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Project Sunrise: A350 or 777X?

Pleb Status

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If Boeing are becoming so desperate to sell a relatively few 778/779 to QF, QF should get Boeing to take the 12 'slightly used' A380 as part of the deal...
 

juddles

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Probably shouldn't have gone around making big promises before doing the sums. Doesn't sound like prudent long-term management to me.
I disagree. It sounds like very prudent management, to make decisions based on the most up-to-date situation.

I think anyone who wants to doubt AJ's skills at management should take a look at the QF share price in recent years. I think that share price is a far more accurate comment on his management skills than many opinions around here :)
 

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I think anyone who wants to doubt AJ's skills at management should take a look at the QF share price in recent years. I think that share price is a far more accurate comment on his management skills than many opinions around here :)
I am happy to take that challenge...

The share price has risen due to -

A big reduction in jet fuel prices without a significant reduction in fuel surcharges.
A $2B+ write down in asset values.
The termination of the domestic capacity war that QF was fuelling.
A very financially weak competitor in the domestic market (where almost all of their profit is made).
A very sticky, very compliant customer base.
A compliant media who will print/parrot your press releases as they want your advertising dollars.
A general recovery of the economy since the GFC.
The ASX was at a record high.
A direct line to highest level of all Governments who will kowtow to any 'request'.

Almost anyone could make money under these conditions, given QF had more than 70% market share (and higher in the business market). The question is could have someone else done better?
 
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Happy Trails

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I am happy to take that challenge...

The share price has risen due to -

A big reduction in jet fuel prices without a significant reduction in fuel surcharges.
A $2B+ write down in asset values.
The termination of the domestic capacity war that QF was fuelling.
A very financially weak competitor in the domestic market (where almost all of their profit is made).
A very sticky, very compliant customer base.
A general recovery of the economy since the GFC.
A direct line to highest level of all Governments who will kowtow to any 'request'.

Almost anyone could make money under these conditions, given QF had more than 70% market share (and higher in the business market). The question is could have someone else done better?
Plus a few $bn in share buybacks.
 

juddles

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In any case, getting back to the core discussion here, I am very happy with the developments. I have a vested interest in the success of Sunrise. Because I invested a gazillion dollars and flights with Qantas to attain LTG. And I truly think that it is a challenge for an airline in Australia to remain viable in this day and age. Thus I have a very personal desire for Qantas to remain existing. If I had the equivalent of LTG with VA at the moment I would be very concerned.

As I have expressed before, my opinion is that AJ has seen in Sunrise a way to keep Qantas relevant in the future international airline market. Any Australian airline will always have to carve out a niche market, as we are just so small, so geographically isolated, and with such high labour costs. Sunrise could allow Qantas to shine in those specific ultra-long haul routes, where there are customers able to pay a premium. (and of course there will be F!!)

But it is a hard project - in many senses it is trivial in a sheer dollar sense for the aircraft manufacturers, but "world's longest routes" has always had a disproportionate amount of coverage/flair that brings great advertising value. And it just so happens that with Boeing's MAX emergency, they appear to be very keen to offer something to QF that is very "compelling". This helps tighten the screws on Airbus too, rather than giving them a stronger position. If AJ and Qantas can use the whole situation to lower as many costs as they can, then fantastic, IMHO.
 

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View attachment 183783

View attachment 183787

Can you pick which is Qantas and which is Virgin? :)
VA did not have any of the aforementioned (mostly external) benefits to help their share price.

Also, QAN share price was ~$6.30 in October 2007 and had dropped to ~$2.50 in November 2008 when AJ took over. He let it drop to under $1.00 during his tenure. Share buybacks have significantly reduced the number of shares on offer, artificially inflating the share price today. QAN did not pay any dividend for a number of years.

QAN as a business today is still not worth more than it was worth in 2007 and is essentially the same or even larger than it was.

I argue that anyone could have done what AJ has done as QF CEO (or even better).
 
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juddles

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VA did not have any of the aforementioned (mostly external) benefits to help their share price.

Also, QAN share price was ~$6.30 in October 2007 and had dropped to ~$2.50 in November 2008 when AJ took over. He let it drop to under $1.00 during his tenure. Share buybacks have significantly reduced the number of shares on offer, artificially inflating the share price today. QAN did not pay any dividend for a number of years.

QAN as a business today is still not worth more than it was worth in 2007 and is essentially the same or even larger than it was.

I argue that anyone could have done what AJ has done as QF CEO (or even better).
Jeez - maybe this needs a separate thread! I am acutely aware that the share price was in the doldrums for a few years after AJ took the helm. Instead of using that against him, may I offer you an alternative interpretation of that? Essentially AJ took the reigns when Qantas was heading into oblivion. He made hard choices, inspired changes, but in such a large company these obviously take a few years to change things. Rather than try to use those early years against him, maybe try to recognize that he held fast with his ideas in a very difficult phase for Qantas and managed to give it an absolutely huge turn-around.

Can you share what you think he did wrong? What would have been better for the company? I am not an expert in these things. Qantas has two battlefronts - international and domestic. It appears to me that on the international front they have recovered from doom to have a chance at success. On the domestic front they are literally wiping their behind with the competition. And as a third (and very important part) their loyalty program is doing absolutely phenomenally well.

These comments of mine are about Qantas as a company and AJ's achievements as the head of this. I am not a share holder. I have sufferred the harshness of the cuts and "enhancements" and actually became disillusioned enough with them to stop flying them this year. But I still respect that AJ has taken a company in a cutthroat industry and kept it alive and thriving.
 

