QF "trust us" letter

[Quickstatus]

lower expense domestic trip, etc.

Probably the effect will trickle down simultaneously in the different aviation markets. Hopefully fares will come down to more reasonable levels. I don't see international fares coming down soon until or unless seat availability improves substantially.

Bitre statistics to Oct 2022.

 

[jase05]

I would be very surprised if the float isn't soon (at least partial).

It’s well underway.
Half a dozen investment banks have wrapped uo their pitch meetings with VA already

 

[milehighclub]

Qf said they were going to keep some aircraft over the holiday season as operational spares. Well, back to normal programming.....

Whilst I agree it is a bit more back to normal, at the same time you don’t send a spare aircraft to where one is stuck because of weather and end up with two stuck.

 

[exceladdict]

I wonder what alternative reality those people are living in.

If your mortgage repayments have gone up $750-1000/month (which is what they have for anyone with a $400K+ mortgage), you can't make that up by cutting out a daily take-out coffee or dropping a gym membership.

You have to slash sources of big discretionary spending. Travel is going to be squarely in the firing line given that it is easy to spend $5-10K+ on a single trip. If you're trying to save lots of money, it makes logical sense to drop from 3 annual trips to 2, a high expense overseas trip to a lower expense domestic trip, etc.

I agree, after savings are squashed, young home owners will be those that hurt and cut that travel spend.

It is like saying 2+2=4 but those on higher incomes (who probably have made more of a dent in their mortgage) will be impacted the least and retain spending (I think this mckinsey article conceptualises it reasonably well).

 

[Quickstatus]

at the same time you don’t send a spare aircraft to where one is stuck because of weather

Agree - both QF21/22 and QF7/8 on 1Feb was cancelled due to bad weather at DFW

Drilling deeper....
QF7/8 operated on 2Feb but not QF21/22
Surely if QF78 could operate on 2Feb, then QF21/22 could have as well - at least from a weather point of view.

Turns out the plane that does the Dallas-Melb route was still in Dallas

I think QF22 VH-ZND actually departed DFW on 30Jan and returned via a diversion to AKL on 1Feb. It was already in MEL 1hr 15min before the cancelled QF21 on 1Feb.

The answer for why QF21 did not operate on 2Feb could be because QF21 is Mon/Wed/Sat operation and not a 7 day a week operation. 2Feb was a Thursday
Interestingly it arrived into MEL 5hrs late. I wonder if a 787 crew was sent to AKL

 

[p--and--t]

The market is currently capacity restrained. Its a fair bet by next calendar year the high fares we are seeing will drop markedly. JQ are already marketing fares on different routes at different times under $50 domestically

QF is down one A380 ATM currently in AUH for maintenance?

Speculating this might be the QF1 that had to divert due to a fire alarm? Could be wrong. Regardless the fleet of A380s is due to increase from 7 to 10 within the next few months, def before end of year which will bring a lot of seats to market. In addition to that CX is getting back into the air and the Chinese carriers as well. A lot more capacity coming on line internationally out of AU.

Domestically, the new frames start being delivered from Airbus from the end of the year.

But Mr Joyce you need to be honest with us. I was due to fly Melbourne-Dallas this week. Now we know the weather was bad in Dallas but… on Wednesday I was in the lounge and 3 hours before departure we were told that QF21 wouldn’t fly thatbday but would definitely fly Thursday. 2.00am Thursday I was sms-ed saying no flight that day.

Turns out the plane that does the Dallas-Melb route was still in Dallas and wasn’t going to fly from Melbourne for days. I think Qantas needs to seat treating customers with the honesty they hope we will accept from them.

Ludicrous statement. I strongly suspect the CEO never makes a decisions to which sectors are flown or not. Pilots decide if the weather is bad or the plane has a defect.

 

[Quickstatus]

I strongly suspect the CEO never makes a decisions to which sectors are flown or not

Disagree, the executive whether AJ or someone else in the team have absolute discretion whether certain sectors are operated or not. Agree, Pilots discretion are whether the flight leaves the ground or not, or arrives at some place or another.

