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

[evanb]

It isn't just the early morning long hual arrivals that QF may want to change when WSI opens. There may be some current evening departures that leave before QF may want, but are stuck with the start of the curfew period. Such as Tokyo and maybe some North American routes.

Tokyo is immovable due to the countervailing slots. Only North American flights in that scope are YVR and SFO, but problem with shifting later SYD departure is later arrival and fewer onwards connections at YVR and SFO. They're probably as late as they want to go. If they wanted to go later they could already shift YVR and SFO nearly 90 minutes later, but they don't, so not sure why going beyond 11pm would be useful.

 

[justinbrett]

On which side? UK CMA and EC will definitely allow it. In some respects they can't block it since they've allowed the IAG merger and near controlling QR position in IAG. They would have to target the ownership structure first. That said, they may require some minor remedy actions.

It might be considered a diplomatic overstretch for ACCC to be too harsh on approving the QR/BA/IB JV, so I suspect the most they might do it focus on specific routes. Even when combined, can't think that the JVs would form a dominant enough position on any route to worry the ACCC, especially given that there's ample competition (even on SYD-LHR). The benchmark they set with QF-MU and QF-JL was clearly routes where there were no/few other carriers e.g. SYD-PVG and SYD-HND.

What's possibly likely is QF going to ACCC for something with MH or CX ...

ACCC. Is it normal for an airline to have two overlapping JVs in the same market? That’s where I was going with that. I would have thought that was quite strange.

Yes, technically it’s not a 4 way JV but with the largest airline QR being in both, isn’t it effectively that?

I guess similarly wouldn’t ACCC have a problem with QF having a JV with anyone as long as it also has a JV with EK? I would have thought so.

 

[evanb]

ACCC. Is it normal for an airline to have two overlapping JVs in the same market? That’s where I was going with that. I would have thought that was quite strange.

Yes, technically it’s not a 4 way JV but with the largest airline QR being in both, isn’t it effectively that?

I guess similarly wouldn’t ACCC have a problem with QF having a JV with anyone as long as it also has a JV with EK? I would have thought so.

There are precedents for overlapping partnerships and some near JVs. Technically, VA hold seperate authorities with QR and SQ that are partially overlapping, but it's certainly NOT the same scope. Similarly, VA have some overlap between QR and UA.

Trying to bundle them together would likely be a problem, but ACCC will view them separately, hence why the market share on key routes (e.g. SYD-LHR) wouldn't likely be sufficiently dominant. That said, ACCC have made some reactionary decisions recently. It's not a stretch that they decided QF just wasn't going to have another one and hence MU decision, so maybe they'll do the same and just say QR must choose.

 

[exceladdict]

The conversation has moved on a bit I do wonder if the ramping up code shares and partnerships with AF/KLM and existing ones with AY ex-SIN might be a piece of the puzzle in filling au<>sin capacity, enabling all cities to connect on to the sin/LHR.

Many flights seem to have half a dictionary worth of code shares on them these days

 

[RSD]

The conversation has moved on a bit I do wonder if the ramping up code shares and partnerships with AF/KLM and existing ones with AY ex-SIN might be a piece of the puzzle in filling au<>sin capacity, enabling all cities to connect on to the sin/LHR.

Many flights seem to have half a dictionary worth of code shares on them these days

The conversation certainly has - and the conversation would have been very minimal still if QF had of chosen the 777X instead of the A380ULR - they dodged a bullet there!

 

[elanshin]

But QF shifting a single route over doesn't help them.

Its likely to be cheaper. Which could JQi moving over. Not just one kr two flights but all JQi ops. Also takes them out of the SYD QF lounge for the QF status/Q club holders.

Mainline QFi we won't see much movement for ages if ever. Maybe one day they'll have a huge network and theres not enough to land into SYD anymore.

 

[evanb]

Its likely to be cheaper. Which could JQi moving over. Not just one kr two flights but all JQi ops. Also takes them out of the SYD QF lounge for the QF status/Q club holders.

Mainline QFi we won't see much movement for ages if ever. Maybe one day they'll have a huge network and theres not enough to land into SYD anymore.

I don't think it's a fait accompli that WSI will be much cheaper. It hasn't been developed as a cheaper or lower cost airport, rather it's been developed to add capacity. Nothing about its design and building has been focused on being cheaper. But point taken that it should have a cost advantage because SYD's costs are just that high. Nevertheless, QF/JQ own or have long leases on various key infrastructure at SYD that when combined with their economies of scale when negotiating with SYD does give them a substantial cost advantage that they won't have at WSI.

I don't think we should discount the importance of network effects and feed into JQ's international ops at SYD, especially for routes like ICN and RAR while others like DPS or HKT might be just fine without it. Honestly, I just don't think that we'll see any QF group international at WSI for a while unless the route is specific to the local catchment.

 

[Doddler]

I don't think it's a fait accompli that WSI will be much cheaper. It hasn't been developed as a cheaper or lower cost airport, rather it's been developed to add capacity. Nothing about its design and building has been focused on being cheaper. But point taken that it should have a cost advantage because SYD's costs are just that high. Nevertheless, QF/JQ own or have long leases on various key infrastructure at SYD that when combined with their economies of scale when negotiating with SYD does give them a substantial cost advantage that they won't have at WSI.

I don't think we should discount the importance of network effects and feed into JQ's international ops at SYD, especially for routes like ICN and RAR while others like DPS or HKT might be just fine without it. Honestly, I just don't think that we'll see any QF group international at WSI for a while unless the route is specific to the local catchment.

I can tell you what *would* get Qantas flying to/from WSI. If a company like Rex started operating from there.

 

[AuSammy]

I can tell you what *would* get Qantas flying to/from WSI. If a company like Rex started operating from there.

QFg have already signed up to fly from WSI, limited capacity initially admittedly.

 

[evanb]

I can tell you what *would* get Qantas flying to/from WSI. If a company like Rex started operating from there.

Why would Rex fly to/from WSI? The PRSS slots at SYD give them a sweetheart deal. This applies equally to Qantas. Neither of Rex and Qantas are going to shift regional flying to WSI since it won't allow them to utilise those slots at SYD for anything else.

That said, Qantas have already signed various leases at WSI. Capacity thresholds in some of those will need them to base about 15 aircraft within first year. Their public statements say 10 JQ and 5 QF.

Another good indicator of which airlines might do what there are what service providers are doing. Even before Qantas's announcement of 5 QF aircraft, was that Dnata signed a lease to build a catering facility ...