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financial results

Aug 25, 2017

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Qantas Group CEO Alan Joyce, delivering loads of good news today

Qantas shareholders will get a further unfranked dividend of seven cents a share, and its passengers, a upgrade of its flagship A380 cabins, and much more.

It made an underlying Profit Before Tax of  $1,401 million (the second highest in Qantas’ history) and, as reported earlier today, will make an evaluation of new ultra-long range aircraft for Qantas International with a view to non-stop flights to London and New York City from Australia’s eastern capitals.

These are among the taking points Qantas Group CEO Alan Joyce will discuss shortly at a media conference, and subsequent analyst session in Sydney this morning.

  • Underlying Profit Before Tax: $1,401 million (second highest in Qantas’ history)
  • Statutory Profit Before Tax: $1,181 million
  • Statutory Earnings Per Share: 46c
  • Return On Invested Capital: 20.1%
  • Net free cash flow: $1,309 million
  • Up to $500 million shareholder return: 7 cents per share ordinary unfranked dividend, plus an on-market buyback of up to $373 million
  • $55 million for non-executive employee bonus
  • Upgrade of A380 cabins and Melbourne Domestic lounge announced
  • Evaluation of new ultra-long range aircraft for Qantas International

Qantas today reported an Underlying Profit Before Tax of $1,401 million and a Statutory Profit Before Tax of $1,181 million for the 12 months ended 30 June 2017.

The underlying result represents the second highest performance in Qantas’ 97 year history, down 8.6 per cent compared with last year’s record. It is slightly above the guidance range provided in early May this year, mainly due to strengthening of the Group’s domestic businesses. A drop in statutory profit before tax of $243 million reflects that the FY16 result included the gain on sale from the Sydney Domestic Terminal.

Overall, the FY17 performance shows the Qantas Group’s margin advantage over local and global competitors which has been underpinned by completion of its three year transformation program.

SUMMARY OF RESULT

All parts of the Qantas Group delivered strong returns in FY17.

In the domestic market, Qantas and Jetstar combined reached a record $865 million Underlying EBIT, making them again the two most profitable airlines in Australia with around 90 per cent of the total domestic profit pool.

Qantas International, which has faced high levels of capacity growth in the broader market, saw an improvement of conditions in the second half; it posted an Underlying EBIT of $327 million. Continued strength in its core markets helped the Jetstar Group deliver the second highest profit in its 13 years of operation.

Qantas Loyalty booked a record $369 million Underlying EBIT on a 4 per cent increase in revenue as it continued to diversify its earnings.

The Group met all the objectives of its financial framework, reporting a 12-month return on invested capital of 20.1 per cent.  Another $470 million in transformation benefits were delivered, completing the three year program and outperforming the $2 billion target by $125 million.

The Qantas Transformation Program has underpinned these results and enabled the Group to outperform its key domestic and international competitors.

This performance means Qantas is able to reward shareholders, recognise the hard work of its people and invest for customers.

CEO COMMENT

CEO Alan Joyce said the result marked completion of a turnaround plan that has repositioned Qantas as one of the most profitable airline groups in the world.

“Three years ago, we started an ambitious turnaround program to make the Qantas Group strong and profitable. We tackled some difficult structural issues, became a lot more efficient and kept improving customer service.

“Today’s announcements show this plan has well-and-truly paid off. It’s delivered $3.5 billion in cumulative underlying profit, record customer satisfaction and the opportunity for Qantas to grow.

“We operate in a very competitive environment, so continuous improvement is crucial. Being more efficient is part of our culture and we’re now targeting an average of $400 million in gross benefits a year.

“We have a plan to keep delivering sustainable returns well into the future. We’re investing in lounges, Wi-Fi and cabin upgrades; looking at new aircraft to evolve our network; and diversifying into new businesses like insurance and financial services.

“Our people remain central to our success, and that is why it is so pleasing that we are able to grant another bonus to around 25,000 non-executive employees to mark the successful completion of the turnaround program,” added Mr Joyce.

REWARDING OUR PEOPLE

In line with the successful completion of the $2 billion transformation program, non-executive Qantas Group employees will receive a bonus of $2,500 (or $2,000 for part time). This will apply to approximately 25,000 people ranging from pilots to cabin crew, engineers, ground staff and office workers.

This brings the total amount set aside for non-executive bonuses to more than $220 million since the start of the turnaround in 2014.

Major changes to A380 cabins and routes

Qantas has revealed considerably more about its plans for the future use of its 12 Airbus A380s than its rivals in their use in the Australian market, Emirates and Singapore Airlines.

A multi-million dollar upgrade will see a change in the seat mix on the super jumbos to meet increased customer demand for premium cabins on flights to the US, Europe and Asia.

Structural changes are focused on the upper deck where 30 Economy seats will be removed and some partitions and a crew workstation rearranged to use space more effectively. This allows for an additional six Business Class and 25 Premium Economy seats, increasing the overall seat count on the aircraft by one and increasing premium seating by 27 per cent.

