A world first
But really, the group strategy is about horses for courses. The airlines may be very different but the overall blend provides a comprehensive offering to the market. Efficiency, in this case, is tapping every revenue stream while managing costs appropriately.
The alliance between Jetstar and AirAsia — a world first for low cost carriers — has added extra spice to this already intriguing “fusion” recipe. The alliance aim is to instigate a round of major cost reductions that will, ultimately, translate into even lower fares. Naturally, ground services savings are high on the agenda.
“We are currently evaluating the potential opportunities this may present for cooperative arrangements for airport passenger and ramp handling in Asia at common airports and how we can better work with AirAsia’s operations in Australian ports such as Gold Coast, Perth and Melbourne,” says the Jetstar spokeswoman.
Significantly, the additional leverage that joint purchasing could bring opens up the potential of working with the aircraft manufacturers. Bruce Buchanan, Jetstar’s chief executive officer, says the configuration and designs for the next generation narrow body need to meet their business requirements. Tony Fernandes, AirAsia Group CEO, concurs, noting that a common aircraft type specification should be proactively pursued by both airlines because of the many efficiencies it would bring.
But despite the multitude of drivers affecting ground handling, there is a simple philosophy driving the decisions at the Qantas Group: reduce costs but increase the quality. These two aims are not necessarily mutually exclusive, but combining them isn’t painless either.
“Qantas has always had a focus on delivering a premium ground handling service, and this remains the case,” Ayoubi says. “However, the global financial crisis has had a significant impact on global aviation — cost has become a key factor in airline ground handling procurement. This and not organizational change is the key issue on the demand side.”
Solid infrastructure will play a vital role in determining both quality and costs. “In terms of infrastructure for ground handling, Australian airports are strong by international standards, though it is always possible to improve,” Ayoubi says. “Space is the No. 1 consideration, and we have more flexibility to influence infrastructure decisions at our domestic terminals than at international terminals.”
However, the real deal maker is innovative technology. Qantas has recently implemented the GroundStar system, supplied by German company, INFORM. This provides management with a means to optimize rostering and operational planning, as well as communication, reporting and analytical tools.
Prior to the implementation, the required efficiency levels were simply unachievable, with legacy systems and spreadsheets holding sway. It is reported summer/winter season roster planning took about three months from production to revision, publication and agreement. GroundStar is now active and used daily throughout Qantas’ Australian operations to support the staff planning, rostering and deployment.
“The key to improved efficiency is maximizing productivity while delivering a quality product,” Ayoubi notes. “Investment in new equipment and technology, as well as training and internal policies and processes, will be very important.”
The airline’s commitment to next-generation check-in — known as “Airport of the Future” — will also affect ground services. During 2010, the first of Qantas frequent flyer members above Silver level will receive their own dedicated boarding pass and a permanent bag tag. An intelligent chip will encode the relevant information, and the boarding pass will also act as means of recognition at security checkpoints, allowing frequent flyers to speed through.
“It is genuinely a big challenge, and especially the permanent bag-tag component, because it is an absolute world-first,” Qantas CEO Joyce says. “But we are not afraid to step into the future, and I’ve asked our people to work to an ambitious timetable.”
QANTAS expects this year to halve the amount of maintenance work it sends offshore.
The order includes 68 A320 or the larger A321 aircraft, and 31 Boeing 737-800 aircraft.