Khoa Huynh catches Qantas out

A report in The Herald Sun says that Qantas ticket sales on the Pacific route defy claims by the carrier its share of the international passenger market has fallen, a study has found.

Canberra’s aviation bureaucrats have been told the national carrier charges passengers more to fly to Los Angeles and that its dominance of the market has strengthened.

Data produced by aviation whiz kid Khoa Huynh, presented to the Federal Government task force on national aviation policy, argues that a 6.3 per cent fall in market share since privatisation was more than offset by Qantas’ success in taking advantage of a growing market.

In 2000 the airline flew 782,052 passengers across the Pacific and last year carried 1,097,310 – a 40 per cent increase, the submission notes.

“Qantas is certainly not being weakened by international competition.”

“In fact, the international air transport market has grown and Qantas has taken advantage of that growth,” the study adds.

The paper, which draws on recognised data, reveals that Qantas now controls 71 per cent of the trans-Pacific market and its 350-seat 747 Boeings continue to fly 82 per cent full on the route.

The data mounts a strong case for the Federal Government to allow another carrier to operate the lucrative route.

The 22-year-old Mr Huynh’s evidence contrasts markedly with Federal Transport Minister Anthony Albanese’s recent decision not to open open the route to new competition.

In his study Mr Huynh found that Qantas commands double-digit fare premiums on the Pacific compared with what it earns on Kangaroo route services to London.

He also points out that Qantas reaps a higher yield from business class sales on the US route than Singapore Airlines can from selling a first class fare in the super luxury section of an A380 jumbo from Sydney to London.

Mr Huynh’s claims are based on officially recognised data, including analysis Singapore Airlines commissioned from a Canberra-based research firm in 2005.

A Singapore Airlines spokesperson told BusinessDaily: “When we first saw his (Mr Huynh’s) figures we initially feared a leak.”

Qantas officials who examined Mr Huynh’s arguments did not question the accuracy of his figures, only that he had openly declared his support for their rival on a web blog.

Mr Huynh and Singapore Airlines have separately defended the study as Mr Huynh’s own work.

Executives of both carriers were astonished that a young man living in Britain, and who has never boarded a Qantas flight or visited Australia, would choose to involve himself in the decidedly dry issue of Australian aviation policy.

Mr Huynh argues that a new overseas entrant on the route would give Australians cheaper air fares, increased frequencies and improved opportunities for holidaymakers and business travellers.

He notes that Singapore Airlines already has pledged $12 million for a US-based marketing campaign to promote Australia if the ban is lifted.

Speaking to BusinessDaily by phone, Mr Huynh said he wanted give a gentle nudge to the Australian Government and other governments on deregulation.

The aim was to create a more liberal aviation market, free of unnecessary government interference, nationalism or confused national interest, Mr Huynh said.

His study draws on a wide range of economic data, including information from Australian government agencies, newspaper reports, broadcast material and various airline studies, including a 2005 report the Canberra-based firm Econtech Pty Ltd prepared for Singapore Airlines.

Mr Huynh said that, until he undertook his research, he was unaware of the the price premium Qantas charged on trans-Pacific flights compared with what it cost to fly via the Kangaroo route to London.

Comparing the difference between Singapore Airlines and Qantas business class fares between London and Sydney, the study suggests that Qantas generates a revenue yield of 38.8/km compared with SIA’s 30.2/km.

The difference is even more marked when the cost per kilometre of travelling in Singapore’s luxurious first class suites to London and on a Sydney-Los Angeles ticket with Qantas is compared.

SIA nets 63.2/km for the first class suite on a London-bound A380 from Sydney, while Qantas reaps a first class fare yield of 85.2/km to LA and 66.6/km from business class.

A Report by The Mole from The Herald Sun