Other key elements of the A380 refurbishment program include:

  • Replacing Business Class Skybeds with the latest version of Qantas’ Business Suites, dubbed ‘mini First Class’ by frequent flyers. Every seat gives direct aisle access and allows better use of cabin space compared with the Skybed.
  • Installing the airline’s all new Premium Economy seat in a 2-3-2 configuration. This seat is almost 10 per cent wider than the model it replaces and will debut on the Dreamliner later this year.
  • Reconfiguring the front of the A380’s upper deck to redesign the passenger lounge to provide more room for First and Business Class customers to dine and relax.
  • Enhancing First Class, which remains in its current configuration on the lower deck. Each suite will be fully refurbished, including contoured cushioning and a larger, higher resolution entertainment screen.
  • Updating Economy with new seat cushions and improved inflight entertainment.

Work on the first A380 is expected to begin in the second quarter of calendar year 2019. All 12 aircraft will be upgraded by the end of 2020. The design integration will be managed by Airbus.

Qantas Group CEO Alan Joyce said the upgrade would make sure the national carrier’s A380s retained their reputation for space and comfort on long haul flights.

“Customers love the A380. This upgrade is a major investment in putting the next generation of seats on the aircraft as well as more creature comforts to maintain its status as one of the best ways to fly,” said Mr Joyce.

“We’re seeing increased demand for Premium Economy and Business Class on the long haul routes that the A380 operates, including from people using their Qantas points to upgrade. When more travellers experience these new seats, we expect that demand will keep rising.

“Working with Airbus we’ve been able to achieve a very efficient layout on the upper deck. Using this space to increase the proportion of premium seating improves the revenue potential and the overall economics of the aircraft.

“When you combine this upgrade with the other investments we’ve been making in new aircraft and new cabins, it will give us consistency with our premium seats across the A380, A330 and incoming 787 Dreamliner,” added Mr Joyce.

Some elements of the upgrade will be rolled out later this year, including a memory foam mattress and pillow menu in First Class.

Qantas is continuing to investigate new technology to offer fast Wi-Fi on its international routes. A trial on the A380 in 2012 showed low levels of take-up due to slow connection speeds over remote areas of ocean. Fast domestic Wi-Fi  has become a reality only recently due to new technology and next generation satellites serving the Australian mainland. Qantas intends to be the first Australian airline to offer next generation Wi-Fi on international routes as it becomes available.

Qantas has also flagged its A380s will be operating more regularly on routes to Asia, with the 787 Dreamliner taking on the Melbourne-London route (via Perth) and freeing up some A380 flying time. More detail on these flying patterns will be announced shortly.

The capacity of Qantas A380s after the upgrade will be: 14 First Suites (unchanged), 70 Business Suites (up by six), 60 Premium Economy (up by 25) and 341 Economy (down by 30) for a total of 485 passengers (up by one).

low cost carriers

Aug 6, 2017

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Norwegian will soon have 737 MAX 8’s like this doing trans Atlantic routes

About a year ago, Norwegian Air enjoyed a similar profile among European and North American carriers as the offshore sighting of a Viking raiding party would have had from an English North Sea facing fishing village in the medieval period.

Norwegian promised nothing less than rape and pillage in terms of what it set out to do, including exploiting the low wages and non-existent labor protections of its Irish base. It has many bases in the EU and in Thailand.

But it now transpires that while passengers increased by 19 percent over a year on its latest quarterly filing, they didn’t bring enough money with them to offset massive increases in the airline’s costs of doing business. The Norwegian kroner went south, fuel went north, lots of jets were ordered or received, and chief financial officer Frode Foss, who has been at Norwegian since 2002 also went.

The cautionary tale about the costs of Norwegian’s aggressive expansion in the North Atlantic and European markets is dissected by Air Finance Journal. (You can find a read-me-for-free option at the link.) Although this isn’t a postmortem and the Norwegian brand carried by the bright red nosed jets is very much alive, it’s now a bit anaemic.

Norwegian had 133 jets in its fleet up until the end of its last quarter, mainly 737-800s, but also a small number of 787-8s and -9s and the first two 737 MAX 8s, of  another 106 Boeing single aisle jets and a few dozen from Airbus’s A321 NEO line on order.

While consumer reports of its flights vary from ‘influencer’ social media posts declaring a new age of millennial friendly flights has opened (whatever that means) to the usual scathing stuff possibly posted by ‘anti-influencers’ Norwegian gets positive wraps for offering an amazing 117 cms of leg room in its premium economy rows, or about 10 cms more than Virgin Australia or 20 cms more than Qantas.

Ordinary economy is, um, ordinary, and only around 2.5 cms roomier in seat pitch than Qantas or Virgin Australia. But the 787s are unfortunately nine across in economy which is very un-Viking of Norwegian.

Its headline initiative in the last year has been to use single aisle 737-800s (pending ugrades to the MAX 8s) to do non-stop trans Atlantic flights, some from relatively obscure facilities that are  ultra-convenient to neighborhoods where the wallets are thick and the patience with the drive to places like JFK or Heathrow is thin, even if in one’s dreams, the airports gave away the parking for free.

