How can QFi not be making any money? packed flights to the UK

[simongr]

I know it is only a sample of one but just checking my flight to the UK next week to gauge any chance of an OpUp (very unlikely I know but always interesting to speculate rather than working) and F is showing this:

F0 A0 J2 C0 D0 I0 W0 R0 T0 Y0 B0 H0 K0 M0 L0 G0 E0

So potentially only two seats available for sale.

The EF seat map is showing five unallocated seats in F, 1 in J and 1 in PE

Checking on the QF website the return trip in J would cost $14,963 :shock: I paid about $11K a couple of months ago.

Just what is wrong with QFi that aren't making money???

 

[Kendall Roy]

Olympics? Peak Season?

 

[nlagalle]

Just what is wrong with QFi that aren't making money???

Higher base operating costs?

 

[smit0847]

Bad management?

Poor fleet maintenance?

Too many overheads?

Crippling union involvement?

Limited route structure?

 

[richie9x]

Could be filled up with passengers on the companion fares.

 

[dajop]

I know it is only a sample of one but just checking my flight to the UK next week to gauge any chance of an OpUp (very unlikely I know but always interesting to speculate rather than working) and F is showing this:

F0 A0 J2 C0 D0 I0 W0 R0 T0 Y0 B0 H0 K0 M0 L0 G0 E0

So potentially only two seats available for sale.

The EF seat map is showing five unallocated seats in F, 1 in J and 1 in PE

Checking on the QF website the return trip in J would cost $14,963 :shock: I paid about $11K a couple of months ago.

Just what is wrong with QFi that aren't making money???

Don't forget that not everyone is travelling from Australia to London, some are probably travelling the other way around on tickets bought in London (and probably paying a lot less), whilst others may only be travelling part of the journey.

A random look at some loads for different sectors of same flights can tell a slightly different story (and ditto for SYD flights)

QF9 MEL-SIN F3 A3 J9 C9 D9 I9 W2 R0 T0 Y0 B0 H0K0 M0 L0 G0 E0
QF9 SIN-LHR F0 A0 J1 C1 D0 I0 W0 R0 T0 Y0 B0 H0K0 M0 L0 G0 E0
QF9 MEL-LHR F0 A0 J1 C1 D0 I0 W0 R0 T0 Y0 B0 H0K0 M0 L0 G0 E0

 

[AnonymousCoward]

a) SYD/MEL-LHR isn't the only route that QFi flies - I think it's one of their busier ones - but it probably subsidies the loss-making ones that aren't full
b) Don't always believe expertflyer in terms of actual loads - sometimes it shows J0/W0/Y0 yet I'm still able to get a ticket ex-Australia. It's just ex-Singapore that I can't get a ticket.

 

[drewbles]

Every QFi flight i've taken over the years has been at, or very close to, max capacity.

It's clear they're filling the birds, but obviously there's other factors at play. Too many cheap seats? Higher base operating cost? Taxes? I don't know but i'm sure it's a combination of it all.

 

[yohy?!]

Cooking the books.....

 

[kempvet]

the emergence of the middle Eastern airlines and government subsidies, creative accounting and the use of legislative loopholes (AA bankruptcy), far cheaper labor costs in other countries, but most importantly the tyranny of distance syndrome with respect to Australia, most places at the end of the line will do it hard, compared to a real hub such as Singapore.

 

[dajop]

Another thought, could it also be that we haven't yet seen the effect of dropping 50% of the LHR services flow through to the financial results? One would expect higher loads and higher yields after this cut in capacity but given that it happened in the last few months of the financial year we won't really see the impact of this until next FY.

 

[dukkha]

[..] Just what is wrong with QFi that aren't making money???

Airline profit margin is less than 1%. Any incidents turn the operation into a loss making business. Our journalist at WSJ illustrated earlier this month.

How Airlines Spend Your Airfare
How Airlines Spend Your Airfare - WSJ.com

How Airlines Spend Your Airfare - The Middle Seat Terminal - WSJ

 

[kelvedon]

Airline profit margin is less than 1%. Any incidents turn the operation into a loss making business. Our journalist at WSJ illustrated earlier this month.

How Airlines Spend Your Airfare

Thanks for posting that Dukkha. an interesting read.

And a QFi "loss" helps push the restructuring barrow.

 

[simongr]

Airline profit margin is less than 1%. Any incidents turn the operation into a loss making business. Our journalist at WSJ illustrated earlier this month.

How Airlines Spend Your Airfare
How Airlines Spend Your Airfare - WSJ.com

How Airlines Spend Your Airfare - The Middle Seat Terminal - WSJ

I guess my OP was a bit of a vent about the continued story of not making any money - but all I see is full cabins and huge prices. How can QF not make money in that situation and others can charging lower prices...

 

[JohnPhelan]

I guess my OP was a bit of a vent about the continued story of not making any money - but all I see is full cabins and huge prices. How can QF not make money in that situation and others can charging lower prices...

Because most of the others don't have the same overheads as QF. Generally, the Middle east airlines don't pay any taxes and are actively subsidised by their governments. And the Asian airlines generally have a much lower wage bill.

Why do you think almost all European airlines have pulled out of Australia? Because with their wage and company structures, they simply can't compete against the Mid east and Asian airlines.

QFi's problems are not surprising. In a market that now shops on price, QFi simply can't compete. I continue to fly with them, despite the fact that they are more expensive, because I want to support an Australian company (and because of QF's impeccable safety culture). But the vast bulk of people choose on price.

 

[amaroo]

CODB ....filler

 

[mannej]

I guess it can be very route dependant.

QF seem to be downsizing on the PER runs (SIN and HKG) going from 333 to 332's.

Both CX and SQ seem to be adding extra flights, or using bigger aircraft (such as the 773's etc).

I find it interesting that QF struggles here, but I guess neglect does that.

 

[dukkha]

I guess my OP was a bit of a vent about the continued story of not making any money - but all I see is full cabins and huge prices. How can QF not make money in that situation and others can charging lower prices...

Mid-East airlines has super cheap petrol (cheaper than water at local price), Asian airline has cheap labour ($1 a day and still begging more hours so that they can crack 100+ hours per week for over time) and national airline such as SG and MH has their tax-payer subsidizing the cut-throat competition.

When Richard Branson, the wealthy owner of Virgin Atlantic Airways, was asked how to become a millionaire, he had a quick answer: "There's really nothing to it. Starting as a billionaire and then buy an airline." Unwilling to accept Branson's proposition on faith, your Chairman [Buffett] decided in 1989 to test it by investing $358 million in a 9 1/4% preferred stock of USAir [, which filed its chapter 11 bankruptcy later in 2002].

 

[Fruitcake]

Mid-East airlines has super cheap petrol (cheaper than water at local price), Asian airline has cheap labour ($1 a day and still begging more hours so that they can crack 100+ hours per week for over time) and national airline such as SG and MH has their tax-payer subsidizing the cut-throat competition.

Holy misinformed stereotyping, batman! :shock:

 

[whatmeworry]

I think most people believe that AJ's long game is to slowly cannibalise QFi, make it appear as unprofitable as he can and to make the staff look like they are unwilling to change till he can by force or by government coercion jetstarise the QFi in one form or another.

Eventually we will get QFi lite (Nearly there) as routes have been stripped back and reinvestment is funnelled into JQ. At some point QFi and JQ will be merged or JQ spun off to take over QFi and we will all be flying the Orange Kangaroo!