More Frequent Flyers

A key to achieving this has been to minimise the time it takes for an aircraft to unload all passengers and cargo, restock catering and utilities such as water, refuel and then board passengers and load bags and freight for the next flight.

Low-cost carriers around the world have led the way, with pioneers such as Southwest Airlines in North America and EasyJet in Europe perfecting the 30-minute turnaround which has been followed by the likes of Virgin Australia, Jetstar and Tigerair Australia in our backyard.

Now Qantas is aiming to adopt some of those low-cost carrier practices in a bid to further reduce its turnaround times on domestic flights from July.

The airline is reducing turn times for domestic Boeing 737-800 services to 35 minutes from the start of 2015/16, compared with 40 minutes in 2014/15 and 45 minutes two years ago.

To help achieve this goal, Australia’s largest airline has trialled using both the front and rear doors for boarding on flights operated with its 737-800 fleet at Gold Coast Airport (which has no aerobridges) and has expanded the initiative to other mainline ports in recent times.

In addition to helping lower unit costs, Qantas chief executive Alan Joyce says the use of dual boarding is also a “real positive” for customer satisfaction, measured by netvpromoter scores, “because it gets them on and off the aircraft faster”.

“Some of the best on-time carriers are the low-cost carriers that get their procedures right,” Joyce told reporters on June 7 on the sidelines of the International Air Transport Association (IATA) annual general meeting in Miami.

“If you think of getting from 40 minutes to 35 minutes for turnarounds on the 737 fleet a lot of that is putting dual boarding in, which the customers actually love. ” The move to introduce 35-minute turns was shown to the financial community during Qantas’s investor day presentation on May 12.

Qantas Domestic chief executive Andrew David said the initative would “drive further operational and schedule efficiencies”, lower costs per available seat kilometre and increase the return on invested capital.

Also, it would result in an $80 million benefit by the end of 2015/16.

“In effect, what we are implementing are low-cost carrier practices overlaid with full service end product,” David said.

“No small achievement, and only possible with the operational excellence that is embedded inside the business in our people, processes and systems. ” Qantas noted the utilisation of its 737 fleet, measured by block hours per aircraft per day, had increased five per cent in the second half of 2014/15, compared with the first half. Moreover, about 30 per cent of flights were turned around in 40 minutes in March 2015, according to the slide presentation.

Neil Hansford, the chairman of aviation consultancy Strategic Aviation Solutions, said Qantas’s efforts to increase the utilisation of its fleet was both necessary and achievable.

While dual boarding would go aWe are . . . flying our assets much harder than we ever did before. GARETH EVANS

long way to meeting the 35-minute goal, Hansford said there would also have to be a focus on refining the processes and procedures for loading and unloading of freight carried in the bellyhold space of the 737, given the Boeing narrowbody did not use cargo containers.

“In Europe for instance, Ryanair do not take any cargo because they don’t want to use the rear lockers of the aircraft and the passenger baggage invariably all goes in the front lockers,” Hansford told Australian Aviation. “That is all about turnarounds. And it is cheaper. ” “If you going to go for quicker turnarounds to get aircraft utilisation up, domestic freight certainly can be a disadvantage. You have either got to put a lot more labour on or you’ve got to accept that it takes longer to turn the aircraft around. ” Qantas may also have to adopt a firmer stance on carryon baggage.

“That should be the next thing that Qantas does, not as a money-making exercise but quite simply as a way to quicken the boarding process,” Hansford said.

“While there are people standing in the aisles looking for somewhere to put their stuff, they are not sitting down and getting buckled up and ready to go. If they are carrying theone piece to seven kilos, you’ve got a much better chance of getting the aircraft in and out in 35 minutes. ” In terms of overseas flying, the investor day presentation also showed Qantas International had increased its fleet utilisation by 16 per cent since 2011/12 to 13. 6 average hours per aircraft per day, which had allowed the airline to create additional flying opportunities.

Qantas’s Airbus A380 fleet, which serves Melbourne, Sydney, Dubai, London, Los Angeles, Dallas/Fort Worth and Hong Kong (during peak periods) flies an average of 13. 9 hours per aircraft per day, which was up 14 per cent from 2011/12.