This is an interesting variation on the concept of Dreamliners and the like being used as hub busters, more like connecting say Beaumaris to Fivedock rather than Tullamarine to Mascot, except that Australia doesn’t have a huge supply of well off suburbs concealing underutilised 2500 metre runways generally hosting corporate jets or upper end general aviation ‘toys’.

Nevertheless, there are possibilities of doing that sort of service around some of the larger or more travel active cities on either side of the Atlantic. Norwegian seems prepared to find and develop them, but from a low fare or leisure perspective rather than something that might dislodge loyal legacy airline customers from their club rooms and costlier airline cabins.

So far, Norwegian shows no signs of being interested in taking on AirAsia X, Jetstar or Scoot in this country, but it is clearly thinking of linking SE Asia to Scandinavia or northern Germany, and there are signs of interest in flying 737 MAXs from India to secondary or tertiary cities in Europe.

There are massive attitudinal and public policy barriers to Norwegian’s ‘wilder’ or more impulsive thoughts, but if it finds such rich veins of untapped demand exist then there will be a new contest underway among transborder low cost franchises, no doubt including the likes of Jetstar.

air safety

Jul 2, 2017

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The Jetstar 787-8 involved in the 2015 incident while flying from Melbourne to Darwin

There are sobering similarities between a Jetstar 787 control incident which is the subject of an ATSB investigation published last month and the loss of an Air France A330 which crashed into the mid Atlantic on its way to Paris from Rio de Janeiro in June 2009.

Fortunately the Jetstar incident in December, 2015, involving the similar temporary blocking of air speed measuring devices called pitots, did not end in a tragedy like that which killed all 228 people on board Air France flight AF447.

The Jetstar pilots did what apparently all other pilots have been done (other than those of AF447) when confronted by a sudden loss of vital data and a consequent disconnection of the autopilot system.

They held their throttle and attitude settings until the pitots self cleared, and then dealt with deciding whether to proceed with the flight or land for the technical reasons outlined by the ATSB.

The AF447 pilot flying did something inexplicably different to the unreliable airspeed procedures used by airlines, by pulling back on the side stick controller and sending the Airbus on a climb which ended with the airliner stalling and soon after, belly flopping with a force of 32G on impact, on the surface of the ocean

His colleagues proved incapable of identifying or rectifying the problem.

An astonishing litany of smokescreens and fierce arguments ensued for months over the conduct of the last moments of AF447.

The ATSB report doesn’t refer to AF447, nor cross reference other well documented cases of scheduled flights suffering from similar transient failures causing unreliable airspeed indications in the cockpits of various types of jets..

Given the bitterness that persists over the loss of AF447, this is understandable. This isn’t a case of safety lessons according to some pilots, but a reminder that degraded safety cultures which forget such lessons can destroy lives.

For all its tactful brevity, the ATSB report is an important contribution to air safety and an endorsement of the professionalism of the Jetstar pilots.

low cost carriers

May 26, 2017

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One of Tigerair’s no longer loved (?) A320s

Tigerair is to expand its low fare footprint in Canberra with three times weekly services to Brisbane from September 14.

The flights will operate on Tuesdays, Thursdays and Sundays with mid morning departures from Brisbane and lunchtime departures from Canberra. Tigerair Australia is in the process of replacing its A320s with 737-800s sourced from its owner Virgin Australia.

There is no known detailed timetable for that changeover, which includes Virgin Australia getting rid of its highly popular Embraer E-190s which are a major product differentiation between itself and Qantas in the Canberra market.

Tigerair Australia is also adding a new flight to its Canberra-Melbourne route from September 15, lifting frequency to eight single aisle jets a week.

When will Qantas low fare brand Jetstar join in the fun? Perhaps soon, as Canberra has enormous potential for low fare flights, and not just on domestic routes, but on the NZ and Asia visitor markets.

Tigerair Australia CEO Rob Sharp says the additional low cost flights announced today were in direct response to overwhelming consumer demand.

He said “Canberrans have truly embraced Tigerair’s great value fares and friendly service. We have had a fantastic customer response to our Melbourne Canberra services since we launched them in December last year.

“With eight weekly return services from Melbourne and three from Brisbane, Tigerair Australia will be providing close to 4,000 seats weekly through Canberra Airport or over 200,000 seats annually to the doorstep of the nation’s capital city.”

ACT Chief Minister Andrew Barr said, “We look forward to continuing to partner with our valued airport and tourism partners to stimulate air travel on the new route.”

“Tigerair flights between Brisbane and Canberra comes off the back of record domestic visitors to the capital last year – and is a sign of the growing status of Canberra as a tourism destination.”

Neither Chief Minister Barr nor Tiger CEO Sharp mentioned the appeal of low fares to students, and business travellers who run their own transport budgets. If the prior record of LCC travel in Australia is a guide, Canberra will gain dozens of budget fare flights in the nearer future.

low cost carriers

May 7, 2017

5 comments

Nice on the outside, less nice than ever on the inside?

Jetstar will gain capacity equal to one and half current A320s when it add six seats to the 180 seat inventory on 43 of its narrow body Airbus fleet according to this account in Australian Aviation of an investor day briefing.

