There used to be a thing called a 'library' in newspapers, which might have been useful if consulted by the writers of some stories about Virgin Blue this week following its profit down
There used to be a thing called a ‘library’ in newspapers, which might have been useful if consulted by the writers of some stories about Virgin Blue this week following its profit downgrade ambush last week.
The plan to enact single branding of the Virgin Blue group, which includes Pacific Blue and V Australia, was announced by its founding CEO Brett Godfrey at a well attended National Aviation Press Club luncheon on September 16 last year.
He also had a few other things to say about Virgin Blue’s Airlines of the Future project.
A glimpse of where Virgin Blue expects to be within five years was given by its co-founder and CEO, Brett Godfrey today when he told the aviation media it has a previously secret ‘airline of the future’ unit working on its renewal and growth.
Some features of that future will be:
* A single brand for V Australia, Virgin Blue and Pacific Blue,
* The offering of ultra low fares and a more spacious economy product on the same aircraft
* A wireless, paperless, portable device based process for booking flights, checking in, making changes, and earning and tracking loyalty points and status, and
* Internet on all flights
But before that happened V Australia’s contribution to profits would outstrip that of Virgin Blue’s domestic operations.
The bit about V Australia’s future profitability certainly shows no sign of coming true any day soon. History can be such a bitch!
Going through my notes I see references by Godfrey to the resistance of consumers to putting any value on increased seat pitch, yet also to the plan to offer (presumably to non price resistant consumers) a ‘world record seat pitch’ in economy, and to have better seats in premium economy. He also referred to big ambitions for the Velocity loyalty program. All on September 16, last year, not this week.
Godfrey thus outlined the territory, and ambitions of his very experienced and razor sharp successor, Qantas veteran John Borghetti.
However we can see the outlines of some of Borghetti’s early decisions emerging. The hints about a reconciliation with Singapore Airlines may or may not be purely aspirational but the very success of Godfrey and Branson in resisting the destruction of Virgin Blue by refusing to sell the carrier for $250 million to the Singaporeans in September 2000 meant that this could never happen in a future in which Godfrey was still CEO. After which Branson tore up a symbolic $250 million cheque in front of reporters, using a blank Qantas Credit Union cheque donated by a Virgin Blue employee.
(Singapore Airlines intended to fold Virgin Blue into the doomed Ansett-Air NZ combo in which it was about to burn around $700 million in year 2000 dollars. Had this strategy succeeded Qantas would have been the only Australian domestic jet airline by mid-morning September 14 , 2000, after the last Ansett passengers found themselves arriving on a red-eye flight from Perth at dawn to a locked Ansett terminal.)
That is not to say a deal will be struck about branding, or anything else, with Singapore Airlines in the future. It is to say however that Borghetti has more freedom of action than Godfrey in these matters, and he will use it too.
Expect to see V Australia 777-300ERs seamlessly connecting Perth to their US departures from east coast capitals before long, as Borghetti targets both the high yield trans continental business market, and looks for more profitable international usage of its fleet.
(Just how he might make anything ‘seamless’ about operating a domestic-to-international 777, or anything else, through Sydney Airport, is however a riddle no-one has yet solved. )
How does a ‘virtual window’ for passengers, or a cockpit where the pilots fly lying prone grab you.
Or a total of 25 seats across in a flying manta ray blended wing body airliner.
A NASA funded program to identify advanced airliner concepts for the 2030s has produced five subsonic designs that address tough rules for lower greenhouse gas emissions (70% less fuel burn) and noise levels (71 decibels lower than a current model 737).
They also propose some very radical innovations despite two of the designs from a GE and Northrop Grumman team looking just like current airliners…at first glance, while Boeing has proposed a hybrid battery and liquid fuel 154 seat turbine that uses a strut reinforced wing similar to those used in high wing monoplanes in the 1930s.
NASA also contracted for domestic designs that could use the 1500 metre runways of metropolitan general aviation airfields and take pressure off America’s congested longer runway equipped hub airports.
A Massachusetts Institute of Technology team, supported by engine maker Pratt and Whitney, came up with two designs, the D8 double bubble transcontinental US design shown in the headline graphic, and the H3 series based on a blended wing body or BWB concept with non-stop trans Pacific capabilities.
The D8 has the same 180 seat all economy capacity as the baseline Boeing 737-800 used in its study, but the seats are roomier and eight across in a twin aisle cabin in a jet that would fly around 10% slower than typical single aisle jets today but be much faster to turn between flights.
It uses three ducted tail mounted engines, which also masks noise below its flight paths.
The MIT teams H3 design is intriguing for many reasons, including its cautious embracing of the BWB concept. The design is reinforced internally with four walls, creating five distinct tubular cabins each five across in economy, to overcome the structural stresses caused by the tendency of pressurized structures to ovalise, and deteriorate as proved to be the case with the Section 41 issues in high cycle Boeing 747s. It would be like flying in five parallel joined DC-9s, and the turning moment in the outermost seats during turbulence or even minor course adjustments would be a major thrill ride experience.
The other teams, lead by Boeing, GE and Northrop Grumman all consider BWB options in their detailed documentation, but dismissed them as sub-optimal.
The long and detailed presentations by each of the teams are worth the hours it takes to follow them if you are interested in aero-engineering, risk analysis, and closely reasoned estimates about where materials, systems, engines and fuel technology will take airliner design in the next 20 years.
However NASA, as usual, is having trouble with consistent reliable website links so to access them it might be best to go to its media release here and then scroll to the presentation PDF links at the bottom of the page.
Boeing’s SUGAR Volt design does look a bit like Mary Poppin’s bonnet from some angles with its strut reinforced wide thin high wing but this 154 seat twin turbine is a seriously argued hybrid electric-liquid fuelled airliner.
SUGAR stands for Subsonic Ultra Green Aircraft Research. A lot of words are spent with cute terminology concerning other SUGAR derivatives, like raw-SUGAR but the analysis rises above this irritation.
The power plant, which Boeing considers as both an open or ducted rotor, can run using batteries to turn the turbine when the fuel burning core is shut down, or idle.
