CEO Alan Joyce (left), addressing the media attending the Australian Tourism Exchange in Adelaide this morning, said, “During tough times, our strategy of having a full service carrier, a low fare airline, a frequent flyer scheme that’s giving us decent returns and our freight business has given us stability in terms of earnings.”
And soon, a low cost longhaul segment will be added with the launch of Jetstar International’s longhaul services using Singapore as a hub.
“We are one of the two airlines in the world with an investment grade – the other being Southwest – and this financial strength will allow us to continue our investment in growth.”
Joyce said that there was still a role for a premium airline, and that premium traffic has recovered “despite what the doomsayers were saying after the global financial crisis”.
“We are also buoyant on the low cost segment in Australia and, in particular, Asia. We have the unique ability to grow whichever brand is needed at any time.”
He said, “After the global financial crisis, the premium market did shrink and Qantas did see a drop in business. But that traffic is returning and by financial calendar year end, we will be operating two of the most profitable brands in Australia – Qantas and Jetstar – and our capability will be undiminished.”
He called Jetstar a “great success story”. “It’s helped us maintain a strategic position in the domestic market and it is now fulfilling that role in the international market. It is now the third largest airline operating in and out of Australia now and is servicing a very different segment – the price-sensitive leisure segment.”
Jetstar Asia, he said, had seen great growth, according to figures released last week – a 40% growth in passenger demand and seat factor up by 10 points in one month alone.
“Singapore will be a key hub for its services into Europe and Asia and we are pretty excited about that business.”
Asked which brand would see the faster growth in Asia, he told WIT that “whichever brands produced the best returns would get the aircraft. Our aircraft can be used in either brand and we could use up to 100 B787s if we exercised all our options.”
Asked which brand was performing better at this moment, Joyce said that while Qantas’ international business had suffered because of the global financial crisis, Jetstar’s international and domestic business had performed well. “Qantas domestic has also performed well, so the question is not by brand, but it’s dependent on segments of business.”
Rob Gurney, group executive-commercial, said in Asia, Singapore had made a particularly strong recovery in the first part of the year but “China has been a standout market, eclipsing Japan in passenger numbers”.
India, he said, had also been impressive. One market that had disappointed has been Korea “but March first quarter, we are seeing growth in all markets in Asia”.
With the largest aircraft order in the world, Joyce said Qantas would continue to invest in products and expansion of its routes.
It announced at ATE plans to introduce daily A380 services from Melbourne to London and six A380 services between Melbourne and Los Angeles, among other expansion plans. In Europe, it will expand its code share with British Airways to cover 29 destinations and will increase frequencies to Stockholm and Amsterdam.
In Asia, it will increase capacity on Sydney-Narita and China Eastern Airlines has signed up to join Qantas’ frequent flyer programme.
It is also investing in the domestic sector to become “the next generation premium airline”, particularly in the products that customers want, said Joyce.
Other than advanced seat selection, Web and mobile check-in, Qantas will roll out the next generation airport check-in. “This will require significant investments in new technology and giving premium travellers new intelligent chips, permanent baggage tags and priority screening so that it reduces time spent at terminals,” said Joyce.
This, he stressed, was key to Qantas maintaining and even growing its 65% share of the domestic market.
Photo: Andrew McEvoy, Tourism Australia’s CEO (left), joined Qantas’ Alan Joyce (centre) and Rob Gurney to announce a new A$44 million joint marketing partnership between the two organisations.
Featured image credit (Airplane routes): Ockra/iStock
