have a yield problem ex-Australia, and BNE
is the market that best illustrates it.
Everything that I'm about to write is equally applicable to MH
, they all suffer from the same underlying problems in this market.
The first thing is to remember that they can sell Y many times over if the price is right. The price *has* to be right to compete against the LCCs that are eating into their bread and butter. In order to remain competitive they are offering low yield Y fares of the sort never before seen. Hence a yield issue.
The 77W is actually "perfect" (wrong choice of word) for BNE
because the incremental trip costs compared to a smaller aircraft are relatively small, but with ~100 extra Y seats. To the fullest extent applicable on a loss making route, those seats pay for themselves.
particularly suffers is a lack of J demand. SYD
are much larger cities and larger business markets, and the proximity (and affinity) of the West Coast to SE
Asia, coupled with what we might refer to as the "cashed up miner" syndrome, keep things chugging along out of PER
is in a catch 22, not really falling into either.
In the past the relatively high yield fares to Asia, topped up with some Kangaroo traffic, kept things humming relatively smoothly. The arrival of LCCs on the one hand and ME3, and more recently PRC3, on the other have upset this delicate balance.
really no longer fit in the market outside of "flop and drop" special fares flicked through consolidators. This is a problem (infinite Y demand, limited J demand, soft fares) they all face in Australia, and BNE
represents the "perfect storm" to highlight those issues that are being felt more broadly.
Low fares on TG
might not be too obvious, but they rely very heavily (as does GA
and to a slightly lessor extent MH
) on consolidators and travel agents. The likes of Infinity/FCL can often flog ridiculous discounting, and it is these relationships that fill the planes.