vanuatu, Cook Islands, Samoa, Tonga ... all have horrific numbers. Normally I would write this off as slow season outside of school holidays, and extrapolating the Indonesia data it appears that DPS also had an awful month, lending credence to their theory. But, and here comes the massive but, Fiji and Hawaii (strictly speaking is USA, but I'll include it hear) both had phenomenal months, as you will see in a second. If anyone can explain this I am all ears. I honestly can't fathom how NAN (and HNL for that matter) managed to buck this trend.

And then there's Asia. Oh Asia. First of all, please join me in a moments silence for Thai, Malaysia, and Garuda. They tried hard, bless them. But they weren't alone, and Brunei, Scoot, Air Asia, Jetstar, Silk Air, not to mention a raft of destinations from Qantas and Virgin Australia are right up there with them. For the record, Singapore Airlines missed out on being on this list by the narrowest of margins. We have been discussing the over-capacity situation to South East Asia for months, and here it is laid out in all of its glory.

The two most concerning figures are Jetstar to Japan (cf QF and JL) and Qantas to New Zealand (cf NZ).

Now for the chirpier news, these airlines/routes achieved a load factor over 80% on a bi-directional basis:

Air Canada - Canada
Air New Zealand - New Zealand
Cathay Pacific - Hong Kong
Delta - USA
Etihad - UAE
Fiji Airways - Fiji
Jetstar - Fiji
Jetstar - USA
Qantas - Chile
Qantas - Philippines
Qantas - USA
Vietnam Airlines - Vietnam
Virgin Australia - USA

If we expand this to above 75% (it is off-season after all) you can add:

British Airways - United Kingdom
China Eastern - China
Eva Air - Taiwan
Hawaiian Airlines - USA
JAL - Japan
Jetstar - New Zealand
Qantas - Japan
Qantas - United Kingdom
Qatar Airways - Qatar
Tigerair - Singapore
Virgin Australia - Fiji


EDIT: linky - Worked Hard, Flew Right
 
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allrite
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 9:17 am

Quoting RyanairGuru (Reply 30):
The two most concerning figures are Jetstar to Japan (cf QF and JL)

I wonder (and I'm on a mobile and can't check) if Jetstar's performance to Japan is complimentary to that of QF and Japan Airlines. Cheap fares on the latter two may take passengers away from the former. I'd like to look around May, when Golden Week falls in Japan and accommodation can be apparently difficult. Whereas April is cherry blossoms and Australian school holidays.
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CXfirst
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 9:56 am

Those numbers look terrible. Surprised by a lot of them, and very worried for some of them, particularly these:

Quoting RyanairGuru (Reply 30):
Below 50%:

Below 55%:

Air India - India
Jetstar - Japan
Thai Airways - Thailand

Below 60%:

Garuda Indonesia - Indonesia
Malaysia Airlines - Malaysia

Below 65%:

Air Mauritius - Mauritius
Scoot - Sinagpore
South African Airlines - South Africa
Virgin Australia - Indonesia
Virgin Australia - Thailand

Below 70%:

Air Asia X - Malaysia
Indonesia Air Asia - Indonesia
Jetstar - Indonesia

Lots of services that are either low cost (so bad yields), to holiday destinations (bad yields) and services that traditionally have had quite good load factors.

-CXfirst
 
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RyanairGuru
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 10:35 am

I've just spotted something that I missed the first time:

Quoting RyanairGuru (Reply 30):
Below 70%
Quoting RyanairGuru (Reply 30):
Virgin Australia - UAE
Quoting RyanairGuru (Reply 30):
over 80%
Quoting RyanairGuru (Reply 30):
Etihad - UAE

That partnership sounds like it is working swimmingly  
Quoting CXfirst (Reply 32):
Lots of services that are either low cost (so bad yields), to holiday destinations (bad yields) and services that traditionally have had quite good load factors.

