Found this comment from Phil. Worth noting:

Where in the anniual report does it state this.

Yeah you get the same chance of having this information overtly advertised in the annual report as you would information about Qantas price fixing. You can derive this information by investigating the information and numbers that go into the annual report. I didn't make this information up, I was told this by someone in the financial industry. Perhaps I can get something sent to Wikileaks-

Hmm...methinks your source in the financial industry, should it exist is misinformed. To the best of my knowledge, most of Jetstars profits - like most low cost carriers, comes from ancillary revenue (meals, baggage, excess baggage, change fees, accommodation packages, car hire, insurance sales etc). Flight sales which include no shows aren't included in this figure. Your rhetoric begins to sound increasingly conspiracist, Phil.

I'm not going to debate it - I was told this information by someone who I regard as a reliable source and I believe it to be true. Check the Sydney Morning herald website Aug 13, 2010 for an article "Frequent flyers keep Qantas profits aloft"- basically the lions share of Qantas/Jetstar profits come from it's Frequent Flyer program sales to credit card companies etc. No mention of ancillary revenue such as you list in this article- so it seems you are mis-informed It's not difficult to believe the original claim - Imagine that the average Jetstar seat operates on a 5% margin.. that means that if one ticket is torn up and discarded by a traveller - the money kept by Jetstar is equivalent to 20 paying travellers. Then there's the issue of the taxes that no longer need to be paid to the airport authority etc. I am no expert in these matters - but it seems very feasible when you give it some thought.

so you don't want to debate what is clearly and potentially misleading and libelous information?

yep read that article - the FF divisions sells seats to say amex booking and other business booking services - very profitiable indeed, as revenue is locked in seperately to costs of the flight. FYI - if you google qantas profits the article comes up near the top, so you just hunted for some info to suit your comments. However it does not refer at all to your claim. You sir are a cad.

heres the qantas annual report links - go crazy, prove your theory.
http://www.qantas.com.au/travel/airlines/investors-annual-reports/global/en

@ Really - Do you think they're going to advertise this fact? I originally said that this person discovered the information when they STUDIED the annual report and supporting info. Investors will often JUST READ the annual report. Financial professionals will dig deeper to UNDERSTAND and verify numbers and information in the annual report. Understand the difference? What is Libelous? Are you suggesting that it is libelous to suggest that Jetstar make 50% of their profit from tickets that people abandon? What is libelous about that? Are you suggesting that it is somehow illegal or immoral to derive a big chunk of profit from selling tickets that people don't use? Are you suggesting that Jetstar NEVER keep funds from tickets that people abandon? Are you suggesting that Qantas/Jetstar are above reproach? Well if so how is it they they have been fined for price fixing? If and when I have the info (proof) I will work out how to share it. Call me anything you like.. it changes nothing.

BTW - thanks for accusing me of just googling some article just to prove a point. Interesting accusation .. Actually I read the SMH everyday- people do that. I remembered that article because out of all the possible components of airline income - it never occurred to me that the FF program provided Qantas with a revenue stream. It did surprise me that the FF program was THE program that provided Qantas with a profit. I keep many airline and Jetstar related SHM articles.. and other interesting SMH articles.. I can refer you to several about how pilots are discontent with Jetstar among other issues. Maybe the pilots are just whingers too.. somehow I doubt it.

It would be great if Jetstar did try to sue for libelous, slander, defamation....the whole lot. It would publicise this site so every one will know about Jetstar before they consider booking with them. And just imagine how many people would read this wonderful site. I am a huge fan of the mastermind and considerate person who started this website. They had the guts to stand up for themselves and do something unlike most people who are just sheep and accept whatever shit this apology for an airline dishes out to them, which is usually contempt, complacency, ignorance, arrogance, rudeness and the list goes on................

