QF to wind back intl routes as JQ set to become Australia’s main intl airline

[sydstar]

Jetstar has it's own niche market. That market isn't for the majority of leisure travellers and it isn't for business travellers either. But I agree. Qantas does not appear to have a strategy to recover from this slump.

The stats would seem to agree with this. Looking at the May stats, seat utilisation for QF for Japan is at 75% inbound and 76% outbound. Compare this to the amazing JQ who are at 48% and 54% respecitvely. What a great route to start putting a brand new 300+ aircraft on! April also had a 20 percentage point difference in favour of QF. Singapore looks to be a bloodbath for all (with even SQ not being able to crack 75%).

Although the just announced changes to USA/SCL services do give a glimmer of hope. Of the remaining QF destinations in Asia, I can't see JQ really being able to do much with any of them, especially with JQHK going nowhere fast

 

[ashleyn]

Many posters have already hit the nail on the head. QF needs a clear published strategy for the next 5 years to give it's loyal customers some clarity, certainty and vision. Enough of the knee jerk reactions.

 

[moa999]

QFi has a pretty clear strategy.
Cut costs to make it profitable.

If and only if management can see it is profitable and/or covering the capital cost of new purchases will it get new aircraft (ie 787-9s)

No point buying me aircraft if all you are doing is locking in 20yrs of losses

 

[Buzzard]

I think the Flying Kangaroo will become the Flying Wallaby.

 

[Aussie_flyer]

The stats would seem to agree with this. Looking at the May stats, seat utilisation for QF for Japan is at 75% inbound and 76% outbound. Compare this to the amazing JQ who are at 48% and 54% respecitvely. What a great route to start putting a brand new 300+ aircraft on! April also had a 20 percentage point difference in favour of QF. Singapore looks to be a bloodbath for all (with even SQ not being able to crack 75%).

Although the just announced changes to USA/SCL services do give a glimmer of hope. Of the remaining QF destinations in Asia, I can't see JQ really being able to do much with any of them, especially with JQHK going nowhere fast

You are comparing ONE route (SYD-NRT) to Jetstar's many. Not to mention the fact that as a LCC JQ require the aircraft that costs the LEAST to operate. The margins are very thin on JQ so they need the more efficient aircraft economically than Qantas.

 

[Pleb Status]

The EK tie up will kill off the remaining QFi services to Europe. No full service partners in Asia (CX are a frenemy at best, MH will only survive being propped up by their government) will kill off most of the QFi services to Asia as no onward connections are available.

The only way the QFi Europe and most Asia services will survive is if the EK partnership is dismantled and QFi services are rerouted via Asia. Buying the 789 will do nothing without this fundamental change. 3K is effectively useless if you are a business traveller.

 

[Pleb Status]

As the EK tie up would be very difficult to break, I would try the following. QFi to Asia/Europe will be dead anyway (like from PER already), so it is worth a try. It might save 3K as well.

Using 3K as a base, I would rebrand and move Jetstar Asia upmarket, but not to completely match SQ. Very similar to what VA have done in Australia. The new airline would have a low cost base but be a mostly full service airline (offer connections, a decent seat pitch, free meals for longer flights, in seat entertainment) but without first class, first class lounges etc.

The airline would use the existing (but refurbished) A320 for intra Asia flights and new 788/789 for Australia-SIN flights. The airline would be a full (and equal) partner of QFF (including all elite benefits) and I would look at being an Oneworld member as well. If successful, a daily SIN-LHR flight could be added.

The Jetstar brand would have to go as it is linked to 'Low Cost'. I would go for a branding which is white and red but different name and logos to QF. I would have the full change completed within 18 months. Once complete, all QFi flights to SIN would be operated by 3K via QF codeshare.

In summary, QFi to SIN and 3K generally do not appear to be making any money at the moment and, without change, will continue to lose money in the future. Low cost competition out of SIN is high and someone will need to go bankrupt/shut down in the near future. Without full service connections, QFi will continue struggle to SIN (SQ operate four PER-SIN and QF cannot operate one). Moving 3K upmarket may attract more business generally and allow suitable connections for QFi.

 

[moa999]

You are comparing ONE route (SYD-NRT) to Jetstar's many. Not to mention the fact that as a LCC JQ require the aircraft that costs the LEAST to operate. The margins are very thin on JQ so they need the more efficient aircraft economically than Qantas.

Disagree with this. While the operating cost of the 787-8 may be less than the 330-2/3, it will be more expensive from a lease perspective which needs to be taken into account.

Eg. Scoot operating with 10+ year old 777s, or Jetstar Pacific with second hand 320s

 

[cmon0005]

Personally I think they should rehatch red Q.

 

[Aussie_flyer]

Disagree with this. While the operating cost of the 787-8 may be less than the 330-2/3, it will be more expensive from a lease perspective which needs to be taken into account.

Eg. Scoot operating with 10+ year old 777s, or Jetstar Pacific with second hand 320s

Disagree all you want but scoot is going all B787 in the next few years. The 777s were a temporary measure until the 787s arrive. The 787s were ordered by singapore airlines but have been transferred to their subsidiary SCOOT. Sound familiar?

 

[Foreigner]

QF had so many destinations which have been wound back over the years.

http://en.m.wikipedia.org/wiki/Qantas_destinations

 

[medhead]

Many posters have already hit the nail on the head. QF needs a clear published strategy for the next 5 years to give it's loyal customers some clarity, certainty and vision. Enough of the knee jerk reactions.

QFi has a pretty clear strategy.
Cut costs to make it profitable.

If and only if management can see it is profitable and/or covering the capital cost of new purchases will it get new aircraft (ie 787-9s)

No point buying me aircraft if all you are doing is locking in 20yrs of losses

At the moment Qantas seems to be getting a new 5 year strategy every year

You are comparing ONE route (SYD-NRT) to Jetstar's many. Not to mention the fact that as a LCC JQ require the aircraft that costs the LEAST to operate. The margins are very thin on JQ so they need the more efficient aircraft economically than Qantas.

Yet Jetstar were supposedly making money an profit with the A330, even with those thin margins. QFi were not making money. It makes much more sense to cut the costs of the part of the business that needs help, say by giving them the least cost aircraft. It makes zero sense to make JQ more profitable and not reduce the cost of QFi (if they really want to maintain the status quo).