Speculated route cuts

[Isochronous]

Qantas set to cut flights to New Zealand and Northern Territory | News.com.au

EMBATTLED Qantas may be forced to cut flights to New Zealand and the Northern Territory as part of its $2 billion cost saving drive.Fly-in-fly-out routes to mining communities could also be on the chopping block as part of a wide-ranging review announced yesterday by the airline, according to Qantas's former chief economist, Tony Webber.
"I see it as a three-tier thing," he said.
"The first tier is the mining routes, followed by any routes positively affected or indirectly affected by mining actions, such as those in Queensland and Western Australia.

"One of the routes that is always really bad recently is Darwin and other Northern Territory routes," he said.
"They've already pulled back considerably but they may pull back further."
Mr Webber said services to the New Zealand cities of Christchurch and Wellington were also at risk.

Mr Webber is a bit of a media tart, but what do people think about this speculation.

Is QF struggling with Wellington and Christchurch services?

What about NT? I know CBR-DRW got the axe not that long ago, but what else is there in NT to cut?

What's interesting is that subsequent comments in the article argue that international cuts to BNE, MEL, PER, and ADL actually were detrimental to profits in the long-term:

Pacific Aviation Consulting managing director Oliver Lamb said the struggling airline needed to reconnect with Australian customers outside Sydney if it is to return to profitability.He said Qantas had made an error by dramatically slashing many of its international services from Brisbane, Melbourne, Perth and Adelaide over the past two years, allowing foreign airlines to capture its market share.
"Qantas has spent a lot of money on ventures in Asia, and Jetstar, at the expense of its international network," Mr Lamb said.
"They need to grow the international network from Melbourne, Brisbane and Perth - the two are not mutually exclusive."

 

[VHOEJ]

Qantas set to cut flights to New Zealand and Northern Territory | News.com.au

Mr Webber is a bit of a media tart

You summed it up in one. Why do the media go to this guy every time QF is mentioned? He isn't an expert, he is an ex-employee from years ago.

 

[Standby]

Tony Webber was chief economist at QF so has the historical business knowledge and industry context to be approached before Ben Sandilands for any views. To call him just an ex employee lumps him in a group that includes JB and all the ex QF staffers at VB.All know what worked for QF whilst they were there,JB though prob has better up to the minute inside info now than T Webber .I think he will be wrong about the NT.Route decisions will move with the economy,QLD has mining in construction mode now and the NT has new projects kicking off so capacity will move east now WA is moving more into production mode where fly in/ out numbers will decline, So NT should actually increase flying , following the Fin review is my insider source.The close down of some operations in Gove announced recently is a bit of a back step but new projects will outstrip it in the long run.As 4 Tasman, CHC must be tough after the earthquake but WLG is the capital you'd think would survive

 

[markis10]

I think the article is way off the mark, DRW is unlikely to get any cuts for flights, in fact recently QF increased their BNE DRW frequency, I do think Gove will lose most of its flights for the simple reason there is no longer a reason to go there unless you live there. NZ won't see any cutbacks either, as that would be in breach of the approval for the JSA.

 

[zainman]

isn't one of the conditions of the EK/QF alliance that they cannot reduce capacity to NZ? If yes then surely they can't cut those routes...

 

[SeatBackForward]

QAN's current problems reminds me of the "Homer the Vigilante" Simpsons episode:

Otto: Um, how are we going to get out of here?
Homer: We'll dig our way out!
Wiggum: No, dig _up_, stupid.

 

[moa999]

Thought most of the mining routes were under contract to the mines for FIFO so would expect these to be profitable

 

[J-G]

Certainly noticed lighter loads on PER-PBO flights lately. Some services downsized to Dash8s.

 

[yo yo ma]

I think the article is way off the mark, DRW is unlikely to get any cuts for flights, in fact recently QF increased their BNE DRW frequency.

It was partially correct in that it was JQ that reduced services to Darwin, rather than QF. As you said, they have added ADL-AKL.

JETSTAR is stopping flights from Darwin to Manila and Tokyo and cutting other domestic and international services as part of an overhaul of its Top End flights. The budget carrier said it will relocate three Airbus A320 aircraft to Adelaide and reduce the number of weekly services in and out of Darwin from 54 to 49 a week in response to what it said was "increased capacity and competition", particularly on international routes.
"Jetstar has been clear in the past that our flying from Darwin is among the most marginal on the network," the airline said.
"This month, Jetstar will begin direct services from Adelaide to Auckland and non-stop flights from Adelaide to Bali," Jetstar Australia and New Zealand chief executive David Hall said.




Jetstar to reduce international flights from Darwin in the wake of Qantas budget cuts | News.com.au

 

[11sjw]

Certainly noticed lighter loads on PER-PBO flights lately. Some services downsized to Dash8s.

Have the DJ flights to PBO started as yet?

 

[WeeGraeme]

What's interesting is that subsequent comments in the article argue that international cuts to BNE, MEL, PER, and ADL actually were detrimental to profits in the long-term:

I know I'm only one passenger on one return flight.

I flew BNE to LHR in July. I preferred to fly Qantas. I also wanted to fly via a South East Asian hub on the way out. I couldn't find a flight out of Australia on the Qantas website, where travel was via any SE Asian hub. I would even have accepted a QF codeshare for part of the trip. I'm not saying that Sydney and Melbourne don't need the capacity they have, but I think it still annoys people in the other capital cities that you can't fly on QF metal from those cities to Europe, and you can't fly via a SE Asian hub.