The report is undoubtedly for investors a telling and persuasive endorsement of sound management of the Jetstar asset.

Jetstar group chief executive Jayne Hrdlicka made the point that this reconfiguration comes without the capital costs of acquiring new aircraft, which to make a stab in the dark when it comes to bulk discounts, could be worth anywhere between $30 million and $50 million before the costs of engines.

It is also very clearly true that this sort of asset management makes Jetstar a more formidable low fare competitor and one better able to contain the apparently limited ambition of Virgin Australia’s equivalent Tigerair Australia low cost subsidiary.

But what does it do for the product, or as the comments below the article discuss, the ability of cabin crew to do their job?

Jetstar makes the point that by making the seats wafer thin legroom isn’t compromised. Well, it’s pretty compromised with the current seats, so let’s say, it doesn’t make it worse.

If we turn the argument for more seats on its side, those extra six seats only add to the bottom line if they are sold. Otherwise they are an irritation. And talking of bottoms, jamming people into ever smaller toilets where they can’t perform the personal and hygienic functions they are intended to serve just adds to the misery of flying, especially if you are with small children or more elderly relatives.

There seems to be no mechanism in the market place that prevents airlines from diminishing the quality of the product in a physical way, including at times in the full fare or premium cabins to the point where the customer decides to fly less than before.

Will six extra seats really per flight really bring Jetstar better fortune? Will further hurting and humiliating customers make the brand stronger? When does this downward spiral in amenity stop?

These aren’t the most important questions facing society by any measure. But they sure make travellers as mad as hell.

unpopularity contests

Apr 28, 2017

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A 717, the last Jetstar jet into which the writer’s rear end fitted

Long suffering flyers have an interesting spat to contemplate between Choice and Jetstar, the airline that forgot your kneecaps and hip bones, and sometimes tries to flog its miserable seats for more than Qantas, its esteemed full service owner, because it might just think consumers are lazy or stupid.

Choice has published an unflattering, but ludicrously irrelevantly constructed consumer ratings survey in which Jetstar to quote “ranked dead last in a survey of international airlines, losing out to more than 70 rivals from eight different countries.”

Jetstar has published a somewhat telling, but also in some respects, dubious rebuttal.

Since the Jetstar URL is one that gets overwritten, here is the guts of its response.

Consumer group Choice airline survey

28 April 2017

  • There are a lot of holes in this latest Choice survey, including leaving out our main competitor Tiger because they didn’t collect enough responses, so the veracity of the report is questionable.
  • Choice seem to enjoy criticising airlines without understanding the safety standards we operate to or recognising the role of low cost carriers in making travel more affordable for millions of Australians.
  • We know how important it is to get customers to their destination on time, and we recognise there is room for improvement and our team is doing a lot of work behind the scenes. Weather is often the source of delays, particularly in the more tropical destinations we operate to, and we’ll always put safety before schedule.

Background

  • Jetstar has been named the best low cost carrier in the Asia Pacific for six years running by SkyTrax, an internationally recognised and accredited ranking.

Let’s deal with the Skytrax bit first. In this reporter’s opinion, Skytrax polls are the stuff of lazy reporters writing up listicles because they don’t have the skills or editorial direction needed to engage in real news reporting.

Unless or until Skytrax publishes intimate and thoroughly independently audited details as to how it makes its money each year and from which airlines, and explains at length how it prevents multiple voting and other means of rigging an opinion poll result, its claims should be treated with as much caution as the polling for pre-selection in inner city seats for Australian political parties.

And that doesn’t mean being audited by any of those high profile ratings companies or accounting enterprises that totally failed to get the Global Financial Crisis right either.

Indeed, to complete the digression, the only airline preference polling that ought to be trusted should be done by the Australian Electoral Commission, or appropriately credentialed UN observers.

Choice didn’t even poll consumers in the UK, the US, Germany, or any country in Asia. It must think its readers in Australia are idiots. As must Jetstar in relation to its customers if it places even a shred of confidence in a Skytrax poll.

The experiences of this reporter, and his much more widely travelled circle of friends and associates and family, point convincingly to value-for-money as being the only basis for choosing one airline over another.  Value-for-money includes of course frequency, punctuality, reliability, amenity, courtesy, and as always, safety.  But safety isn’t front of mind for most flyers in Australia. It’s a long time since TAA and Ansett-ANA flights crashed killing all onboard on various domestic flights in this country. That isn’t to devalue the critical importance of safety, but to suggest that most of us fear acts of terrorism much more than we are influenced in carrier choice by doubts about safety standards.

Jetstar is the Qantas bet on price being the prime determinant for airline choice for many flyers not only within Australia but across Asia where it has a trans border Jetstar branded low cost franchise. It’s a bet on where newly minted middle classes in this hemisphere will spend their travel money. It’s also yet to prove an abundantly lucrative bet, but it is clearly useful as a means of driving productivity or cost improvements in the industry in general, and in its worst manifestations, bloody uncomfortable as a flying experience.

