Thursday, 20 August 2015

So - what does all this Qantas Profit really mean?

Two or Three years ago, I and many others from Senator Nick Xenophon through to ex Qantas boss Geoff Dixon were bagging the performance of Alan Joyce. Damn it, they even had a plan to take over and oust him.

Joyce had his workforce including flight attendants, maintenance engineers, baggage handlers and pilots all gunning for him when he played hardball on wages, conditions, and even shut the whole airline down for a few days.

The Qantas service suffered. Disgruntled flight attendants have little motivation to provide good service. Customers fled to a revitalised competitor over at Virgin. They upgraded their product, while Qantas gave economy passengers cardboard snacks served in cardboard.

Service and route contraction
Qantas reduced its international services dramatically - some routes disappearing while others were 'handed' to Emirates, or their low service offshoot Jetstar. In the meantime - Virgin successfully transfored from low service opperator, and poached some Qantas business customers as well. Both airlines lost a lot of money. Qantas by providing two new domestic services for each one of Virgin's, and Virgin by expanding rapidly, investing in lounges, upgraded product, and I suspect staff training. In fact at one stage, Virgin's international service to the USA in business class beat Qantas hands down.

All this while - the benifits flowed through to the consumer. Fare prices plumetted due to competition, and choice improved. On the international front - we moved our allegiances to other international carriers - offering close to similar service, but usually at much reduced cost.

It felt like no-one was flying Qantas
I have not forked out for a direct Qantas international service for the last 5 years. I have chosen similar quality carriers at much reduced prices - sometimes half the price that Qantas charges. Occasionally travelling on Qantas metal, but having bought the fare at a vastly reduced rate via another One World or partner carrier. For example: Jet Airways to Delhi via Hong Kong business class, with the Sydney to Hong Kong leg on Qantas metal. I was happy to put up with the lesser earnings of status credits on Qantas, until my travel agent successfully requested that Qantas 'take over' that part of the booking, and I earnt status credits as if it was a Qantas purchased fare.

But I digress.

What does all this profit success mean for Qantas long term? 
I'm not entirely sure, but I think it means that Qantas stays in the game, instead of falling out of it.

For me, after price and service, its the hardware that matters. Although a faithful Jumbo devotee (love that Business Class upper deck), my first trip on an A380 was transformative. That low pressure used to make my head hurt on long-haul. Nothing dramatic, just a dull ache, and overwhelming crankyness by the end of the trip - and that was after the self medication with alcohol. With the A380 - none of that fatigue.

Qantas has the A380, and that has kept them in the game. With the addition of the 787 9's, that too will keep them in the game - just. At the moment - you can fly on Scoot to Singapore in a 787. On United to the USA on a 787. Even Air India operates 787's out of Australia. China Southern uses them between Guangzou and Sydney. Even Jetstar can get me to Denpasar, Honolulu or Phuket on a 787. Later this year, you can travel on ANA to Japan on a 787. In 2016 - Air Canada will be operating them between Vancover and Brisbane.

Joyce - stupid/brave?
So unlike with the A380 - Qantas is no leader in using these new higher pressure, higher cabin humidity, more fuel efficient planes. It is definitely a follower. And I think that might be where Joyce wants it to be. Still he might surprise us. He has been stupid/brave before.

And here's the promotional video for some light relief:

Qantas in Profit, dividend for shareholders, and 787 orders confirmed

Qantas announces $975million profit for the year, in contrast to a $646million loss the year before.
It is also promising a dividend of 23¢ per share - the first time it has paid out since 2009, when it parted with 6¢ a share.

It has also confirmed the purchase of 8 x 787-9 Dreamliners for delivery in 2017 - a decision that was rumoured months ago.

For a more extensive summary go to SMH or AusBT

Tuesday, 18 August 2015

Sydney Airport buys Terminal 3 from itself?

Sydney Airport, Terminals 1, 2 and 3 - Image: Sydney Airports
Terminal 3 in Sydney is where Qantas runs its domestic flights from. It leases it from Sydney Airport Authority, who have just bought out the lease:
Sydney Airport will gain control of the retail operations at the airport's Terminal 3 and move to co-locate domestic and international operations there over the longer term after agreeing the $535 million purchase of the terminal's lease from Qantas Airways.
The lease was due to expire anyway in 2019 - so this just lets them have hold of it earlier for a know price, while it gives Qantas some certainty through until 2025.