Phil, the lion's share of the Qantas group's profits come from the Frequent Flyer program. However, a brief perusal of the QF annual report will indicate that Jetstar's profits are listed separately to the Qantas Frequent Flyer profits. A notation however does exist within that report stating that increased JQ profits were partially due to the Jetstar Mastercard program - another ancillary source of revenue that you've happened to overlook. Assuming that Jetstar made $17 per passenger on average ancillary to fare revenue, and flew around one million passengers a month in fiscal year 2009/2010, the profit figures for the year look quite supportive of my case. This figure, incidentally, whilst not derived from any JQ literature, is not unheard of within the industry. As an example, Ryanair in the 2008/2009 financial year made an estimated $24 per passenger on average in ancillary revenue.

To be honest, Phil, your arguments are riddled with appeals to nebulous authority, a lack of knowledge of the airline industry, and a number of non-sequiturs. Whilst Jetstar certainly does have its' faults - and as a soon to be ex-employee of their outsourced reservations and Customer Care department, I'm probably more intimately familar with these than you are - relying on no-shows to make up the profit margins is not one of them

@ Really Really - the SMH article says what it says.. my source for this information works in the financial industry and has over 100 employees in his/her firm. You are some pratt that works in a call centre or some such. A profit is a profit and many revenue streams can be attributed to whatever profit is attained. In todays SMH Jetstar is the star performer in the Qantas group (when it comes to profit - not quality of service).
So how do Jetstar do it? What explanation could there be for these monster profits Jetstar enjoys? Yes they sell cheap fares and people spend $17 on snacks.. I don't think so. Jetstar has fewer employees and they pay them less- but can this really explain the profit surge reported today in the news? Surely not. I guess Jetstar is just some magical company that charges less and makes more.

You work for Jetstar - why don't you simply refute this claim by providing the ACTUAL figures for the revenue collected from tickets that people abandon (inc fees & taxes) compared to total revenue? Jetstar certainly keep the funds from abandoned tickets - that number exists.. if it's not 50% of the profit - what percentage is it? Educate us??

@ Phil: I'm also 'some prat' with a Masters, and currently studying for a Ph.D. I'm also 'some prat' who part-owns a business on the side. I also seem to be 'some prat' who has a better grip on the aviation industry than you do.

Think about it. You purchase a JetSaver fare, you're paying $10 more for baggage than you otherwise would as part of a JetSaver Light fare. Ergo - $10 in ancillary revenue that otherwise wouldn't have been gained. Should you change your flight - a minimum of $40 in change fees - also ancillary revenue. Want an exit row seat? Prepare to part with $18 or so per flight. It's not rocket science after you take a gander at the fees and extras structure. Jetstar also minimises costs by outsourcing call-centre and many admin functionalities, and maintaining a fleet of aircraft with around 80% of parts commonality and with a very low average fleet age as compared to Qantas which streamlines and minimizes unforeseen maintenance. Qantas has a far more elderly and diversified fleet with greater maintenance requirements.

As to why I don't provide actual figures - as stated, I don't actually work for Jetstar, nor am I an authorized spokesperson with such information at my disposal. I'm actually about to be out of a job with Jetstar after its call center functionality is moved over to the Philippines . I've worked with a number of Jetstar staffers over the time I've worked for JQ, however, who have given me quite the education in how the industry operates. At an educated guess, I'd say the amount of revenue collected from fares abandoned would be quite low as compared to the amount of revenue gained from actual travelling pax, the majority of the fares I know to be abandoned by pax being sale fares that it would be far more expensive to change than to leave and purchase new fares

Incidentally, taxes and charges can actually be claimed back after an admin fee is charged and quite a number of passengers do pursue this through customer care.

@ Really - you are also some prat that cannot dispute the claim.. so until it can be proved or disproved anything else is just hot air.

