Qantas Project Sunrise goes ahead, 12 new A350-1000s ordered

[justinbrett]

This is an astute observation. People keep assuming they'll charge more (i.e. higher cost or price). They won't, instead they'll earn more though higher yields, but higher yields doesn't imply higher prices. There's some nuance to it, but yields here are driven by premiumisation, i.e. more premium seats and a higher proportion of premium seats.

So a QLXEU base fare SYD-LHR-SYD will still be A$ 1650 whether you're on SYD-LHR-SYD or SYD-SIN-LHR-SIN-SYD, but when there are only 140 Y seats on the A350 compared to 341 on the A380, it should be obvious that they'll be selling a much lower proportion of them on the A350. This is exactly what we see on PER-LHR where they sell the exact same fare bases on QF9/10 or via SIN on QF1/2. When you look a longer way out you tend to find the same fare bases on both (inevitably cheaper on the non-stop since you're not paying additional taxes at SIN), but because of fewer seats available on QF9/10 they'll sell quicker and appear more expensive closer to the date, but they're no longer like-for-like inventory. What this is really showing is the higher yield on the non-stop.

They did say there would be a premium, however reading between the lines I don’t think that will be done by making via SIN cheaper. Ex SYD will be whatever they can charge whether you go non stop or via SIN. Ex BNE might be significantly cheaper via SIN, it’s all how they structure the fares.

Project Sunrise tickets will see a 20% premium

Speaking at a media roundtable at the International Air Transport Association’s annual general meeting in Istanbul, incoming Qantas CEO and current CFO Vanessa Hudson said premiums on Project Sunrise would at least be similar to those on the current Perth to London route.

australianaviation.com.au

 

[RooFlyer]

This is an astute observation. People keep assuming they'll charge more (i.e. higher cost or price). They won't, instead they'll earn more though higher yields, but higher yields doesn't imply higher prices.

I'm pretty sure Qantas have said that they will charge a premium for Sunrise seats. Isn't this what this article (quoting Hudson) says?

Project Sunrise tickets will see a 20% premium

Speaking at a media roundtable at the International Air Transport Association’s annual general meeting in Istanbul, incoming Qantas CEO and current CFO Vanessa Hudson said premiums on Project Sunrise would at least be similar to those on the current Perth to London route.

australianaviation.com.au

This one quoting Joyce

https://www.executivetraveller.com/qantas-project-sunrise-a350#:~:text=half%20of%202024.-,How%20much%20will%20Qantas%20Project%20Sunrise%20A350%20flights%20cost?,more%20than%20the%20stopover%20set.

or did I misunderstand you?

 

[evanb]

They did say there would be a premium, however reading between the lines I don’t think that will be done by making via SIN cheaper. Ex SYD will be whatever they can charge whether you go non stop or via SIN. Ex BNE might be significantly cheaper via SIN, it’s all how they structure the fares.

Project Sunrise tickets will see a 20% premium

Speaking at a media roundtable at the International Air Transport Association’s annual general meeting in Istanbul, incoming Qantas CEO and current CFO Vanessa Hudson said premiums on Project Sunrise would at least be similar to those on the current Perth to London route.

australianaviation.com.au

Yes they'll generate a premium. They even explicitly indicate the premium they earn on PER-LHR, but the point is the manner in which they'll generate that premium. It isn't done through higher fares, but how they manage yields, just like they do on PER-LHR. It's about selling more of those higher fares.

 

[evanb]

I'm pretty sure Qantas have said that they will charge a premium for Sunrise seats. Isn't this what this article (quoting Hudson) says?

Project Sunrise tickets will see a 20% premium

Speaking at a media roundtable at the International Air Transport Association’s annual general meeting in Istanbul, incoming Qantas CEO and current CFO Vanessa Hudson said premiums on Project Sunrise would at least be similar to those on the current Perth to London route.

australianaviation.com.au

This one quoting Joyce

https://www.executivetraveller.com/qantas-project-sunrise-a350#:~:text=half%20of%202024.-,How%20much%20will%20Qantas%20Project%20Sunrise%20A350%20flights%20cost?,more%20than%20the%20stopover%20set.

or did I misunderstand you?

The article doesn't say they'll charge higher fares though. It says that they'll generate a premium and that people are willing to pay more. They're not the same thing.

