Speculative Musings on the EZE/SCL Switch
 

I thought I'd start a thread with some uninformed speculation about the recent announcement that SYD-EZE will be replaced by SYD-SCL. Although it was lumped in with the Building a Stronger Qantas announcement this part of it doesn't seem to be at all related to the Asia strategy that that was all about.

There has been plenty of Flyertalk speculation/threads in the last 2 years about QF flying to GRU or GIG but with this announcement it certainly doesn't look as though Brasil is on QF's short term radar.

I find QF's change of gateway a little bizarre notwithstanding the better LAN connections available from SCL and if the LAN/TAM merger goes ahead then the connections from EZE wouldn't be much worse than those from SCL.If LATAM does go ahead and goes over to Star Alliance then the connections in SCL won't be an issue!

I can't help but wonder if it isn't some local issue at EZE that has pushed QF to SCL. While Chile may be more of a destination for the mining executives than Argentina I can't really see that this would make a huge difference to the loads/yields that QF would achieve. So what would be the motivation for this change? They are moving from a market where their only direct competition is 3 Aerolineas Argentinas flights a week (ie no direct competition for premium traffic at least- no disrespect for AR intended :p) to a market where they are directly competing with LAN who have 6-7 flights a week.

I had a conversation with someone in QF 6 months ago and from what I was told I formed the view that when Qantas suspended their service to EZE first time around it was more because of operational difficulties QF was having in Argentina than for load factors per se.There may have been some issues dealing with local authorities and perhaps their local partners as well.

On another note several posters in threads about QF flying to Brasil have remarked that the market between Asia and South America is booming and that the flight distances between major Asian cities and Brasil/Argentina/Chile flying via Australia/NZ are among the shortest available placing Australia/NZ in an ideal position to capitalise on this growth. SQ, EK ,QR and Air China (I think) have all started services in the last year which seem to be aimed at the Asia-South America market.

In view of this I did a cursory check on Expertflyer of fares between Asia and South America and there are hundreds of fares published by something like 20 different airlines from all continents among them from the Middle East (EK and QR), Asia (SQ,MH,JL and KE), Europe (BA,LH,KL,AF), Africa (SA), North America (CO,AA,UA,AC,DL) and South America (LA,JJ).

QF can offer one stop service between all the major Asian ports and South America and how many fares does QF have filed? Checking fares ex-SIN,KUL,JKT,PVG,BKK and NRT I could find just one QF fare- a Premium Economy fare from NRT to EZE for around $6000 and QF doesn't even offer PE on the flight from NRT to SYD. Is there perhaps a message there as to why QF seems to be having just a little difficulty competing?

Again QF needs to get its head together and publish fares on Amadeus for Asia-><-Latin/South America connections seamlessly BOTH from Asia AND FROM Latin/South America PERIOD!

I can't believe QF is stupid to NOT capitalise on this growth.

Flying via North America takes extra hours and Europe the same.

Oceania (SYD and AKL in particular and the REASON LAN/CX is in this business together @ AKL!) is the FASTEST ways from East Asia south of Shanghai to Latin/South America (Santiago, Buenos Aires, Sao Paulo, Rio de Janerio!).

SQ is going via Europe (BCN) because they want the C/F revenue premium of the traditional Europe-Latin/South America traffic and also their 77W for the time being doesn't have to deal with ETOPS issues.

EK and QR are for South Asia (total travel time).

JNB is also efficient but South Africa has a-lot of problems including limited frequencies on South Atlantic.

See this: http://www.gcmap.com/mapui?P=SIN-JNB...+&MS=wls&DU=km

Oceania has a SPEED advantage to Latin/South America that NO OTHER AIRLINE can match except for JNB and let's face it, not a-lot of business-people have business ties in South Africa.

BUT Oceania (Aus, NZ) and Latin/South America DO have a-lot of business ties.

