How will Joyce react to troublesome routes?

[maninblack]

Dixon was always quick to react to un-profitable and troublesome routes as well as downturns. It has me wondering how long routes such as Mumbai and Bangkok will last on the QF schedule. It will be interesting to see how quickly Joyce acts.

Mumbai was already fairly minor with just 3 x A332 services a week and with the general economic slowdown and now the recent significant problems there which will no doubt have a major impact on tourism, I wonder how long QF will try to sustain this route. For travelers not departing SYD there are other easy options into India anyway.

BKK is a different story but is going to see a significant fall-off in traffic and there is no reason why anyone traveling to London (and not stopping off in Thailand) would now risk choosing this route over going via HKG or SIN. Again especially as this route is really only of primary convenience to traffic originating or ending in SYD.

 

[FL360]

For Kangaroo route if the economy downturn drops pax numbers, they might abandon the route via BKK and put pax via HKG or SIN. For the genuine BKK pax they will keep the QF flight no. using JQ flight to HKT, and transfer them to BKK using another "affiliated" Asian LCC !

 

[Platy]

Dixon was always quick to react to un-profitable and troublesome routes as well as downturns. It has me wondering how long routes such as Mumbai and Bangkok will last on the QF schedule. It will be interesting to see how quickly Joyce acts.

Mumbai was already fairly minor with just 3 x A332 services a week and with the general economic slowdown and now the recent significant problems there which will no doubt have a major impact on tourism, I wonder how long QF will try to sustain this route. .

That would say it all really now wouldn't it? Kindergarten cost analysis over common sense.

IF you can't make a route work to the hub of a country representing a quarter of the world' population maybe you don't deserve 1% of your souped up CEO salary.

Tourism or biz to India?????

Yep, why not try Deathstar to Goa instead of QF to Mumbai?!

 

[Platy]

It will be interesting to see how quickly Joyce acts...

Don't worry - the BA Board will tell him what to do...

 

[Platy]

For Kangaroo route if the economy downturn drops pax numbers, they might abandon the route via BKK and put pax via HKG or SIN. For the genuine BKK pax they will keep the QF flight no. using JQ flight to HKT, and transfer them to BKK using another "affiliated" Asian LCC !

What, like Honolulu??? (JQ3/4 and QF3/4)...

When QF1 becomes JQ1 you don't need a crystal ball to start buying farewell cards to the QF brand.

 

[FL360]

For these potential mergers news I always get the feeling that it is more to do with executive end of year bonus instead, because I am sure some of the bonuses are linked to the share price of QAN, potential takeover news simulate share price... at the end of the day it is all about talks talks talks anyway...

Remember during the dying days of ansett ? Solomon Lew and "someone (can't remember)" was talking about buying Ansett, this drag on for a while, at the end the white knight deal failed and it sends QAN shares up, it is hard to imagine insider trading did not take place there....

 

[Platy]

For these potential mergers news I always get the feeling that it is more to do with executive end of year bonus instead, because I am sure some of the bonuses are linked to the share price of QAN, potential takeover news simulate share price... at the end of the day it is all about talks talks talks anyway...

Maybe. But, remember for Iberia it's a colossal kick in the n*ts (they weren't told)! The stakes are high...

 

[simongr]

IF you can't make a route work to the hub of a country representing a quarter of the world' population maybe you don't deserve 1% of your souped up CEO salary.

My company has cut all travel to India as a whole until the situation is better understood so I wold not be surprised to see flights cut.

India is a supplier to the world rather than a power house - business is not 100% dependent on us travelling there - more on their ability to service us (and real major economies) so I am not sure where your attitude is coming from.

 

[docjames]

Solomon Lew and "someone (can't remember)"

Lindsay Fox

 

[garyjohn951]

My company has cut all travel to India as a whole until the situation is better understood so I wold not be surprised to see flights cut.

India is a supplier to the world rather than a power house - business is not 100% dependent on us travelling there - more on their ability to service us (and real major economies) so I am not sure where your attitude is coming from.

I find these quick actions interesting.

The deadly bomb attacks in London didn't stop people going and the word is that there will 99% likely to be another "successful" bomb attack in London within 3 years. Is that stopping people !!!

India is a HUGE place.

 

[Platy]

I find these quick actions interesting.

The deadly bomb attacks in London didn't stop people going and the word is that there will 99% likely to be another "successful" bomb attack in London within 3 years. Is that stopping people !!!

India is a HUGE place.

EXACTLY!!! 500 seats a week to a population, of what, nearly 2 billions?

Suppose it comes down to this. Are you going to let short term simplistic bean counting decide the fate of a multi-billion dollar company that MUST transact on an international level AND have the STRENGTH to take the good and bad times in its stride through innovative strategy. The QF brand is bleeding from every capillary, vein, artery and soon there won't be enough circulatory pressure to keep the system flowing. What a joke, QF suppose to be the equal of BA?! Look folks, the Deathstar has, what, just a paltry SIX scarebuses on international routes?????

Ooops, sorry. off the script folks. Since Deathstar has running costs up to 50% less than regular brands (eh that would be QF!). That MUST be the answer! Right , Alan???? Businesses be damn*d - obviously 4.5 billion folk worldwide (those not starving in the world) don't do anything to generate GDP in supposed bad times.

But that is not the point is it? Joycey has decided that Deathstar will rule the airways and the costly insufferable anachronistic QF must be superceded by the orange star studded scarebus and dreamliner armada.