But that's the nuance: they even speak to PER-LHR as the example, but there isn't a single (economy class) fare basis where QF charge more for PER-LHR than for PER-SIN-LHR. They will sell fewer of the cheaper fares, but that's not the same thing as higher ticket prices or charging a premium (as opposed to earning a premium).

 

[RooFlyer]

The article doesn't say they'll charge higher fares though. It says that they'll generate a premium and that people are willing to pay more. They're not the same thing.

I respect what you’re saying, and I know you have keen insights into these things, but I disagree. I think the language ‘charging’ and ‘pricing’ a 20% premium and ‘20-30% higher prices’ is not the same as airline earning a premium or a higher yield.

Qantas expects to charge a 20 per cent premium on direct Project Sunrise flights from Australia’s east coast to London and New York.

Former Qantas boss Alan Joyce previously suggested prices of “20 to 30 per cent” higher compared to fares on the same routes but involving a stopover, such as London via Singapore or New York via Los Angeles.

Qantas expects to charge a 20 per cent premium on direct Project Sunrise flights from Australia’s east coast to London and New York.

they’ve been touting it as this cough-hot product that the world is waiting for. Why wouldn’t they charge more for it?

 

[Doddler]

QF’s intent is to charge a premium for the Sunrise flights. I will probably mostly continue to fly to LHR via SIN if that option remains available to save on price.

Will be interesting to see the extent to which Qantas continues with a Singapore presence. If the long-term aim is to shift all premium passengers to Sunrise flights, then the First Lounge there might be a casualty.

 

[tanahflyer]

Will be interesting to see the extent to which Qantas continues with a Singapore presence. If the long-term aim is to shift all premium passengers to Sunrise flights, then the First Lounge there might be a casualty.

I can’t think of many other Asian cities with such a high density of premium O&D demand

 

[evanb]

I respect what you’re saying, and I know you have keen insights into these things, but I disagree. I think the language ‘charging’ and ‘pricing’ a 20% premium and ‘20-30% higher prices’ is not the same as airline earning a premium or a higher yield.


they’ve been touting it as this cough-hot product that the world is waiting for. Why wouldn’t they charge more for it?

Indeed, I'm saying the same thing: ‘charging’ and ‘pricing’ a 20% premium and ‘20-30% higher prices’ is not the same as airline earning a premium or a higher yield.

But the articles you linked incorrectly implies that they'll charge 20% more for tickets or price tickets 20% more (despite the headline also saying that). Point is they've missed the nuance. The comments from Hudson (and Joyce before) and Qantas have spoken about the premium and they always keep referencing PER. That's what I've looked at, empirically every economy fare every listed with ATPCO (which is the platform that airlines load the fares that are then priced/booked through the GDS), doesn't apply any supplement for the non-stop. They do in business class where they apply supplements on the non-stop.

Ultimately, they're going to make their money by just selling fewer economy and fewer cheap economy in favour of filling from the front (between and within cabins). This risk of this is obvious, if it's so easy why don't they use that same config on all their routes? Ultimately they can't, but they bet they can on these routes.

 

[dajop]

Interestingly on

Will be interesting to see the extent to which Qantas continues with a Singapore presence. If the long-term aim is to shift all premium passengers to Sunrise flights, then the First Lounge there might be a casualty.

Qantas run a single A380 service SIN-LHR each day. They also run up to 9 services a day between Australia and SIN, so their presence in SIN isn’t entirely dependent on the LHR service. I guess the AF, AY and KL codeshares support this traffic as well, but there is very strong O&D traffic.

 

[evanb]

I can’t think of many other Asian cities with such a high density of premium O&D demand

Qantas doesn't have a particularly high density of premium O&D demand to/from Singapore. With the exception of QF1/2, their capacity is dominated by the least premium dense widebodies in their fleet (A330-300). What Singapore has is volume though.

Tokyo on the other hand, where they flew the B744 until the end and tried to work out how to use the B789 with it only not continuing since they needed it for range elsewhere.

 

[RooFlyer]

But the articles you linked incorrectly implies that they'll charge 20% more for tickets or price tickets 20% more (despite the headline also saying that). Point is they've missed the nuance. The comments from Hudson (and Joyce before) and Qantas have spoken about the premium and they always keep referencing PER. That's what I've looked at, empirically every economy fare every listed with ATPCO (which is the platform that airlines load the fares that are then priced/booked through the GDS), doesn't apply any supplement for the non-stop. They do in business class where they apply supplements on the non-stop.