 

[p--and--t]

I agree, after savings are squashed, young home owners will be those that hurt and cut that travel spend.

It is like saying 2+2=4 but those on higher incomes (who probably have made more of a dent in their mortgage) will be impacted the least and retain spending (I think this mckinsey article conceptualises it reasonably well).

Yes young home owners are and will be impacted significantly. Their decisions not to fly may have an impact on LCCs.

But what percentage of the aviation market are they?

Certainly a far larger percentage that may not at be impacted, or only slightly impacted, and it will not trim their desires to travel.

Post automatically merged: Feb 4, 2023

Disagree, the executive whether AJ or someone else in the team have absolute discretion whether certain sectors are operated or not. Pilots discretion are whether the flight leaves the ground or not, or arrives at some place or another.

We will disagree. I was referring to IIROPS from the original post and the CEO would not be making any decisions in that regard

 

[Quickstatus]

CEO would not be making any decisions in that regard

Of course he can, the CEO can at anytime direct that a flight, if not already departed, to not depart. Or direct that the flight, if not already departed, be operated to another airport.

 

[TheInsider]

But Mr Joyce you need to be honest with us. I was due to fly Melbourne-Dallas this week. Now we know the weather was bad in Dallas but… on Wednesday I was in the lounge and 3 hours before departure we were told that QF21 wouldn’t fly thatbday but would definitely fly Thursday. 2.00am Thursday I was sms-ed saying no flight that day.

Turns out the plane that does the Dallas-Melb route was still in Dallas and wasn’t going to fly from Melbourne for days. I think Qantas needs to seat treating customers with the honesty they hope we will accept from them.

Lol. That aircraft was not still in Dallas.
The aircraft that was originally meant to be for your qf21 was the same aircraft the went DFW-AKL-MEL. Then it was delayed 24 hours due to the ice storm In Texas. The subsequent departure 24hrs later was still the same aircraft, but then got cancelled due to futhur weather in DFW.
Just because one aircraft does one route, doesn't mean it does the same route all the time. It changes very frequently.
You're kidding your self if you think AJ has any say over the day to day operations of the airline, yet alone one specific flight.

 

[p--and--t]

Of course he can, the CEO can at anytime direct that a flight, if not already departed, to not depart. Or direct that the flight, if not already departed, be operated to another airport.

The distinction is could or would. Not discussing further

 

[TheInsider]

Of course he can, the CEO can at anytime direct that a flight, if not already departed, to not depart. Or direct that the flight, if not already departed, be operated to another airport.

Yeah, nah. Doesn't work like that.

 

[Quickstatus]

would

the CEO never makes a decisions to which sectors are flown or not.

Your original statement says "CEO never"...

 

[RooFlyer]

It’s well underway.
Half a dozen investment banks have wrapped uo their pitch meetings with VA already

I see Reunion Capital the Financial Advisor, who will help appoint the bank(s). I reckon two banks.

Of course he can, the CEO can at anytime direct that a flight, if not already departed, to not depart. Or direct that the flight, if not already departed, be operated to another airport.

You're kidding your self if you think AJ has any say over the day to day operations of the airline, yet alone one specific flight.

Yeah, nah. Doesn't work like that.

Well, he did/ it did at least one time, I think?

Qantas grounds entire fleet

Qantas has taken the extraordinary action of grounding its entire fleet with immediate effect over an industrial dispute with employees. Airline CEO Alan Joyce says the company had no choice in the face of impossible demands by unions. All Qantas employees involved in industrial action will be...

www.abc.net.au

 

[levelnine]

Yes young home owners are and will be impacted significantly. Their decisions not to fly may have an impact on LCCs.

But what percentage of the aviation market are they?

I think you underestimate the impact.

Economics and business are games played at the margins.

You lose 5-10% of your customers and, all of a sudden, a whole bunch of flights, routes, strategies tip from profitability to unprofitability. The Qantas group has a whole bunch of leisure-heavy routes (HNL, Far North Qld, HND/NRT, NAD, NOU, ZQN, DPS, etc etc).

Just like a recession isn't a change in unemployment from 4% to 50%, it is a change in unemployment from 4-5% to 8-10%.