Of course the the amount of revenue collected from fares abandoned would be quite low as compared to the amount of revenue gained from actual travelling pax. But we are not talking about REVENUE - we are talking about PROFIT MARGIN. The revenue collected from ABANDONED tickets is 100% MARGIN if people don't claim back the taxes (which most wouldn't know to do).. and as you can see by the figures Jetstar last year operated at a 4% profit so the margin made on all tickets travelled is very low. At 4% - the 50% figure would be accurate if one ticket was abandoned for every 25 travelling passengers. Maybe 3 or 4 people each flight- particularly ones that arrive 2 minutes late at check-in (think about that). Like I said before - this sounds perfectly feasible.

BTW - I have two degrees, own two retail stores (that would be a full time business) and a significant real estate portfolio. You don't need to know about the airline business to understand business. But none of this means ANYTHING unless you've seen the figures. And I've met someone who claims to have SEEN THE FIGURES. So tell me again Really - have you seen the figures?

Sorry - Qantas operated at 4% profit.

Read all these posts, don't want to get in to it- just thought it was funny that all these unused tickets are seen as 'abandoned'. Um no i doubt it. Pretty sure the unused seats on many flights and the resulting profits are from people who ran late and missed check in, or simply had to forfeit their ticket AND money they paid for it simply because jetstar are so inflexible with their transfer policy that someone who needs to change their flight details cannot do so. A crap load of profit this year probably came from people who cancelled their holidays up north due to flooding and cyclone yasi, who had bought a cheap ticket with no transfer or refund options.

Actually there were refund/re-route/change date options (free of charge) for people affected by the floods/cyclones/Bali volcanoe eruption etc etc.

Abandoned is the word I coined.. I don't work in the airline industry and as you have deduced Jetstar would have a lot of tickets sold that wind up unused for various reasons. I guess some tickets are abandoned, some unused, some forfeited.. call it anything you like.. but these are tickets that people paid for that don't result in even $1 of expended fuel costs. I myself have also done this- you buy a cheap ticket assuming that you want to fly on that date and time, and if things don't go to plan - you just tear up the ticket. What I think is nasty is that flights get rescheduled with great regularity - so some customers would tear up the ticket, get confused by the new time and arrive late, or just say the hell with it and pay extra to change a ticket to a time more suitable.

phil
You prove it, you are the one making the claim. But using your figures of say 4% of travelllers running late and hence forfeitting their fare - well thats the cost of them choosing a low cost carrier - it is not Jetstars fault that the passenger was late (unless of course in those instances Jetstar stuff people around in the luggage & check in etc) Also FYI, you are the one that produced the hot air, so hence you are the prat, not me, I just questioned your rumour.

Wow you own some stuff, got a degree, have a penis (assuming this one), wow I so am impressed. I am humbled before your might and majesty, and am obviously wrong.

and just in closing, since we can all make unsubstantiated claims. Over 50% of retail owners with 2 degrees are corrupt, thieves and child molesters.

@ Phil - I actually have seen the breakdown of Jetstar's revenue stream. However, I can't reveal the exact figures due to professional confidentiality. The reason I demonstrated just how an ancillary revenue stream works within JQ is that as it is with most carriers JQs profit comes from ancillary revenue streams - flight revenue account maybe for operating costs if that, as can be seen by looking at the 2009/2010 QF annual report. This is one of the reasons that the airline industry in general is not a fantastic vehicle for making money, and why many full service carriers, are looking at the Low cost carrier model as a method to potentially revitalize business through increasing ancillary sources of revenue.

Incidentally, Phil, having made extraordinary claims, the onus is upon you to back those claims up with proof - idle speculation does not count. As I've said before, if you have bones to pick with Jetstar, there are far more substantial ones to pick, such as disruption handling, service, the outsourcing of Australian jobs to Manila and Singapore, or the restrictive fare model, which is not necessarily a requirement for profitability. I've had the opportunity to travel with an LCC in the US called JetBlue, which whilst similar in many ways, has far better service and seating, far less restrictive fare rules, and has managed to remain profitable whilst maintaining a superior product. I'd personally like to see JQ's fare rules and product reorganized along JetBlue's lines as they are far beneath the product they could be.