Boeing predicts that battery technology in the ’30s will provide performance levels unavailable today, but achievable in the medium term.
The SUGAR-Volt is intended to be capable flying shorter distances almost entirely on its batteries.
Boeing also proposed an optimal cruise speed of Mach 0.6 (slow) if liquid fuel is expensive, or up to Mach 0.8 if it is cheap.
The Northrop Grumman SELECT project looks at first glance to be a current 737, but with more clearance for the engines. The acronym means Silent Efficient Low Emissions Commercial Transport.
The most interesting thing about SELECT could be the process of elimination its team undertook before arriving at a 120 seat proposal that looks just like a 737 today from anything but very close range.
The GE-Cessna-Georgia Tech team have come up with the most interesting predictions for a back-the-future design.
This is a 20 seat shortish (1800 kilometres) range high wing turbo-prop that fits in where the Twin Otter (which although under renewed limited construction) left off as a mass produced commuter airliner many years ago.
But it takes small commuter airliner concepts further. The tear shaped high performance turbo-prop and its ovaloid four across cabin is designed to hold laminar (super slippery) airflow across much of its surface area, so much so that the cockpit and passenger windows are ‘virtual’, covered in the same next generation composite skin that encases the lines of fasteners seen on the 787.
This skin is to contain the external paint and the lightning conductivity which has been such an issue on the 787 (see diagram below.)
The FAA Part 121 airliner will have two pilots and one cabin crew. The pilots lie prone on reclining seats to enable a sleeker shaped nose, and see the world, like the passengers on an ultra high definition LED type window.
Let’s hope the virtual passenger window view is not taken from a forward looking tail mounted camera. Imagine the disorientation of feeling forward acceleration but seeing the external visual cues heading toward you from the side!
The maximum field length for the GE team design is only 1100 metres, but the turbo-prop power plant will be capable of Mach 0.55 at 12,000 metres, a combination of cruising speed and altitude not approached by turbo-prop airliners today.
The GE team estimate that the technologies needed to make their deceptively conventional looking design a reality are only 60% in place today, but within reach of being sufficiently mature and reliable for operations from 2030.
If only this was available for Moorabbin or Bankstown now, before they become big box retail precincts, or whatever else they get sold for before the ‘thirties come.
Apr 25, 2010
In political terms, Senator Bob Brown's call for a new study on a VFT or
In political terms, Senator Bob Brown’s call for a new study on a VFT or very fast train between Melbourne-Canberra-Sydney risks provoking some fierce green negativity.
However it probably says something about the chances for that issue getting an airing that since Friday when he launched the proposal it has vanished into media invisibility, thanks no doubt to inspired or unlucky timing as the case may be. The Melbourne Storm fraud, the ANZAC holiday weekend, and the continued leaking of the Henry Taxation Review all killed the VFT story in its tracks, so to speak.
But what will the rank-and-file Greens do to the notion? If windmills can cause so much opposition among greens to what in some circumstances can be a useful boost to renewable energy because of the apparently real threats they pose to bird life…and the tranquil views sought by so many tree changers…what exactly are they going to say about 320 kmh trains rocketing through the parrot rich woods and fields of the southern highlands?
Or being powered by electricity generated by fossil carbon releasing coal fired power stations? Railway permanent ways do not just scar the countryside, and areas of natural beauty, but make cuttings that involve the collapsing of hillsides that are of significant durability on a geological time scale, and every bit as invasive as major highway construction. And they create a noise problem as long as the route.
In Europe the environmental impact of high speed railways is diluted by the extensive changes historically made to the landscape by higher population densities, and by layers of development and industrialisation. This is not the case in Australia, even in the south-eastern corner. We live in a place that is emptier and quieter than any other economically developed nation. We generate the vastly greater proportion of our electricity by burning coal and liberating fossil carbon. In France however the trains run on electricity which comes from turbines turned by steam superheated by nuclear fission, which is achieved by ‘managing’ the relative proximity of rods of enriched uranium, or in some cases plutonium. It’s clean, but scary power.
Thus understanding the nevertheless impressive case for railway expansion, whether it is to be very fast, or for rather less money, faster than before, becomes a process of understanding the desperately pressing matter of reducing the release of fossil sourced carbon. We can’t resolve the issues of radically improving rail infrastructure without dealing with the sources of the power it requires.
Rail transport is like fossil carbon reduction, an issue a coal dependant society continues to find all too hard to do anything about. This is different to the situation in air transport, where the pursuit of non fossil carbon releasing fuel substitutes is driven by sensitivity to rising oil prices rather than any other factor, contrary to what the airlines would have us believe.
(The ultimate goal of the airline industry, which is algal grown octanes with zero impact on food crop production, is perhaps two to three decades away from realisation, but it would have obvious benefits in terms of replacing fossil carbon releasing fuels in shipping and surface transport and perhaps even power generation.)
Brown referred to a Melbourne-Canberra-Sydney route. Canberra is a big complication to a VFT in that it involves engaging on a large scale one of the natural enemies of fast rail in general, which is complex hilly terrain.
The fastest passenger railway route on earth, the Wuhan-Guangzhou line, which began services in December 2009, is 922 kilometres long between the major two stations, or coincidentally, very similar to the likely length of an all new high speed line between Sydney and Melbourne that avoids the worst of the natural obstacles caused by high country around and to the south of Canberra.
The Wuhan-Guangzhou link took 4.5 years years to build, including 177 kilometres of twin track tunnelling. The non-stop service between the two large cities is currently scheduled at 2 hours 57 minutes at an average speed of 313 kmh in trains that reach a top speed of 350 kmh, and have in a trial run exceeded 390 kmh.
However most of the scheduling involves services stopping at some or all of the 12 major centres between Wuhan and Guangzhou as those intermediate express markets are considered essential to the overall viability of the state owned line.
The metal wheel on metal rail technology China is using is now going into a speed range which had previously been seen as belonging exclusively to magnetic levitation or maglev systems, but they are currently in eclipse as that contact free technology has failed to scale up into a workable proposition, in China where a short haul maglev link exists between Pudong Airport and Shanghai, or anywhere else.
