[HedgeFundFlyer]

All very sad.

QF are a superb airline, domestically and internationally, and I have never had anything other than a great experience with them.

A little birdie tells me BA are looking to bring forward the delivery of several A380s from 2016. Depsite all the bluster about LHR-SIN-SYD being dropped, I wonder if they haven’t spotted an opportunity to fill a gap.

I for one would much rather go via Sinagpore. I know many others feel the the same. The timings are better and, because it’s the same plane, the chances of a DXB style connection meltdown are far lower.

[rferguson]

I agree. I think QF are probably up there with the best in terms of service – definitely of the ‘western’ carriers anyway.

Actually HedgeFundFlyer that was another of the rumours doing the rounds at the LHR Crew base – that one of the two flights would once again be re-routed via Asia, most likely HKG.

All will be revealed on Thursday morning UK time I guess!

[AMcWhirter]

rferguson – Thanks for the interesting information. It confirms the contents of last Friday’s online news piece.

So it would make commercial sense to combine the passengers from both flights onto a single A380, (possibly Q1 which originated in Sydney) and continue that one A380 through to London.

Another disadvantage for Qantas on the London-Dubai route is the one I featured in Ask Alex.

Most passengers flying into Dubai will be changing planes for onward destinations with Emirates being the natural choice (for the onward flight)

But if a passenger were to choose QF rather than EK to fly LHR-DXB then he or she would not get status credits if the booking is made through emirates.com rather than qantas.com

http://www.businesstraveller.com/ask-alex/2013/qantas-and-status-credits-when-booking-on-emira

[canucklad]

Agree with everybody else, QF is a fantastic airline and actually was a contributing factor in my choice to not fly BA long-haul.

It is sad how QF has managed to get into this situation, it seems that they are in a downward spiral of their own making, and yet the stats that rfergusons excellent post is telling in the dilemma that QF now find themselves.

Ironically if I wanted to fly to OZ, QF would be the first airline on my want to fly list!

[transtraxman]

Yet again the Australian analysts CAPA come up with another article on Qantas (and Virgin Australia).

“Is loving Qantas to death in Australia’s national interest? Airline ownership dogma defeats logic”

http://centreforaviation.com/analysis/is-loving-qantas-to-death-in-australias-national-interest-airline-ownership-dogma-defeats-logic-154426

Suffice it to say that the ownership of Virgin Australia is split in the following way……..
“The airline is owned by listed Virgin Australia Holdings, (VAH, which includes Virgin Australia; Virgin Australia (NZ) and Virgin Australia Regional Airlines, each 100% owned; and Virgin Samoa (49% JV) and Tigerair Australia (60%; Singapore Airlines is a partner).

In turn, the holding company is owned by:
Air New Zealand (app 25%)
Singapore Airlines (app 22%)
Etihad Airways (app 20%) and
Virgin Holdings/Richard Branson (10%).”

………This is the disadvantage against which Qantas has to work but cannot according to the the Qantas Sale Act 1992.
However, ……
“Thanks to the Qantas Sale Act 1992, the formerly government owned airline has been singled out for “preferred” treatment. It may not have more than 25% ownership by any one foreign airline and a maximum of 35% among foreign airlines overall; the maximum foreign holding permitted by investors overall is 49%. Importantly too the Act contains provisions which effectively prevent an ownership structure similar to Virgin Australia’s. These may not sound seriously restrictive, but in the local ecology they represent an unnecessary and very significant handicap.”

Apparently the government wishes to change the law so that Qantas and Virgin Australia can operate on a level playing field but the opposition is against…. basically to keep “jobs in Australia”.
“There is little evidence to support any such claim. In fact the evidence points in precisely the opposite direction. Virgin Australia, propped up by foreign governments (so it is argued), has actually expanded its Australian workforce by over 30% between 2010 and 2013; not so Qantas.”

“Amending the Qantas Sale Act will alone by no means save Qantas. There is much more to be done. But not amending it will do a lot to ensure its demise, ironically without even protecting the privileged minority which seeks to maintain the status quo.”

