NickN: Most PAX only get a single drink with dinner and I imagine this would cost QF perhaps $3 to $4 at the most out of the ticket price. This would be less than the highly publicised cost of Qantas IT measured as a percentage of ticket price. It has been reported that QF IT represents around 10% of a ticket price, so for a red-e fare of $89 one way SYD-MEL, IT costs are probably equal or greater than the meal costs including the free drink.
However, you won't find many $89 seats on the peak hour CityFlyer flights and they are generally on the edge, say after 7:30pm at night. I have noticed the QF flights are now nearly full again during peak and that in the last 2 months effective prices have gone up by around $30 one way for the same flight and that the 767's are back on services that were 737 and the :15 and :45 flight departures are also back. So I think it will be interesting to see the QF load and RPK factors for domestic in Apr, May and Jun.
The two brand strategy has been working very well for QF and has is what is essentially responsible for the new world carrier approach at DJ. DJ got squeezed at both ends by QF and JQ, likewise JQ has done a good job of containing new entrants such as Tiger.
If QF was to cut the CityFlyer full service approach then they would have to slug it out directly against DJ and Tiger but with a higher overall cost base. This wouldn't work and is why they started JQ in the first place. There are still two types of flyers in the domestic market, those who enjoy the full service and are willing to pay a few extra dollars for it (and it is literally a few extra dollars fare bucket compared to fare bucket) and those who are not. It is not a case of PAX changing in large numbers to DJ or Tiger but the traditional QF PAX is not flying at all, in any way shape or form at the moment. Companies are not saying that staff have to fly DJ, they are saying you cannot travel at all. Those who are still travelling are doing so because it is income generating, internal meetings that would have been done face to face are now being done over the web or over the phone.
However everything is runs in cycles and as I mentioned domestically I am already having a seat mate on most flights where as a few months ago I would have had a row of 3 to myself and I have noticed I am also paying more at the same time. So I still think your prediction of the demise of QF is a little early and I would encourage you to research a little further rather than basing your argument around opinion and selecting facts as you end up only looking for information which supports your arguments rather than looking at the whole picture.
|
29th May 2009, 07:24 AM
Linear Mode