A photo gallery of what is now the fastest passenger train route on earth is contained in the YouTube above. The one below is a video which mostly illustrates the rail experience.
Both deserve a close study for what they have to say about fast rail, and China.
Seen from afar yesterday morning’s Boeing hosted Aero Environment Summit in Sydney placed far more emphasis on the near term use of non-fossil carbon releasing fuels than the first such event in 2008.
This reporter intended to be there, but had an in-flight diversion, to stay in metaphor.
So with the benefit of the pictures or presentations but not many of the words, it seems that in a political environment where air transport is under immediate pressure to reduce its carbon emissions the strategic response is to emphasise some significant shorter term breakthroughs in fuel derived from plants or biomass.
The longer term solution, algal grown octanes, is being pursued harder than ever, but Boeing is now confident that viable and environmentally sustainable biofuels can, in the interim, become a reality by 2015.
In any of the ETS proposals that are being taken seriously in Europe and the US, the use of such fossil carbon reducing fuels rewards the airlines in terms of compliance, as well as their developers.
How well based is that confidence? As argued by Billy Glover, the MD for Environmental Strategy in Boeing Commercial Airplanes, the case seems pretty convincing. Various test flights have demonstrated that plant and even part algal derived fuels can be burned with the same efficiency in existing engines and safely carried and distributed in their tanks and fuel transfers systems in the same wide range of operating conditions required of jet grade kerosene.
What are called ‘drop in’ fuels, that can be used or blended in place of kerosene without any special modifications or procedures are already a reality. They are due to be appropriately endorsed or certified by the major aviation agencies this year.
They can be in viable, read ‘affordable’, use by 2015.
Glover also presented this graphic (below) which clarifies the distinctions between fossil released carbon and natural carbon cycles, differences which are often ignored in the populist debate by those who argue that social engineering has better answers to carbon curbing than invention or innovation in alternative energy technologies.
No doubt driven by political and social realities, the industry imposed conditions for biofuels production requires it to have a lower carbon footprint than fuel from petroleum sources, and not compete with food crops for water or arable land or pose bio-security risks.
A research scientist at the CSIRO division for Sustainable Systems, Andrew Braid, put the biomass potential of Australia (below) at 36% of current power demand or 26% of petrol and diesel use.
This isn’t a complete solution. Nor is it 100% realisable. But it is well in excess of the minimal, some would argue pathetic, 2020 carbon reduction goals under the government’s current give-the-coal-industry-anything-it-wants policy.
Clearly on the CSIRO projections air travel in Australia could make significant carbon savings in the medium term, and have a real prospect of pacing if not exceeding the consequences of typical aviation growth in a mature economy. Or at least act as a bridging measure toward the more drastic reductions required of long term improvements in engine and fuel technology.
Rolls-Royce also put up this teaser (above ) of its projected ‘open rotor’ engine, which could deliver 30% fuel burn reductions by 2018, a figure guaranteed to fascinate any airline even without being linked to reducing the release of fossil-sourced carbon.
The open rotor concept, which is also being pursued by its arch rival GE, is a reincarnation of the ‘unducted fan’ proposals of the ‘80s. That engine concept, which Boeing proposed using in its 7J7 (as shown at the top of this article) as early as 1992 failed for a number of reasons.
It was incredibly noisy, it required reduced cruise altitudes compared to conventional turbo-fans which had implications for air space crowding, and if one of them blew apart, as engines sometimes do, it would cut off the tail of the jet, or at the very least, rip up the horizontal stabiliser, either of which would result in certain disaster.
The 7J7, had it proceeded and performed as promised, was to be a 737 replacement and an A320 ‘killer’. It would have most likely adopted the then unclaimed 777 numbering, which would in turn have likely been designated the 787 family, there would have been no NG series 737 family, and 787 now in its test and certification phase, would have no doubt been designated the 797.
In our dreams of course. The technology wasn’t ready. How ironic is it to contemplate the ‘open rotor’ design possibly emerging reborn from the past as the engine for the all new airliners which 10 or more years from now, will become the replacements for the current Airbus A320 and Boeing 737 families?
If you want to prepare yourself for the 21 hours it will take you to fly from here to Paris and in the confines of economy class, nothing could surpass this compilation of previously obscure as well as better known movies of Charles Lindbergh’s first solo flight across the North Atlantic on 20-21 May 1927.
The 33.5 hour flight from Roosevelt Field on Long Island to Le Bourget not far from today’s main airport north of Paris is one of the iconic pioneering long distance flights of the 20th century.
Win Perkins, a real estate appraiser who specialises in airport properties tracked down footage from five newsreel cameras who were at the dangerous little strip for the takeoff, as well as rare air to air images shot by three news aircraft that captured the early stages of the trans Atlantic flight, mostly done at around 65 metres altitude.
When you visit the link you can access a menu of four different videos Perkins has produced by clicking on ‘Contact’, as well as the departure video highlighted on that page.
The fourth video, of the massive crowd scenes and pandemonium at Le Bourget is also compulsive viewing, and an insight into a life changed by fame but which saw Lindbergh challenge established American values as a pacifist, and also pioneer anti-whaling and conservation causes.
All the vital signs from the Cathay Pacific and Dragonair operating statistics for February indicate that the boom has resumed in China.
Fingers crossed. Fuel is too high. And the demand for premium products has not recovered at the same pace as underlying demand, which makes sense of reports that Cathay Pacific will start introducing premium economy seating in the near term.
In its commentary Cathay Pacific says:
Cathay Pacific and Dragonair traffic figures for February 2010 show a sharp rise in passenger volumes and cargo and mail tonnage compared to the same month last year when the impact of the global downturn was being deeply felt.
Last month, Cathay Pacific and Dragonair carried a total of 2,062,187 passengers – up 14% on February 2009. The month’s passenger load factor was 84.1%, an increase of 7.5 percentage points, while capacity for the month, measured in available seat kilometres (ASKs), rose by 0.7%. For the first two months of 2010 combined, the number of passengers carried was up 6.7% compared to an ASK drop of 1.6%.