But not all is negative as Qantas has a cash pile to see it through rough times though it is bleeding.

“…….domestic demand is softening, so that even current levels of capacity are generating insufficient yields.

But this is a market where a (relatively) new entrant is seeking to establish a foothold, while the incumbent is fairly naturally resisting. The flavour is added by suggestions that in the airline business a 65% market share generates higher than proportionate returns. That is where Qantas stands now and Virgin understandably would like to alter the balance.”

There is much more to see in this soap opera but who is going to benefit? Could IAG offer the solution? And if that is so what changes then?

[SimonS1]

The figures from rferguson are quite damning. No carrier can survive on a route with those yields.

The Australian govt can fiddle whilst Rome burns but the outcome is clear for all to see. Sadly cutbacks are necessary to the point where there is a profitable core, and rebuild it from there.

If it’s true that Qantas costs are double those of EK then the cuts will be deep and painful, sadly.

[rferguson]

What is most perplexing is that the service reductions to Qantas didn’t happen as soon as the joint business with EK commenced – it was pretty obvious from the outset that the new strategy would be to send all European transit traffic via DXB – so how did QF still expect to fill their two daily A380’s?

Qantas is still a bit of a political hot potato in Australia. Although it’s a publicly listed company there are still many ‘expectations’ Australians have about Qantas. There would be political implications if Qantas say for instance axed the right for Melbournians to have their own direct QF flight to London yet still allowing Sydneysiders the route. In Western Australia the local media has torn Qantas to shreds for cutting back it’s international routes from there. The latest has been to withdraw the QF codeshare on the daily SAA flight from PER-JNB – it now (ridiculously) routes customers PER-DXB-JNB! It’s a bit like when BA first axed long haul flights from ‘the regions’. The economic realities came second to the ‘right’ to have direct flights from their cities.

What’s interesting about the QF situation is it always seems to be in dire straits when it needs some legislation changed or some kind of authority approval. For example, they announced dire financial results and morbid rumblings of going bust when they were pushing for the QF/EK deal to go through the competition authorities. Then once they got their approval, everything seemed to be on the mend.

Now, it seems again they are in dire straits – coincidentally the same time it is campaigning for a change to the ‘Qantas sales act’.

The fact that it’s costs are 16% higher than Virgin Australia’s is no great revelation. Of course they would be. They are a legacy airline – they have things like pension contributions and what not to pay into. It is no different to European carriers. Lufthansa and Air France are going to have higher costs than Germanwings or Vueling. BA had higher costs on short haul than BMI did – but it was still BMI that ended up disappearing.

Those 16% lower costs at Virgin Australia aren’t helping VA – they are also operating at a loss.

A really interesting article – which also gives a look into the unmarked frosted doors of the little mentioned ‘Qantas Chairmans Lounge’.

http://mobile.abc.net.au/news/2014-02-24/verrender-dont-fall-for-the-qantas-ruse/5278432

[AMcWhirter]

Latest reports in the Australian media (dated Tuesday February 25) suggest that Qantas may sell its Melbourne airport terminal.

It may also make some cuts at its budget subsidiary Jetstar.

Job losses, originally predicted at 2,000, may go as high as 5,000.

http://www.theaustralian.com.au/news/qantas-set-to-axe-5000-jobs-and-sell-its-melbourne-airport-terminal-to-negotiate-federal-assistance/story-e6frg6n6-1226836427210#page

[TominScotland]

I booked two Avios reward seats BNE-MEL-DXB return in Economy at short notice (for personal reasons) and got back here to Brisbane just on Sunday. Great availability and very low add on costs so a no-brainer compared to an ex-Australia fare. I will complete a proper review when I get the chance but the international legs on QF09/10 both had low loads – great opportunity to spread out even in the small Economy cabin upstairs. Good service throughout – in my view, streets ahead of EK. It would really be a pity to loose a QF option to OZ.

As a BA Gold card holder flying QF metal, was able to use the massive EK Business Lounge in DXB T3 (which was an odd feeling) – this is even bigger than the old one in T1.

