Look closely at the domestic business class cabin on your Cityflyer next time your company makes you walk through to the economy section. It’s not going to be around much longer in its current form in the new reality of cheaper and tighter seating.
As this commentary included in today’s release of the Qantas operating statistics in September makes clear:
In direct english, Qantas is saying it can’t get away with high fares in the current market and that business class isn’t selling like it used to.
Put this beside head-to-head scheduling by Jetstar against both Cityflyer and Tiger on the Melbourne-Sydney route and the writing is definitely in the timetables if not on the terminal walls.
The market is changing to a broader based beast with price, frequency and reliability much more relevant than frills.
The headline figures are that total group passengers were up 6.6% in September compared to 2008 and Qantas is managing its capacity well, flying fewer non-revenue passengers than a year earlier.
But in the actual detail, Jetstar is growing strongly, and aggregate yields are sick.
Qantas international carried -20.8% fewer passengers in the month, or -7.1% using the passenger/distance flown metric of revenue passenger kilometres as shown in the detailed table below. To a degree this will reflect shorter to medium haul Jetstar international routes taking over Qantas frequencies on the Japan routes for example, but also the loss of market share to competitors such as Singapore Airlines, Emirates, Cathay Pacific and on the once lucrative US routes to V Australia.
The yield figures mean that an awful lot of Qantas frequent flyer points would have to be flogged to retailers and other third party buyers to keep the group’s flying operations profitable in the first quarter of the current financial year.
And the more those points are created and sold the less the opportunity for those who earn them the hard way, by flying, to convert them to reward flights.
