article: The End of The World As Qantas Cityflyers Know It

[crazydave98]

Thought this article might interest readers of this thread.
Original at:
Crikey - Business - The end of the world as Qantas Cityflyers know it

The end of the world as Qantas Cityflyers know it

Date: Monday, 25 June 2007

Ben Sandilands writes:

The start date for the end of the world as Qantas Cityflyers know it was announced over the weekend.

From 4 December Jetstar starts competing directly with its Qantas parent twice daily on the Sydney-Brisbane part of the 'golden triangle' that those cities make up with Melbourne.

$39 one-way will compete with anything from the $151 to $494 one-way fares available on the route on the Qantas Cityflyer schedule this afternoon or tomorrow.

Jetstar was always going to be turned directly against Qantas to drive 'cost reforms' through Qantas. The embattled Qantas unions have always said so, making last week’s overwhelming voting down of the latest QF pilot Enterprise Bargaining Agreement more symbolic than effective at changing the management agenda.

But there is more to this than most Cityflyer sky warriors might realise, especially those sitting in business class.

Too many of them aren’t paying anything like the published business class fares on the inter city routes where Qantas flies Cityflyer shuttles as frequently as every 15 minutes.

The deals that secured travel contracts from the big end of town are unsustainably cheap now that Ansett is gone.

Qantas can make more money out of fully flexible economy fares than from bulk contracts for business class, plus free Qantas Club memberships. And the real numbers prepared to pay around $1,000 for 75 minute return flights between capitals is too small, and concentrated on too few flights.
With under-performing business class cabins rattling around the network full of underpaying suits, and Virgin Blue poaching regular economy flyers who liked improved legroom and half empty lounges with free wi-fi, Qantas Cityflying as we know it is coming to an end.

Apart from that, travel is a major cost for most companies. With a promise from Tiger for rock bottom fares, and cheaper offers from Virgin Blue and Jetstar, travel managers who can deliver a big per trip saving have far more influence over where executives sit at company expense than ever before.
The end result is already apparent in many European carriers, where the low cost revolution has been strongest. Inter city flights are moving to single cabin formats while those on large travel accounts, or prepared to pay a surcharge, are getting more widely spaced rows up front or beside the over wing emergency exits.

These are the last days of the Royal Barge inter-state flight as we know it.

[Mal]

Thanks for the article. I suppose with Media Monitors et.al, you get access to all of the good stuff quickly

Interesting times ahead, but I disagree with Mr Sandilands on both his general view and some comments.

1. Comparing a launch price for an airline vs a last minute walk up fare? Huh. Jetstar will easily creep up to the $90-100 mark for the cheapest fare, and Qantas will use it as their discount child when they want to compete with DJ and Tiger rather than hurting CityFlyer's eliteness and ever increasing higher fares.

2. CityFlyer is the Qantas competition tool against DJ in the 'Business' end of town. It ain't going anywhere. Business will always be around on the Golden Triangle I believe - There are always egos to be stroked and high paying pax to keep happy.

Time will tell, but for the moment I'm thinking this is a Crikey puff piece of the highest school of 'gossip mag' variety.

[oz_mark]

I was under the impression that most of the contracts that were around pre-Ansett collapse have since been renewed on terms much more favourable to the red rat. While there are still discounts on offer they are nothing like they used to be.

[simongr]

Hy-per-bol-e

[straitman]

I would have thought that 'most' companies would look at where, why and how their people need to be moved.

We (the company I work for) buy the most appropriate ticket for the situation and this means that within Oz it's sometimes QF and it's sometimes DJ. When there is only a marginal difference the person travelling gets to make the choice. Each situation is relative to the required approvals and business needs. ie flexibility vs cost MUST be considered at all times. There is no 'J' ticketing domestically within Oz, NZ, USA or anywhere though its available for travel over approx six hours (I'm not sure of the exact number) Those who choose have the availability to use their own points for upgrades which again gives QF the advantage for longer legs. (My recent trip to PER earnt me approx 6700 points and cost 20000 for upgrades which I think is a great deal)
Without having exact figures I'd have to say the QF gets 80% of the market, DJ 20% and JQ 0%.

It all comes down to using 'yield management' in reverse.

The question must then be asked as to why QF get most of the travel $ and put simply it's capacity and cost and therefore availability.

[Yada Yada]

In my view the journalist's premise is correct. When Tiger joins the fray, capacity will be increased and fares will go down. This is likely to some business managers to change their QF-only policy to BFOD.

I can't see this spelling the end of the J cabin altogether, but I wouldn't be surprised if QF considered using all-Y configs on some of their Cityflyer services.

Without having exact figures I'd have to say the QF gets 80% of the market, DJ 20% and JQ 0%.

I'm not quite sure I understand what your % split refers to. I fly Virgin Blue weekly and see nothing but suits on board and the Lounges getting busier each week. DJ is not a predominantly "leisure carrier".

[swissbignose]

I can't see this spelling the end of the J cabin altogether, but I wouldn't be surprised if QF considered using all-Y configs on some of their Cityflyer services.

There are already some all-economy configs on CityFlyer services. They fly between Canberra and Sydney!