Fell foul of the awful Dubai fog on the way back – QF 10 managed to get into DXB so we were only 2 hours late but QF02 had to divert to Bahrain and suffered a much greater delay. Don’t think that Singapore has the same problems.

[rodders]

Tom
I think as a BA gold card holder you could have accessed the EK First lounge, it does cause the EK lounge guardians to reach for their book!
Having taken QF several times now DXB/LHR/DXB the issue seems to be that under the EK/QF agreement QF cannot discount its fares too much on the DXB/LHR legs, invariably BA will be AED 12k return in Club, while EK and QF are often in the AED15-17k bracket. Loads have seemed on the light side, and I agree its been easy to get FFQT tickets on the route in both economy and premium economy….

[Jimmywright]

Correct. As a OneWorld member access to the Dubai lounge is available when flying on Qantas metal. So nice of Qantas to organise that. Unlike BA and their associated lounges where they generally only negotiate access for BA card hodlers. But I digress.

http://www.qantas.com.au/travel/airlines/lounge-locations/dubai/terminal-3/associated-lounge-international-business-lounge/global/en

[MarcusUK]

I have been down in Sydney for 2 weeks…
reports on the news, and with a late night interview with the CEO of Qantas, it seems pretty clear on all reports that Qantas will be making 3,000+ redundant.
in addition, they have cancelled the “heavy Maintenance” Contracts, and a Company associated with this is closing, with 800 loss of jobs.

They have asked the Government to change the regulations re overseas funding, and pressure is on from these local MP’s who’s constituents are affected by the plant closure, as well as where many Qantas crew are employed from.

Sadly I have seen on each visit to Australia in the last years, older airplanes and deteriorating conditions of them inside and out. Virgin Australia has a heavy weight here which has increased, and they have a positive image, and taking much business. New Aircraft, trendy lounges, good prices, and taking much business. Clearly clever Etihad have been involved in the investment strategy for them, and added resource for Virgin Australia.

I also have been affected and switched my travel to Australia via The Gulf, rather than via Asia. For the many reasons you have all highlighted, the standard of the services on board, and on the ground, and the modern Aircraft used in terms of layout and comfort.
However, I have chosen Etihad, which in my view offers a far better service and business and First than Emirates, and arguably superior economy cabins also. The lounges are better than any Asian Airline even, and food on board offering A La Carte menus at any time, no meal times or trolleys are used in Premier cabins, and the standard with the chef on board, excellent.
The whole philosophy of being a “guest” not a customer or passenger, shows, and it makes a huge difference.

With two Business fares return LHR – SYD via AUH at £2,775 each, the fare was the 3rd lowest next to Air India, and Malaysia Airlines. However, they also offered chauffeur cars, also for the stopovers, so that is 8 transfers in total. Also, Premium stopovers with the 1st night free, and additional nights half price, so we arranged 2 and 4 nights stopovers out/back.
The savings and value of these alone is over £1,000 to us, so this is one benefit.

They also have triple miles these two months, and we already gain Silver status in the Etihad Guest program. By the return, we have a one way AUH – SYD business earned each.

No other Airline can match this in value, let alone quality, this is one of the many reasons i have now switched to Oceania travel via The Gulf, not asia.

Even Singapore Airlines downgraded SIN-SYD to “medium Haul” service some years ago, and gave you ONE meal in Business class, on an overnight flight! Being asked do you want your meal for dinner, or do you want a breakfast, does not impress!

So in some ways, the other Airlines have brought the transfer of business on themselves.
In respect of Qantas, here in Oz they have had a poor reputation for some time, and simply cutting costs and shabby aircraft domestically, shedding the workforce and engineering out for some years, does not help themselves.
Air New Zealand pulled out of Oceania – Asia – London, as will Virgin Atlantic, and even Air Asia on the Low cost side, could not make it work. It seems BA will follow It is also affecting Malaysia, Singapore, and Thai Airways with a loss of custom, taken by the Gulf carriers.