Oh and stop in North America on the way back to Asia with a swing tour of Europe if they want to go that way (business in Europe) or fly back via the north Pacific or the south Pacific.

All of the other Asian airlines to GRU go via Europe/North America (KE-LAX)/South Africa (MH-CPT, loner only 2x weekly because of South Africa regulatory problems) because they don't want to deal with ETOPS issues for the time being (this is progressively being changed on the south Pacific route to Latin America I've heard with Boeing doing things /w the 787 and the 77L/77E/77W being turbocharged with ETOPS207 and other regulatory issues and flying +1 hour.)

http://www.youtube.com/watch?v=sXrUIFOh2zA

Press Release: http://www.qantas.com.au/regions/dyn...011/aug11/5160

Financial District: http://www.youtube.com/watch?v=-uVVt...eature=related
Above song is Southern European Romance (aka Spanish!).

There have been several comments on FT that the SYD-EZE route has been exclusively operated by 744ERs. Could it be that the switch to SCL is to enable operation by "ordinary" 744s without the extra ER range? This could solely be an aircraft availability issue.

Maybe it is as simple as the USD100 reciprocity fee Australians are charged on arrival into EZE?

Perhaps, but Oz PP holders are still charged ~$70 to enter Chile.

SCL offers sterile airside transit while EZE does not, thereby avoiding the charge for non-O/D traffic. SCL has more O/D traffic from Oz than EZE, thanks to a surprisingly large Chilean population in Australia (some dating back to refugees from the coup). Finally the change to a OW hub is logical and might be a sweetener to keep LA in Oneworld. CX feeding LA at AKL and QF flying SYD-SCL non-stop will definitely help LA revenue.

I remember posting in a forum a while back, that QF should try to make its geographical disadvantage an advantage. It should do this by targeting the premium market to fly one-stop via SYD from Asia to South America. With an amazing First lounge in Sydney and a competitive Business one, the stop in Sydney could be quite competitive for premium customers. And for a couple of hours, Sydney airport is just as good if not better than the current alternatives via the US and European airports.

Qantas could have appropriately timed flights from existing centres and perhaps new ones (Beijing, Guangzhou, Seoul perhaps?) to connect to a 2-3 flights per day to South America (Santiago, Buenos Aires, Sao Paulo, Rio de Janeiro). Qantas be innovative with a first mover advantage. With the World Cup coming up in Brazil and substantial investment into South America, this should pay long-term dividends. If AJ says Chinese are conscious as to service and safety, then why not use the QF brand to be the airline of choice China-South America?!?

But I guess QF do not have the aircraft to reach South America.....

Now, admittedly, QF labor costs are higher than other airlines, but to me QF customer base is not as price sensitive as management believes. But perhaps QF management should lead my example with wage restraint? Lets compare the salaries of the CX CEO and QF CEO....enough said.

But it is clear Jetstar is the future - in the announcement, Qantas Mainline had 6 deferred A380, with NOT one new aircraft ordered for the Qantas airline. However, 110 A320 were ordered for the Joint Venture airlines.

You can do international transfers at EZE without clearing immigration.

Is this new? Normally I stopover in EZE as it is a great city to visit, but the one time that I did transit had to clear immigration (circa 2009 so prior to some of the reciprocity charges).

Not new. I've done it a few times over the years.

From the Argentina forum - the extra fees would be avoided in Argentina by a transit in SCL continuing to any Argentinian airports Except AEP or EZE.

Chilean fees can be avoided by entering Chile by land (eg bus from Mendoza)

Come on guys and gals - if you can figure out the rules on QF's FF program :rolleyes: - visa limitations are trivial :D

Happy wandering

Fred

Having a UK passport also helps avoid the fees.

Dave

That is not something to be taken lightly. Maybe short by great circle route, but the climb up to 10,000 feet and about 5 million bends in the road makes for a long day.

No where near as adventurous as Lhasa to Kathmandu :D
And definitely less time

Fred