QF29 Hong Kong to London: How Qantas trashed their own route

In August, Qantas announced their intention to cut their Hong Kong to London service as part of a series of network changes. Its demise can be attributed to a series of poor network planning decisions made by Qantas that starved it of customers.

Background

Currently, Qantas operates a daily 747-400 between Hong Kong and London as QF29/30; this flight begins in Melbourne and is one of four daily Qantas services between Australia and the UK. Qantas is planning to axe the Hong Kong to London route in March 2012.

Qantas also flies to Hong Kong from Brisbane, Sydney and Perth using its A330-300 (the workhorse of the Asia network).

Forgetting to connect the flights

Qantas neglected to follow a basic ‘Airlines 101’ principle in operating their Hong Kong hub – they forgot to time their flights so that passengers could connect. This meant that they could not fill up their Hong Kong to London flight with passengers from around Australia.

Airlines typically provide a service between Australia and the UK/Europe using the ‘scissor hub’ approach. This involves flying services from a range of Australian cities to a central hub where passengers connect onto services to the UK/Europe. Major players in the Australian to Europe market, such as Singapore Airlines, Cathay Pacific and Emirates, all use this approach. Qantas also employs this approach at its Singapore hub. Services from Adelaide, Brisbane, Melbourne, Perth and Sydney are neatly coordinated to connect to onward services to London, Frankfurt, Mumbai and formerly Paris.

The ‘scissor hub’ approach was not adopted by Qantas in scheduling their Hong Kong services. Flights from Brisbane and Perth, which lack a direct service to London, were not timed to meet the flight from London; instead, these passengers were funnelled via Singapore. Essentially, the Hong Kong to London service was fed by only one flight (QF29 from Melbourne) rather than four. An incredibly wasteful approach to planning a service.

Qantas had the potential to make this flight the primary link between Brisbane/Perth and London, leaving the A380s to be fed by services from Melbourne, Sydney and Asia (via RedQ). This oversight was particularly wasteful because Brisbane to London is actually faster via Hong Kong than via Singapore.

Inferior onboard product

Qantas rolled out its updated onboard product onto both its Singapore to London flights but not its Hong Kong to London service. This would have caused passengers to shift to the Singapore hub, thereby artificially diminishing the profitability of the Hong Kong to London route.

Qantas should have given the Hong Kong to London route the same product as the Singapore to London services. This product would have been a source of differentiation against competitors and removed the artificial shift of passengers towards the Singapore hub. It also would have left more space on the A380 for passengers connecting off the new ‘RedQ’ carrier.

A few other What-ifs

• It is likely that Qantas could have continued to operate the Hong Kong to London route, despite the poor scheduling out of Singapore, if they had bought the Boeing 777. Air New Zealand successfully operates the HKG-LHR route using the 777-200ER despite lacking any partner airlines at Hong Kong or London.
• The Hong Kong hub could have been used to operate a tag flight to Beijing to replace the Sydney to Beijing service that was axed in 2009. This would provide additional feed for the London flight and give one of the A330s something to do instead of sitting on the ground in Hong Kong all day.

Closing

The Hong Kong to London route’s supposed poor performance was caused by Qantas’ failure to manage the details effectively. The route could have been a real winner, particularly for Brisbane to London passengers, if Qantas bothered to connect the flights properly and provided the same onboard product that other Qantas London flights have received.

How could Qantas have better managed their Hong Kong network?