Ansett Australian Global Rewards - Where to now? Re:FFP

Ansett is all but gone, and we are going to have to look at a travelling future without our beloved AN. Who are you going to choose? Virgin Blue, or (the previously unthinkable) Qantas. Obviously, Qantas has the advantage with Qantas Frequent Flyer. But would that even be worth it?? It must be so hard to get a reward seat on a QF flight these days. It might be worth sticking with Star Alliance internationally and flying Virgin Blue domestically...what will you guys do, or what have you been doing since September? Will the Star Alliance do anything more to keep an Australian customer base?

I am praying for

1. A miracle

If that does not arrive

2. Virgin Blue become full service. I would love to have a Virgin Atlantic type product here.

Interesting report on the 7:30 Report as I write. Whole program devoted to AN it seems, only 10 mins to go.

I will certainly stay with Star Alliance.

Cheers,

Justin

Thanks, I'm gonna watch it now! It's almost 730 here. Be back on the forum tonight.

I knew there was a good reason that Queensland didn't have daylight savings. Get an extra 1 hours warning on TV programming.

A miracle? Justin do you expect a little man with a bulging briefcase from Singapore to show up at 501 Swanston St. tomorrow morning and say "Now, let's deal!"... alas SQ are smarter than that, or you'd hope so.

Seriously though, Lang may well win out, and that is a disgrace. DJ would definately propsoer in the AN terminals, but the DJ product really is not one I'd want to fly. Their seats are not comfortable, the pitch is crummy etc. There's no way I'd fly a DJ 737 to PER. It would just be way too uncomfortable.

Unfortunately Star Alliance is in a real pickle - without an Ansett type entity in the market they just only have the feed at internatinal gateways.

It would be nice if UA could get local rights back on SYD-MEL, but that won't happen unfortunately.

I'd have to fly QF domestically and stick with Star for the rest of the world. Well, I suppose I could fly DJ MEL-SYD or even MEL-BNE, but all prices being equal, I'd go QF to at least get some points/status credits (only 6,970 to go to lifetime silver! http://www.flyertalk.com/forum/tongue.gif )


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RichardMEL, UA 1K
A Star Alliance Member.

Well its the darkside for domestic and the Star alliance for international.

I suppose the best we can hope for is for the ACCC pressure the government to allow the internationals to sell the domestic sectors. There are plenty of SQ aircraft that sit round all day in SYD MEL and BNE which could be utilised and there is of course UA on SYD/MEL.

ABC in SYD had an aviation expert (who wasn't from FT I might add) on today, and he said that he could see australian tourism suffering because of the lack of Star alliance link. He said that it was hard to put together trips mixing and matching * with the dark side and as a result Australia was looking a less attractive tourist destination. He said that the Star alliance if they were worth their weight in anything would be bending over backwards to try and rectify this situation anyway they could because it has the potential to seriously damage the alliance.

Anyway - I suppose if AN isnt going to exist post Monday we can only rely on Air NZ. Perhaps they might wish to codeshare on UA SYD-MEL-SYD which would allow us to book domestic seats on the service as NZ can sell domestic services. Maybe even a NZ 737 doing CNS-AYQ-SYD to cater specifically for the foriegn tourism market... but then again I always have been a dreamer! A dreamer with 6590 tier credits to go before lifetime silver :-)

Ah yes, but how many loyal Ansetters would fly on NZ?

I'll wear my Star Alliance cap with pride if/when I get on big red again! http://www.flyertalk.com/forum/biggrin.gif

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RichardMEL, UA 1K
A Star Alliance Member.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by RichardMEL:
Ah yes, but how many loyal Ansetters would fly on NZ?
</font>

The bright ones would.

At least if NZ offered competitive fares and good service on routes the former Ansetters wished to fly.

The bigger question is would NZ be targetted and harrassed by various unions in Australia.

Hey while we're *****ing about Air Canada in Canada, maybe someone could fly a couple of jets up north and compete directly with the real BIG RED.

We all saw the writing on the wall when AC took over CP ... but no, none of your politicians in OZ took notice. So there.... we have ONE airline which we all hate here in Canada, and honestly, even with QF's sparse service, it still offers MORE between SYD and MEL than Air Canada's between YVR and YYZ!