Now, if you were to concede that there is an underlying problem in the western economies (personal debt levels perhaps?), then we would have a real debate...

 

[dajop]

BKK is a different story but is going to see a significant fall-off in traffic and there is no reason why anyone traveling to London (and not stopping off in Thailand) would now risk choosing this route over going via HKG or SIN. Again especially as this route is really only of primary convenience to traffic originating or ending in SYD.

I would have thought:
a) BKK has a history over the last 30 years of these sort of issues, always rebounding strongly after things settle down (that isn't to say things have settled down yet, but will one day, whether it is a week, a month or longer)
b) Many pax on QF 1/2 all the way through to/from LHR may not be aware that the plane actually stops in BKK
c) QF 1/2 to/from LHR operated successfully through SIN anyway when crisis was on
d) I suspect the JQ market is probably more likely to be scared off by the BKK events, than the perhaps the QF market, particularly given many of the pax up the front of QF not going on to LHR are doing business in BKK and would have good information on the situation.

 

[simongr]

I find these quick actions interesting.

The deadly bomb attacks in London didn't stop people going and the word is that there will 99% likely to be another "successful" bomb attack in London within 3 years. Is that stopping people !!!

India is a HUGE place.

Actually post 9/11 and around the UK bombings the reaction of my prior company was to suspend all international travel. Post the UK bombings all staff were advised that they should not travel to London until the situation was clearer - i.e. was this going to be a long term campaign?

EXACTLY!!! 500 seats a week to a population, of what, nearly 2 billions?

< snip > QF must be superceded by the orange star studded scarebus and dreamliner armada.

I am not sure I understand this rant. Why should an airline not reduce or increase routes based on the profitability of a particular route? If teh BOM route is not making money then why do they have an obligation to fly there? There are three other decent hubs in Asia (SIN/HKG/BKK) - why do QF HAVE to fly to BOM?

 

[JohnK]

I don't think the QF full service route to/via BKK is going to go away in a hurry. The recent incident is not likely to affect through traffic or genuine visitors although it may affect some of the JQi leisure market.

Why do people think that JQ is the solution to unprofitable QF routes? JQi has performed atrociously to date and some of the routes it has attempted to make sucessful have light loads. By the way haven't a few of the JQi routes disappeared already?

If JQi was to operate the HKT/BKK routes exclusively for QF then I am afraid they are going to lose a lot of business. Looking at my next SYD-BKK return trip in March EK is priced at ~$780. I haven't looked at the JQi airfare but I know which carrier I would choose regardless. I think JQi would struggle to compete with SQ (via SIN), TG and CX (via HKG) who are priced at ~A$1200-1300. For the record QF has one of the highest airfares around the time I want to go and with Platinum status in the bag I may try something different....

 

[ANstar]

Some great stats are on this site

International Airline Activity - Monthly Publications

You can see pax numbers on the routes / airlines year on year as well as their load factors.

Might give an insight into what routes are for the chop - I'd say Chinese routes aren;t looking good, not is HKG for the QF group.

 

[SusanS]

Probably the same way he reacts to most problems, he's a mathematician/physicist/CEO, so he's going to be very practical, matter-of-fact. If the route don't work, it don't work. It's not a matter of making a route work - either it does or it doesn't. Passenger demand is the determining factor, and if it ain't happening, then it's costing money, so get rid of it.

Of course you can try and stimulate demand, but if it's not real, it won't hold and you've spent an awful lot of money/energy/time on something that just wasn't going to happen.

It's tough times out there, and as a ruthless shareholder, I say go Joyce!

Q is private transport business, not public transport.

 

[Platy]

I am not sure I understand this rant. Why should an airline not reduce or increase routes based on the profitability of a particular route? If teh BOM route is not making money then why do they have an obligation to fly there? There are three other decent hubs in Asia (SIN/HKG/BKK) - why do QF HAVE to fly to BOM?

1. The potential Indian market is colossal. If QF can't run the route profitably, they must be making some profound errors.

2. QF do not HAVE to fly there. The problem is that if they choose not to, they are ignoring one third of the world population (and a country Australia are looking to, to sustain any chance of economic growth).

3. Route by route profit is only one factor to consider when setting an overall strategy.

4. QF group has a history of attempting to replace some routes with Deathstar on the basis they will be cheaper to run and thus result in greater profitability only to see these fail.

5. Adjusting factors such as pricing, product and marketing strategy might improve profitability - adding and substracting routes on simple profit analysis is not the only option.

6. Removing ever more routes from the QF schedule weakens the overall QF brand.

 

[Platy]

Some great stats are on this site

International Airline Activity - Monthly Publications

You can see pax numbers on the routes / airlines year on year as well as their load factors.

Might give an insight into what routes are for the chop - I'd say Chinese routes aren;t looking good, not is HKG for the QF group.

More critically, IMHO, these figures also show a loss of market share for QF.

 

[Platy]

Passenger demand is the determining factor, and if it ain't happening, then it's costing money, so get rid of it

Well yes you certainly would have to axe any superficially unprofitable routes with a business approach, which ignores any interest in attempting to control intrinsic factors affecting customer demand.

I would be quite worried about my shares (if I had any) on the basis of Joyce's first week fumblings (particularly the lack of sell on the BA deal and the possibility of exposing the airline to BA's woeful financial position and superannuation fund liabilities).

 

[Platy]

Q is private transport business, not public transport.

So you'd be quite comfortable for the Fed Gov to remove the protection of QF on the highly profitable US routes? Routes which might feature a higher passenger demand if the more competition were allowed?!