Blah Blah Blah.. Extraordinary claims? I made one claim.. based on information passed to me from a reliable source. And as I have said, if I can get the proof, I WILL make it available. Ask yourself- why are you so obviously offended by this statistic? SOME percentage of Jetstar profit is derived from ticket reveneue from travellers who abandon for forfeit or lose their tickets. If it was 10% would that make you feel better? Did I blame Jetstar for passengers running late? What I do believe is that Jetstar knowing human behaviour, has built a profitable business model based on this knowledge.

Actually my words were: 'I have two degrees.... But none of this means ANYTHING..."

And actually... my original comment was in fact a comment on another topic. Some kind person copied my comment and posted it as a discreet topic on this page and we've been debating ever since.

If you read the actual paragraph I say "Jetstar is an airline that derives 50% of it's profit from NOT FLYING PASSENGERS. Something to think about next time you book"

The last sentence was actually aimed at getting people to consider a full service airline rather than a budget airline, or at least consider that Jetstar will adhere strictly to thir T&C's to disqualify travellers and keep the ticket revenue if they can. It actually wasn't so much a criticism of Jetstar (who to some extent can run their business as they see fit), but rather an admonition to customers to think before they book.

Phil

I think I can at last agree with you as per your last paragraph - people need to consider (and seriously) full service airlines.

happy to leave it there - its been fun, but happy to keep playing also

As an aside.. years ago I was painting the lounge room, it's a boring job so I was listening to John laws on talk back radio, not something i would normally do but I was taking time off work renovating the house and needed a distraction from the drudgery. Some woman rang to complain about Telstra and started the rant by saying "I got a free phone from Telstra.. and"- John Laws rudely cut her off and announced "You're an idiot - nothing in the world is free". I remember it well because I oddly found myself coming to agree with a talk back radio jock- which is a scary prospect to consider.
The point is - many ordinary folk are fodder for well researched and implemented marketing plans. Basically the average punter is no match for the fine print, computer aided analysis and tertiary educated corporate entrepreneurs who come up with these unbelievably cheap offers and deals. No deposit. Three years interest free.. you name it.. it's the heart and soul of modern business. Personally I feel sorry for a good number of customers who complain on this website who feel they get taken advantage of.. sometimes a deal that's too good to be true is actually too good to be true. Still many travellers abide by the strict Jetstar rules and many have a good experience. I used to be one of them. It changed for me when I booked a ticket online in Vietnam and tried to pay cash at the Vietnam post office and found that the Jetstar website has a flaw making it impossible for me to pay for my ticket. I attended the Jetstar counter and they wanted me to pay a US$24 fee for paying cash for the ticket - an extortionate price considering the average Vietnamese salary is $100 a month. I wrote two letters to Jetstar explaining the fault in their website and the difficulty I'd had simply paying for a ticket. I thought someone would want to know. I was eventually sent an email and a reference number to be told that it will be a minimum of 15+ working days (3+ weeks) before I got a response. In the end I got a phone call about 2 or 3 months later. Search way back on this website and look for a topic "Stand here all day and nothing will happen, pay more money and something will happen" to read about what happened. I've come to the conclusion that profit is pretty much all that matters to Jetstar- no wonder their financials have surged ahead. The pilots are critical of Jetstar, some customers are critical, and I stupidly believed that some customer service manager somewhere in Jetstar might be interested in learning how there was a fault in their website design - particularly one that makes it impossible for customers to pay money. While I am very happy for Jetstar and any other Australian company to spin a profit - I wonder at what cost the profit is being made, and how this reflects on overseas tourism in Australia.

Good luck - I wouldn't touch the travel industry with a barge pole.. unless you have the stomach to be a Bruce Buchanan- who will retire on a multi-million dollar payout one day.