Cairns Post: Airline opens international link

[chooms]

Airline opens international link - Local News - Cairns, QLD, Australia

Airline opens international link


Wednesday, January 28, 2009
© The Cairns Post

NEW air services to be announced today will add crucial links to Japan at a time when the tourism industry most needs them.
Continental Micronesia is adding an extra six flights from Guam into Cairns in March and two extra weekly flights from April until September as part of a nine-month trial tourism leaders hope will prove to the airline the services can work permanently.
The services will add 9000 seats into the Far North but importantly provide vital links between Cairns and Japan.
More than 100,000 seats were lost when Qantas cut services between Cairns and Japan last year, but research shows many Japanese still want to holiday here. Continental Micronesia, which already has two weekly flights between Cairns and Guam, serves eight major cities in Japan.
It also flies to Manila and Honolulu with regular services to the US mainland.

 

[docjames]

But, if they wont come on direct flights, why on earth would they come on a flight via Guam?

I guess it's <10% of the lost seats replaced, so they'll probably fill enough to keep it viable. And it might be an interesting option for FNQ residents to get to HNL/USA rather than transit BNE/SYD/MEL/AKL.

 

[turtlemichael]

But, if they wont come on direct flights, why on earth would they come on a flight via Guam?

I guess it's <10% of the lost seats replaced, so they'll probably fill enough to keep it viable. And it might be an interesting option for FNQ residents to get to HNL/USA rather than transit BNE/SYD/MEL/AKL.

The plus in Japan is that Continental is seen as legacy and Jetstar is not. Go figure! I understand their market into Cairns is currently mainly from Japan and also Guam residents with a trickle from the mainland. The flight from Tokyo via Guam is currently 10-12 hours including 3-4 on the ground so its not unreasonable compared with at least the same via a southern destination and 7-8 on JQ. I guess it will come down to price and, so far, can't see anything cheap on the Continental site though it's early days.

For the few who want to come from East Coast and Houston direct to TNQ, maybe for diving, it's as timely as going via LAX/SYD or AKL.

All up, at this point anything is welcome. The Premier is apparently in Cairns today to announce it so I wonder if their are any "subsidy" dollars as per JQ/QF?

 

[Mal]

All up, at this point anything is welcome. The Premier is apparently in Cairns today to announce it so I wonder if their are any "subsidy" dollars as per JQ/QF?

Somehow I think Qld taxpayers are susidising these new flights to some extent...

 

[docjames]

IIRC they said on the ABC news @ 7pm last night around $5million subsidy from Qld govt.

 

[Platy]

IIRC they said on the ABC news @ 7pm last night around $5million subsidy from Qld govt.

Oooch!

Now let me see if I have got my maths right.

6 extra flights in March plus two per week for the 6 months April-Sept totals (6 + (2x6x4)) = 6 + 48 = 54 return flights in total or 108 sector flights.

So $5m divide 108 is about $47,000 per flight sector.

OR if the aircraft if fully loaded with 175 pax (it's a 737) that's $270 per seat per sector ($540 round trip).

Now the typical cost of Cairns Guam return is $900 so this represents a better than 55% subsidy!!!

The QLD taxpayer is effectively guaranteeing to buy over 100 seats on a 175 seat aircraft at the curently advertised economy fare!!!

Nuts. Please someone tell me my maths is wrong....

 

[turtlemichael]

Oooch!

Now let me see if I have got my maths right.

My calculator isn't working this morning so I can't check the maths. I have faith in your number crunching ability however.

Another way of asking the question is whether it is better to spend the money that way or on dole payments?

 

[docjames]

Dont forget the theory is they make that money back from tourist revenues - those extra people are supposed to inject money into the economy so it's not just "but 100 seats" per se.

Note i did say theory......

 

[Platy]

Dont forget the theory is they make that money back from tourist revenues - those extra people are supposed to inject money into the economy so it's not just "but 100 seats" per se.

Note i did say theory......

Yes, I agree, BUT.....the crazy thing is that Gov aren't subsidising the tourists to come here, merely, removing the business risk from the airline!!! The tourists aren't getting a cheaper fare out of this to persuade them to go to Cairns rather than an alternate holiday destination.

The Gov are not providing an incentive for more business in Cairns at all! Just a different way to get here.

One must hope that there are both appropriate marketing initiatives and a re-commitment by local businesses to deliver consistent quality product to back up this paltry number of extra seats.

The worrying development in CNS CBD is the increasing number of failed restaurants leaving empty premises, not to mention a key street corner where redevelopment has been suspended - the place is feeling like a has been city....not a good image for tourists...

 

[turtlemichael]

Dont forget the theory is they make that money back from tourist revenues - those extra people are supposed to inject money into the economy so it's not just "but 100 seats" per se.

Note i did say theory......

I think it's a well proven theory in places like TNQ which is virtually dependent on tourism.

 

[docjames]

I happen to agree with platy and tutrlemichael! In some cases it works, in some it doesnt. But that applies for any government subsidised operation, some work, some dont. (Hello Melbourne F1 Grand Prix - there's gotta be better ways to spend $41m - and I'm an F1 fan!).

What about $250 vouchers to spend upon arrival??? Cash into tourist pocket, airlines decide if take risk or not (rather than collect the cash for luttle/no risk). If there's demand for travel, they'll put on flights.



The answer is there is no easy soultion, but a number of approaches should be used together.