I agree. At a casual glance TG, MH, GA were the three I was most concerned about. Given that their respective Australia O&D markets have been taken by the LCCs, and in the case of TG and MH they're not the competitors they once were to Europe, I think it is inevitable that we see them slash capacity to Australia. That will be sad to see, but they can't withstand these sorts of figures for too long. The likes of Air Asia and Scoot didn't exactly have stella months either, but with their lower cost bases they're probably not hurting quite as much on the bottom line (although Air Asia's recent financial results were pretty illuminating). I'm not sure why DPS has had such a bad month, with Virgin, Jetstar, and Air Asia all having very low load factors, but it will definitely be interesting to see whether these bounce back or not during June and July over the winter school holidays. That data isn't available yet.
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allrite
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 11:10 am

Quoting RyanairGuru (Reply 30):
I know that May is one of the slowest months for international travel for Australia, and that's why I thought it would be interesting (to see how bad it gets) and the load factor figures are pretty horrific.

If I'm reading this chart correctly May is the worst month of the year and this year is still better than the last for overall numbers. I suspect that the timing of Easter plays a big part in the stats during this period.
I like artificial banana essence!
 
81819
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 12:06 pm

Quoting IndianicWorld (Reply 14):
Making mult-billion dollar investments at this time is unlikely to play out well when announcing a substantial loss, even if that new fleet would be a big bonus for the airline's medium term operations.

QANTAS's priority is the re-structure of their business. I know this is a play on words, but this is a major investment in itself.

When we consider a new aircraft really only have the potential to give QF an operational saving of approximately 10% and their current costs in comparison to their competitors is upwards of 20%, ROI would probably dictate spending $1 billion on re-structuring rather than $3 billion on new aircraft.

Quoting Sydscott (Reply 6):
I'd hope that on August 28th, when QF announces their results, they will give some clarity on if they'll be ordering the 789. That will be the key decision which will drive just about everything else. No 789 order, or no conversion of the deferred A380 order into A330NEO's or A350's would tend to indicate a QFi that doesn't have a future.

I am not exactly sure this is totally correct.

Although I agree this would be a good indicator, I'd suggest QFi's current capital requirements for aircraft has been locked in for the next 2-3 years. When we consider the A380's will take ten years to pay off and QF are currently re-furbishing their entire A330 fleet, we probably have capital expenditures up to year 2018 of $0.4-0.5 million per year for QF International alone.

As the older A380's come of lease, I'd suggest this will free up cash to purchase additional A380's to replace the last nine 747's.

Using this methodology as a metric for capital expenditure, I don't think we will see any 787's in QF's fleet until 2021.

Quoting RyanairGuru (Reply 30):
For the record, Singapore Airlines missed out on being on this list by the narrowest of margins.

It would be interesting to see where Emirates sits on this list. It could be the case passengers are choosing to fly to Europe via Dubai, rather than Singapore meaning the South East Asia load factors are being affected by both low demand and different purchasing decisions in the market place.
 
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RyanairGuru
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 12:11 pm

Quoting travelhound (Reply 35):
It would be interesting to see where Emirates sits on this list.

74%
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qf2220
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 12:35 pm

Quoting Bluebird191 (Reply 22):
QF107/108 gets renumbered to QF17/18

Why renumber a flight?

Quoting RyanairGuru (Reply 30):
Qantas - PNG

Is this Qantas or QantasLink (or both)?

Quoting JQflightie (Reply 21):
and between Sydney and Santiago

Called it! (ok back in my box...!)
 
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RyanairGuru
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 12:44 pm

Quoting QF2220 (Reply 37):
Called it!

Hehe, I thought of you as soon as I saw that one 
Quoting QF2220 (Reply 37):
Is this Qantas or QantasLink (or both)?

AFAIK just QantasLink ex CNS
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allrite
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 1:53 pm

Northern Australia needs more and cheaper international airports according to tourism experts - ABC News.

I thought the current strategy was to manage tourism by getting rid of tourist attractions like the Reef.
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Flyingsottsman
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 2:36 pm

Saw a small peice in the Hearld Sun tonight that Garieth Evans of was saying that JQ could be doing the balk of the international flying as QFi will cut more to save costs, the main story is in the buisness section of the paper which I did not read I just saw the headline and a small peice you have to go to the business cection of the Hearls Sun. Anyone one else seen or heard anything of this? I asked this question in a thread a couple of weeks ago asking could QFi make JQ the main international carrier out of BNE,MEL,ADL,PER, and just run QFi just out of SYD?
 
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allrite
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RE: Australian Aviation Thread Part 104

Fri Aug 22, 2014 2:43 pm

Quoting Flyingsottsman (Reply 40):
secs ago) and read 10 times:

Saw a small peice in the Hearld Sun tonight that Garieth Evans of was saying that JQ could be doing the balk of the international flying

Discussed in it's own thread. Speculation, not news, and hopefully not true.
I like artificial banana essence!
 
