How would you run Qantas?

[lastrow]

1. Place more emphasis on JQ for internal flights. The situation now is that JQ and QF often both leave within ten minutes of each other going to the same destination with the QF flight costing twice as much as the JQ flight for the same trip.
2. This situation just has to be rationalized with Jetstar providing the bulk of internal Australia flights using larger, quality aircraft with high capacity one class seating.
3. Want to travel Sydney - Melbourne? Then go by bus, airbus that is, but still just a bus.
4. Get Jetstar out of SE Asia where the fare setting formula by local airlines seems to be how low can you go?
5. QF can then concentrate on providing a premium international service with a yield producing fare structure, a service appealing to the more mature travelers who will pay for comfort.
6. Qantas must move its image from the K Mart level to the David Jones level.

 

[dajop]

I really don't understand suggestions to nationalise, or the government to take back Qantas. Not sure how much it would cost to "bail out" QF, but if the aim is to support tourism why not just hand out travel vouchers to all taxpayers? Government involvement should be restricted to levelling the playing field with VA (ie change or remove Qantas Sale Act).

Aside from vested interests around FF points (mine included), why should the government bail out QF? It seems the arguments are mainly sentimental, and it wouldn't be precedent setting for an airline like QF to disappear (Ansett, Pan Am, TWA?). It seems that QFd is still OK (if only they would abandon the "line in the sand" and go back to a comfortable profit maximising duopoly rather than trying to destroy the competition). It seems QFLink is OK. The real problem child (if we are to believe what we are told by the company) is QFi. I will play devil's advocate - and put aside QFF interests - does Australia need QFi anymore? It has pretty much abandoned PER and ADL, so they don't need it. MEL and BNE probably would do OK without it plenty of other carriers serve those two ports, perhaps SYD would suffer most, but then again is still the most attractive airport for other carriers. Really there are only three important "routes" it serves extensively that would significantly impact air services between Australia and the world - the US, South America and South Africa. With the US, I am sure others would eventually step in, but JNB and SCL could be more problematic, as they are (economically) four-engine destinations, and four engine planes are becoming less and less common.

Anyway just playing devil's advocate! I still think the QF crisis has been over-dramatized for (probably well founded) political reasons around QF Sale Act.

 

[Awesom Andy]

One of the things I've learnt today at the SQ event in the SIN DO is that SQ gets absolutely zero government funding. I'm not sure if it can actually be proven one way or another, but if that's true, then I really can't see a reason why the Aus government should support QF either.

 

[dajop]

One of the things I've learnt today at the SQ event in the SIN DO is that SQ gets absolutely zero government funding. I'm not sure if it can actually be proven one way or another, but if that's true, then I really can't see a reason why the Aus government should support QF either.

I think the argument is that SQ is government owned. Which it is partially, with >50% ownership by Temasek Holdings - government investment corporation. Which (if one can believe what is written) pays taxes etc like any corporation. I guess the strongest pointer that SQ operates in a not dissimilar fashion to QF is it's not expanding ad nauseam like the gulf carriers. It's expanded some areas, but also contracted and chopped a few routes over the last few years too, and transferred a few to Silk Air.

 

[oz74]

The thing that I find hard to understand is why are the board persisting with Joyce and the strategy???

Any public company in as much trouble as QF should have a board with the balls to admit they have got it wrong and cut there losses.

Joyce has to go, no question about it.

 

[moa999]

Oz74, any strategy that Joyce implementing has been fully signed off by the Board.

That said I'm sure the delays in JHK approvals and additional $$ for JJ were outside what was originally approved

 

[codash1099]

Here's a few clues that look half reasonable:

Reviving Qantas - Wild About Travel

 

[markis10]

Here's a few clues that look half reasonable:

Reviving Qantas - Wild About Travel

Somewhat of an oxymoron with respect the suggestions though, like expand destinations but rationalise fleet, DFW and JNB would be hard to put an A380 in for instance.

 

[MEL_Traveller]

Here's a few clues that look half reasonable:

Reviving Qantas - Wild About Travel

I think point 9 is particularly relevant - airline representatives should be considering issues strategically - not just as a 'one-off'.

9. Revive Loyalty
Frequent flyer pages are filled with the lack of connection long term flyers have felt with their preferred carrier for some time. Responding to frequent flyer complaints and reaching out to them is imperative to restore the carrier’s credibility.

 

[timster]

Shut down Jetstar.
Free wifi. (loss leader ?)

 

[moa999]

I don't get the shutdown Jetstar stuff. Jetstar Dom makes a profit and plays to a certain audience. Without Jetstar, Tiger or AirAsia or Lion would be replacing it.

