QF "trust us" letter

[MooTime]

Share of what though? Discounted domestic flights?

Fare differences alone between the two airlines will more than make up for a few percentages of domestic market share.

Edit - where's your source for this?

The last I have is this graph which was from April. Trajectory was down for VA, QF was up.

well i don't keep every article i read on hand, but its been well documented as your graph shows QF drifted south (~78% to ~64) & VA lifted a tad (~18% to 32%). more than blip, a little trend may we say. nice you mentioned the last smidgeon of a 2 year graph.
Just search anything airlines QF VA market share etc plenty there.

Anyhow my point was that if QF can keep increasing it's prices to cover for any lack of pax then that's fine. Listed company shareholders yes all aware.

anyhow I think the email from AJ was weak & just wanted to address the turn back & technical issue lately & throw in a boast about their reliability according to their own website.

Just another story of QF not doing a thing wrong basically.

They certainly are a match fit airline.

 

[p--and--t]

Centre for Aviation published this in August 22

Qantas Group asserting domestic market dominance​

Qantas Group – comprising Qantas Airways, Jetstar, QantasLink and Network Aviation – controls approximately two thirds of the domestic market (61.2% of seats, 65.2% of ASKs and 53% of frequencies, as of early Aug-2022).

The goal for the group is a 70% domestic passenger share, which it intends to achieve through a combination of rapid fleet growth from FY2024 (year commencing Jul-2023), along with strategic acquisitions.

In May-2022 Qantas moved to acquire full ownership of Alliance Airlines (pending regulatory approval).

Although Alliance is small – with a less than 1% market share – it has a consistently profitable fly-in/fly-out charter operation and a growing fleet of Embraer E190s feeding limited scheduled services. Alliance’s E190 fleet is due to grow from 20 to 33 aircraft by early 2023, potentially allowing Qantas to open up new routes and to shift some of its domestic 737 fleet to routes that are better matched to capacity.

Qantas is also on the cusp of a major domestic fleet transition, starting a move to an all-Airbus narrowbody fleet.

In May-2022 an order for 20 A321XLRs and 20 A220-300s was finalised, adding to the 108 A320neo family aircraft already on order. These will gradually replace its domestic 737NGs and 717 narrowbodies, with the new aircraft offering higher capacity, more range and better fuel efficiency. Deliveries are due to begin in mid-2023.

After nearly two and a half years of navigating the COVID-19 pandemic, Australia’s largest airline group reported that it is “seeing a strong, sustained recovery in travel demand”.

However, fuel prices and workforce issues – including pilot and ground crew shortages – have resulted in it pulling back on ambitious capacity growth plans in recent months.

In Jun-2022 it announced that it would operate around 103% of pre-pandemic domestic capacity – down from an earlier plan to operate 110%; but it only managed around 90%.

 

[MooTime]

ok I apologise for claiming VA had 36% market share & not providing evidence, had quick look & couldn't find an article. If I find I will post.

didn't mean to make this a p%$sing contest.

Topic of email from AJ is weak, that's all she wrote.

 

[justinbrett]

well i don't keep every article i read on hand, but its been well documented as your graph shows QF drifted south (~78% to ~64) & VA lifted a tad (~18% to 32%). more than blip, a little trend may we say. nice you mentioned the last smidgeon of a 2 year graph.
Just search anything airlines QF VA market share etc plenty there.

Anyhow my point was that if QF can keep increasing it's prices to cover for any lack of pax then that's fine. Listed company shareholders yes all aware.

anyhow I think the email from AJ was weak & just wanted to address the turn back & technical issue lately & throw in a boast about their reliability according to their own website.

Just another story of QF not doing a thing wrong basically.

They certainly are a match fit airline.

It's really not wise to pull trends from within-covid times. The 80% market share of QF for a brief period was never going to last, and again, the pie was very small (remember when there was a single daily flight between MEL & SYD?) Also remembering that was when VA went into administration.

The QF group market share before covid was approx 60%, more or less where it is now, so it hasn't really changed. Tiger has gone, and it would seem that share was split between VA & Rex.

 

[MooTime]

It's really not wise to pull trends from within-covid times. The 80% market share of QF for a brief period was never going to last, and again, the pie was very small (remember when there was a single daily flight between MEL & SYD?) Also remembering that was when VA went into administration.

The QF group market share before covid was approx 60%, more or less where it is now, so it hasn't really changed. Tiger has gone, and it would seem that share was split between VA & Rex.

Fair call.
Accepted.

What's your view on AJ email?

 

[drron]

Pre Covid is an irrelevant comparison as VA has gone through bankruptcy proceedings since then. Bain took over in June 2020 and Tiger disappeared then though VAs low point was July 2020. Looking at the graphs since then VA has taken market share from both QF and JQ.

That is a remarkable achievement in the circumstances as QF basically held all the aces. Bankrupt Airlines historically don't have a good track record. I for one think they have done far better than I thought possible.