SQ wouldn't cometo the rescue to AN even if it was handed to them on a silver platter. SQ is hamoerraging from NZ govt's counteroffer for NZ shares and SQ board will not be investing in any foreign companies for some time to come.

Pity though.... because SQ REALLY only wanted ANSETT and not Air New Zealand. But by sheer lunacy, NZ forced SQ its only option. And now it's paying for it.

Not that I travel domestically much. But what's the chance that VirginBlue would grow up and fill the shoe AN left?

Would it be possible that it'll expand and eventually be a candidate for the *A?

Either way, the loss of SYD-HKG on *A is a major loss for me. It just left a gaping hole in my RTW itinerary options. Otherwise that sector still has inadequate capacity (QF/CX) from what I've seen.

DJ is too low cost for an alliance like * and likely would have no interest in such. They don't interline(that I know of, anyway) and I believe they don't even use a world liked GDS/res system. Pax would have to schlep their bag from their incoming flight to DJ by themselves etc. Plus no lounges and no FF program means DJ really wouldn't be accepted into * as any kind of full member.

DJ can of course grow and if the Patrick deal goes through with the result of DJ taking the AN terminals for themselves, they'll have lots of room and great facilities (gates!) to use - they'd love it.

Star Alliance is in trouble in the pacific, and they know it.

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RichardMEL, UA 1K
A Star Alliance Member.

The trouble is DJ is a discount airline. They won't be joining *A. Nor will they compete on the same level as QF as QF is a full service airline. Both are pleased with what they're doing now and I don't see them making any major changes.

goodo

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by RichardMEL:

Star Alliance is in trouble in the pacific, and they know it.

</font>

Good grief -- the "pacific" is served by Star Alliance carriers SQ, UA, NZ, TG, NH, AC and some spill over from LH and OS. Australia while desirable and important, is not the Alliance make or break market for the "pacific".

Six *A carriers (SQ, UA, NZ, AC, OS, TG) still land pax in various Australian cities anyway. The gap is intra-OZ service on Star Alliance of course, not that Australia has fallen off the Star map.

Furthermore, Star Alliance carriers such as UA can and do partner with airlines outside the framework of Star Alliance. Since talking to QF is probably a non-starter and Ansett is dead, airlines such as UA could very well be looking at talking with Virgin Blue for some level of partnership. It wouldn't be an ideal match for many reasons, but if it were economically justifiable, I'm sure UA would be looking in to it What else can they do? Conjure up another airline??



[This message has been edited by Quokka (edited 02-28-2002).]

I feel like the biggest traitor in the world, but I think I will join Qantas Frequent Flyer. I do travel internationally on occasion, and when I do within the next 12 months, it'll be for miles. However, the majority of my travel will be within Australia. For that reason, I want lounge access in Oz. That of course is not possible with Virgin Blue. So I'll probably be joining be joining the bandwagon on the darkside. I'd love to stay with star, but it just won't benefit me for domestic travel. http://www.flyertalk.com/forum/frown.gif
I think I'm going to become a very reluctant Qantas customer...

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by trentis:
Who are you going to choose? Virgin Blue, or (the previously unthinkable) Qantas.</font>

I don't believe QF is unthinkable. I avoided AN for years due to their inferior service and inferior systems. Then, once I was flying AN more, they had their inferior FF scheme. The only gem in AN was the wonderful international service which was easily the best Y class international in the world.

And for what it's worth, I just booked a reward flight on QF MEL-PER for Easter, since my AN booking is worthless now. I had to leave a week before Easter, but that's pretty good: In previous years, there has been absolutely nothing available on QF near Easter by well before this time of year.

Well, what can one do when one needs those lounge facilities for business travel.

Irrespective of the number of *A services in the Pacific, the loss of domestic routes in Australia is a serious loss to *. It would be one major market lost to the alliance. For one thing, a major number of ex-AN business flyers would be lost to QF/OW. And we all know these are the most profitable customers for airlines.

I can't see how * can recover unless DJ can move up to be a full service airline.

Well, I guess that OW lost Canada and this is their pay back to *A.