There is a reason Virgin bought Tiger.

WiFi in Australia will struggle due to lack of domestic ground stations and satellite is still too expensive

 

[cove]

I think Virgin may be wondering why they bought Skywest and Tiger which were real basket cases. Virgin is losing about a million a week last time I looked and have had to do two emergency share issues at 20 cents and 38 cents after starting at something like $2.25 some years ago. I don't think there is much worth copying by Qantas so far.

 

[markis10]

I think Virgin may be wondering why they bought Skywest and Tiger which were real basket cases. Virgin is losing about a million a week last time I looked and have had to do two emergency share issues at 20 cents and 38 cents after starting at something like $2.25 some years ago. I don't think there is much worth copying by Qantas so far.

I am sure QF would like to be losing $1M a week compared to their actual figures, and I am sure they would like to copy making a profit in the last two years as well

 

[medhead]

I don't get the shutdown Jetstar stuff. Jetstar Dom makes a profit and plays to a certain audience. Without Jetstar, Tiger or AirAsia or Lion would be replacing it.

There is a reason Virgin bought Tiger.

Indeed. The problem is not jetstar's existence. It not knowing how jetstar fits. Is it a qantas group airline or not? If it is part of the group then be consistent in its position. Don't change the use of jetstar to suit what is worst for the customer. If it's not part of the group then cut the strings completely; no cross selling, no replacing qantas flights with jetstar, etc.

No need to shut it down. Just fix the integration.

 

[erkpod]

As the guys from the Plane Crazy Down Under podcast started saying years ago, "If it's new, it's JQ!" and things like the 787 help prove that.

 

[erkpod]

I think Virgin may be wondering why they bought Skywest and Tiger which were real basket cases. Virgin is losing about a million a week last time I looked and have had to do two emergency share issues at 20 cents and 38 cents after starting at something like $2.25 some years ago. I don't think there is much worth copying by Qantas so far.

I know I was surprised when VA bought into TT. I guessed at the time that if TT refused passage for whatever reason that they'd direct them to VA specifically. It's probably the case that because QF has JQ as the LCC arm, VA thought they'd do the same with TT.

 

[samh004]

I don't get the shutdown Jetstar stuff. Jetstar Dom makes a profit and plays to a certain audience. Without Jetstar, Tiger or AirAsia or Lion would be replacing it.

There is a reason Virgin bought Tiger.

As medhead noted, they cross sell and allow lounge access sometimes, but then don't allow it other times. Stuff like that seems really out of place. It really needs to either be acceptable or not, but instead it ends up being acceptable when it suits them, not the customer.

As for 'without JQ someone else would be flying the route' - there's still persistent rumours that they don't pay for their A330 maintenance, and Qantas picks up the tab. So while that's not a 'domestic' issue, it still raises doubt on their profitability.

If they do so well domestically, why don't they fly to CBR? Etc

 

[medhead]

I was trying to back up the point about (not) shutting down JQ.

As for 'without JQ someone else would be flying the route' - there's still persistent rumours that they don't pay for their A330 maintenance, and Qantas picks up the tab. So while that's not a 'domestic' issue, it still raises doubt on their profitability.

Interesting rumour about the maintenance. Perhaps there is a lease/contract between QF and JQ that includes QF maintaining the aircraft. That would account for the rumours. But still raise the issue of fair value: is the contract on fair terms to QF or did management make a direction about the fee?

 

[samh004]

I was trying to back up the point about (not) shutting down JQ.

I think domestically they work, though not sure why if they work so well they're not on certain routes such as any service to CBR

It's internationally and overseas that may be a different story.

Plus, they should be better integrated. I understand priority this and that makes little sense as that's where they make their money. And they're not after loyalty. But it's QF who need to work out a proper position than the one they have to help their customers decide.

On a side note, if they're pushing JQ so much, why are the fares on qantas.com for Jetstar always a rip off and don't reflect the actual price/ sale? Would seem silly not to advertise a lower cost if you wanted to nudge customers onto the cheaper group airline.

 

[cove]

James Hogan from Etihad is going on the board of Virgin Australia Holdings.
He is reported as saying "Maybe I can add some value".
Etihad featured in the $350 million capital raising that could have been labelled a second financial lifeline but the press were too nice to say that.
If Qantas sells a bit or all of the Qantas Frequent Flyer business it could be at a price/value greater than the whole Qantas business based on today's share price.
Getting both Virgin and Qantas back to making a reasonable net profit seems a while away.