 

[exceladdict]

Back to the letter and OP:

"...We’re working hard to make things better still. (..). Across the Group we’re expecting 11 new aircraft this year alone as part of ongoing fleet renewal, and in the months ahead we have some exciting (gulp...) announcements on lounges, destinations, and Frequent Flyer developments."

Uh oh.. exciting developments = QFF "enhancements" incoming?...

How long has it been since things became simpler and fairer? Are we seeing devaluations at other airlines?

 

[dajop]

That is a remarkable achievement in the circumstances as QF basically held all the aces. Bankrupt Airlines historically don't have a good track record. I for one think they have done far better than I thought possible.

It was probably much better for VA to go bankrupt when they did than during good times. Cleared the deck of investors with competing interests and found a strong willing investor. All at a time where the airline had the upper hand against leasing companies who faced a glut of aircraft that had no homes. Likewise with staff (initially anyway). They also have been disciplined so far and have more or less followed the playbook of the original Virgin Blue that was quite successful until they rebranded.

 

[SYD]

Back to the letter and OP:

How long has it been since things became simpler and fairer? Are we seeing devaluations at other airlines?

Too long but maybe they’ll reverse it but only give 1/4 SCs on QR…

 

[JohnK]

Does market share matter if they are charging more than everyone else and filling their planes every day - ROI - its a company with shareholders looking at profits.

And here in lies the problem.

QF working model is keep shareholder happy and screw the customer. The customer has very little choice right now.

 

[Townsend]

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.

 

[RooFlyer]

And I note the VA line isn't at 36%, which was the source I was asking for originally.


Do you want to contribute anything useful or just want to pick a fight?

There was no official data in this thread on this topic, I googled and posted what I found. @drron found a more up to date version than I found which is great. My source was Australia's domestic market nearing full recovery but short term problems blunt capacity

Now that you've revealed your source, we can have a look at it ourselves. Here's a wider view of what you presented:



The headline in the article is a bit different from your initial description.

The last I have is this graph which was from April. Trajectory was down for VA, QF was up.

If we are going to present data, need to source it and present fairly, so we can all judge for ourselves, rather than some anonymous partial snip.. I judge that the picture for Virgin in that article was pretty good.

 

[Greg555]

Only one letter will satisfy me - Joyce's resignation letter.

Let's follow that with Goyder's and the rest of the board.

 

[Quickstatus]

My impression is that VA² is doing remarkably well.
The most interesting aspect is that QFᵈ is not carrying significantly more domestic pax than VA²

Turns out the plane that does the Dallas-Melb route was still in Dallas and wasn’t going to fly from Melbourne for days

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

 

[drron]

I agree that the time of VA’s bankruptcy was near perfect for the debt problem but doubtful that from the passengers perspective it was anything good.

 

[Quickstatus]

Joyce's resignation letter.

Or better the devil you know?
He obviously has the support of the Board.

To spill both, I think you need a very significant shareholding.

 

[RooFlyer]

My impression is that VA² is doing remarkably well.

I've been burrowing into the Virgin ecosystem over the past few months, and I've been genuinely surprised at the depth of the ancillary services, not just board-and-fly, ker-ching, thank you. Partner flying and buying opportunities, Business flyer etc; e-mails answered personally and promptly (within an hour in case of one to Business Flyer, within a day from their Platinum mob).

Not what I was expecting from an airline coming out of a near-death experience and going into a float. You'd think a quick gouge, plump up the business and Bain exit stage left.

 

[Quickstatus]

debt problem

The other debt problem is the looming refinancing of circa $300B maturing low interest fixed rate home loans into much higher variable interest rates. How that plays into the AU aviation market will be very interesting. In a high cost economy and less discretionary income, which aviation segment will lose first?

I suspect its a case of making hay while the sun shines.

.....

Bain exit stage left.

I had also cynically thought that VA² was going to be a quick pump and dump. I still think it's going to happen. Maybe the current economic uncertainties is delaying the exit?

 

[exceladdict]

The other debt problem is the looming refinancing of circa $300B maturing low interest fixed rate home loans into much higher variable interest rates. How that plays into the AU aviation market will be very interesting. In a high cost economy and less discretionary income, which aviation segment will lose first?

I suspect its a case of making hay while the sun shines.

.....


I had also cynically thought that VA² was going to be a quick pump and dump. I still think it's going to happen. Maybe the current economic uncertainties is delaying the exit?

I've seen a few pieces saying that people will hold on to travel for as long as possible, reducing savings and spend in other discretionary areas first. That makes sense to some extent but as covid revenge spending lapses and the fixed rate mortgage transition shock filters through the economy, I agree that discretionary spending will be hit hard.

Possibly why VA are pushing business flyer hard, to hopefully offset a drop in leisure travel. I would be very surprised if the float isn't soon (at least partial).

 

[levelnine]

I've seen a few pieces saying that people will hold on to travel for as long as possible,

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.