The Sydney-Frankfurt city pair is 16400km apart and is currently only offered through 6th-freedom operations since 2013 (Gcmap.com, 2105)/ (Bitre.gov.au, 2015)/(Australian-Business-Traveller, 2015). With GDS-affiliated information, flights are offered by numerous global airlines/operators, naturally with (Tourism-AU, 2015)/ (Drum@worldairlinenews.com, 2015)/ (Centreforaviation.com):
- All traffic connecting through 6th-freedom hubs located within Asia and the Middle-East
- 1 or more stopovers in those regions (with some high-stopover trips stopping in Australia, Europe and North America).
- Both home operators carrying O/D traffic places codeshares and interline opportunities on third-party carriers (such as LH with SQ/TG, QF with EK, and AB/VA with EY).
- Typical one-stop operations associated to the SYD-FRA city pair is shown to the right. Other fares (subject to seasonality, competition and other market performances brings UA, CI and AC on-board)
- Two-stop operators include the following (in order of typical economy-class fare charges)
Information above (Tourism Australia, 2015), indicates seasonality in revenue-passengers between Australian-German city-pairs (assuming similar nature between SYD-FRA segments-volumes). Strong seasonality is depicted through price-desensitivity in the high-yield country-pairs. This is mainly due to:
- Weak pricing-power by competing carriers and low presence of LCCs (Schofield@aviationweek.com, 2015)
- High-operating costs power given distances and aircraft-economics today (Australian-Business-Traveller, 2015)
- Weak “visiting-friends-and-relatives”, holiday and leisure market, flat-line on business/education/employment market, and volatile tourism between countries (macroeconomic-variables) (Austrade.gov.au, 2015).
Inconsistency in volumes between Australia and Germany is facilitated by fleet/aircraft flexibility of third-party non-LCC operators, fare/revenue-management and flexibilities induced by legacy-carriers with hubs, spokes. This is clearly identified in GDS-fare offerings/pricings/structuring (Management School, Lancaster University LA1 4YX-UK, 2015), and volumes-management by high-service carriers.
HISTORY, MACROECONOMICS & TRENDS – port, hub-carriers, GDP, CPI, cost-impacts, (EU)
Currency/Exchange: The softening Australian-Dollar had impact-negligible inputs on exciting volumes and proportionality of traffic between SYD-FRA given a weak-Euro. CPI tended for cyclical-moderation while GDP grew strongly in Germany, in sharp contrast to Australia. (Xe.com, 2015)/(Austrade.gov.au, 2015).
Cost-Variables: Weaker oil prices lowered BESF and BELF for many carriers (only to strengthen airline-competition), while taxation, union culture and non-facilitative macroeconomic conditions hampers prospects of regained-traction of 4th-freedom itineraries between SYD-FRA. Passenger-capacity on intermediaries-carriers between “SYD-xxx” and “xxx-FRA” has only strengthened, and is set to continue so (Iata.org, 2015)
Regulations: Strong regulatory culture between both origins/destinations. This includes regulatory disproval for 34 EY/AB service-codeshares (Reuters UK, 2015), and strict regulations in intermediaries injecting capacity into FRA/SYD ports.
COMPETITION NATURE –business/leisure market (price, income, frequency, timings, seasons, demographics, products (+value drivers: features, functionality, benefits /advantage, differentiation)), market segmentation/targeting, brand equity/scale, customer-equity, distribution. COMpettive, impacts. Market intelligence (leaders, challengers, follower, niche), brand, value-points.
FRA-SYD city-pairs elect broad competitive-spheres with strengthening shares by intermediary operators. Given low price-elasticity and high-reservation/yield market (mentioned-above), the segments are of fierce competition by premium global carriers on value-drivers, products/in-flight amenities, schedules/connectivity, loyalty-programs, impromptu itinerary-alterations/flexibility. Premium carriers also play fiercely on price, as suggested by fare-structures of operating-carriers.
Carriers serving SYD-FRA generally provide price-proportionate services in accordance to value-catchments mentioned above. General-analysis of operators will be divided into groups with northern-summer schedules (Info.flightmapper.net, 2015)/ (Info.flightmapper.net, 2015):
- EK (14w-A388 SYD-DXB-SYD + 21w-77W/A388 FRA-DXB-FRA + (7w-77W SYD-BKK-DXB-BKK-SYD + QF Asian/DXB ops-codeshare))
- QF (7w-A388 SYD-DXB-SYD + (EK DXB/FRA/BKK codeshares)).
- QF/EK premium product-offerings on long-haul services features (A380s), with inferior products on shorter segments (77Ws/A330s/ QF-737s) (Qantas.com.au, 2015)/ (Whirlpool.net.au, 2012)/(Seatguru.com, 2015). Market leader with strong interlinked brand-equity, customer-equity and volume.
- Diversified fare-structure, with correlation on value points such as number of stopovers and layover-time (service-gaps) at DXB and fare conditions. Typical low-yield itineraries feature additional stopovers at BKK/PER/SIN/BNE/HKG/MEL. (Skyscanner.com.au, 2015).