The low price thing is also at times more perception than reality, as anyone who inadvertently clicks on a Jetstar flight when making a booking on the Qantas website can sometimes discover, and its critical for consumers to keep in mind the cost of extras in low cost carriers in general when making bookings anywhere on the planet.  The fare differences in total between low cost and full service can be trivial, or even non-existent.

The over arching problem with low cost carriers world wide is that they seem responsible for some full service brands undermining their own product standards by cramming the seats in tighter than ever in the history of jet airliners, cutting back on toilets, and insinuating extra or ancillary charges into the booking process.

A more in depth and properly resourced reporting of relevant consumer issues was once a strong point of Choice. And the ‘established’ print media as well. But those of us in the media have fallen on hard times. The money isn’t there any more. Maybe consumers don’t really give a rat’s either. The article in Choice is just a shabby piece of crap, and deeply disappointing. And Yes, flying with Jetstar isn’t great either. Jetstar is trying to be a better airline, although at times it is just ‘trying’ in the other sense of the word.

airports

Mar 9, 2017

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A bit more blood is needed in the anemic A4ANZ graphics

The new united front by Australian and New Zealand airlines to end their being mercilessly screwed by privately owned airports is seeking popular approval by identifying itself in the media as on the side of consumers victimised by such things as unjustifiably costly car parking charges.

It’s both a clever and welcome lever to use, even though the A4ANZ or Airlines for Australia and New Zealand website is much more focused on the neglect of airport infrastructure.

Although this is but Day One, a key issues that might engage A4ANZ would be curing Melbourne Airport’s vulnerability to long delays caused by adverse crosswinds by building a third runway ASAP.

Such a runway, which has been modelled in various forms by Melbourne Airport’s owners, would also ease peak hour congestion even when strong westerlies aren’t playing havoc with schedules.

There have long been mutterings from pilots and some operational people about the need for the Melbourne’s terminal airspace to be redesigned, something of potential attraction to the residents of suburbs affected by a concentration of traffic that approaches the main airport by overflying nearby Essendon airport.

REX or Regional Express appears to be something of the odd person out when in comes to the membership of A4ANZ. Not to put too fine a point on it, but REX’s tiny turboprops really get in the way of the bigger slot hungry ambitions of the other much larger airlines, and they’d probably like to see it dead.

The PR quote from REX’s Executive Chairman Lim Kim Hai is exquisitely constructed. He says “A4ANZ is critical for regional communities as major airports are all too ready to sacrifice critical regional interests.

“Rex looks forward to working with Professor Samuel and the Board to ensure the sustainability of all stakeholders big or small in the aviation industry.”

There is no chance that the likes of Qantas CEO Alan Joyce or his Virgin Australia peer John Borghetti will be seen shoulder to shoulder brandishing placards outside airport shareholder meetings, or responding to crises of “What do we want?” with a chorus line of “Another Melbourne runway”.

But a united front against the legacy of the dumbest and most ruinous privatisations in Australian history, that of monopoly gateway airports, might yet produce some fireworks.

low cost carriers

Feb 27, 2017

5 comments

Looking a bit like a candy dip, a Norwegian 737-800

Norwegian mightn’t register as an airline of note in this country, but it is doing to aviation what flags of convenience shipping did to once powerful maritime empires world wide.

It carries the branding of one of the highest cost yet most livable and wealthy countries on Earth, and is rapidly expanding its reach using off shore bases in such places as Ireland, Thailand and now the US, as in the ‘broken’ or ‘forgotten’ parts of America.

The latest and arguably most significant chapter in the Norwegian story will begin soon when it starts flying from small town America to Europe with the latest and longest ranging single aisle jets.

That story is told in some detail in this Skift report. (Norwegian Air is part of the Norwegian Air Shuttle group, and although the intricacies of its structure and branding will bore most readers to tears, they should keep company tax investigators on their toes.)

While Norwegian’s small town USA romance seems unlikely to see new tech versions of single aisle jets like the 737 MAX and A320 NEO flying to Bali or Raratonga from Dubbo or Bendigo anytime soon it echoes something Qantas seemed to be trying to do with its offshore Jetstar operations in Singapore and maybe elsewhere in recent years.

That was when there was a controversy over Asia based Jetstars operating so called tag flights within Australia at the end and start of flights involving Darwin or Cairns. It never quite gained traction.

But the capabilities of more efficient versions of single aisle jets might allow such thoughts to have more operational credibility in the next decade.

The debate could be bitter. Economic purists might argue that the real future for Australian aviation is to have all those expensive pilots and cabin crews living instead in Singapore or Manila under terms reminiscent of indentured labour camps predating World War II or maybe the American Civil War for that matter.

They would just commute to Australia on international flights, pump themselves up with magic pink pills for a few Sydney-Melbourne rotations and then fly home to company compounds or whatever for an overly generous 9 hour 15 minutes sleep break, including the transit times from airport to bunk and back.

Or that’s how the critics lambasted such services, and they did have some very good points too.  Alternatively, and perhaps more realistically, some of the proponents mused that the very existence of such a threat to allegedly overpaid and unproductive Australia based labour would be enough to force wage and conditions ‘reforms’, and discourage such offshoring.