I (egoistically) miss Ansett very much. While in Australia I always very much enjoyed their:
* lounges (they ranked highest for me compared with all other StarAlliance business lounges).
* GDay-(0ne-way)- fares (for 'overseas'-visitors)
* the possibility to include Ansett (in business-class) into my StarAlliance paid business- rtw-trips
* the possibility to 'feed' my Star-ff-programs with status miles (mostly LH miles&more, rarely UA Mileage Plus as UA always discriminated the earning possibilities in eco on AN)
* their excellent business-class: HKG-SYD - it compared (almost for me with European taste) to what Lauda offers on their VIE-Australia routing.

Depending on:
* the future of the Qualiflyer-program (still also linked with Qantas) t
* he new SWISS airlines partners/alliance (should be decided by march-2002)
* news from Australia about (hopefully) any (reduced) future of 'a new Ansett' (together with Star)

I will decide on my own 'inner-Australian-flight-partner' of the future somewhen in late spring/early summer 2002. I might even buy (in a year, when I turn 60 on march-2-2003) a 'Senior Life' membership for the Qantas Club (one-time costs A$ 1'935.45).

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by trentis:
Who are you going to choose? Virgin Blue, or (the previously unthinkable) Qantas. </font>

I am doing such little travel now (only 4 domestic flights this year) it doesn't really matter.

QF is a big arrogant corporation. With AN out of the picture they will become even worse. But to be honest I just can't stand flying DJ. They make flying like travelling on a bus to summer camp. I like the formality of airlines such as QF, AN and SQ.

So, what little domestic flying I do will be with big red.

On a separate note, while I find the loss of AN upsetting from the staff's POV with all those lost jobs, and the loss of a local * carrier, I did not find them to be a good airline pre the September collapse. I had numerous terrible flights with them. I even wrote about one here (http://www.flyertalk.com/forum/Forum81/HTML/001865.html).



[This message has been edited by MilesDependent (edited 02-28-2002).]

As GuyBetsy has referenced, we've been through this in Canada and learned to accept the lack of a oneworld domestic carrier. Virgin is most unlikely to increase their cost structure by adding a front cabin, lounges and the like. They don't need to do anything to grow their business, other than perhaps enhancing a link into the Virgin Atlantic FF program. Branson has been on the record that he wants nothing to do with alliances, and even shareholder Singapore Airlines has been rumoured to be considering leaving STAR on many occasions, questioning the value of that link.

As to the option of cabotage -- i.e. permitting foreign carriers to pick up local passengers for domestic only "tail runs" on their international flights -- it has been talked about here in Canada too, but there are only a few flights daily that could offer a few hundred seats max. And business travellers want frequency and schedule convenience, which this option does not provide: international flights are more likely to be delayed due to late running of inbound aircraft, schedule is once a day, or even less frequently...

I have always viewed the ability of small market countries like Australia and Canada to support two full service carriers as being next to impossible. Domestic operations are expensive, and with discount competition, has reduced margins to minimum, or to even loss levels. While enhanced inflight and ground services can garner higher fares, there are fewer companies willing to pay what they were a couple of years ago. The domestic airline industry is becoming more of a bus service, low fares, high density...

We have had to learn to fly AC domestically, or opt for discount carriers and their less generous leg room, amenities, etc. In your case, it will be QF. We were lucky that AC acquired CP, and we lost nothing in our FF program accounts. This has cost AC dearly, and it is now reeling from a C$1 billion loss on the year. QF is still making money, despite its claims of fall off in business. [Curious that the billion dollar figure is also the estimate of what the Lew-Fox group were anticipating the various government grants and assistance programs to bring to their Ansett deal. Had QF bought out AN as AC had CP, they too might be looking at a billion dollar loss, in anybody's dollar terms!]

The real issue is: How much a competitor to QF is willing to lose? Why should someone pick up all the liabilities that go along with AN, when they can wait a few months, then come into the market with a clean slate, much lower operating costs, and a real opportunity to take QF on if there is actually a market for a business class competitor. [RootsAir tried that approach in Canada, and lasted about a month. Corporate accounts were not forthcoming and it could not exist on the back cabin economics. Roots had better luck this year with their Olympic outfits for the US and Canadian teams, and trying to design and run an airline.]