Sad but that is how it is, but major mistakes have been made in cutting back the small areas that matter most to which Airline we will choose.
Not surprising that we change our custom to other Airlines.

[Scotty01]

The reality is Qantas have pretty much given up. The Emirates thing is a last role of the dice and they will be enveloped and digested.

Over the last 15 years we have flown more with QF than any other airlines and almost always in First when available. I have never seen an airline devalue its Premier cabin so openly. I have lost count of the number of pilots who’ve been up there in the front. I remember leaving Sydney on a flight to Singapore and literally there being a queue in the Galley of relatives of the staff on the flight jostling for an upgrade into a First cabin that was already pretty full.

I don’t know when airlines are ever going to get this. We all love to be upgraded and we can all live with paying to be in the First cabin when they upgrade as long as they do it quietly or, preferably, out of sight. The worst thing in the world is to pay for it and to find them piling people in without a thought for them destroying their own product. In my experience Qantas have been the leaders in this.

I remember working with a guy who used to be their lead internal auditor and him telling me that the biggest wrench for him in leaving them was giving up that 1A seat that was his every time he travelled for work. Don’t they get it; I am not going to give them five grand when they have some prat with no awareness of his impact, and who at best should be in Business or maybe Premium economy, sitting where I have paid to sit.

Sad to see….but they might as well throw in the towel now.

[Jimmywright]

Marcus, your post sums up Qantas’s core issue perfectly, which is perception.

Your perception is Qantas has old aircraft, Virgin Australia has new aircraft. The reality is yes Qantas does have SOME old aircraft, vis the 767 in particular, but when compared to Virgin Australia they are more or less head to head in terms of average fleet age and the number and rate of new aircraft arrivals.

A good place to make this comparision is the 737-800 fleet where both airlines have around pretty much equal sizes, with Qantas having Qantas 62 and Virgin Australia 71.

Other fleets such as the A330’s bit harder to make meaningful comparision as Virgin Aus does have enough of them.

As for maintenance the perception is Qantas has offshored it’s maintenance. The reality though is what Qantas has done, or is about to do is offshore the 747-400 maintenance, for the simple fact they now only have around 12 of them, going to 9 (or maybe even less after tomorrow) soon.

The other reality is over the past 5 years or so Qantas has onshored their A330 maintenance, due to the fact the fleet has built up significant enough numbers to make that worth while. They even built a new facility to do that, though with the headlines you see in the papers, usually fueled by the Unions they only talk about job losses, not the job gains this extra work has generated.

Qantas has also invested in onshore 737 maintenance with plans to move that to Brisbane. They also moved 767 maintenance to Brisbane a few years back too, yet again as there are job losses involved in Melbourne (737) and Sydney (767), the union fueled headline is all you ever see.

But Qantas is bad and dangerous for doing this, according to the unions. Never mind of course that Virgin Australia has never had their own maintenance in Australia and all is done under contract, mostly offshore.

But as an Australian, living in Australia who flies quite regularly on many different airlines, mostly at the pointy end I am quite happy with what Qantas provides and I still reckon on flights under 4 hours (ie australian domestic) they offer some of the best service for the price out there and internationally up there too.

Now you may say if I am so happy then why do I fly other airlines. The answer is simple Qantas doesn’t fly everywhere I do. Which gets back to another issue with Qantas, which is the Australian population wants it to fly everywhere they want to and they whinge when it doesn’t. The reality of course is the market here is finite and Qantas cannot fly everywhere so to me a Qantas concentrating on the core domestic market and key local overseas markets with partnerships to elsewhere is a good thing, not bad.

[MarcusUK]

It makes me wonder, what the real agenda was with Emirates entering this agreement. Qantas
Did they aim to for a real partnership, or had they only thought about their own expansions, and that Qantas was so vulnerable it could simply take Their business?
I wonder the real aims and Strategy at work here…

Etihad of course, aim for co-operations, code-shares, and through investments, working with others in partnership. EK are more Bullish, as we have seen, with many other countries’ Markets

[Author]

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