At the absurd extremes of each position, Australia would either move closer to some sort of debt fuelled consumer paradise where nobody actually made or did anything and outsourced everything, or sealed itself off from the wicked forces of globalisation, had no trade contract with the outer darkness, and drove 30 year old cars between capital cities because there would be no air services, and otherwise sat around eating dirt while chanting ‘oi, oi, oi’.

Sarcasm aside, Norwegian is exploiting a different and much deeper and richer range of geographical opportunities to do to established carriers, what Qantas (to its critics) seemed to want to do to itself, and only a matter of years ago.

cancellations

Nov 28, 2016

5 comments

The last column shows October 2016 cancellations
The last column shows October 2016 cancellations

If you are stuck at a gate when your second replacement flight has just been cancelled like your first flight the Bureau of Infrastructure Transport and Regional Economics has some light reading for you.

It’s the Airline On Time Performance Statistics for October which will try to tell you that you are a statistical aberration.

Almost everything was fantastically on time in October, with Virgin way out on front by a few strands of hair, while REX was the only way to fly on time that month (or any month for that matter) with so few cancellations (0.5 percent) that only half of one of its tiny turbo-props was late on one flight every day, which is actually pretty awful even for the 16 or so passengers who were therefore on time when the remains of their SAAB 340 miraculously reached its destination before the other half.

But there are always losers in transport statistics, and while yours truly is generally speaking over-represented in that column, spare a thought for one of our readers at Launceston a week ago.

Whilst trying to get back from Launceston to Canberra via Qantas on Monday 21st November I encountered three different Qantas family aircraft with service faults for a journey that only requires two aircraft!
 
QFxxxx Launceston to Melbourne was cancelled because the incoming aircraft experienced a mechanical fault (according to the departures board) and was itself cancelled.
 
I was changed to JQyyy an hour later, but upon landing it too had suffered a fault, and we had to wait for an engineer to arrive from Melbourne on the next flight to fix it before we could leave.
 
Due to the delays I was shifted from QF8uuu to QFzzz for my Melbourne-Canberra leg , but after arriving at the gate to find it dark and empty they announced they had changed the gate as this aircraft had a fault and could not fly.
 
After questioning Qantas about the concerning number of mechanical faults, and their terrible service, I was informed that these kinds of delays are normal.
I have travelled a fair bit, but I have never encountered so many faults in one journey in my life.
 
Is this common? Are you hearing of increased faulty aircraft on the Qantas fleet? The experience has left me concerned about the safety of Qantas and Jetstar. I look forward to any light you may be able to shed on this matter, as Qantas wasn’t interested in addressing any of my concerns.

Our reader was in the cross hairs of a so far unexplained spike in unreliability reports concerning Qantaslink, the regional brand of Qantas which operates most of the flights for the Qantas group for both Launceston and Canberra services.

In the previous month, October, the OTP report shows that Qantaslink cancelled 9.3 percent of its Launceston services, and 6.1 percent of its Melbourne-Canberra flights, and was the most cancelled mainline and regional brand in flying in Australia that month, with a score of -2.8 percent, compared to Virgin Regional -2.4 percent, and Jetstar -2.3 percent.  In Launceston in October, Jetstar also cancelled 1.8 percent of its services while the goody goody two shoes Virgins cancelled NONE of their services, not even the regional ones mentioned earlier on a nation wide basis.

So our reader is more than entitled to be annoyed, including by the brush off he says he received from counter staff.

Nevertheless, safety isn’t compromised by flight cancellations.

Safety is only compromised by humans being cancelled, by the plane load, by airlines that press on regardless when all the lights aren’t green, and through greed, stupidity or culpable criminal negligence, they think they can get away with short cuts.

air safety

Oct 15, 2016

5 comments

If it can do this to a Jeep on the ground, imagine what it can do to a jet at 40,000 feet
If it can do this to a Jeep on the ground, imagine what it can do to a jet at 40,000 feet

There are some unresolved issues concerning the total prohibition of the carriage of Samsung’s dangerous (and finally discontinued) Galaxy Note 7 mobile device, but Qantas and Virgin Australia have been quick to conform to the US ban in relation to flights by its airlines.

This is the Qantas statement:

Qantas and Jetstar customers are advised that the carriage of Samsung Galaxy Note 7 devices on-board is prohibited on ALL FLIGHTS effective 12:01am (AEDT) Sunday 16 October 2016. This is due to concerns regarding potential fire risk from the device’s battery after a number of incidents worldwide and follows a ban put in place by regulators overseas. The ban applies to devices being carried onto the aircraft, in carry-on baggage as well as check-in luggage. Other Samsung devices are not affected.

Note: this is updated advice from the previous Qantas Group policy, which allowed carriage of the Samsung Galaxy Note 7 provided it was turned off. This restriction has now been broadened to a total ban.

Virgin Australia, and its low cost brand Tigerair Australia, have posted prominent travel alerts, and is like Qantas and Jetstar, are making sure passengers are well aware of the changed situation as they arrive at terminals or make on-line booklings. No such official advice has been posted as yet by Australia’s totally responsive on-the-ball safety regulator CASA, but we do know they care deeply, always think about the public first, and will eventually fix what must be an unfortunate oversight.