The only option I can see is a reborn Air NewZealand using Open Skies as a way of developing a core route structure between Australia's key cities. But there is so much bad will towards that carrier, I doubt this will occur. And even if UA does get the right to renew its SYD-MEL-SYD local carriage, this is a very minor alternative. Since Singapore and Virgin already have a shareholder arrangement, I doubt it would enter the Australian market in any agressive fashion, nor wish to move Virgin Blue upmarket.

And Guy Betsy, I don't think is it fair to compare AC's frequency between YVR and YYZ on the same terms as QF's SYD and MEL routes. The latter is a short haul shuttle service, with hourly or greater frequencies, while the former is a longhaul transcon route, which is almost hourly. AC's YYZ-YOW-YUL shuttles are as frequent as QF's SYD-CAN-ADL-MEL shuttles, and I suspect AC's transcons are more frequent between YYZ-YYC-YEG-YVR than QF's ADL-SYD-MEL-PER or ADL-MEL-SYD-Brisbane

Welcome to the new world of small market commercial aviation.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Shareholder:
Welcome to the new world of small market commercial aviation. </font>

I'm glad to see other voice of reason on here. The days of one airline being all things to all customers is quickly coming to an end. Oz might just be ahead of the curve. With AN gone, DJ will force real price pressure on QF on domestic routes, not the cozy duopoly that previously existed.

How will QF respond? Without the ability to make real cost reductions on it's domestic service, it may be forced to withdraw from unprofitable or marginal routes, as yields will decrease on competetive routes, and will not be able to subsidize loss making routes.

QF has begun to look for ways to reduce costs on Int'l services thru their Australian Airlines subsidiary. My hunch is that if the new Austrailian Airlines is successful, you'll likely see more and more QF service moved to it. Why? Because it will make money on it's own. QF will keep only the plum routes, and segment off the parts that they can't make money at on their own. We may very well see alliances within alliances. "QANTAS partners" flying as "OneWorld partners".

Canada certainly is close to seeing the same thing, as AC doesn't appear to be able to function under it's own weight, combined with the competition from WestJet.

The US is starting to get a taste of the new reality, as Southwest, AirTran, and JetBlue nips at the majors domestic markets. The weight of the domestic networks are going to become too much to bear. Domestic markets rely on business travellers subsidizing the discount travel, but the lowfare carriers are showing business travellers that they don't have to pay exhorbitant short haul fares. That impacts the yield, and starts a spiral that I doubt the majors will be able to come back from.

but then, that's just my .02

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Shareholder:
The only option I can see is a reborn Air NewZealand using Open Skies as a way of developing a core route structure between Australia's key cities. But there is so much bad will towards that carrier, I doubt this will occur.</font>

Without wishing to open up the 'is NZ to blame' argument, I'm curious to know people's opinions on how much bad will there is towards Air New Zealand among the general public, i.e. outside the aviation / hardcore AN fan / FT community. How long are people's memories for this sort of thing, and how strongly do these feelings rate compared to self-interest (i.e. I'll buy the cheapest ticket, or the one which suits my FF programme etc)? I know many of you guys would never fly NZ again, but what about the average guy in the street?

Of course, given its current vulnerability, whether NZ could actually take on QF in its own market and survive, and whether the unions would let them, is a whole other question...

A spokeswoman for Virgin Blue said last night it would be happy to look at any Star Alliance proposal but would not change its cost effective model to cater for international airlines.
"The reality is we have not really focused on it," she said.
"At the end of the day we can still carry Star Alliance passengers even if we are not members of the Star Alliance."
what does this last sentence mean? is it as empty as it seems at first glance?

Actually, DJ has already carried STar Alliance pax, when UA SYD pushed all of us onto DJ services SYD-MEL to cover their unfortunate mistake with their domestic traffic rights post 01Jan.

Interesting tidbit I heard in relation to this: Not only did UA@SYD stuff it up with rebooking folks on DJ (eg: when I turned up I had no reservation because UA didn't supply the right names/PNR's whatever to DJ.... and I wasn't the only one) - well UA in the US had organised a deal with QF to put its pax on, yet SYD overrode that and went with DJ..... (maybe it was cheaper??)

Just a rumour, mind you....


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RichardMEL, UA 1K
A Star Alliance Member.

