Tiger exits MCY and ASP in July

[Simo]

OOL lounge? Obviously still viable, but TT Pax don't have access, do they?

If they did it would only be a small part like JQ.

Maybe in the VA lounge they should heard the TT pax into a special holding area and just leave crates of VB and wine in casks as they can be used for in flight pillows.

 

[pauly7]

OOL lounge? Obviously still viable, but TT Pax don't have access, do they?

Not yet anyway.....!

 

[dk4]

60% of something is still better than 100% of nothing though! I.e. If Virgin is not making any money (100% of nothing) and they think TT can (60%).

Of course. But you obviously can't grasp what I was getting at.

Its about how to mix between the brands, when both can make a return.

There are so many variables, but in a very, very simplistic example; let's say that out of every $10000 of ticket sales, on a particular flight sector, a "full service" brand can return $150 nett but a "lower cost" brand can return $200 nett.

At Qantas Group (all other things equal) they would axe QF and deploy JQ to increase return, simple. But at Virgin Australia Group, deploying TT would only return to the group $120 (60% of the $200), so they may be better off retaining VA to get the $150.

Whereas, if the "full service" brand's ability to generate a return drops down to $100 nett, from every $10000 in sales, versus $200 nett from the "lower cost" brand, both Groups may be better off deploying their lower cost brands.

So, the threshold at which each airline group will switch to their lower cost brands (based on nett return) is different. With Virgin probably more likely to hold onto flying " full service" for longer than Qantas.

 

[gwilli1]

A quick summary of the Changes to SYD-OOL-SYD VA / TT Schedule from 15th Sept.

SYD-OOL
Current		From 15th Sept
7.10	VA	7.10	VA
8.15	VA	8.10	TT
9.10	VA	9.10	VA
10.40	TT
11.10	VA	11.10	VA
12.10	VA	12.10	TT
13.10	VA	13.10	VA
15.10	VA	15.10	VA
16.10	VA	16.10	TT
17.10	VA	17.10	VA
18.10	VA	18.10	VA
18.10	TT	18.40	TT
19.05 (F,Su)	TT	19.05(F,Su)	TT
19.10	VA	19.10	VA
OOL-SYD
Current		From 15th Sept
6.00	VA	6.00	VA
7.00	VA	7.00	VA
9.05	VA	9.05	VA
10.10	VA	10.00	TT
11.05	VA	11.05	VA
12.30	TT	12.30	TT
13.05	VA	13.05	VA
14.05	VA	14.00	TT
15.05	VA	15.05	VA
17.05	VA	17.05	VA
18.05	VA	18.00	TT
19.05	VA	19.05	VA
20.00	TT	20.30	TT
21.00 (F,Su)	TT	21.00(F,Su)	TT

 

[Simo]

A quick summary of the Changes to SYD-OOL-SYD VA / TT Schedule from 15th Sept.

SYD-OOL
Current		From 15th Sept
7.10	VA	7.10	VA
8.15	VA	8.10	TT
9.10	VA	9.10	VA
10.40	TT
11.10	VA	11.10	VA
12.10	VA	12.10	TT
13.10	VA	13.10	VA
15.10	VA	15.10	VA
16.10	VA	16.10	TT
17.10	VA	17.10	VA
18.10	VA	18.10	VA
18.10	TT	18.40	TT
19.05 (F,Su)	TT	19.05(F,Su)	TT
19.10	VA	19.10	VA
OOL-SYD
Current		From 15th Sept
6.00	VA	6.00	VA
7.00	VA	7.00	VA
9.05	VA	9.05	VA
10.10	VA	10.00	TT
11.05	VA	11.05	VA
12.30	TT	12.30	TT
13.05	VA	13.05	VA
14.05	VA	14.00	TT
15.05	VA	15.05	VA
17.05	VA	17.05	VA
18.05	VA	18.00	TT
19.05	VA	19.05	VA
20.00	TT	20.30	TT
21.00 (F,Su)	TT	21.00(F,Su)	TT

Great comparison.

 

[Simo]

I wonder how many times TT has missed the Syd curfew.

 

[gwilli1]

I wonder how many times TT has missed the Syd curfew.

Im not sure , but the 21.00 departure ex OOL on Fridays & Sundays would test the curfew occasionally with a timetabled arrival of 22.30

 

[Deleted member 29185]

The changes will have little impact on me (SYD-OOL 16.10 is possibly the only problematic one) but I just hope this is not the first step of more to come.

 

[eastwest101]

As others have mentioned, generalizing a bit but ASP and MCY were both very tired and uncompetative marginal tourism and disposable income reliant routes subject to the high AUD making them very unattractive and expensive mass market destinations compared to overseas, and no well heeled niche tourists would dream of booking TT if there was any other option available to them.