There are however a few other unresolved matters. It is unclear what penalties if any might be applied by any Australian carrier against a passenger that decided to pack a switched off Samsung Galaxy Note 7 in his or her checked luggage, despite all the already extensive pleadings not to do so by most airlines in the world including Qantas and Virgin Australia even before this total prohibition on carriage.

It is unclear what would happen if the normal security screening at most Australia airports of even modest size detected a Samsung Galaxy Note 7 on terms of penalties, even though the phone would be confiscated.

In general terms Australia’s airlines and its safety and security authorities rely on people being informed, considerate and smart when asked to comply with sensible safety precautions. But this is a risk where enforcement penalties might be the only way to cut through to the stupid or selfish or delusional traveller. The Samsung Galaxy Note 7 can explode as well as just ignite and fiercely burn. It has the clearest of potential to destroy an airliner in flight, the more so if the device is under the cabin floor in checked luggage and therefore unable to be put in a flame proof bag by cabin attendants before it sets fire to everything else around it if it is hidden in a suitcase.

Hence the urgency that is yet to reach CASA, although be patient, it is surely on its way.

routes

Sep 16, 2016

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Qantas: Nothing beats an upgraded A330 on Victoria-Japan flights
Qantas: Nothing beats an upgraded A330 on Victoria-Japan flights

At the risk of over analysing the changes Qantas has announced on Melbourne-Tokyo routes, it seems that the boom in traffic between the cities is proving better for its full service rather than low cost Jetstar product.

From December 16 Qantas will start daily Melbourne-Narita flights with its flashy new cabin A330-300s, which it officially describes as  “the aircraft widely seen as best in class for the business market.”

These  297 seat jets will completely replace Jetstar’s 335 seat 787-8 Dreamliners on the route from February 25 next year.  The current Jetstar services between the cities are shown as mainly one-stop flights, with some trip times lasting more than 16 hours, or longer than it takes to fly from Melbourne to Los Angeles!

The new Qantas flights Melbourne-Narita are shown as non-stop with a trip duration of either 10 hours 15 minutes or 10 hours 30 minutes, which is a huge improvement over the timings of most of the Jetstar Dreamliners. The A330s come with a real business class rather than a Jetstar product which could be said to struggle to match the Qantas premium economy offered on its longer haul A380s and 747s.

The progression from the current services to the Qantas A330s is described here.

Although Qantas is sacrificing some 38 seats per flight on the route by replaced the tight pack 787s with the newly configured A330-300s its supporting statement shows strong demand for its providing more than 700 additional seats per week on the route through increased frequency of service.

The number of visitors to Australia from Japan grew by 17 per cent in 2015/16 financial year, with those travellers spending $1.5 billion – up 14 per cent on the previous year.  Outbound travel by Australians to Japan is also growing rapidly, having seen a 24 per cent increase in 2015.

Flying between Melbourne and Tokyo (Narita) is going to be faster and more comfortable on Qantas from mid December.

air safety

Aug 18, 2016

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This is the Virgin violated tail cone of the Jetstar A320
This is the Virgin violated tail cone of the Jetstar A320

In what might be an attempt to embarrass Government over lack of resources the ATSB has today published its final report into a low speed terminal area bump and grind between a Virgin 737-800 and a Jetstar A320 at Melbourne Airport three years ago on August 10.

It was a minor incident although it carried the risk of a becoming major had fuel in the wing of the Virgin flight caught fire when it ripped off the tail cone of the Jetstar plane.

After 36 months the ATSB concluded that:

This occurrence highlights the importance of ensuring that adequate clearance exists prior to commencing pushback. This includes using sufficient personnel to ensure visibility of each side of the aircraft at all times.

No shit Sherlock. This is really laying it on the line about the under funding of the transport safety investigator. No-one takes three years to investigate the aviation equivalent of a car in a shopping carpark reversing into a stationary vehicle.

The clear message, and it is a genuine safety message, is that the ATSB has been so gutted of resources that this bingle which should have taken less than a month to exhaustively investigate was left to only fitful moments of attention for three years while the safety investigator struggled to sort out more serious matters.

Not that it always succeeds in such efforts. It not only screwed up a compromised investigation into the Pel-Air medivac charter crash of 2009, but seems hopelessly lost in dealing with its past serious errors and coming up with a credible and comprehensive new final report.

It took three years to fail to address the principle safety issue which saw a Virgin and a Qantas 737 both forced to land short on fuel at a fog shrouded airport in Mildura the same year because neither needed to be fuelled under Australia rules to find an alternative to Adelaide airport when it was closed by a deterioration in the weather when neither had anywhere else they could go.

But while there are many valid grounds for criticising or despairing about the ATSB, it hasn’t been given the government support necessary to actually do its job in a timely manner.  It treatment is a reflection on successive governments who have adopted policies of cutting back on spending on public services until they break.

