How much cheaper will trans-Pacific flights get?

[Warks]

Stories in the media regarding the Open Skies agreement between US and Australia have given me (false?) hope that I might be better to wait a while before booking the family flight to YVR via LAX (& Disneyland!!).

Have been running a few dates through Webjet and the best I have got is about $10 000 for 2 adults & 2 kids (under 12). I haven't researched it too hard as I probably can't afford it until next year anyway. Might be able to get enough points for two adults to LAX return by then but that's it.

So will we see some insane deals from airlines we probably wouldn't trust to get us across the Pacific in one piece? I'd appreciate your thoughts and predictions.

 

[Evan]

I would guess that economy will not be that much cheaper.

I think the competition may be more in the premium cabins but even that depends, if there is really so much demand for premium cabins we still wont see a reduction in prices much or at all.

Just my thoughts anyway, you know like petrol, it never comes down, only goes up !

E

 

[Mal]

I don't think any carriers are able to take advantage of it at the moment (except Qantas).

V Australia will when their aircraft come online, Qantas has plenty of aircraft on order which will allow them to increase flights as they fit.

I doubt any American Carriers will take up the extra flights. They have enough issues with trying to make money and update old aircraft without wanting to embark on any expansions to Australia.

Emirates/Singapore are the 2 carriers which would have been able to (perhaps) make a difference, but they are still locked out of the new agreement.

 

[N860CR]

Try looking at statravel.com.au for some cheap flights for the kids. I found under 26 fares to LA with NZ for about $1600, then for the over 26's about $1800.

 

[simongr]

7.3%
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And for the more serious answer - this is a major unknown. We do not know if more players will enter the market, how current players will react and where the source of demand will be from.

In theory "open skies" should improve competition but many things affect the market - the collapse of the US economy might create opportunities for Oz business which might drive demand. We know supply will increase with the A380s but will this make a difference.

The question as ever is what do you want to do and when - and will some future speculative price reduction change what you want to do? I personally start with what I want to do and then work out how I will pay for it....

 

[aybee]

What time of the year will you be going? Is it just LAX and YVR on your itinerary?

 

[bambbbam2]

I was very interested in the unofficial comments yesterday that the money that Qantas make off this route really just covers the losses they are copping on most other international routes.

Apparently domestic makes money but Aus-US is the only profitable OS route.

 

[ANstar]

I was very interested in the unofficial comments yesterday that the money that Qantas make off this route really just covers the losses they are copping on most other international routes.

Apparently domestic makes money but Aus-US is the only profitable OS route.

Hmmm, I doubt that is true. I woudl imagine places like JNB would be nice earners... It is hard to think that QF are having high load factors internationally AND generally getting a higher yield than their competitiors in premium cabins and be losing money....

I would expect NRT/PVG/PEK to be marginal, but I would guess the rest are doing ok.

 

[simongr]

Why would you expect PVG to be marginal? It is very hard to get a D class fare on that route - which would suggest higher yield factors wouldnt it?

 

[ANstar]

Why would you expect PVG to be marginal? It is very hard to get a D class fare on that route - which would suggest higher yield factors wouldnt it?

I would epxect some of the newer routes to still be borderline (ie PEK/PVG)... In saying that if one was optimistic you could say the bulk of their long haul flying is profitable and if it isn't they are pretty quick to drop underperforming routes (ie YVR)

 

[Evan]

I would expect NRT/PVG/PEK to be marginal, but I would guess the rest are doing ok.

Recently just about every single QF flight i have taken has been full or close to full, so i am sure some money to be made.

NRT ??? if that was not making much money then why would they have double up flights on some days of the week ?

As a general rule i have heard around 70% load and they break even, anything over that is more into profit.

E

 

[NYCguy]

OK, I'm a cynic, but I can't imagine that any new carrier who offers a truly competitive Biz product in the non-stop Aust-US market is going to be able to resist the temptation to wring every last drop out of that particularly juicy plum. I don't believe for one moment that SQ want the rights to fly SYD/LAX/SYD simply because they have a burning desire to bring fare-justice to the premium-cabin passengers who are being screwed by QF and UA's duopoly. But even if the fares stay sky-high (boom-boom!), I think that UA will have more to lose than QF, and here's why...

The second that SQ start a daily non-stop service between LAX (most likely) or SFO (my preference) and SYD, I am going to kiss United goodbye on that route, new F cabin or not. Why wouldn't I prefer to lounge around in my R-class suite drinking Dom Pérignon Rosé, rather than sitting in a new seat on an aircraft that's still going on for twenty years of service, and prone to go U/S at the slightest provocation? Even if SQ didn't use the A380 on the transpac, their 77W product is already better than UA's upcoming rejig, and the aircraft are pretty much brand-spanking. You can change the curtains, Mabel, but it's still the same sh*tty old kitchen. I also don't mind if UA dump me from the UGS roll - I'll be PPS Solitaire in no time, and retain *A gold, so no matter.

Anyhoo, to get back to my point, I don't think that SQ will be discounting their F or J/C product just to have a dig at UA or QF. People who are addicted to QF/OW will still fly with them, and *A passengers will, I imagine, take their not-insubstantial trans-pac travel-budgets over to SQ, and connect with the UA network in LAX or SFO. I know I will.

