What is the Qantas Chairman’s Lounge worth?

Not that there would ever be a positive business case to justify a “very fast train” between Sydney and Melbourne, especially given the inordinately expensive construction costs in Australia.

But …

This below table shows why there will never, ever, ever be such a train in Australia.  The return on investment on the Qantas Chairman’s Lounge (which all Federal MPs and Senators get invited to), plus all those free upgrade is clearly not small.

This table by the way … Top 10 Highest Revenue Routes.

Note the top earning route is between New York and London and the 3rd top earning rout is between London and Dubai.  On a revenue per kilometre basis or a revenue per hour air time, Qantas is out there by an oligopolist mile.

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20 Responses to What is the Qantas Chairman’s Lounge worth?

  1. Pyrmonter

    Has TAFKAS borrowed Emma Alberici’s text on bookkeeping, in which revenue is profit and vice versa?

  2. @Pyrmonter

    Has TAFKAS borrowed Emma Alberici’s text on bookkeeping, in which revenue is profit and vice versa?

    No TAFKAS has not. Particularly as Alberici was talking about tax and TAFKAS is talking about revenue.

    It should not surprise that Qantas does not disclose profit by route, but given that neither BA not Emirate make much of a profit and Qantas does, one can infer certain things.

  3. sabena

    Pyrmonter,not really.
    But the following should be noted:
    1.The costs per seat mile are much higher on SYD-MEL than they are on LHR-JFK.This is because wide bodied aircraft operate LHR-JFK with savings in fuel, crew costs and airport charges.
    2.More interesting is where are the competitors eg Virgin on SYD-Mel, Virgin on LHR-JFK, BA on LHR-SIN & LHR-HKG.
    3.Note that no Chinese routes are involved as business demand is obviously lighter.
    As an aside,there was Northwest Airlines(later merged with Delta) which flew from Seattle to Tokyo,whilst Pan Am flew to Tokyo from San Francisco to Tokyo via Honolulu.In the era of regulation,fares were the same,although Northwest’s operating costs were only 2/3rds of Pan Am’s as the route was much shorter.Northwest was therefore very profitable in the pre deregulation era.

  4. Archivist

    Doesn’t it show the opposite?
    The table shows that the Sydney-Melbourne route is one of the most lucrative air routes in the world. Therefore, it could surely be argued, a VFT service between them would be financially viable.

    I’m not saying that as an advocate of the VFT, just making the point that you could look at the same data and conclude the opposite.

  5. Roger

    Assuming – for argument’s sake – the AGW hypothesis, how does one square all those co2 emissions with corporate virtue signalling?

    Offsets? Pfft.

    Business would be lobbying for VFTs if they were serious.

  6. Youngster

    What those figures show is that there are a lot of people living at either end of that route, as well as a lot of businesses and public servants, plus those two airports are the main international hubs for Oceania. They are just too far apart to make trains or driving viable, so air travel is the only option. I would say it’s more a commentary on demographics and geography than crony capitalism or corruption.

  7. notafan

    A vft would have to have zero stops to be close to air travel times.

    Good luck with that.

    Also it will make those froggy subs look like Myer bargain basement.

    Iirc only one of the European vfts is profitable.

    One.

  8. Nob

    Train travel only beats air on routes where it can go centre to centre in five hours or less.

    Even that’s stretching it. If you’re going to Bordeaux, you’re not going to get off at CDG and get the TGV.

    I did once though just to try it. Waste of time.

  9. Amadeus

    Spartacus old mate, see if you can get figures on Sydney-Canberra & Canberra-Melbourne routes. Back in the olden days when I was reviewing fare structures for the Feds, the routes into and out of Canberra were the most expensive routes per air-miles in the known universe.
    My money is on the fact that nothing has changed in the intervening years. Those two routes (or roots-rorts) demonstrated down to the last syllable how government authorised duopolies functioned. Over 80 per cent of the travel was unashamedly on the taxpayers’ teat. Those sectors had the largest number of “Business Class” pews in the flying circus in Australia.

  10. Spurgeon Monkfish III

    I’m examining a business case for a SYD-MBE VFT at the moment and will hopefully post it a bit later.

    It’s not good news for VFT proponents.

  11. Stuart Morgan

    Melbourne – Sydney is the second most flown route in the world. So it’s not necessarily the case from the above data that this constitutes a disproportionate revenue generator for Qantas. Revenue per air seat mile is a more valid metric.

  12. Cynic of Ayr

    I wonder how much the cost of a first class seat is entirely based on the price the government is prepared to pay, which is basically limitless?
    Consider, not only the MPs and Senators that TAFKAS mentions, but every Public Servant above “tea lady” grade, expects a frequent trip for ego and the fun of it.

  13. The BigBlueCat

    Look, VFT’s are great – I’ve ridden the Thalys from Rotterdam to Paris (stops at Brussels), and the TGV from Paris to Zurich (stops at Dijon). Smooth, quiet, fast. But I have my doubts about the economic viability of a VFT service between Sydney and Melbourne.

    Now Melbourne to Geelong would be a better bet, and much easier to build. But a VFT between those cities might only save 30 minutes @ 200km/hr, or 40 minutes at 300km/hr. While it might be impressive at 300km/hr, I doubt the average would be anywhere near that.

  14. David Brewer

    Doesn’t it show the opposite?
    The table shows that the Sydney-Melbourne route is one of the most lucrative air routes in the world. Therefore, it could surely be argued, a VFT service between them would be financially viable.

    That’s what I thought too. Plus you’d have to add revenue from Virgin and other planes, and from Canberra-Sydney and Canberra-Melbourne flights, plus a bit more from people travelling from other points on a possible VFT line.

    Even so, and even though I would personally like to have a Sydney-Melbourne VFT service available, I suspect the economics still would not work out. I am not sure that any high-speed lines in developed countries pay for themselves, even in France where they have been protected by restrictions on buses and planes, and facilitated by draconian land-acquisition powers. Anyone have any figures?

  15. Spurgeon Monkfish III

    I’ve submitted a guest post to Sinc on the “economics” of a VFT between Sydney and Melbourne.

    Not sure if he’ll post it though. Fingers crossed.

  16. Squirrel

    Assuming he’s still front man for Labor at the time, the Very Fast (and Hideously Expensive) White Elephant is bound to be a centrepiece (possibly even a “signature policy”) for Albanese at the next federal election – so any realpolitik information like this which argues against it is very encouraging for those of us who care about staving off national insolvency.

  17. Petros

    Did you factor in travel time to and from the CBD for the air travel component, Spurgeon? Melbourne airport is out in the sticks.

  18. Spurgeon Monkfish III

    Petros – I travel that route four times a year for work and I’m an economist.

    I think most relevant considerations have been factored in.

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