The Boeing 747-400s were also working a lot harder, with utilisation up 19 per cent over the past three years to 12. 7 average hours per aircraft per day. Qantas plans to reduce its 747 fleet from 12 currently to nine.

The Airbus A330-200/-300 fleet had also recorded a 15 per cent increase in utilisation to 15 average hours per aircraft per day, while the 737-800s were flying seven per cent longer at 12. 6 average hours per aircraft per day.

“We are using our assets and flying our assets much harder than we ever did before,” Qantas International chief executive Gareth Evans said during the May 12 presentation.

“That’s enabled us to change our network, generate more revenue with the same asset base, add new points to the map, add new services and additional services to new markets. ” Qantas is launching new Brisbane- Tokyo Narita services from August, was due to resume Perth-Singapore flights in late June and has planned an increase in seasonal flying to Vancouver along with increased frequencies to destinations such as Honolulu, Hong Kong andSantiago, as well as to New Zealand, in peak periods.

It had also retimed its Melbourne- Dubai-London service, which leaves Australia at night and departs from London in the afternoon, reducing ground time at Heathrow and freeing up the A380 fleet to do more flying.

Evans said Qantas’s two daily services to London from Melbourne and Sydney via Dubai were now being operated by five A380 aircraft, compared with six before the Melbourne service was retimed.

That schedule change, plus tweaks to Qantas’s Los Angeles service and maintenance schedule that freed up another aircraft, had enabled the airline to replace the three-class 747‑400ERs flying between Sydney and Dallas/Fort Worth with the A380, which offers first class, extra seats and was able to fly non-stop in both directions. (The 747 made a technical stop in Brisbane on the way back to Sydney. ) “That’s a win-win on London and a win-win on Dallas and a hugely positive impact for the network as a whole,” Evans said.

“There’s multiple examples of that happening and we are rightnow leading edge in terms of the utilisation of our fleet because of some smart things we are doing leveraging our partners and leveraging the network that we have. ” However, the changes to Qantas’s London schedule had “placed some additional stress on our network and turnaround times” according to an April 17 Fairfax Media report that quoted a memo to staff from Qantas’s manager of base operations at Sydney Captain Martin Gardiner.

“As a result of our performance, London airport has given Qantas an official warning, meaning that we could be fined £20,000 for each non-compliance of our slot time, or worse lose our slot,” Captain Gardiner said in the memo.

“We have been asked to advise Heathrow what our plans are to improve this performance. All areas of the business including flight operations are now monitoring the performance of these services very closely so that we can improve our performance and retain our landing slots in [London]. ” Fairfax Media reported Qantas was the 75th out of 80 airlines that flew to London

Heathrow inEvery time I fly through [Dubai] I dread it. NEIL HANSFORD

February for on-time performance.

Joyce said the issue was being well-managed by the airline.

“We are not going to do this and have utilisation go through the roof and end up having customer satisfaction collapse on us,” the Qantas chief executive said during the investor day.

“This is day-to-day management of slots. ” Evans said one factor that had impacted the Melbourne flights to London was air traffic control (ATC) issues through Dubai Airport.

Also, the airline had adjusted some of its processes and procedures, with the aim of turning around the A380 in Melbourne “quicker than we have ever done it before”.

“It was never an issue of losing slots,” Evans said. “We remain incredibly focused on being as punctual as we possibly can be. ” “The slots in London are very difficult to move but we will look at perhaps tweaking some of the slot times just to give us a little moretime around the track so we can get into London on time more often. ” As a regular traveller through Dubai on Qantas, Strategic Aviation Solutions’ Hansford has experienced first-hand the delays due to air traffic control and the airport’s inability to help delayed flights gain some time through a quicker transit on the ground.

“I can’t give you any good news about Dubai and every time I fly through it I dread it,” Hansford said.

“You get put into holding patterns, you get sent for a tour of the Emirates because the airport is not coping in the busy times so Qantas is late to get on the ground and it is hard to do a catchup.