 

[samh004]

Thought most of the mining routes were under contract to the mines for FIFO so would expect these to be profitable

Unless the competition has forced them to offer flights with very slim margins.

 

[Aussie_flyer]

I know I'm only one passenger on one return flight.

I flew BNE to LHR in July. I preferred to fly Qantas. I also wanted to fly via a South East Asian hub on the way out. I couldn't find a flight out of Australia on the Qantas website, where travel was via any SE Asian hub. I would even have accepted a QF codeshare for part of the trip. I'm not saying that Sydney and Melbourne don't need the capacity they have, but I think it still annoys people in the other capital cities that you can't fly on QF metal from those cities to Europe, and you can't fly via a SE Asian hub.

You can fly to asia for a stop then on qf codeshare ek metal to dubai then dubai to london on qantas. You may need an agent to put it together. Ive no idea if the website allows it.

 

[Isochronous]

I know I'm only one passenger on one return flight.

I flew BNE to LHR in July. I preferred to fly Qantas. I also wanted to fly via a South East Asian hub on the way out. I couldn't find a flight out of Australia on the Qantas website, where travel was via any SE Asian hub. I would even have accepted a QF codeshare for part of the trip. I'm not saying that Sydney and Melbourne don't need the capacity they have, but I think it still annoys people in the other capital cities that you can't fly on QF metal from those cities to Europe, and you can't fly via a SE Asian hub.

You have two options if you want to go via Asia:

1. QF to SIN/BKK, then EK to DXB and Europe
2. QF to SIN/BKK/HKG, then AY to Europe via HEL (they codeshare with QF I believe), or BA to Europe via LHR, or CX from HKG (you may need to use the multi-city engine on the website to book this, or call QF, or use a travel agent)

 

[markis10]

It was partially correct in that it was JQ that reduced services to Darwin, rather than QF. As you said, they have added ADL-AKL.

JETSTAR is stopping flights from Darwin to Manila and Tokyo and cutting other domestic and international services as part of an overhaul of its Top End flights. The budget carrier said it will relocate three Airbus A320 aircraft to Adelaide and reduce the number of weekly services in and out of Darwin from 54 to 49 a week in response to what it said was "increased capacity and competition", particularly on international routes.
"Jetstar has been clear in the past that our flying from Darwin is among the most marginal on the network," the airline said.
"This month, Jetstar will begin direct services from Adelaide to Auckland and non-stop flights from Adelaide to Bali," Jetstar Australia and New Zealand chief executive David Hall said.




Jetstar to reduce international flights from Darwin in the wake of Qantas budget cuts | News.com.au

The article is talking about QF domestic to NT , not JQ, FWIW in a domestic sense JQ actually increased their NT flights by making the CNS DRW a daily (which in itself is a likely precursor to QF link culling that route I suspect). The move to 3k for DRW international makes a lot of sense, at least Darwin has a full service One World option now internationally with MH.

 

[daturtle]

Have the DJ flights to PBO started as yet?

I've heard rumours of Deathstar Dash-8s...

 

[eastwest101]

The article is talking about QF domestic to NT , not JQ, FWIW in a domestic sense JQ actually increased their NT flights by making the CNS DRW a daily (which in itself is a likely precursor to QF link culling that route I suspect). The move to 3k for DRW international makes a lot of sense, at least Darwin has a full service One World option now internationally with MH.

All good points thanks! Interesting story happening in DRW due to relocation of resource projects and domestic competition in DRW plus the other part of JQs sort of half hearted attempt at making DRW a 'mini hub' with JQi A320 flights to Bali/Manilla/Singapore and Japan being discontinued. Do you think the movement of JQd based A320s from the DRW base to a new ADL base, and more 3K into DRW is a combination of high costs built into the DRW base and/or low yields due to competition in DRW coming from international competitors? I guess we also have to consider that the NT tourism market is also dead as a dodo with the high AUD making life tough for the NT tourism industry.

 

[markis10]

All good points thanks! Interesting story happening in DRW due to relocation of resource projects and domestic competition in DRW plus the other part of JQs sort of half hearted attempt at making DRW a 'mini hub' with JQi A320 flights to Bali/Manilla/Singapore and Japan being discontinued. Do you think the movement of JQd based A320s from the DRW base to a new ADL base, and more 3K into DRW is a combination of high costs built into the DRW base and/or low yields due to competition in DRW coming from international competitors? I guess we also have to consider that the NT tourism market is also dead as a dodo with the high AUD making life tough for the NT tourism industry.

I think JQ have struggled with providing a competing product requiring a DRW stopover, not helped by OMG timings, moving to 3k aircraft may help with timings as well as costs down the track.

 

[11sjw]

I've heard rumours of Deathstar Dash-8s...

With Rio Tinto moving to Virgin (I've heard this and/or a BFOD policy) I would've thought DJ'd get that up at running ASAP.

 

[eastwest101]

I think JQ have struggled with providing a competing product requiring a DRW stopover, not helped by OMG timings, moving to 3k aircraft may help with timings as well as costs down the track.

Yeah - I agree with that conclusion. JQ are a bit stuck with DRW as well - as once other competitors like Malaysian, Silkair, Tigerair, Indonesia Air Asia, Phillipines Airlines and other various SE Asian LCC's get established then JQd will be delivering transit passengers to DRW and hence to their competitors! So the cost pressures are coming into the Australian market with DRW as a handy beachhead. That also explains the move to 3K services as you would imagine that JQ with their built in Australian costs would start to get massacred by the lower cost carriers...