Qantas flags higher airfares

[tuppaware]

Qantas flags higher airfares

I think we have had unprecedented low airfares out there because of the economic condition and the level of capacity that's there, Mr Joyce told reporters today. I think airfares and yields are improving; they have to improve going forward in the international markets because most of the international industry is losing money.

All intentions point to a increase in domestic price. :-(
If only we had another company (not tiger!) that could shake up the market!

 

[anat0l]

He said Qantas’s major international markets such as the US and Britain remained weak, but its domestic operations were improving.

Idiot. :evil:

How can the US and Britain be major international markets if they are weak? It probably means that these are not the sales which are sustaining the airline / group.

It also probably points to problems in those markets that need to be addressed (i.e. it is something that Qantas can do, not that it is out of their control), or it means that Qantas need to investigate how to make other markets much more viable (without compromising existing standards, of course).

It almost looks as if the whole restricting F to these "weak" markets is a stubborn brick-wall-head-banging exercise rather than a strategic considered decision.

All intentions point to a increase in domestic price. :-(
If only we had another company (not tiger!) that could shake up the market!

The increase in prices has already been gradual and ultimately inevitable. Although some people are converted to LCCs or Y/Y+ travel forever, people who are gradually finding the dollars again are finding premium travel again. Also, when planes start getting filled again due to low prices, why wouldn't you raise the price?

 

[QF WP]

Well, domestic capacity out of BNE on Sunday has almost been reached:

Flights Out: Brisbane to Sydney - Sun 21 Feb 10

From                 To        [URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]Red e-Deal[/COLOR][/URL] [URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]SSaver[/COLOR][/URL]   [URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]FSaver[/COLOR][/URL]   [URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]FFlex[/COLOR][/URL]    [URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]Bus[/COLOR][/URL] 
 
[B]05:30 [/B]Brisbane [B]08:05 [/B]Sydney[URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]QF503 [/COLOR][/URL]No seats No seats No seats $448     $728 
[B]07:15 [/B]Brisbane [B]09:50 [/B]Sydney[URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]QF509 [/COLOR][/URL]No seats No seats No seats $448     $728 
[B]08:15 [/B]Brisbane [B]10:50 [/B]Sydney[URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]QF513 [/COLOR][/URL]No seats No seats No seats $448    No seats 
[B]13:15 [/B]Brisbane [B]15:50 [/B]Sydney[URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]QF533 [/COLOR][/URL]No seats No seats No seats No seats $728 
[B]14:15 [/B]Brisbane [B]16:50 [/B]Sydney[URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]QF537 [/COLOR][/URL]No seats No seats No seats No seats $728 
[B]14:45 [/B]Brisbane [B]17:20 [/B]Sydney[URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]QF539 [/COLOR][/URL]No seats No seats No seats No seats $582 
[B]15:15 [/B]Brisbane [B]17:50 [/B]Sydney[URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]QF541 [/COLOR][/URL]No seats No seats No seats No seats $728 
[B]16:15 [/B]Brisbane [B]18:50 [/B]Sydney[URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]QF545 [/COLOR][/URL]No seats No seats No seats No seats $728 
[B]16:45 [/B]Brisbane [B]19:20 [/B]Sydney[URL="http://javascript<b></b>:void(null);"][COLOR=#0000ff]QF547 [/COLOR][/URL]No seats $198     $315     $448     $582

Must be all those AFF & FT'ers going home from the AFF/FT AGM

 

[straitman]

Well, domestic capacity out of BNE on Sunday has almost been reached:


Must be all those AFF & FT'ers going home from the AFF/FT AGM

But some of us are going to MEL :!:

 

[davidj-bell]

Idiot. :evil:

How can the US and Britain be major international markets if they are weak? It probably means that these are not the sales which are sustaining the airline / group.

It also probably points to problems in those markets that need to be addressed (i.e. it is something that Qantas can do, not that it is out of their control), or it means that Qantas need to investigate how to make other markets much more viable (without compromising existing standards, of course).

I'm not sure this is a fair assessment of QF's future. From my understanding (and I'm sure someone will correct me) QF had something like 4 daily flights to London and 1 to Frankfurt, and 5 to LA, whereas only 1 a day each (if that) to Argentina and South Africa. Therefore, UK and US would be some of their major international markets. That traffic is down indicates those markets are weak.

And QF has been doing something about those markets - people have been whinging that a return from the UK and US to australia is much cheaper than a return from australia to the UK or US, so therefore QF have been responding by cutting fares for those originating from US or UK.

It almost looks as if the whole restricting F to these "weak" markets is a stubborn brick-wall-head-banging exercise rather than a strategic considered decision.

Given that even BA has talked about reducing first (some new aircraft won't come with first) because of a lack of demand (BA has recently been talking about taking away european business class on flights less than 2 hours, according to WW, "the world has changed, and people aren't buying those seats any more" or words to that effect), I'm sure QF has looked at the next 5-10 years, and decided that they could fill that space with more J/Y+/Y passengers, thereby generating more revenue.

 

[QF WP]

I have to agree with him, anat0l. :shock:

 

[JohnK]

Just because aircraft are filling up does not mean that airfares need to increase. Doesn't demand increase when airfares are low (e.g competitive) and decrease when airfares are high?

Qantas’s low-cost airline Jetstar increased capacity by 32.9 per cent in the first half and was now the third-largest international carrier operating out of Australia, Mr Joyce said.

What a useless statement.

Is he comparing JQ to SQ, TG, EK, TR, D7? These airlines only fly out of Australia to selected hubs and they are not Australian Airlines. There are only 2 serious local carriers flying out of Australia and that is QF and DJ/VA and it leaves JQ languishing in third spot. Nothing to write home about....

 

[davidj-bell]

Just because aircraft are filling up does not mean that airfares need to increase. Doesn't demand increase when airfares are low (e.g competitive) and decrease when airfares are high?

You've forgotten the supply side. When airfares decrease, supply of seats should also decrease (which we've seen, F being one such casualty, the reduction of the frequency of flights) leading to a new price equilibrium