The two airlines carried a total of 119,801 tonnes of cargo and mail last month, up 18.7% on February last year. The cargo and mail load factor was 77.1%, a rise of 12.4 percentage points, while capacity, measured in available cargo/mail tonne kilometres, was 2.1% down. For the year to date, a tonnage rise of 24.9% compares to a capacity decline of 1.5%.
Cathay Pacific General Manager Revenue Management Tom Owen said: “The rise in passenger numbers and load factor in February was largely a result of Chinese New Year falling a month later than in 2009, although a general pick-up in the quality of demand since the lows of last year’s economic crisis has continued. Demand was buoyant across both airlines’ networks over the two-week Lunar New Year period, and we were encouraged to see the continuation of premium traffic growth after the holiday period ended. However premium volumes and yields in all cabins remain materially below pre-downturn levels.”
Cathay Pacific General Manager Cargo Sales & Marketing Titus Diu said: “We experienced a spike in demand prior to Chinese New Year but then, as expected, there was softening in the key Mainland markets over the holiday period. However, demand for the month as a whole was fairly robust and the fact that we cancelled a number of scheduled services helped us to achieve a high load factor together with some increases in yield.”
The key statistics are in the table below, with further details available here.
Singapore Airlines controlled Tiger Airways is giving away seats for nothing except the compulsory taxes and charges across most of its network on every Tuesday and Wednesday between April 7 and May 31 from today.
This is incredibly generous. Having lost more than $70 million on its Australian operations since November 23, 2007, and locked itself into agreements to purchase hundreds of millions of dollars worth of A320s, Tiger has come up with a pricing formula for which it receives nothing, with the airport owners, air traffic control and security screeners continuing to receive their per seat charges.
It will for example only cost $25.66 to fly between Sydney and Adelaide under the conditions of the deal, while the operating costs paid for the 110 minute flight will leave Tiger with little change from $10,000.
This is also a ‘clever’ departure from Tiger’s basic revenue model, of collecting lots of forward fares with which to pay current expenses, so that the volume of loss making fares for future flights grows faster than bills payable in the present. All that is needed to complete the picture is to understand what ‘clever’ really means in Tiger’s scheme of things, and convince grocery chains, banks and other essential services providers to get with the new model.
Australia’s domestic market works on one-way fares, giving consumers plenty of opportunity to compare prices and mix and match sectors to get the best deal. It might be one of the surprise specials Qantas puts up on its booking engine some times for one leg, and one of Tiger’s $20+ gifts to Australia for the other.
Remember there is no reason to pay a much higher fare on Tiger for the return trip if you score one of these super cheapies. Tiger is cross subsidising your entire trip, since even a $21 fare one way, and a full fare of $300 the other way is going to result in an average fare of just over $160 on some routes where this about as good as it gets if you want to fly in the morning or evening peak departure times.
Tiger is thus driving more sales revenue to its competitors, and collecting none for itself.
It’s truly brilliant. Opportunities like this should be taken up with enthusiasm.
Virgin Blue didn’t just return to profitability in the six months to December 31, but became the first jet airline with an Australia wide network to earn better profits , whether per jet, per seat, or in aggregate, than the much larger Qantas group of airlines.
It made a net profit after tax of $62.5 million in its first half compared to the $58 million reported by Qantas, Qantaslink, Jetstar and very importantly, the Qantas loyalty scheme, in its six monthly report delivered last week.
The Virgin Blue group, including Pacific Blue, had 84 jets predominantly engaged in regional international and domestic services by December 31 with an average of about 140 seats, compared to the 191 aircraft with an average capacity of about 160 seats primarily if not exclusively deployed on similar routes by the Qantas, Qantaslink and Jetstar brands at year’s end.
(The total Qantas fleet at balance date was 240 aircraft including those predominantly engaged in medium to long haul international services.)
While Virgin Blue co-founder and CEO Brett Godfrey didn’t give much away about changes it has already flagged to its branding or product, he announced an in principle agreement with Boeing for 50 new 737s which will include the largest and newest version, the 200 seat 737-900ER.
And while at least 28 of those new 737s will replace what in Virgin Blue terms are ‘older’ jets, maybe six years old, many will be used to defend and expand its Australian market share, for which it is already in the market seeking short term or bridging leases.
The 737-900ERs are the Boeing equivalent of the Airbus A321 of which six are already in service with Jetstar but with well over 200 seats. The gossip is that with improvements and expansions planned for Virgin Blue’s premium economy product, its -900ER seat count will never be as dense as in Jetstar’s Airbuses, another signal that Virgin Blue’s sights are firmly set on a single branded economy and premium economy product available on every flight to every destination.
However, strong though the Virgin Blue figures are in the circumstances, Godfrey’s presentation makes it clear it sees itself facing the same tough trading conditions in the remaining half year to June 30 as the Qantas group indicated in its guidance.
Both groups expect less than stellar trading conditions for the rest of the financial year, apart from optimism from Virgin Blue about its V Australia entry into the Australia-US market. And if scale becomes more important in driving down costs, the potential advantage remains with Qantas, because of its ability to deploy wide bodied jets fast in the inter city market, and a decision to lift the seat count on the A380s and 747s that it already flies against the 777-300ERs operated by V Australia.
However the contest between the one branded Virgin Blue group operations of the near future with the jumble of Qantas Cityflyer, Qantaslink and Jetstar brands does call into question a possible use-by date for its dual, but really multi-brand strategy.
Will its utility depend on how fast Qantas can gut the work practices of its major brand to achieve the efficiencies of the Jetstar model, or will it happen even faster if the market continues to shift more to the middle, or into what Godfrey calls the New World Carrier model’s territory?
Virgin Blue today claimed to be larger than Qantas full service domestic in jet operations, a situation made inevitable by the growth of Jetstar at Qantas expense, and the use of turbo-props on some routes where they really offer a less acceptable consumer experience than the gradually spreading reach of the Embraer E-jets.