“I can see Qantas actually putting a longer flight time on that sector to make sure that they get to their slots that they are continually missing at Heathrow. ” Evans said the on-time performance of Qantas’s international operations had continued to “hold at high levelseven though the utilisation has been increased”.

With no new narrowbody or widebody aircraft on order (Qantas has deferred delivery of eight A380s to a yet-to-be-confirmed future date), any more additional flying such as new routes or increased frequencies has been achieved through increased fleet utilisation.

“You think of all of the work we have done on international and a lot of the growth that we are achieving in the domestic market, it is better utilisation,” Joyce said.

“We are [reducing] our turn times, we are doing more maintenance when the aircraft are naturally on the ground, we have changed the way we have done maintenance and we are improving utilisation across the board on all of the fleet types.

“So there is still growth potential coming from the group. ” Crucially, Qantas also had 50- odd options and purchase rights for Boeing 787-9 Dreamliners, which could be used either as replacement aircraft or for future growth.

The company has establishedthree criteria that needed to be met before it would consider taking up those firm delivery slots – returning Qantas International to sustainable profitability and to a position where the division returns its cost of capital, pay down $1 billion of debt and bring the balance sheet back to an “investment grade matrix”, and establish appropriate staff conditions to ensure the business case for the 787-9 stacks up.

Joyce said suggestions a choice would have to be made between returning to an investment grade credit rating or purchasing the 787-9 were “flawed”.

“If we get the debt down and we get the performance where it needs to be with those returns then we are going to be at the investment grade rating matrix,” Joyce said in Miami on June 7.

“That can be achieved with buying the aircraft in the future. We believe you have to chew gum, walk and sing at the same.

“You have to be in a position where you are investing continually for the future, you are paying down debt and strengthening your balance sheet and getting yourself back to investment grade and you are giving returns back to shareholders.

“That’s the position we want to get the airline in. ” Evans told reporters on the sidelines of the IATA AGM Qantas’s first 787-9 option was for delivery in late calendar 2017, with the remaining delivery slots spread out over the rest of the decade.

A decision on whether to exercise that first option would be made in the “back half of this year”.

“We’ve got specific pricing, specific delivery slots and the ability to essentially drop and pick up those slots as we desire to do,” Evans said.

Qantas’s long-haul pilots union has certainly played its part towards any potential 787-9 order, having reached an in-principle agreement with the airline over a new enterprise agreement (EA) that included not just an 18-monthpay freeze but also provisions for operating the Dreamliner.

“The most notable feature of the proposed EA is the inclusion of a new set of terms and conditions for the introduction of Boeing 787s into mainline should the board make the decision to purchase these aircraft,” Australian International Pilots Association (AIPA) president and Qantas pilot Nathan Safe said in a update to members on May 28.

“These changes have been based around building a viable business case for the type of ultra long-range flying capable of being performed by the 787.

“We have been pleased with the quality and tone of negotiations since they began earlier this year and we note the unprecedented level of transparency and sharing of commercially relevant information. ” Qantas chief pilot Dick Tobiano said in a message to staff the terms and conditions for a “new type” was the most exciting aspect of the in-principle agreement.

“This will potentially lead to new investment with a net hull increase, growth and promotional opportunities for our pilots,” Tobiano said.

Morningstar analyst Ross Macmillan said Qantas’s existing fleet more than adequately covered all existing routes at the moment.

And although there was sufficient capacity in the airline to further increase flying, Macmillan believed there were few opportunities out there in the market for profitable new routes.

“I can’t imagine Qantas all of a sudden deciding they they have found some previously under-serviced international air routes,” Macmillan told Australian Aviation.

“I guess it really comes down to whether you can point to any new international or domestic routes that are going to be incredible growth opportunities over the next three years.

“There hasn’t been any low-hanging fruit in the international market really since we saw the massive growth of the low-cost airlines over the last few years. ” Macmillan said Qantas was in a very favourable position currently, given the expectation fuel prices would remain low in the period ahead, the Australian dollar was hovering around 75 US cents and more rational capacity plans domestically from both the Qantas Group and rival Virgin.

“Qantas is at the moment in a particularly sweet spot,” Macmillan said.