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qfvhoqa
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RE: Australian Aviation Thread Part 104

Sat Aug 23, 2014 1:27 am

Quoting RyanairGuru (Reply 30):
The two most concerning figures are Jetstar to Japan (cf QF and JL)
Quoting RyanairGuru (Reply 30):
Below 55%:
Jetstar - Japan
Quoting RyanairGuru (Reply 30):
If we expand this to above 75% (it is off-season after all) you can add:
JAL - Japan
Qantas - Japan

I would say that the weakening of the Yen has impacted outbound leisure demand ex-Japan and JQ is not immune. I think carriers are seeing lower loads on Japan-Hawaii flights too because of this. The fact that QF & JL are both holding up well implies that business traffic is still strong (also when you consider that JL's fares are usually quite high).

Quoting RyanairGuru (Reply 30):
Below 50%:
United Airlines - Guam

  I do wonder why SA)">UA persists with CNS-GUM. There wouldn't be much reason for traffic ex-GUM to CNS or ex-CNS to GUM aside from military traffic - but surely that would be headed to TSV instead of CNS.

Quoting RyanairGuru (Reply 30):
Below 60%:
Malaysia Airlines - Malaysia
Quoting RyanairGuru (Reply 33):
At a casual glance TG, MH, GA were the three I was most concerned about. Given that their respective Australia O&D markets have been taken by the LCCs, and in the case of TG and MH they're not the competitors they once were to Europe, I think it is inevitable that we see them slash capacity to Australia. That will be sad to see, but they can't withstand these sorts of figures for too long.

MH's problem with loads is recent and we all know why they in particular struggle to fill their flights as very low fares. I would expect that their third daily SYD & MEL flights will be cut, and if not they should be.

Quoting RyanairGuru (Reply 30):
Below 65%:
Qantas - Singapore

BNE-SIN was still op by 744 for part of May, and SYD-SIN still had some 744 service. Now these have been swtiched to A330 we should see an improvement in loads. I wonder if the end of PER-SIN will also help.

Quoting RyanairGuru (Reply 30):
Below 65%:
South African Airlines - South Africa
Quoting RyanairGuru (Reply 30):
Below 70%:
Qantas - South Africa

Hmm.. Many said that the end of the QF-SA agreement would mean QF would suffer. Loads indicate that SA would have just as tough a time. The codeshare with VA will somewhat replace the seats they sold to QF but they will also be less competitive in the SYD market without a non-stop option.

Quoting RyanairGuru (Reply 30):
these airlines/routes achieved a load factor over 80% on a bi-directional basis:
Cathay Pacific - Hong Kong

Seems to support zeke's claim that CX deserves more frequencies to Australia when even in a low month their loads exceed 80%. I'm not sure I agree they need more frequencies when they could be upgauging frequencies. Why would they need a fifth daily flight to SYD?
 
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RyanairGuru
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RE: Australian Aviation Thread Part 104

Sat Aug 23, 2014 1:35 am

Quoting qfvhoqa (Reply 42):
I would say that the weakening of the Yen has impacted outbound leisure demand ex-Japan

Very good point, and JQ would be disproportionately affected by that given their reliance on inbound tourism.

Which leads to:

Quoting qfvhoqa (Reply 42):
I do wonder why SA)">UA persists with CNS-GUM

It's when you mentioned the weakened Yen that this made sense, as this route is apparently reliant on Japanese tourists to CNS connecting over GUM. If the situation does not approve I would not be surprised to see this route quietly dropped.

Quoting qfvhoqa (Reply 42):
I'm not sure I agree they need more frequencies when they could be upgauging frequencies

Oh but the benevolent Cathay Pacific is selflessly doing what is in the best interest of the Australian economy  

If their 77Ws don't have the right configuration for Australian services, as Zeke claims, I don't understand why they don't reconfigure some. They already have four 77W configurations, so it's not like they apply the one size fits all philosophy.
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PoleHillSid
Posts: 62
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RE: Australian Aviation Thread Part 104

Sat Aug 23, 2014 2:26 am

Quoting RyanairGuru (Reply 33):

I've just spotted something that I missed the first time:

Quoting RyanairGuru (Reply 30):
Below 70%
Quoting RyanairGuru (Reply 30):
Virgin Australia - UAE
Quoting RyanairGuru (Reply 30):
over 80%
Quoting RyanairGuru (Reply 30):
Etihad - UAE

That partnership sounds like it is working swimmingly

Doesn't tell us anything. It could be that the evening departure flights operated exclusively by EY could be up over 90% and the afternoon flight shared by VA/EY could have low passenger numbers for both carriers. And they operate different aircraft i.e. Capacity. EY 292 seats on an A346. VA 361 seats on a 77W. "Lies, damned lies and statistics."
 