It has also shown its hand in contesting a changed market in which the most money that can be made is from a middle sector that wants frequency, flexibility and a much better quality than Jetstar or its Tiger Airways clone can provide, all at less than the fares full service Qantas needs to charge in order for that type of product to survive.
Jetstar launches the first customer guarantee by an Australian airline this Friday morning (including its Asian and New Zealand franchises) by way of social media on YouTube and through media press releases.
Why is it doing this? To neutralise the intentions and risks of proposed air travel consumer protection measures contained in Chapter 5 of the Federal Government’s Aviation White Paper, released in mid December.
This extract sets the scene:
What is Jetstar’s response?
There are significant problems with this guarantee, the most immediately irritating being the gratuitous inclusion of ‘soft’ marketing motherhood statements within a set of ‘hard’ performance metrics and the compensation for a failure to meet them.
The guarantee makes no mention of an impartial ombudsman to deal with the substantive issues anticipated by the White Paper and leaves Jetstar as the jury and judge for dealing with complaints in which the penalties are paid for by trivial amounts of highly conditional vouchers for future travel on its flights.
If there was an extra zero for the voucher amounts, a minimum of $500 worth of future travel, and no expiry deadline or other picky conditions, or something really meaningful, like full transferability to any other airline of the offended consumer’s choice, we’d know Jetstar was really, truly engaged by the need to keep to its service obligations.
In an air travel market where the cost of taking a train or taxi to most large Australian airports exceeds $50 one way, and where parking can cost more than a return airfare over as little as several days, vouchers valid for a credit off future air fares do not even begin to cover the consequences of airline service failures.
That isn’t to deny recognition of some important commitments by Jetstar to keep customers better informed, in fact, it is already doing a ‘soft’ launch of some very innovative check-in and re-booking and trip advisory functions. But giving the mishandled customer the option to spend a more appropriate $500 or $1000 voucher on the services of Virgin Blue, or those of Air Asia, or Air New Zealand would really focus Jetstar’s mind on keeping its side of the ‘contract’ between customer and airline.
Which also makes it important to query why cash refunds can’t be as fast as a credit or debit card transaction can be reversed. People pay for airline tickets with money. If they don’t get what they paid for they should get their money back. Not funny bits of paper with a value that expires after three months and is laden with conditions and qualifications. It only takes a fraction of a second to take cash off the customer, and the same technology can give it back, just as quickly. Hanging on to the money for more than two weeks is outrageous.
Jetstar has come a long way in getting serious about service delivery. All that is missing now is real money, in meaningful amounts, in the hands of consumers the moment a service guarantee is broken.
Feb 9, 2010
Looked at clinically, the $200 million air travel security upgrades including body scanners anno
Looked at clinically, the $200 million air travel security upgrades including body scanners announced by the Prime Minister Kevin Rudd today are a case of futile measures meeting an impossible task.
That is because there is no remotely practicable combination of procedures and technology that can remove the risk of a terrorist attack on the population at large where people gather, whether at an airport, a railway station, a sports stadium or a pub.
Of course the government knows this, but it also knows it can’t do nothing. So like the US and in the UK, Australia goes through the process of being seen to do things that are next to useless, but generally speaking, doing them less obnoxiously than the measures already encountered at the major airports in Los Angeles, London and Frankfurt for example.
The new body scanners to be introduced in 2011 are already in use at Amsterdam as described and illustrated earlier this year in Plane Talking.
But the body scanners are only going to be used in the major international terminals, which is naturally an invitation to anyone who wants to imitate the crotch bomber who set fire to his testicles on Christmas Day on a flight about to land at Detroit to try something similar in a domestic terminal.
And $54 million of the $200 million being spent is for cargo X-ray and explosive traces technology to be deployed in the air freight processing chain at ‘appropriate locations’.
Which means terrorists sending bombs by express parcels will just have to make do with ‘inappropriate’ locations. The statement is an admission of failure.
Although given the use of trucks to move a lot of air freight consignments between some Australian cities for part of the delivery process, there is always a reasonable chance such a plot will turn into a road rather than air accident.
It might seem laughable, but it is no laughing matter. There is a lot of risk outside of airports, as the Bali atrocities and the Madrid and London transport bombings showed.
The new measures will only make people feel more secure if they don’t think about them in any detail.
The analysis and commentary that preceded the Japan Airlines bankruptcy filing yesterday was conducted almost entirely in the words and terminology of failed airline business models.
The carrier was going to be able to ‘lock in’ more traffic by ditching one alliance, Oneworld, for another, Skyteam. It was assured (as is almost certainly true) of anti-trust immunity to fix fares and timetables in order to better screw consumers in a planned joint venture with a major US carrier. Fares would be more competitive, yet higher, but sustainable, and it would be able to provide ‘better’ choices to customers even though the plan is to cut the size of its network deeply.
There was even learned commentary suggesting that the stakeholders in Japan Airlines would benefit, or come out ahead. Well, not if they were shareholders, whose stock is to be cancelled, not creditors, who will see $US 8 billion vaporised by bankruptcy, nor if they were employees, since they are to be culled by 30%, nor any who were relying on the pension fund the new company is expected to dishonour.
In short, it is hard to work out what stakeholders are left that haven’t been burned if not destroyed, including the government and taxpayers of Japan.
The language of commentaries that ignored the ingrained culture of incompetence and failure in Japan Airlines should be understood as being uncritical and self-serving and all too readily repeated without questioning on the finance pages.
Rebuilding Japan Airlines using the rubble of its demolition is not a prescription for success, and seems predicated on its major Japan competitor, All Nippon Airways, and better run competitors like Cathay Pacific, Singapore Airlines, Qantas and Jetstar not continuing to evolve or react as the government funded recovery plan lurches into action. They will not stand still.
All Nippon is widely believed to be preparing to do its own Jetstar style low cost brand on domestic and perhaps international routes. And Jetstar, contrary to the expectations of many, including myself, made deep inroads into the Japan-Australia market.
It seems that the iron grip of the half dozen or so tour wholesalers who are often considered ‘the’ leisure customers of the Japan carriers is being loosened by on-line distribution and changes in consumer culture.
