No, conversely, I believe it shows that they have been undercharging on a lot of other routes.
The return on capital invested is so poor, and subject to such risk, in the airline industry, that the owners of QF, VB, and every other airline in the cosmos would make significantly greater returns by dumping the lot and buying a block of flats (admittedly a very BIG block of flats, but you know what I mean)
The only people who seem to make a reasonable return out of aviation are the airport owners who have everyone by the short and curlies - airlines and pax alike - they charge like wounded bulls and "cost recover" everything.
If airlines could "cost recover" we wouldnt be seeing the corporate blood letting that we are seeing at the moment.
Part of the problem is of their own making - dropping unsustainable fares into the market - even if they are only lead in fares, sets an expectation amongst travellers that these low fares represet the real cost of travel and that every other fare is gouging.
When you look at the money invested in a fleet, VB group has 3 777's, 57 or so 737-700/800's and 19 E Jets, QF has significantly more than that - with each 737 costing around 40-50 million US, the 777's in the order of 180-200 million and the E jets around 30 million - that is a lot of money tied up in aeroplanes. If you own/finance say half of that you have a lot of debt, if you lease the other half you have a lot of lease payments - either way you need significant cash flow to keep the doors open.
As an aside, I feel the need to say something about the term "raping" the public. I know it wasnt meant to cause offence, but the fact is that rape is a truly evil crime and to use the term to describe product pricing is unfair to those people who have had their lives touched by this evil. Sorry I dont mean to preach but people use words in such a throwaway fashion sometimes and it ends up diminishing the horror of the act.
|