As mentioned above by others, you have to also remember that these demand headwinds are hitting at a time when supply of seats (by QF as well as its competitors) is continuing to increase.

 

[Tropic]

Economic pressures aside, I think it would take World War III to stop the many debt-free, cashed up retirees I know from travelling where and when they desire (obviously just not on QFi)....just hope we dont get to test that proposition given way things are heading...

 

[Tropic]

think you underestimate the impact.

As I stated upthread, I agree and think QF are well aware they have downside risk given the level of reputational damage and bad will they have generated with their loyal customer base and thats whats behind current media and announced "exciting developments".. end 2023 will be interesting

 

[Quickstatus]

but then got cancelled due to futhur weather in DFW.

Cancelled due to further weather?

As per and additional to per my previous post:

QF22 ZND DFW-MEL arrived via AKL diversion on 1Feb 1:15hrs prior to scheduled operating of QF21 on 1Feb which was cancelled as was QF7 1Feb for weather reasons at DFW.
However QF7 2Feb was able to depart as per normal schedule - where is the further weather?
AA34 AKL to DFW and NZ28 to IAH was also able to operate on that day (assuming IAH weather was same as DFW)

QF21 does not ordinarily operate on a Thursday (2Feb) which I suspect is the actual reason QF21 did not operate even as a "delayed" on 2Feb. Presumably the passengers were either delayed until the 4th or the airline managed to get seats elsewhere - say QF7, QF11, QF93 or AA34 via AKL.

The point is that there was an aircraft to operate a QF21"D" to DFW and returned on 2Feb/4Feb without impinging on the rest of the 787 fleet.
Since arriving as QF22 on 1Feb, ZND continues to sit in MEL.

Of course this assumes there was 787 crew to operate an QF21"D" on 2Feb.
On 2 consecutive days QF21 and QF8 diverted to AKL the next day. QF21 arrived into final destination 5hrs late and QF8 7.5hrs late. On both occasions, the airline may/must have positioned a relief 789 crew to AKL. Maybe this is a reason that the airline did not operate QF21 on 2Feb

But back on topic:
I don't recall any musings by AJ that the average customer or FF actually believes.....I could be wrong.....

 

[Lynda2475]

Alot of travel for 2023 has been paid for using credits/vouchers/travel passes for flights and accomodation from covid cancelled trips in 2020/21 so the rising interest rates wont necessary see an immediate drop in leisure travel.

And whilst younger mortgage holders may have to give up travel to meet rising repayments, many of those more mature passengers who travel in premium cabins where the airlines make their money are mortgage free; and have more discretionary money now that savings are earning interest again after a decade of virtually no earn.

The email was pathetic, just hurry up and have another DCS and I will make forward bookings.

Was reading an article early this week where Virgin owe an aiport in WA 500k in unpaid landing fees, Im not convinced buying into such a debt ridden business is a good investment, I certainly wouldnt put all my eggs in the Virgin basket.

 

[p--and--t]

Alot of travel for 2023 has been paid for using credits/vouchers/travel passes for flights and accomodation from covid cancelled trips in 2020/21 so the rising interest rates wont necessary see an immediate drop in leisure travel.

And whilst younger mortgage holders may have to give up travel to meet rising repayments, many of those more mature passengers who travel in premium cabins where the airlines make their money are mortgage free; and have more discretionary money now that savings are earning interest again after a decade of virtually no earn.

The email was pathetic, just hurry up and have another DCS and I will make forward bookings.

Was reading an article early this week where Virgin owe an aiport in WA 500k in unpaid landing fees, Im not convinced buying into such a debt ridden business is a good investment, I certainly wouldnt put all my eggs in the Virgin basket.

Yep.

Semi retired, mortgages locked in for quite a while yet at between 2-3% on low LVIs or offset. Already have 3 cruises this year mulling over xmas jaunt and finalising a month away in the Caribbean next April.

The Aussie population is not a homogenous group of cash strapped single income first home buyers - far from it.

The vast majority of people I see on overseas flights and tours and cruises are not first home owners. (leaving aside the 7 days cruises into the Pacific from the east coast which have quite a few).