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Jeez - maybe this needs a separate thread! I am acutely aware that the share price was in the doldrums for a few years after AJ took the helm. Instead of using that against him, may I offer you an alternative interpretation of that? Essentially AJ took the reigns when Qantas was heading into oblivion. He made hard choices, inspired changes, but in such a large company these obviously take a few years to change things. Rather than try to use those early years against him, maybe try to recognize that he held fast with his ideas in a very difficult phase for Qantas and managed to give it an absolutely huge turn-around.

Can you share what you think he did wrong? What would have been better for the company? I am not an expert in these things. Qantas has two battlefronts - international and domestic. It appears to me that on the international front they have recovered from doom to have a chance at success. On the domestic front they are literally wiping their behind with the competition. And as a third (and very important part) their loyalty program is doing absolutely phenomenally well.

These comments of mine are about Qantas as a company and AJ's achievements as the head of this. I am not a share holder. I have sufferred the harshness of the cuts and "enhancements" and actually became disillusioned enough with them to stop flying them this year. But I still respect that AJ has taken a company in a cutthroat industry and kept it alive and thriving.
I agree that this is a discussion for another day (and thread). I just wanted to rebut your initial statement by highlighting that the QAN share price has been largely affected by numerous external factors that have little to do with the management of QF by AJ....
 

pauly7

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I
I am not going to rubbish people such as @Himeno or @DavidFlynn who choose to believe what Alan Joyce says at pressers.
Although I wonder if they still expect a dormitory under the decks on the project sunrise aircraft.
But I don't think it is entirely unreasonable of me to be cynical given the B789 layout.
Yes as @moa999 points out the B789 is smaller than the B777X.
But airlines such as Etihad have had F cabins on smaller aircraft.
With Qantas' record of over promising and under delivering, I won't believe it until it happens.
I’m not going to rubbish people.... (oh wait I will anyway :cool:) that seem to think that anything that appears in mainstream media via a PR release that is designed to keep the company top of mind and in the media is a ‘promise’.

Once you understand the why and strategy behind the PR/PA/CR function then you will learn better how to differentiate between PR messaging and will help you become less hot and bothered about your so called ‘promises being undelivered’.

All major companies do it.... let me just hop on my VA 737 to Perth in J, they ‘promised’ me via the media lie-flat beds on trans con so it must be coming true soon...
 

patrickk

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There is a rumour of a stopgap 779 with 100 seats stripped out (bare up the back) and more fuel tanks in the cargo hold. Probably fewer than 200 in economy and around 100 premium; 8 first 70 business; 30 PE. When the 778 eventuates then these 779s would be refitted back to 400 seats by putting the 100 stripped out back.
 

moa999

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Or you could use the room for an Economy+ (ie. Greater pitch) product..
Albeit Qantas would need to charge a decent premium or they might pull back pax from PE (which on $/m² of space is pretty high yielding).

Also gives you a ready-made A380 replacement when you convert them back to a more typical config.

But Boeing would need to be giving Qantas a very good deal to offset all the extra fuel that would be burnt in the meantime lugging around overweight aircraft.
 

DavidFlynn

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But Boeing would need to be giving Qantas a very good deal to offset all the extra fuel that would be burnt in the meantime lugging around overweight aircraft.
Boeing’s 777X strategy of -9s now, -8s later is very smart and if Boeing wins over Airbus is reckon this would be what sealed the deal. Qantas is also in a very good spot because it holds orders and options on the 787 going back to launch, so those would be listed at phenomenally cheap prices. Qantas could convert some of those orders to the 777X and Boeing would be very happy with that arrangement.
 
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kpc

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Thinking about this, I would not pay a premium to fly Syd-Lhr non stop over a 1 stop flight even if it saved me 3-4 hours...I suspect Qf realises that a lot of pax would feel the same way....so the economics of carrying the extra fuel are critical to the success of the non stop flights.
 

moa999

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Albeit if Qantas went down that path they'd probably be better waiting for the next gen of engines for the 777-8 or 35K which may have less compromises.
Eg. RR Ultrafan for 350s expected in 2025/6. I'd assume any improvement on GEs GE9X is somewhat later.
 

chelzmalee

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Keen to see what the science finds on this in regard to the test trips. How do crew and pax cope, etc. 19 hours is a long time to be stuck on a plane.

Personally I’ll still chose a stopover option.
 

Himeno

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Qantas could convert some of those orders to the 777X and Boeing would be very happy with that arrangement.
Would they convert though?
They may have started with a total order book of 115 787s across firm orders, options and rights, but most of those were cancelled. They are now down to 6 orders, 9 options and 30 rights, with 28 aging A330s to look at replacing.
 

dajop

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Thinking about this, I would not pay a premium to fly Syd-Lhr non stop over a 1 stop flight even if it saved me 3-4 hours...I suspect Qf realises that a lot of pax would feel the same way....so the economics of carrying the extra fuel are critical to the success of the non stop flights.
I think they are after the repeat business (in the premium cabins at least). Once you go ULH once, you don't look back, at least in the F, J and possibly even Y+ cabins. Y pax will either love or hate it, most likely the latter, depending on whether the magic number is 32 or 35.

The time savings are one factor, but IMHO it's the freedom of the use of the travel time that's the big selling factor, particularly for repeat customers in J/F. You aren't constrained by having to wake up, lug your bags through security and back onto the plane 2 hrs later to try and sleep again. You have 19-20 hrs to plan your journey to suit whatever sleep/work/time zone adjustment/entertainment arrangements you want.
 

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Looking at some numbers calculated on another site (and like so much here could be completely wrong), the 779 would most likely be limited to 150-200 pax without a MTOW increase.

Adding extra fuel tanks is fine, but every kg of fuel added is a kg of payload/pax that needs to be left behind.
 

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