Virgin Blue is running amok (and on time) on domestic routes in the latest traffic figures posted to the ASX this morning and it is clear Qantas has to do something to stay competitive.
Coming on top of yesterday’s declaration by Tiger Airways at a Singapore briefing that it will press ahead with significant expansion in Australia while its competitors retreat, the heat will be on Qantas CEO Alan Joyce to do come up with some answers.
Qantas hasn’t yet reported its provisional operating results for April, but it is tipped to cut back further on its full service domestic services, which have fallen way behind in key metrics compared to its own Jetstar subsidiary and Virgin Blue.
In April, Virgin Blue passenger numbers grew 3.1%. Its revenue passenger kilometres rose 5.1% and its load factor or proportion of seats sold rose 3.3%, all compared to the same month in 2008.
For the 10 months to the end of April Virgin Blue’s head count is up 5.6% and its RPKs up 5.8% and load factor down 0.4% to 81.8%.
It was also had the best record for punctuality in April, just ahead of Qantas and well ahead of Jetstar and Tiger.
These are dreadful numbers for the Qantas group, which risks slipping from a reduced market share on domestic routes of around 62% in March to below 60%, despite growth in Jetstar which is being wiped out by declining demand for Qantas domestic and Qantaslink flights.
A similarly disadvantageous set of metrics for Qantas were posted by both carriers in March, which in the previous nine months, was going backwards in two out of three of its domestic brands while Virgin Blue overall was growing its head count by 5.9% and RPKs by 6.9%.
Both carriers face the “real” Tiger from 3 July, when it begins flying Melbourne-Sydney, with Qantas already said to be planning to respond by allowing head-to-head scheduling by Jetstar. This will in turn damage its full service Cityflyer services which depended disproportionately on large corporate accounts that have downsized.
But how can you damage something that is loosing its relevance anyway?
The Qantas answers to these challenges will be substantial, but none were available before deadline.
Qantas doesn’t need any help in damaging its “full service” Citiflyer brand – it’s doing a fine job of that by itself. Since when did a small bag of corn chips and a beer – doled out by staff who are more interested in chatting amongst themselves – constitute full service.
Do your sums. With the money you save flying Virgin or Jetstar you can afford something almost decent in-flight and still have heaps of money left over.
Punctu-schmunctuality – in yday’s Melb fog mess Qantas delayed their 0605 Hobart to Melb departure, crew came around explaining to pax in terminal and qantas lounge that the alternative wud hv been to sit in a stack over melb til the fog cleared, but weight/cargo/fuel calcs wudnt gntee us enough margin, so we had another coffee, did the emails etc and left very late. Meantime, competing Virgin flight left on time but then stooged over wonthaggi for an hour and was apparently finally diverted to Sydney. I wudnt be happy to see Mascot when Tulla was the target, but for Vurgin it was another an on-time departure..
True. But not an on-time arrival, so they really blew it!
The comments you make about the April figures for Virgin Blue forget a major point and that is Easter was in March last year and this year it was in April. This has distorted many commentators discussion on monthly domestic travel information over this period.
You have a very good point in relation to comparing the gross values for activity. However looked at from the perspective that it was Easter at the same time for all the airlines, the carriers are reviewing the data to track shifts in the support for one brand in relation to the others, which I think you will agree is why the year to date figures are given as much consideration as the provisional monthly operating statistics.