Qantas has experienced a bit of turbulence of late in the Chinese market. The rise and rise of a number of cheaper Chinese airlines flooding the market coupled with a slowing down of demand has seen the airline (for the third time now) pull the plug on its Sydney – Beijing route. The route will continue to operate through to March 2020 with the airline then linking customers onto alternative routes/ codeshare partners to get them to the Chinese capital.
Frankly it’s a shame it didn’t work out for Qantas. This year alone I have flown the Sydney – Beijing leg with Qantas three times and found the experience head and shoulders amongst the best on that route, particularly in terms of their business product. A lot of Chinese airlines are emerging and with that the product hasn’t been truly tried and tested. Quality tends to be generally mixed but more price conscious driven; great for those who are on a shoestring travel budget.
The exact date in March next year is unknown for Qantas’ withdrawal but what is certain is that Qantas’ codeshare partnership with China Eastern will be bolstered. Alternatively Qantas passengers will be directed to use their Sydney – Shanghai operated aircraft and fly from there domestically on China Eastern or Oneworld partner Cathay from Hong Kong.
Those booked on flights beyond March 2020 with Qantas will be contacted by the airline for alternative travel options.
In the wake of Virgin Australia’s announcement that it’ll fly daily Brisbane – Tokyo from late March 2020, the airline has swung the axe into its daily flights between Melbourne and Hong Kong. The move comes as part of the airline’s recent review into route profitability after a dismal $315 million loss in earning this year.
The move to reduce flights to Hong Kong will will free up the Airbus A330 aircraft needed for Virgin’s daily flights between Brisbane and Tokyo.
Other changes to come out of the six month review to improve the airline financial performance includes the push back of Boeing 737 MAX jets delivery from November 2019 to July 2021 and delaying a launch of an enhanced B737 business class seat.
It’s a shame to see Virgin reduce their presence in Hong Kong. Understandably the political unrest has made it even tougher for the airline, especially in a market dominated by Cathay and Qantas. Back when the airline launched into Hong Kong in 2017, it was anticipated that the airline would use it as a launch pad into mainland China. That never quite eventuated as Virgin had hoped.
Virgin is hopeful that the new Brisbane to Tokyo route will be a better option, with a new partnership with leading Japanese airline ANA giving them the leverage they require to launch into the Asia market from Japan to China.
In a bit of an unexpected turn since Virgin’s announcement that it’d review its entire network for profitability, the airline is almost certain to be gifted one of the two additional landing rights for Haneda Airport in Tokyo.
Virgin and Qantas both applied for two rare landings slots at Haneda, which had become available to Australian airlines. Virgin asked for one whilst Qantas wished to secure both slots.This week the International Air Services Commission (IASC) issued a draft decision awarding both airlines one slot each, believing Virgin entering the Tokyo market would bring greater competition and airfare competition.
The Virgin slot, if successful, would see them use an A330 daily service out of Brisbane in late March 2020. The news for Virgin comes after the airline recently signed on a partnership with All Nippon Airways. The partnership would see see the two airlines code-share on fall lights between Australia and Japan as well as domestic internal flights.
Rival Qantas hoped to secure both slots, using one to shift its Melbourne flight from Narita to Haneda and use the additional slot to offer Sydneysiders a twice daily service to Tokyo. If the split of landing rights goes ahead, Qantas will have to decide which way it will use that one slot.
Further submissions are being made to IASC with the body to make a final decision in the near future.
Loyalty programs are a cash cow for airlines to the point that some airlines sell a stake or the whole cow for a quick profit hit. Those who have taken the gamble tend to not seen it pay off and more often than not find themselves paying for it, or in the case of Air Canada creating a whole new competing loyalty program.
In 2014 Virgin sold part of its Velocity business to Affinity Equity Partners (AEP). Since the sale the program it has grown to be the third biggest loyalty program in Australia behind Qantas and Woolworths. Virgin now has sellers remorse and has enter an agreement to buy back the 35 per cent of its Velocity program it sold to AEP for $700 million. This is more than double what they sold it for to the group five years earlier.
Virgin has experienced some rocky annual results of late but the shining star of their company has been the Velocity division which saw earnings (before interest and tax) up 12 per cent to $122.2 million.
Personally I think this is a smart move by Virgin which in the end after a initial financial hit see the company not only in a stronger position financially but increase value with its customers for years to come!
Virgin Australia has announced this week a program to cut 750 head office and corporate roles after posting a $349 million full-year loss. The result is a surprising drop for Virgin following their slender thing profit of $64 million the previous year. The plan to slash jobs is estimated to save the airline $75 million annually in costs. The cuts would impact seven per cent of Virgins current workforce.
On top of labour costs Virgin has advised it would be making an urgent assessment of all its current routes and capacities to see where further savings can be made. It’s expected there will be a strong focus around leisure routes. The move would ensure better route profitability for the airline. Virgin has also decided it would hit pause on fleet renewal until July 2021.
The recent loss has not made new VA CEO Paul Scurrah’s life any easier since he landed into the tough job following the departure of John Borghetti. The new CEO pointed to tough trading conditions as well as rising fuel and the lower Australian dollar.
The news follows rival Qantas posting earlier this month a 6.5 per cent fall in annual net profit. Like Virgin they attributed the loss to higher oil prices and a weaker foreign exchange.
Before the wheels have even left the ground on the first Qantas Points Plane, the airline announced this week it would be doing another Points Plane…this time to Los Angeles! What adds a bit more excitement to this announcement is that the B747 will be used, a rare appearance on the Australian – American route hop! It’s a great opportunity for B747 lover like myself who wants to see the Queen of the Skies off in style by flying her one last time (naturally).
With Qantas set to retire all its beautiful B747 fleet by the end of 2020 I cannot stress how great of an opportunity this is. Flight QF99 will depart from SYD for LAX on Sunday 13 October 2019.
Here’s what you need (points wise and excluding those pesky taxes) that you’ll need to secure the seat of your dreams:
- 96,000 Qantas Points for business class
- 72,000 Qantas Points for premium economy
- 41,900 Qantas Points for economy
Qantas as part of its transition fleet plan will gradually replace its 747-400s with the company’s favourite plane of late, the B787 Dreamliner (I’m still yet to be a fan like Mr Alan Joyce).
Will you be booking an seat on the second Points Plane? Keen to hear your thoughts.