 

[NM]

Anyhoo, to get back to my point, I don't think that SQ will be discounting their F or J/C product just to have a dig at UA or QF. People who are addicted to QF/OW will still fly with them, and *A passengers will, I imagine, take their not-insubstantial trans-pac travel-budgets over to SQ, and connect with the UA network in LAX or SFO. I know I will.

I totally agree. The only one to lose out initially will be UA.

 

[Mal]

I totally agree. The only one to lose out initially will be UA.

I think a lot of UA business is American Government and big Corporates with deals with UA. The US Govt business will not be moved elsewhere unless another US carrier starts flying the route. Corporate deals are always up for grabs.

Additionally, I suspect a lot of premium traffic with UA is upgraded frequent flyers. The *A cross airline upgrade scheme isn't working too well UA-SQ from what I hear, so that would affect who would want to stay with UA vs going to a competing *A carrier.

 

[NM]

I think a lot of UA business is American Government and big Corporates with deals with UA. The US Govt business will not be moved elsewhere unless another US carrier starts flying the route. Corporate deals are always up for grabs.

Additionally, I suspect a lot of premium traffic with UA is upgraded frequent flyers. The *A cross airline upgrade scheme isn't working too well UA-SQ from what I hear, so that would affect who would want to stay with UA vs going to a competing *A carrier.

And that is why UA will suffer. The fares paid by US Govt and the prolific upgrades in the premium cabins is not as financially lucrative as those who would be likely yo pay the premium cabin fares on SQ and QF.

UA will still have people sitting in the F and C seats, but the revenue/pax will be significantly less than that of SQ and QF.

 

[Paul_PER]

I can't see any ongoing discounting due to the Open Skies agreement.

As mentioned above SIA and EK are still both locked out. Air Canada have still been denied SYD-LAX, but are now flying SYD-YVR direct.

Air New Zealand can fly direct from Australia to the US but this would almost certainly provoke retaliation from Qantas, e.g. lots more Skybeds on trans-Tasman services.

V Australia with their seven 777-300ER's would probably be the best bet for some start-up specials (along with Qantas matching them). I would then expect to see prices come back to what they are now.

Any start-ups or current US airlines would probably struggle to get aircraft capable of doing non-stop trans-pacific flights with full pax loads & some cargo, considering the:

747-400ER order book is closed (people forget that Qantas was the launch customer for this aircraft in 2000)
747-8I is not available to say 2010-2011
787's are sold out to about 2013
A350's won't be around to about 2015
A345 & A346 aren't selling due to fuel-burn penalties

(Yes Continental and Northwest (?) have ordered 787's but I would doubt they would come back to Australia in any hurry - I think they need to planes to replace old ones on existing routes).

Which only really leaves 777-300ER's, 777-200LR's and A380's and I don't think there are too many delivery slots around for any of these in the near future.

 

[NYCguy]

Air New Zealand can fly direct from Australia to the US but this would almost certainly provoke retaliation from Qantas, e.g. lots more Skybeds on trans-Tasman services.

Does QF have the capacity to flood the Tasman market with Skybeds? I imagine that capacity constraints would limit that expansion, since QF are only just getting around to ensuring that passengers on routes like BNE/HKG are on A330's, rather than the 763s that J pax love so much on a 9-hour overnight flight...

I don't know what NZ are doing with their SYD/USA rights, but there must be a bloody good reason why they aren't having a good poke at the market with their fancy Biz cabin. Perhaps UA asked them not to???????

 

[BlacKnox]

OK, I'm a cynic, but I can't imagine that any new carrier who offers a truly competitive Biz product in the non-stop Aust-US market is going to be able to resist the temptation to wring every last drop out of that particularly juicy plum. I don't believe for one moment that SQ want the rights to fly SYD/LAX/SYD simply because they have a burning desire to bring fare-justice to the premium-cabin passengers who are being screwed by QF and UA's duopoly. But even if the fares stay sky-high (boom-boom!), I think that UA will have more to lose than QF, and here's why...

Jeez, I was asleep by the time I got to the end of the first para. Why don't you actually help someone with some local goss like here... http://www.frequentflyer.com.au/community/open-discussion/decent-accommodation-in-ny-12292-2.html

 

[NYCguy]

Jeez, I was asleep by the time I got to the end of the first para. Why don't you actually help someone with some local goss like here... http://www.frequentflyer.com.au/community/open-discussion/decent-accommodation-in-ny-12292-2.html

I don't know of any accommodation in Manhattan that would suit travelers on that budget. I'm sure it exists, I just don't know where.

 

[NYCguy]

Jeez, I was asleep by the time I got to the end of the first para. Why don't you actually help someone with some local goss like here... http://www.frequentflyer.com.au/community/open-discussion/decent-accommodation-in-ny-12292-2.html

I don't know of any accommodation in Manhattan that would suit travelers on that budget. I'm sure it exists, I just don't know where.

More importantly, your attention-deficit problem may respond to a little Ritalin. How do you get by in the business world when you can't even make it through a few paragraphs without getting bored?