If the patronising and misleading language of the Oneworld press release promising an essentially bogus $2 billion package of benefits to Japan Airlines is any guide, it is not surprising that the bankrupted carrier’s new management is reported to have endorsed defection from that alliance to Skyteam and thus Delta rather than American Airlines for a joint venture on the Japan-US routes and associated domestic networks.
But will this really make a difference? Do alliances really ‘lock in’ customer preferences? The preference of corporate travel managers these days seems to be to price, as in best price of the day, and while individuals may well be sold on the perceived benefits of alliances, those who control the bookings of most executives are increasingly not sold on them price unseen.
A reasonable prediction is that Japan Airlines, as a much smaller carrier, will be given no quarter by those who are building their businesses with new materials rather than wreckage, with new ideas and processes, and without the baggage of old men’s notions of ‘superiority’ or entitlement, and that it will be despised by those stakeholders who lost everything.
Qantas is now predicting a first half profit before tax of between $50-150 million, and today reported a strong rise in passenger numbers for the group airlines of 9.7% in its provisional November operating statistics when compared to a year ago.
Most of that growth came from its domestic and international Jetstar services, as shown in the table below lodged with the ASX today.
While the November figures still put domestic yields in the month as down by -8.9% compared to 2008, and international yields off by -23.2% Qantas clearly sees signs of improvement after the New Year, which is also when the dilution of yields by massive discount sales of forward inventory earlier this year should be coming to an end.
This view is also confirmed by a separate Qantas announcement today that it is restoring some of the domestic capacity cutbacks of the past year from the end of March.
Qantas sees growth returning and isn’t thinking about turning any of it away because of lack of seats.
These are the domestic changes:
It has also boosted its Cityflyer 737 services between Adelaide and Brisbane by four per week from December 29, which is a 20% jump in capacity and more evidence the market is coming back strongly.
Dec 17, 2009
The Aviation White Paper has brought Sydney to a critical cross road
The Aviation White Paper has brought Sydney to a critical cross road. It can go without adequate airport access and wither as a centre for commerce, or it can build a relevant second airport.
This is the text of a statement by former PM Paul Keating and former Hawke government transport minister Peter Morris published in today’s Sydney Morning Herald.
Badgerys Creek was the right site then and is the right site now
PAUL KEATING AND PETER MORRIS
December 17, 2009
A report in yesterday’s Herald that an aviation white paper will rule out ”once and for all” the use of the Badgerys Creek site in western Sydney for Sydney’s second airport would represent a scandalous violation of responsible public policy at the cost of the amenity of the city of Sydney and its people.
The Badgerys Creek site was purchased by the Hawke government 25 years ago. It was purchased with all aforethought to the future needs of Sydney for this vital piece of public infrastructure.
And from the completion of its purchase, the Hawke government vigorously advertised its intentions to local councils and communities, including publishing detailed flight paths and noise patterns.
The sidelining of Badgerys Creek by the Crean Labor opposition and the Howard government occurred for no reason other than cynicism and political opportunism. The opposition abandoned it because of Labor seats and the potential of Labor seats around the site and the government compounded the issue by sterilising the site with its great lie of the year 2000; that Sydney was in no need of a second airport. The Government should look past any white paper group report, to discern for itself the genuine airport needs of Sydney. Inevitably, this must devolve to an airport within the immediate metropolitan area. And only one site qualifies: Badgerys Creek.
This is why the Keating government decided to develop Badgerys Creek, allocating $762 million in the 1995 budget to fast-track construction of the main runway.
The Badgerys Creek land should not be sold. The land parcels could never be assembled again. While the site exists, a second metropolitan airport for Sydney remains a live option.
Already, in anticipation of this report’s publication, every flyblown developer organisation is on the record as wanting to chop the site up for development and developer profits. Disposal of the land would simply put developer interests ahead of the community’s interest.
The Hawke and Keating governments built Sydney’s third runway at Mascot. They did so over huge obstructionism by special interest groups.
But without the third runway, where would Sydney be? And where will it be without a second metropolitan airport?
Badgerys Creek is a far politically easier site to realise as an airport than was the third runway at Mascot. Residential and municipal objections to it can only arise from subdivisions built after the site was bought and in the knowledge that the Commonwealth had planned the site for Sydney’s second airport. And as such, should be seen for what they are: special pleading.
Indeed the very same issues would arise should a change to regular public transport use be undertaken at Richmond.
The Rudd Government claims a renewed and special interest in necessary public infrastructure, and correctly so. But, for an internationalised economy such as Australia’s, there can be no greater or more specific need than to have adequate airport capacity in its largest city. On this issue, the Prime Minister is entitled to proper public interest advice from relevant ministers: weak white papers driven by tricky factional counter-play are not and never can be a substitute for public policy with integrity.
There is so much more to this morning’s announcement that Jetstar will fly multi-daily between BOTH Melbourne airports and Brisbane from July 1.
This is Jetstar v Everyone. That is, Qantas (who owns it) and higher cost Qantas pilots, flight attendants and managers, Virgin Blue and especially the Singapore Airlines controlled Jetstar clone, Tiger.
Officially, the initial Jetstar flights between the main airport at Tullamarine and Brisbane are described as ‘complementing’ the full service Qantas Cityflyer services.
But talking to Qantas pilots recently, who are acutely aware of what they see as a management agenda to transfer their pay and conditions to the much lower rewards offered by Jetstar, this about their removal from the profit and loss account.
They are very unhappy. However Qantas domestic is either in or near to the ‘loss’ side of the ledger on the most recent comments from management, and Jetstar is decidedly on the ‘profit’ as well as growth side.
This could be argued as being much more important to Qantas than meeting the Tiger challenge, since its last balance sheet makes it clear it is its own worst enemy.
For non Crikey subscribers, the story concluded that Tiger was covering its losses and running costs from sales of tickets for future flights, and that so long as it continues to expand forward sales all will be well.