While I am not totally familiar for Virgin Blue's operations, I assume it is like all other low cost carriers: no interlining, point to point, no preassigned seating, no alliances. All these keep costs down. Adding any of these elements adds to the cost structure. Providing FF miles, particularly towards non-affiliated airline programs like STAR or oneworld partners, also adds costs, whether it is 2-cents or 5-cents a mile [remember you are talking Aussie dollars to US dollars]. A minimum of 500-miles going into a non-Virgin FF program would cost Virgin Blue upwards of A$25. When it is selling a seat for less than A$100, that's a big hit! That's how you start on the road to losing money for every passenger you carry. And that's the story of the domestic airline industry in North America right now.

Interesting question about the viability of ANZ re-entering the Australian market -- I assume Open Skies permits unfettered flying within the two countries by each other's carriers -- because I agree it needs to rationalize itself on the domestic NZ front before considering crossing the Tasman. But Australia is a more lucrative market than New Zealand just by virtue of its size.

I know that I would fly Air New Zealand if they had domestic Oz flights - even though they did stuff up my number one airline, NZ would have to be my no2. I love their service (at least internationally, never flown on them within NZ, but have heard great things). And it'd be another reason to stick with Star. But realistically I don't see it - there in enough strife as it is in the New Zealand market and having to cope with downsizing on the international front.

The New Zealand market is the one place that AirNZ are not in strife - they are making money there, and they have the vast majority of the market, including the all-important corporate accounts. However, QF has signalled its intention to upsize its NZ operations considerably and is waging a serious price war at the bargain end of the market, funded by the big money it is making domestically in Oz. And wouldn't it arguably make sense in a time when NZ is scaling back some international operations, to use the aircraft in Australia, where it already has operations in CNS/BNE/SYD/MEL/PER, and where there is a large pool of trained ex-AN staff?

However, you are right that it is unlikely, not least because as the major shareholder the NZ govt is likely to insist that NZ concentrate on their core business. It's a nice dream anyway, and one that would benefit a lot of parties, ie passengers (more choice, and a full-service airline to keep QF honest); frequent flyers (a *A option); tourism (avoiding capacity shortfall); ex AN staff (employment opportunities) etc.

Please don't think I'm painting NZ as the answer to all the problems here - I know how you guys feel about them! I'm just interested in exploring the scenario.

If Air New Zealand were flying domestic here, I'd be with them in a flash. Yes, flying QF is more evil to me than NZ http://www.flyertalk.com/forum/smile.gif At least it's a case of head winning over heart.

Tell me a Star Alliance carrier that can match NZ's domestic service? In fact, tell me any mainstream carrier that will match its domestic service.

The meal services on WLG-CHCs are amazing, and in my experience, domestic is great. It's the only thing now that can remind me of AN's glorious past days. There's no such thing as a domestic long haul flight on NZ, and their short haul domestic is already great. Bring on the Kapiti Ice Cream http://www.flyertalk.com/forum/smile.gif

Having said that, we'll have to be patient for NZ to return; I'd doubt they're in a rush to come back. Actually, they did want to fly domestically in their own right, however because of manouvering by Keating, in this respect the ANZCERTA treaty was only paid lip service, and NZ was required to buy AN.

Qantas is a last resort for me. However with the way DJ flights fill, it might be the only option.

We've got DJ to keep QF on its does with pricing, but noone to keep it accountable with service.

Cheers,

Justin

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Shareholder:
And Guy Betsy, I don't think is it fair to compare AC's frequency between YVR and YYZ on the same terms as QF's SYD and MEL routes. The latter is a short haul shuttle service, with hourly or greater frequencies, while the former is a longhaul transcon route, which is almost hourly. AC's YYZ-YOW-YUL shuttles are as frequent as QF's SYD-CAN-ADL-MEL shuttles, and I suspect AC's transcons are more frequent between YYZ-YYC-YEG-YVR than QF's ADL-SYD-MEL-PER or ADL-MEL-SYD-Brisbane.</font>

When GuyBetsy said "even with QF's sparse service, it still offers MORE between SYD and MEL than Air Canada's between YVR and YYZ!" I think they were referring to the levels of inflight service - and their point is even more appropriate in light of your comments, since QF provides better service on short haul shuttles than AC does on transcons.

Dave