Etihad + European/ME partners:
- EY (11w-A388/77W SYD-AUH-SYD + 14w-A332/A333/A346/77L/77W FRA-AUH-FRA + VA-3w-77W SYD-AUH-SYD + (VA BNE/PER codeshares & KL/AB/JU/AY/AF/AZ/A3/ME’s AMS/(DUS/TXL)/BEG/(HEL/TXL)/CDG/(MXP/FCO)/ATH/BEY))
- Strong-premium stance (product/price) driven by homogenous-scheduling. Market follower with strong growing brand and marketing. Low-yield management and volumes between Australia-Europe driven through partners (Seatguru.com, 2015).
- Mostly high-end fare-structure, with low-yeild fares offset to partner-codeshares. Revenue-management proportionate to number of Australian-doemstic stopovers (MEL/BNE/PER), and partner-stopovers within Europe/Middle-East. Price-undercut for Air-Berlin given utile-management and passenger-inconvenience of domestic-connections at TXL/DUS (Skyscanner.com.au, 2015).
South-East Asian Airlines:
- TG(14w-744 SYD-BKK-SYD + 7w-A388 FRA-BKK-FRA + (LH FRA-BKK + OZ VIE-BKK codeshare))
- SQ (31w-A388/77W/773/772/A333 SYD-SIN-SYD + 14w-A388/77W FRA-SIN-FRA + (LH FRA-SIN + AY HEL-SIN + SK CPH-SIN codeshares))
- MH (21w-A333 SYD-KUL-SYD + 4w-772 FRA-KUL-FRA + (KL AMS-KUL + QR DOH-KUL + UL KUL-CMB codeshares)).
- Malaysia Airlines to end Frankfurt-services, with leverage on KL/QR
- A costly premium-stance offered by most carriers, given strong business/capacity-consolidation and long-haul partner services (Centreforaviation.com). Lufthansa thrives in this setting, giving high frequencies/product/services from FRA. Singapore-Airlines capitalizes on this route, with onward 6th-freedom services to JFK, while Thai slimmed and retained capacity with fewer services on-board A380s. TG&SQ known for excellent products/amenities/customer-service.
- Pricing set high (with MH out of market), with seasonal fare-baskets for domestic-interlines for capacity/revenue management (Skyscanner.com.au, 2015) Qatar also places codeshares on MH/CX services for onward services to DOH/FRA (mid-price range) (Skyscanner.com.au, 2015).
- CA (5w-A332 SYD-PEK-SYD + 12w-77W/744 FRA-PEK-FRA + (LH FRA-PEK codeshares))
- CZ (14w-A332/A333 SYD-CAN-SYD + 3w-A332 FRA-CAN-FRA + (AF CDG-CAN + KL AMS-CAN codeshares))
- MU (7w-A332 SYD-PVG-SYD + 7w-A332 FRA-PVG-FRA)
- JL (7w-772 SYD-NRT-SYD + 7w-77W FRA-NRT-FRA)
- CX (26w-A333/77W SYD-HKG-SYD + 7w-77W FRA-HKG-FRA + (AY HEL-HKG + AB DUS-HKG + QF DOH-HKG + QF SYD-HKG codeshares))
- KE (7w-A333/772/744 SYD-ICN-SYD + 7w-77W FRA-ICN-FRA + (AF CDG-ICN + KL AMS-ICN codeshares))
- OZ (7W-772 SYD-ICN-SYD + 7w-744 ICN-FRA-ICN)
- North-Asian carriers offer diverse product-offerings with modest-capacity/low frequency to FRA (mostly filled by O/D Korean/German traffic). (Skyscanner.com.au, 2015)/(Seatguru.com, 2015). Oneworld members (JL/CX) offer strong connectivity/transparency with Air-Berlin, BA and Finnair, and Star-Alliance members (CA/OZ) with LH.
Market share and direction of carrier-operations between SYD-FRA is depicted in historical-comparison of traffic carriers of volumes between Australia and Germany (assuming variables-consistency) from 2008-2013 (Tourism Australia, 2015)/ (European-aviation liberalization: A-view-from-afar, 2015), which suggests:
- Qantas/Emirates will continue to grow market share
- Singapore Airlines will hold/contract with business-refinement/consolidation (Centreforaviation.com, 2015).
- Etihad set to grow with new A380 services to SYD, and strong AUH-FRA performance
- Malaysia to terminate Frankfurt, and consolidate only to O/D traffic between KUL-SYD
- CX to grow, with new services to DUS and strong-profits (South-China-Morning-Post, 2015)
- Trajectories of other-market shares is contingent upon commercially refined-focus on capturing the market segment. With given infrastructure, perceptions of prospective growth from Chinese/Japanese/Korean-carriers (centreofaviation.com, 2015), entry of Air-India and complacency for QR entering Sydney given current-infrastructure, market share of “other” carriers is set to hold.
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