Unfortunately for Tiger, this gives Jetstar the scent of blood, and the predator becomes the prey. Tiger had cash cover of just over 11 days for its declared operating costs at the end of last March, and with its enormous commitments for new jets in the future, clearly needs the $US 500 million IPO it has admitted ‘considering’ taking to market in the New Year.
Based on its posted revenue and costs figures, but with uncertainty as to whether it is actually paying for its aircraft leases or what its actual cost per available seat kilometres is, Tiger is earning double digit negative returns on the fares it collects.
This can only be tolerated by Tiger’s owners for so long. For Qantas, faced with a clear world wide trend to the low fare model over shorter haul flights, the real issue is to Jetstarise the costs of the parent company’s domestic operations, using the excuse the smart Singapore investors in Tiger have so generously provided.
Dec 13, 2009
In a medical analogy, the Dreamliner has been in an induced coma for more than two years, with many indignities inflicted upon its body, and Boeing management. But the excitement
It’s at last late September 2007 at Paine Field, Everett and the Dreamliner prototype is ready to fly as originally promised for that deadline shortly after it was rolled out on July 8, that year.
Much has happened to that jet since. It has real doors, a proper undercarriage, and all of the intricate monitoring systems required of a prototype that will be one of six flying the testing and certification program.
In a medical analogy, the Dreamliner has been in an induced coma for more than two years, with many indignities inflicted upon its body, and Boeing management.
But the excitement of first flight is building. As Randy Tinseth, the vice president marketing for Boeing Commercial Airplanes, beautifully illustrates in his blog, Dreamliner ZA001 is fully awake. It has completed high speed taxi tests exceeding 240 kmh. The nose wheel has lifted off the ground.
Tinseth gives links to the live first flight telecast too, with takeoff scheduled for a provisional 5 am, Wednesday, Australian eastern summer time, or 10 am Tuesday in Seattle.
The weather only has to be little unkind and it will takeoff almost at the same time the Federal Government drops its Aviation White Paper. It will be hard to know where to look on what by current indications will be the busiest day for air transport news this century in Australia.
If all goes to plan, (and this IS winter in the Pacific Northwest, so don’t bet on it) the first flight which Boeing says may last more than two or three hours will end at Boeing Field, not far south of Seattle, which is where it usually bases its flight test programs.
As the other five test and certification 787s are completed they will also leave Everett for Boeing Field, and a program that will also see the jet fly to special test venues within the US and abroad.
And the customers will start to learn a lot more about what the Dreamliner can really do for them than they currently know.
Dec 11, 2009
Jon Ostrower's report on heavier specifications for the
Jon Ostrower’s report on heavier specifications for the 787 Dreamliners clarifies some of the uncertainties about the capabilities Boeing will be selling for its ultra light-weight high composite medium sized jets.
There is nothing surprising in manufacturers increasing the weight of new airliners to ensure they meet original specifications, although for some time now there have been no specs in relation to payload and range for Dreamliners, and the announcement overnight doesn’t come with a table of capabilities.
Customers like Qantas now know that the 787-8 will be nearly identical in weight and passenger numbers in equivalent configurations to the Airbus A330-200.
But they don’t know when it will be delivered, nor how far it will fly with such a payload.
The situation with the first stretch of the 787-8, the -9, needs official clarification too. If as reported the -9 will now retain a larger cabin yet carry slightly less fuel, will it have evolved sufficiently in overall efficiency by the time it follows the -8 into service to do full payload non-stop flights across the Pacific?
This is a vital question.
The -9 was ordered by Qantas to do Pacific non-stops and Europe via one-stops. If it turns out to be to the 787-8 what the Airbus A330-300 is to the longer range but lower payload A330-200 it is going to need a different role than originally intended on the Qantas or Jetstar networks.
Obviously that would be to fly only as far as Asia, and to replace 767s and the smaller single aisle 737s and A320s on the busier domestic routes.
When the original Qantas group order for 787s was made in December 2005 (for delivery starting in August 2008!) CEO Geoff Dixon and CFO Peter Gregg said that Dreamliners would replace both the 767s and A330s in the combined Qantas/Jetstar fleets as deliveries continued into the next decade.
They also said that in combination with the A380s, the 787s would enable the complete modernisation of the Qantas group wide-bodied fleets.
If that plan is to become a reality it requires one of the Dreamliner models to give a full passenger payload still air range performance of 8000 nautical miles, no ‘ifs’ or ‘buts’, as originally promised by Boeing.
The higher weights announced for the Dreamliners might thus prove to be stage one of a major revision of the claims made about this ultra light weight long range miracle machine.
Whatever the Dreamliners can become will also be indicated by the performance of the six test and certification 787-8s that should start flying in the next week.
According to Boeing that fleet will complete its tasks in time for the first delivery of a production Dreamliner to All Nippon by the end of 2010, and the first delivery of a -9 to Qantas by mid 2013.
That promise to Qantas, made in July, and enthusiastically endorsed by Qantas, was not credible. Air New Zealand is the launch customer for the -9 model, and it has been promised its first delivery by the end of 2013, raising the question as to whether Qantas was so engrossed with management matters at that time that it even knew or cared what Boeing was promising.
It is a mystery that Alan Joyce the Qantas CEO should clear up one day. What made him say in July that it would get 787-9s from late 2013 when this was clearly impossible?
The cultural and political wars that dog airport developments in this country are on display once more, this time at Canberra Airport.
There is an article and discussion on this on the Crikey subscriber site today and through its email bulletin, but the key elements have been apparent ever since Victoria decided in the 60s to replace Essendon with Tullamarine for its major airport.
Once there is a degree of certainty about the boundaries of the airport development land values fall anywhere near or under the likely flight paths, and holdings are then acquired or refinanced or repackaged by astute interests for housing or industrial development purposes.
This happened at Tullamarine, but the Victorian government held the line against earlier protests by some of those who bought properties built close to that airport to impose a night time jet curfew or introduce other restrictions.
It also happened after the declaration of a green fields site for a second Sydney airport at Badgerys Creek, in 1986, except that the urban sprawl of the city advanced on and consumed much of them, and political paralysis prevented the project from continuing.