If the ATSB can’t deal with a pushback incident at Melbourne airport in less than three months let alone three years, it is broken.

alliances

May 16, 2016

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The value of the Value Alliance to Singapore is well mapped
The value of the Value Alliance of low cost carriers to Singapore is well mapped

Tigerair Australia (and seven other low cost carriers) have just announced the Value Alliance to give them the market clout and network reach to take on the major trans border Asia Pacific LCC franchises of AirAsia and Jetstar.

Make that without spending billions of anything on new jets and trying to cut each other’s throats, but at risk of their own, in the process.

It consists of Virgin Australia’s Tigerair operation, Singapore Airline’s Tigerair head franchise and its wide body low cost 787 operation, Scoot, Cebu Pacific (Philippines), Nok Air, and NokScoot (Thailand), Vanilla Air (Japan) and Jeju Air (South Korea).

In some cases there are overlapping ownerships, and there are obvious gaps in the maps including China, Taiwan, Vietnam, Indonesia, Malaysia and India compared to AirAsia and Jetstar.

But the Value Alliance members hold a combined significant presence in 17 hub airports and carry 47 million passengers a year in what is a fast growing market for low fare air travel and it might obviously grow in numbers of airlines and combined network reach.

The arrangements to collectively sell each other’s products (including bookable ancillaries like refreshments, checked baggage, roomier seats, priority boarding and other extras) are in the process of being rolled out.

Put together the branded networks of each Value Alliance Member mean multi-stop itineraries involving any of them can be booked on a single visit to any of their booking sites. Delivering on these claims will be obviously critical to success, given the number of risks the different airports and borders will pose to reliability.

The combined route map shown at the top of the post is also strongly Singapore-centric, reflecting the long term plan by Singapore to leverage low cost travel to grow its tourism industry and reinvigorate traffic flows through its Changi hub at a time when it was being increasingly bypassed by non-stop flights into the PRC and losing some of its shine as both a business centre and cross roads for SE Asia.

Those objectives made it easy for Singapore to accommodate the ambitions Qantas had for its Singapore based Jetstar Asia franchise more than 11 years ago. That same long game has now fostered the formation of the Value Alliance, and added more value to Virgin Australia’s ownership of the local Tigerair franchise.

It’s a game that will be played for a long time to come.

air safety

May 14, 2016

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A safely motionless Jetstar A320 at Melbourne Airport
A safely motionless Jetstar A320 at Melbourne Airport

Jetstar’s tail strike incident at Melbourne Airport this week puts another red flag over the Qantas subsidiary’s operations and the unwillingness to date of the supposed safety regulator CASA to ground or restrict its flights.

However the ATSB appears to have fast tracked its inquiry into an incident that imperiled the lives of those on the 180 seat passenger jet bound for Hobart, indicating a final report will be provided by this November.

Under previous direction the ATSB has botched and now delayed its attempts at a PelAir crash inquiry (2009) and proven incapable to date of dealing with an astonishing situation where Qantas and Virgin Australia 737s were forced to land in blinding fog with low fuel at Mildura in 2013, and an appalling screw up that caused serious undetected structural damage to a Virgin ATR turboprop in regional service in NSW in 2014.

The ATSB has abundant reasons from the recent operational history of Jetstar for its speedy reaction.

In October last year another Jetstar single aisle Airbus, this time a 215-220 seat A321 was dispatched from Melbourne Airport in such an unsafe loading balance condition for a flight to Perth that it struggled to become airborne.

The same month Jetstar dispatched an A32o from Brisbane for Melbourne a Jetstar A32o left Brisbane for Melbourne with 16 more passengers on board than advised, meaning the aircraft was about 1,328 kg heavier than the take-off weight used to calculate the take-off and landing data for the flight.

These two October 2015 incidents perforce demonstrated that Jetstar, an Australian licensed subsidiary of Qantas, had lost on two occasions the absolutely essential prerequisite of safe operations of knowing how jets were loaded and that the distribution of passenger numbers and below floor baggage or freight was within the approved safe limits that are found in the flight manuals of all jet airliners.

These incidents raised questions of safety culture in Jetstar that have not yet been answered by an ATSB inquiry, nor addressed by CASA, the gutless safety regulator that conducted a grandiose grounding of Singapore owned Tiger Airways in 2011 after it infringed safe minimum altitude requirements over the Leopold estate near Geelong during a night time go-around at Avalon Airport.

CASA was justified in grounding Tiger, but was it justified in treating Jetstar with comparative indifference over a series of equally disturbing incidents at Melbourne, Cairns and Singapore Airports in earlier years?

The response of CASA to persistently unsafe practices or attitudes by Tiger was to first ground the carrier, and then restrict the number of sectors it could fly each day until it acquired a safety culture and a respect for the regulations.

The safety culture of Jetstar ought to be in the dock of public opinion over the October 2015 incidents, and as the ATSB says in its notification of an investigation, the loading data for last Wednesday’s flight will be part of that inquiry.

inflight wi-fi

Feb 23, 2016

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financial results

Feb 23, 2016

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air safety

Dec 29, 2015

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air safety

Dec 23, 2015

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