Last week, I wrote an article for CNBC, which talked about the agility of Qantas that keeps the airline in profitable territory. The article resulted in a lively debate with a number of Aussie aviation experts down under, and one of them kindly offered to write a detailed Guest Post on SimpliFlying on how it’s actually Jetstar that’s keeping Qantas afloat.

Grant McHerron (aka Falcon124) is an opinionated aviation enthusiast & co-host of Plane Crazy Down Under, Australia’s only aviation podcast. He is an online/digital project manager and perpetual student pilot who can often be found crewing hot air balloons, working airside at Avalon Airshow and plane spotting at airports around the world. He graciousouly hosted me when I visited Melbourne last year, and we almost watched the sunrise in his hot-air balloon Enjoy!

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The latest half-yearly results from QANTAS continue to show an airline that is hemorrhaging cash on its mainline, full service routes. While QANTAS are certainly showing signs of agility, the primary factor keeping the group afloat is the success of their Low Cost Carrier brand Jetstar.
The creation of Jetstar
Towards the end of the 1990’s, QANTAS saw …

This article was first published on the CNBC blog———-Qantas announced today a net profit after tax of A$58 million for the first half of the financial year, down from $210 million a year earlier, although the airline did recover from a loss in the second-half of last financial year. This 72% dip in profits resulted in the shares falling by up to 7.2% in early morning trades. However, Alan Joyce, the CEO, says the carrier has done better than most of its rivals. And it has, indeed, thanks to its agility.Agility through smart cost-cuttingAlthough revenues dipped by 13.4%, costs were slashed by 16.2%, which shows Qantas’ diligence and discipline in reducing expenditure in the past year. The cutting of frequencies to unpopular routes and grounding of older aircrafts was key to these cost savings.Load-factors have been the highest in five years – at 82.4%, on flights that carried a lesser number of total passengers as compared to the past year.This simply means that flights were more full than in the past, despite the recession. Of course, the downside was that this was achieved by …

Let me say this again. I think Air Asia is one of the most innovative airlines in the world today – right up there with JetBlue, Virgin, Singapore Airlines, Southwest Airlines and LAN Airlines. And today they pulled out a trump card – a joint venture with Australia’s Jetstar Airways. You can keep reading the press releases, but here’s the essence of the agreement and how it will benefit the airlines and their customers (you and I!) What the AirAsia and Jetstar “budget alliance” means The most significant difference is the departure from Star Alliance – type marketing or revenue driven alliances. Air Asia and Jetstar have formed a cost alliance, or what I’d call a “budget alliance” (pun intended). Here is the nitty gritty. The airlines will pursue joint procurement of aircraft – This means that they will be able to leverage economies of scale while buying from Airbus. Joint design specifications – since they’re going to order a lot of planes, they can demand from Airbus things like a twin-aisle A320 or more efficient …

It’s been a fascinating day, as an outside observer of the impasse between Singapore Airlines and Flight Center – one of Australia’s largest and most powerful travel agents (they’re actually much more than just an agent).
The Contradictions – SIA vs Flight Center
Late last night, SIA sent out an email to its Australian frequent fliers, which announced that the airline’s tickets will no longer be sold through Flight Center. That came as a shock, since it’s like saying your website won’t appear on Google.

But things got more interesting, when Flight Center put out a release countering what Singapore Airlines had said, claiming that they’re still selling SIA tickets, but it’s just not the preferred airline. What that means is if you want to fly from Sydney to London, Flight Center would recommend Emirates, Qantas or another airline, unless you insist on flying Singapore Airlines. And that can still mean a lot of business loss.

No lessons learnt from the Indian fiasco?
SIA flight attendants on flights to India used to be tired by the end of the …

Gone are the days when we received some unknown meat topped with a squishy brown liquid and neon green vegetables on board airlines. These days, either we don’t receive anything for free ($2 for water anyone? Think US Airways ), or we receive peanuts (think Southwest) or are over-fed (think Qatar Airways). But which airlines serve the best food?

[caption id="attachment_776" align="alignright" width="373" caption="Food on Singapore Airlines - pretty good, but not the best"][/caption]

This article is inspired from a review SimpliFlying has received, which notes that there is hardly any talk about food quality on board airlines on this blog. Indeed, food quality and serivce forms an integral part of the flight experience – especially for long haul flights. In fact, it can sometimes be crucial to winning the customers hearts, as Malaysia Airlines CEO realized. They had been serving mutton biryani on routes to China, and customers didn’t like it. They switched to chicken rice, and won their hearts. At the same time, they started offering mutton biryani on flights to Delhi, which was well received too.

Personally, …

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Image by pchavali via Flickrllkl
There’s been ton of chatter that Qantas is looking for a bedmate even since the new CEO Alan Joyce took over. Finally, British Airways CEO announced that the airline is in talks with Qantas regarding a potential merger. On the surface, it may look like a good deal, since there are so many synergies to tap on the famed Kangaroo route. But dig a little deeper and you will realize that Qantas may just become a concubine for BA, rather than a trusted mate, and it might just make sense to keep the options open towards airlines like Cathay Pacific.

But before I get into that, let me share my thoughts on why a Qantas and British Airways is still good for both the airlines.
Why QF and BA make a good couple
The goal of mergers is to generally extract value by streamlining operations. But Qantas and British Airways (BA) can probably hope for much …

Qantas became the third airline to take delivery of the Airbus A380 aircraft last Friday, after Singapore Airlines and Emirates. Qantas has ordered 20 A380 planes from Airbus, the first of which will enter service from October 20, initially flying between Sydney/Melbourne and Los Angeles but in January next year expanding to the Sydney-Singapore and Sydney-London routes. But the fanfare and buzz is nothing close to that generated by Singapore Airlines’ first A380 flight to Sydney or Emirates’ A380 flight to New York City.

Given the significance of being one of the first few airlines to operate the Airbus A380, and since it will once be the 2nd largest operator of the A380, it’s a mystery why Qantas has not capitalized on this event to build its brand further. Moreover, given the recent negative press generated by the string of Qantas safety lapses, there is an urgent need to repair the damage done.
How did Qantas miss this golden opportunity?

Lack of radical product innovation: The four classes Qantas product for the A380 are not a radical improvement from its existing fleet of wide body planes. Moreover, the peculiar seat color choices make the cabin look dull. This, as opposed to the double-bed suites introduced by Singapore Airlines for First Class, and showers as well as a bar introduced by Emirates for First and Business Class, in their A380 planes. Both of these airlines took full advantage of these product innovations and marketed themselves well, rightly so.

Which of the first few airlines operating the Airbus A380 have come up with the best advertisements? You be the judge. Personally, I’d rate Emirates’ and Singapore Airlines’ advertisements far above Qantas’.
Singapore Airlines Airbus A380 advertisement

Emirates Airbus A380 advertisement

Qantas Airbus A380 advertisement