As far as ASP goes - anyone with money whom is taking a holiday would be driving anyway, and business/government fliers unlikely to be booked on TT. As far as MCY is concerned - I assume that TT was the only carrier flying MEL-MCY direct.


Now to the OT part - For SYD-OOL - a classic case of an overcapacity bloodbath it is an interesting study.

Since QF re-entered the market and TT are in the market along with VA and JQ it probably safe to assume that no-one is making any profit on SYD-OOL at the moment. To understand this you have to concede that with fixed and variable costs there is a range of costs of putting a seat into the SYD-OOL market, obviously TT costs are < JQ costs < VA costs < QF costs. Probably most if not all seats sold at the moment between SYD-OOL are sold at below cost.

By putting extra cheap seats into the market, TT are lowering the yield for all competitors. As long as TT can keep yields low then it just becomes a matter of whom is most exposed by decreased yields being so low that there is no margin or profitability for anyone. Whom has the highests costs? QF do.

And sure this process also throws VA into potential unprofitibility, so VA decrease their capacity in response but maybe hold onto yield, VA own 60% of the losses that TT make but the Qantas group is in more of a pickle, because it cannot escape 100% of the losses that QF mainline make (which must be substantial), and own 100% of the losses that JQ make if the additional capacity drops the yields so low as to make the JQ services unprofitable, but most importantly Qantas management cannot reduce capacity because they have committed to their 65% line in the sand..... if they reduce QF services but maintain a QF prescence then their economy of scale is gone and the fixed costs kill them, if they reduce JQ services then that means more JQd capacity has to go somewhere else - thus cannibalising QFd mainline.

So its all about managing exposure to losses.

I still can't believe that TT didn't totally re-brand themselves last year, they had a livery and name update so got all the costs and inconvenience of rebranding without any of the public benefits of a name change as the Tiger brand still has the perceived brand value/loyalty/reputation and "cachet" of a fart in an elevator.

 

[drron]

Sorry Eastwest101 but you are a little behind in your knowledge of the Sunshine Coast.At the 2011 census it had a population of 307000.It is the fastest growing area of QLD.
There are quite a few living here that commute on business as well as a lot for family reasons as the majority living on the Coast were not born in QLD.
JQ have 3-4 flights t0 SYD a day with 1-2 to MEL a day.VA only have 1 flight to each per day.The drop in the TT services will make little difference.
MCY is definitely not just a tourist market.

 

[markis10]

Sorry Eastwest101 but you are a little behind in your knowledge of the Sunshine Coast.At the 2011 census it had a population of 307000.It is the fastest growing area of QLD.
There are quite a few living here that commute on business as well as a lot for family reasons as the majority living on the Coast were not born in QLD.
JQ have 3-4 flights t0 SYD a day with 1-2 to MEL a day.VA only have 1 flight to each per day.The drop in the TT services will make little difference.
MCY is definitely not just a tourist market.

Inbound tourism is definitely tourist dominated and in fact when it comes to business has had a significant decline according to TQ.

 

[drron]

It shows that nearly 40% of the traffic is business or visiting family.So the coast is certainly not totally dominated by tourism.

 

[moa999]

VFR - Visiting Friend & Relatives (not Visual Flight Rules - which is the top google results).

So only about 600 business visitors per business day (using 220-day)

Must make it tough to fill the front cabins.

 

[drron]

VFR - Visiting Friend & Relatives (not Visual Flight Rules - which is the top google results).

So only about 600 business visitors per business day (using 220-day)

Must make it tough to fill the front cabins.

Only 1 front cabin each day to SYD and MEL on VA.
No such beast on JQ.

 

[amaroo]

Wonder how they work out who is who? I've clocked up around 400 MCY departures/arrivals and I've never been asked if I was a tourist or business flyer. A keyboard jockey might have looked at my travel days - departs MCY on Monday and arrive MCY on Friday and decided I was obviously a tourist because I spent the weekend on the coast

 

[Dee Thom]

Only 1 front cabin each day to SYD and MEL on VA.
No such beast on JQ.

I was a bit worried when TT re-launched their MCY services, thought VA may pull out and leave MCY as a LCC Port. But, low and behold, I retain the extra couple of inches for my poor old knees, as TT departs my neck of the woods.

Cheers, Dee

 

[Cecil]

As a frequent user of Virgin OOL-SYD Rtn I am disappointed to read this.

 

[Deleted member 29185]

As a frequent user of Virgin OOL-SYD Rtn I am disappointed to read this.

I guess it all depends on flying habits, but for day returns OOL-SYD-OOL is better off than SYD-OOL-SYD. Ignoring the 4 hours or so in the middle of the day (say 10am-2pm) which aren't really flights day returners would commonly take, it looks like only one afternoon flight has been subbed for the OOL-SYD-OOL, but for those flying the reverse, there's a prime morning sub as well as two afternoon subs. Effectively 3 to 1 against SYD residents.