Are aircraft retirements a possibility?

[Melburnian1]

The QF and to a lesser extent the VA loss made headlines.

Beyond those already flagged, is there any chance of either airline making cuts to the number of aircraft operating flights (obviously with VA I'm thinking domestically, since internationally there's little to cut) or would this be viewed by JB or AJ as being a 'gift' to the competitor?

Restricting supply...Economics 101.

Surely the boards of both airlines must be under pressure to save even more money - fast.

 

[Mattg]

Isn't this more or less what they're already doing?

 

[woodborer]

Do you mean is it possible that VA will reduce its A330 fleet from 7 to 6, or is it possible that QF will hand back two A330s and two 737s? Definitely on the cards

 

[harvyk]

I was under the impression that they where already retiring aircraft as a result of the results. I thought it was pretty much the desert for all QF 767's (by the end of the year), and all non upgraded 747's (within the next year or so). Don't know about things on the VA side.

 

[Mattg]

I was under the impression that they where already retiring aircraft as a result of the results. I thought it was pretty much the desert for all QF 767's (by the end of the year), and all non upgraded 747's (within the next year or so). Don't know about things on the VA side.

They're doing exactly what the previous poster said.

 

[Melburnian1]

Mattg, you may have misunderstood the question that I posed.

I asked about cuts beyond those already publicly announced.

An anonymous (share) analyst quoted in today's 'AFR' made a similar point, saying in a rather brief paragraph that further cuts were possible. I think he was discussing QF not VA.

 

[Mattg]

Mattg, you may have misunderstood the question that I posed.

I asked about cuts beyond those already publicly announced.

An anonymous (share) analyst quoted in today's 'AFR' made a similar point, saying in a rather brief paragraph that further cuts were possible. I think he was discussing QF not VA.

They have been continuously announcing cuts and early aircraft retirements for several years. Those announced last week are in addition to those. Do you suggest they make even further cuts?

Again, restricting supply is what they are already doing as well, domestically at least. Qantas has announced no new capacity and various reductions in flights recently, although for several years they were adding more capacity than was met by demand, and as you suggest this did lead to lower profits. But this is changing now.

 

[Melburnian1]

Yes, mattg, I was indeed asking whether further cuts were possible. The analyst I referred to above implied that they were desirable.

This is in the context of weak demand for leisure travel. Filling the 'back of the bus' at reasonable yields is very helpful to achieving profitability, so excessive numbers of empty seats does the reverse. QF has had poor (and perhaps more importantly, declining) load factors domestically lately.