And at Tralee, near Queanbeyan, an attractive slice of land which is a conduit for existing noise reduction flight paths using Canberra Airport is also the subject of a rezoning proposal for housing developments that would almost certainly lead to curfew restrictions that would shut down plans to make it a major air freight hub taking pressure off Sydney Airport.
The housing-jet magnetism is at work as strongly as ever.
Sydney will lose its business capital credentials unless it fixes its air transport problems with another airport in its metropolitan basin, and Canberra cannot achieve its tourism and enterprise development potential without using its existing airport as efficiently as possible.
And this is also true of the vexed but important issues of improving rail services as well as airline services where this can attract and reward private capital, given the implausibility if not undesirability of such investments being made and administered by governments.
As someone who lives within long distance commuting distance of Canberra, and who has reported on transport issues since the end of the ocean passenger liner age in this country, I have also taken up Queanbeyan City Council’s invitation to comment on the rezoning by December 22.
Queanbeyan City Council
Comment: South Tralee Development
- The development imposes the risk of significant restrictions on the future expansion of Canberra Airport in the form of curfews and noise related capacity restrictions during normal hours of operation.
- Canberra Airport has the potential to become a 24 hour cargo hub serving the greater Sydney area and Illawarra as well the ACT, Queanbeyan and nascent new communities in its immediate vicinity.
- It already hosts late night and early morning passenger services which are an indication of future growth at night in RPT activities at the airport.
- Developments in airline business models and medium sized new technology airliners also support its use for international operations to centres in SE Asia, China, Japan, Korea and Pacific states from the middle of the next decade.
- Without competitive and convenient air services growth areas in regional Australia cannot achieve their full potential, or exploit shortfalls in such access in crowded major city airports, notably at Sydney Airport in relation to Canberra and Queanbeyan.
- The maximisation of employment opportunities in Queanbeyan cannot be achieved if operations at Canberra airport are prevented from expanding to their greatest potential.
- Any short term gain from the Tralee development thus comes at the cost of reduced benefits for Queanbeyan in the medium term.
- Queanbeyan has other options for housing developments which would permit it to have that cake, and also the one provided by the growth of Canberra Airport.
- The only way the average age of populations in centres like Queanbeyan can be reduced, with a concurrent lessening of demands on community support programs is by capturing longer term employment opportunities.
- More people in work means healthier community finances and less dependency and demographic stagnation.
- Queanbeyan has a very significant opportunity to achieve such desirable outcomes by supporting the future expansion of Canberra Airport, including its development of international and air freight operations on a 24 hour, 365 days a year basis.
- I have no business links with any of the parties involved in these issues.
Is it another ‘kangaroo route’ competitor, a change maker, or both these things and perhaps a lot more?
Qatar Airways today becomes the third Arab emirates airline to currently serve Australia with an initial three flights a week between Melbourne and its home hub at Doha.
For those interested in the product side of its Boeing 777-200LRs, with 42 business class suites and 217 economy class seats, try aviation photographer Sam Chui’s trip report. Chui is nobody’s tool, and pays for his own fares and incidentals.
For those interested in what it might do to their Qantas shares, do your own research into Qatar and UAE tax laws. Emirates (Dubai) and Etihad (Abu Dhabi), in the United Arab Emirates are enterprises in a federation of economies that behave independently from each other in fiscal policy and impose zero or near zero taxes on almost any significant activity apart from oil production and foreign banking activities.
Qatar Airways is also tax free in Qatar, although the laws related to individuals and foreign enterprises are different in that emirate to those of the UAE.
For those that believe in raw capitalism, Qatar and the UAE (both before and during the current and substantial Dubai debt crisis) are exciting places. Provided their sovereign cultural and religious values are understood and respected.
The emirates occupy the one region from which currently available airliners can fly non-stop with commercially useful payloads to anywhere on earth with the exception of Papeete.
Hence the stunning rise of Emirates since the 80s, and the much more recent competition from Etihad and now Qatar.
Where Qantas and the legacy European carriers like British Airways and Lufthansa, inflict the misery of inefficient and time consuming transfers over Heathrow or Frankfurt on those flying to or from secondary cities, the emirates carriers do it, like Singapore Airlines, by flying into such cities with only one comparatively painless change of plane.
And unlike Singapore Airlines, they also do it daily or multi daily to central and eastern European cities as well as deeper into the UK, and cover the Middle East intensively as well as provide critical links to Eastern and Western Africa.
This is why there is nothing surprising about Qatar accessing the fundamentally liberal air traffic arrangements Australia offers like minded states. Nor is it fair to complain about their economic arrangements when it comes to tax. It’s their business. Maybe an economic model in which prosperity is seen as a consequence of tax free activity is flawed. Maybe it is the way of the future. But it can hardly be categorised as ‘unfair’ for Qatar Airways or its UAE competitors to be free of some of the constraints the western world imposes on its airlines. Why should they play it ‘our’ way if they want to risk trying something totally different?
Before 2010 is over Qatar Airways will have gone from three times weekly to Doha from Melbourne to daily, plus Sydney dailies. It has a plans to double in size within three years, to about the size of Qantas international, and has large pending orders for more Boeing 777s and 787s, and Airbus A380s and A350s.
It will, like the more mature networks of Emirates and Etihad, begin linking this country with leisure and business markets that Qantas didn’t show any sign of even knowing existed until this decade.
Historically, going back two decades, the Middle East carriers gained their initial growth in Australia from the retreat of Lufthansa, Air France, KLM, Alitalia and the former USSR version of Aeroflot from the routes to Europe.
This decade, organic economic growth within the wider Middle East and northern Africa markets has nourished their ambitions. If Australian flag carriers can’t or won’t serve these markets is it not in the national interest for others to seize the opportunities?
Will Emirates stumble because of Dubai’s debt disaster? Maybe. Will Etihad prosper in its place, or even merge with it? Maybe (and it does have a code share deal with Qantas). Will Qatar take its place in the sun? Maybe.
But there is nothing wrong with Qatar having a go.