Quote:
Originally Posted by Marty H
I think QF being full service and having higher operating costs would hurt them I mean you look at a simple MEL-ADL ticket for $55 that inc the cost of their own caterers, providing food for all those onboard, their own cleaners to come on board and clean the aircraft before flight, where as DJ at $49 then will generate revenue through the sale of food onboard, they wont have the cost of cleaners coming on board, they dont hire their own caterers.
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From a balanced viewpoint, I would say the actual cost of producing a meal and actual cost of having cleaners, per passenger, in a flight is quite minimal. Having said that this is only the cost of 'production' and there are hidden costs involved so you are correct in what you are saying.
However I question the ability of generating additional revenue and how much this will actually be when you work out the revenue per passenger per flight. I suspect this will not be a big amount as most passengers would bring their own food or drinks etc or just go without.
What you have said essentially summarises the changes the industry has been going through. One could imagine however if QF decides to charge for food onboard or eliminate cleaners how much of an uproar this will create, especially in the media.
You are also forgetting the substantial investments made by DJ in the VA expansion and what this will mean for DJ as a company and its bottomline. In essence the timing could not have been worse (sheer bad luck). They will take at minimum 2 or 3 years to breakeven (or more depending on how badly the financial crisis hits in the next 12 months) and until then will continue to be a burden on the financial performance of the group.