Qantas warns over discount air fares unless charges cut

[NickN]

Is Joyce just looking for an excuse to hike up fares to make some cash or is he for real?

Have DJ complained about airport costs?

Would love to hear peoples thoughts on this issue.

By Geoff Easdown

May 28, 2009 12:00am

QANTAS chief Alan Joyce has warned discount air fares will end unless the nation's airports trim costs and stopped charging for everything imaginable.

Mr Joyce said Melbourne, Sydney and Brisbane ranked in the top five airports in the world as measured by operating margins.

The three airports netted margins ranging from 65 per cent to 71 per cent, he said in an address to a Melbourne business lunch.

And he revealed the airline pays $700 million a year to the nation's airport operators.

"Airports are very good at earning revenue and producing profits out of everything you can imagine," he said afterwards.

"I think if they could charge for oxygen at the airport they probably would because they do earn a lot of fees out of everything they can."

Flight fees: Qantas to penalise long-legged passengers

Mr Joyce said Qantas was discounting heavily to stimulate travel, but the low prices that kept customers buzzing through airport terminals were unsustainable in the long term unless the airports trimmed operating margins.

And in a direct criticism of Brisbane airport management, he complained that the airport had recently imposed a 30 per cent increase on Jetstar.

"If we include Auckland, four out of the top five highest margin airports in the world form significant parts of the Qantas Group network," Mr Joyce noted.

He contrasted the Australia-New Zealand situation with Frankfurt-Hahn, Malaysia, Singapore and Hong Kong airports which had reduced charges to help stimulate demand in the present economic climate.

He added that constructive discussions were continuing with the managers of both Gold Coast and Melbourne airports.

"But so far no major airport has agreed to lower its charges in an effort to cooperatively stimulate passenger demand," he said.

"Worse, we are still getting proposals to increase leasing and staff car parking charges significantly".

Mr Joyce had earlier disclosed that Qantas was cashed up with $3 billion in the bank and was better placed than its rival to withstand the economic downturn.

He also told how the airline had funding facilities in place to cover all aircraft purchases until 2010, which he said gave "certainty to our operating going forward"

http://www.news.com.au/dailytelegrap...013605,00.html

[Mike W]

QANTAS chief Alan Joyce has warned discount air fares will end unless the nation's airports trim costs and stopped charging for everything imaginable.

That reminds me of another company... oh yeah, Qantas!

[David Knudsen]

Really Mike? Because last time I flew Qantas, my food and drinks were free, I didn't have to pay any extra for my exit row, and my airfare included my checked luggage?

[Andrew P]

and a free newspaper, an update C9 news, a free IFE, free pillow & blankets, etc etc

[Justin L]

I think it is more accurate to say that Qantas' inflight services such as meals, IFE, pillows, newspaper etc. are included in the ticket price, rather than free.

[Marty H]

Marty H - please do not continually quote the post directly above your reply. It is not necessary - mod.

Which is why QF are saying airports need to reduce what they charge QF as their yeild is down due to having to provide everything in a ticket price they are have to charge to compete against DJ, which make revenue off all the above that QF provide.

[Andre H]

Originally Posted by David Knudsen

Really Mike? Because last time I flew Qantas, my food and drinks were free, I didn't have to pay any extra for my exit row, and my airfare included my checked luggage?

The first step is the extra fee for the "more legroom" seats, starting in June ( ? ). 80$ short haul, 160$ longhaul = 2500$ per flight for QF. I think, thats a good idea, if I can choose explicit my seat at the booking process.

[Will T]

Originally Posted by NickN

Is Joyce just looking for an excuse to hike up fares to make some cash or is he for real?

Have DJ complained about airport costs?

Nick, DJ's litigation against the airports (their charges and terminal access in particular) since start-up has been the stuff of legend, culminating in their submissions to the recent Productivity Commission review of airport pricing. They did 'bury the hatchet' with MAP some time ago, but I'd respectfully contend that QF's approach (at least publically) has been 'softly softly' compared to many of their competitors!

[Michael Morrison]

Originally Posted by David Knudsen

drinks were free,

Not if you want a wine or beer.... flew to CNS and they wanted $$$ for it

[Ricky T]

Originally Posted by Michael Morrison

Not if you want a wine or beer.... flew to CNS and they wanted $$$ for it

Alcoholic drinks are complimentary only on weekday CityFlyer flights after 16:00 (12:00 from PER).