Thanks - I am surprised that every outlet I could find had the same interpretation (and I'll seize on your last sentence for some comfort - I never consider ot think about Economy, in any scenario )

 

[Doddler]

Qantas doesn't have a particularly high density of premium O&D demand to/from Singapore. With the exception of QF1/2, their capacity is dominated by the least premium dense widebodies in their fleet (A330-300). What Singapore has is volume though.

Tokyo on the other hand, where they flew the B744 until the end and tried to work out how to use the B789 with it only not continuing since they needed it for range elsewhere.

I guess what I'm thinking is that a further enticement to get premiums onto Sunrise flights could be to take away the First Lounge (Business Lounge would remain). I guess that depends on 1) how much it costs to have the First Lounge in SIN, and 2) what proportion of First Lounge customers are not connecting on a route that is being Sunrised (e2a that once Sydney and Melbourne both have sunrise flights to London, they'll collectively have more premium cabin seats than the current A380).

Still, all pure speculation on my part.

 

[JessicaTam]

I guess what I'm thinking is that a further enticement to get premiums onto Sunrise flights could be to take away the First Lounge (Business Lounge would remain). I guess that depends on 1) how much it costs to have the First Lounge in SIN, and 2) what proportion of First Lounge customers are not connecting on a route that is being Sunrised (e2a that once Sydney and Melbourne both have sunrise flights to London, they'll collectively have more premium cabin seats than the current A380).

Still, all pure speculation on my part.

The QF F lounge is the only OW F/Emerald lounge in SIN. (BA CCR notwithstanding). It would be difficult to argue the case to close it.

 

[SYD]

QF are in record stating that they’ll maintain one-stop services, including SYD-SIN-LHR and JFK via AKL.

Here’s one of several media coverage.

Qantas Plans To Retain One-Stop Routes Once Project Sunrise Launches | Aviation Week Network

Qantas plans to retain key one-stop international services even after the launch of its ultra-long-haul Project Sunrise flights in 2027, the airline says.

aviationweek.com

 

[Doddler]

QF are in record stating that they’ll maintain one-stop services, including SYD-SIN-LHR and JFK via AKL.

Here’s one of several media coverage.

Qantas Plans To Retain One-Stop Routes Once Project Sunrise Launches | Aviation Week Network

Qantas plans to retain key one-stop international services even after the launch of its ultra-long-haul Project Sunrise flights in 2027, the airline says.

aviationweek.com

Quote from that article:

He explained that the new nonstop services will target high-yield premium demand, while one-stop routes will continue to support broader passenger volumes and network connectivity.

So the nonstops are their *premium* offering. If their premium passengers are largely on their Sunrise Flights, why continue to offer the First Lounge at SIN? Unless it proves to be lucrative from BA and other OW flyers?

Earlier point

 

[mviy]

They can say they will continue the existing flights but if the loads drop a lot they will reconsider.

 

[downgraded]

If their premium passengers are largely on their Sunrise Flights, why continue to offer the First Lounge at SIN?

Because many F lounge users are not premium, but it helps to keep them stuck to QF?

 

[RSD]

SYD-PER-LHR seems to earn more SC's than SYD-SIN-LHR, and MEL-LHR via either SYD-SIN or via PER earns the same SC's it seems - if you are chasing SC's from MEL then go to SYD or PER rather than flying MEL-SIN direct before hopping on QF1 in SIN.

 

[elanshin]

Quote from that article:

So the nonstops are their *premium* offering. If their premium passengers are largely on their Sunrise Flights, why continue to offer the First Lounge at SIN? Unless it proves to be lucrative from BA and other OW flyers?

Earlier point

I don't expect the 380 to go away anytime soon on the current QF1/2 route utilising SIN as a major hub for other cities to connect to.

The a380 in of itself is still a standout aircraft to fly in and plenty will want to do this journey rather than direct. It's not one or the other.

 

[justinbrett]

Quote from that article:

So the nonstops are their *premium* offering. If their premium passengers are largely on their Sunrise Flights, why continue to offer the First Lounge at SIN? Unless it proves to be lucrative from BA and other OW flyers?

Earlier point

I think they’re hoping to grow their market share. QF have had 4 daily to LHR before, it’s not a huge ask.

Simple solution would be to originate via SIN from BNE. BNE might even get an F lounge.

You’ve got to keep in mind what traffic volumes are going to be in the next 10-20 years. Brisbane and SEQ is growing rapidly.