ZK-NBT
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RE: Australian Aviation Thread Part 104

Sat Aug 23, 2014 3:51 am

Quoting RyanairGuru (Reply 43):

If their 77Ws don't have the right configuration for Australian services, as Zeke claims, I don't understand why they don't reconfigure some. They already have four 77W configurations, so it's not like they apply the one size fits all philosophy.

CX only have 2 77W configurations!

Quoting qfvhoqa (Reply 42):
MH's problem with loads is recent and we all know why they in particular struggle to fill their flights as very low fares. I would expect that their third daily SYD & MEL flights will be cut, and if not they should be.

I'm not sure on that one, MH added third MEL/SYD services earlier this year in order to pick up more connections and better compete with CX, SQ. I'm not sure their loads were that great before that were they? I agree that they probably should cut the third services.
 
TruemanQLD
Posts: 1346
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RE: Australian Aviation Thread Part 104

Sat Aug 23, 2014 4:31 am

Quoting RyanairGuru (Reply 30):
Below 50%:

Air Niuguini - PNG
Solomon Airlines - Solomon Islands
United Airlines - Guam
Virgin Australia - PNG
Virgin Australia - Solomon Islands

The first two, I understand why the continue to operate. They are government owned and serve an important purpose in ensuring links remain to these countries, and they are also heavily bureaucratic and their purpose is not really to make money. The last three however, raise many questions. CNS-GUM was always an odd route that wouldnt surprise me if it was cut but it has lasted so long that I am not sure it will. VA's POM and HIR services seem a waste of aircraft. IIRC government business flies solely on PX/IE, so it leaves very little high-yielding passengers for VA to catch. POM a little more so due to mining and the likes, but HIR does not offer this and VA is only really catching the low-yielding passengers. I know this is May, but I doubt its 80%+ every other month of the year.

Does anyone have the breakdown of PX load factors for BNE, SYD and CNS? Would like to see as they have a lot of capacity to BNE.

Quoting RyanairGuru (Reply 30):
Qantas - PNG

Given this is only CNS-POM, its not a huge route to start. Qantas flies the route 13x week with a Dash-8-400 and PX flies it 8x with the same (IIRC). Surely this can be rationalised in low season, cutting out one of the daily flights?

Quoting RyanairGuru (Reply 30):
Scoot - Sinagpore

Given their airfares are less than $200 normally, I think its time they give up.
 
IndianicWorld
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RE: Australian Aviation Thread Part 104

Sat Aug 23, 2014 4:42 am

Quoting TruemanQLD (Reply 46):
Given their airfares are less than $200 normally, I think its time they give up.

Tend to agree.

With all the talk of overcapacity into SIN, and much of Asia as a whole, I struggle to see how this will work.

Quoting ZK-NBT (Reply 45):
I'm not sure on that one, MH added third MEL/SYD services earlier this year in order to pick up more connections and better compete with CX, SQ. I'm not sure their loads were that great before that were they? I agree that they probably should cut the third services.

I agree with this. If MH wants to feed its flights it needs better connection options.

The issue is though that after the issues of late with MH, some short-medium term capacity adjustment might be best to increase yield potential until the airline can get back to a stronger position.
 
Flyingsottsman
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RE: Australian Aviation Thread Part 104

Sat Aug 23, 2014 10:14 am

Quoting allrite (Reply 41):
Discussed in it's own thread. Speculation, not news, and hopefully not true.

Ok I never saw that thread.
 
georgiabill
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RE: Australian Aviation Thread Part 104

Sat Aug 23, 2014 2:20 pm

Just wondering if the Air India's numbers are because it is a new route? Needs time to develope.
How much business and tourism between India and Australia?

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