The Sydney Airport Masterplan intends to co-locate domestic and international flights within the Terminal.

Sydney Airport say they arn't going to make many changes except maybe to the retail and food and beverage. I think that is code for goodbye to the openness of the ticketing hall, and expect it to be consumed by shops, making the space as unappealing as terminal 1 and 2 are.

More in the SMH and AusBT

Staying in Canberra in the QT

Canberra for Work

One night in Canberra for work, means I need a cheap hotel, with a good desk, and a good bar to have a working meeting with a colleague.

Avoid the Fog

With the change of seasons upon us, you don't want to be caught in early morning fog on a flight into Canberra, and miss the start of your work day, so wisely, I catch a flight down the previous day. The project doesn't really cover a nights accommodation, so it has to be cheap, but good enough to enjoy, have a good working desk, so I can do some late work, and a bar or restaurant space where I can meet and successfully complete some work with a colleague. That means space enough for a computer, quiet enough to hear a conversation, and with an alcoholic beverage or two on tap.

The QT in Canberra meets that brief.
Shop in your room - cute but useless (except for the Pringles)

Book through Qantas for a discount

While booking my flight on Qantas - I take up the accommodation option, getting $30 off a room at the hotel, taking the price down form a very reasonable AU$152, to a cheap AU$122. I know I'm going to get a basic entry room (QT Standard, queen bed, shower), but its only on night.

The makings of a Negroni, I think
Quirks are good, but oversold
The QT is a great business hotel, and an alternative to some of the more expensive options in Canberra. The room I had was snug, but more than adequate for one person. Bathroom is snug, but serviceable. The quirky decor is fun, but the 'Shop-in-your-room'  is annoying.

Queen Room - similar to the room I stayed in (QT website)

Great bar to meet and work in; well designed rooms with all you need to wash, sleep and work; nespresso machine in room.

Bedside Table

No table service in the bar, and remove the 'Shop-in-your-room' experience. Does anybody really use that set up to make a negroni?
The bar (Courtesy QT website)

Monday, 17 August 2015

Falling back in love with Hyatt

I've always known I was emotionally cheap, but this surprised even me. A points upgrade, and a positive experience with a phone consultant always wins the day. Thanks Emma (consultant on the Hyatt GoldPassport booking line).

Grand Hyatt or Sofitel Melbourne?
I'm off to Melbourne from Sydney in September for 3 days. I have been tossing up whether to stay at the Sofitel, or the Grand Hyatt. I've stayed at both before, and probably prefer the Hyatt overall, although the Sofitel does have some spectacular suites that the upgrade gods have sometimes bestowed on me.

I used to be totally loyal to Hyatt until they devalued their points (making therm worth a third their previous value for upgrades) and never seemed to have points upgrade room availability.

Last time at the Sofitel, we were allocated a standard room on a low floor, and a bit of lack of service (no promised turn-down service, and a refused one hour late checkout). They asked for feedback, so they got it. I just wanted to point out how much it contrasted with the amazing treatment I had received before - including several free upgrades - one to a vast diplomatic suite.

Suite I was upgraded to at the Sofitel Melbourne

Its always worth communicating these things to management. They have promised to 'make things right' for me next time.

Points and Upgrades and Value
Todays booking came down to cost and upgrades. Hyatt was cheaper at $325/night versus Sofitel at $345/night, and Hyatt would give me a guaranteed two step upgrade from a standard room to a suite for 6,000 GoldPassport points per night (18,000 total). On $325/night versus $685/night for the suite, that makes my GoldPassport points worth about 6¢ each.

Gold Passport v Qantas Frequent Flyer Points
Its tempting to book directly with Qantas Hotels - especially when an email appears directly after you have booked your fare. This was their offer:

So the same price as booking directly with Hyatt Gold Passport, but you get to earn 2925 Qantas Points - but of course no status credits. I opted to book directly with Hyatt. That way I get Hyatt points (5 per US$ spent - roughly 4.5 per AU$ - which in the above example are valued at 6¢ per point - versus Qantas points, which based on what I paid for the return fare and how much the trip would have cost in Frequent Flyer points, amount to about 2.2¢ per Qantas Frequent Flyer point.

My advice
unless Qantas points have more value to you for other reasons (topping up to get a points fare), then book through the hotel rewards site. In this case you'll get more value.

So Sofitel will need to wait to 'Make it right' at my next Sofitel stay.