Qantas sees revenue growth opportunities despite capacity slowdown – observations from CEO Alan Joyce

Qantas is nearing its “most exciting year,” as the carrier reaches its centenary, and he says the carrier, according to its CEO Alan Joyce and he says it is in its “best financial position” and is “well positioned” to take advantage of opportunities while “managing challenges”. Mr Joyce was speaking at this week’s CAPA – Centre for Aviation Australia Pacific Aviation & Corporate Travel Summit, where he delivered a keynote address and spoke about the group’s ongoing development.

He explained the group is experiencing “a lot of growth”, “a lot of opportunities” and a growing corporate market share, with its Western Australia market share achieving a +13% year-on-year growth.

Mr Joyce noted that megatrends and big data are “changing everything”. He stated big data allows the group to tailor make its website for individual passenger needs and services, making it “easier” and add value for the passenger while completing the transaction, further noting “knowing this information can get you to cut through the noise”.

According to Mr Joyce, there are four megatrends influencing the carrier:

  • New centres of demand: Placing a focus on Asia due to its rise in aviation;
  • Digitalisation: How the company is using it to its advantage;
  • Shift in consumer preferences: Adapting to changing preferences, particularly changing preferences by generation Y and Z;
  • Climate change: Adapting and managing risks and may pose.

He highlighted that the group has become “very conscious” of currency changes through big data. Mr Joyce noted a weaker Australian dollar means overall added perplexity to the business, meaning the business must adapt to management of oil prices and movements in currency.

Meanwhile, Qantas continues to study its ultra long-haul activities and Mr Joyce confirmed the carrier “will make a call” on the Project Sunrise initiative by the end of 2019. He said it is “clear to say” its Perth-London route has been “an amazing success”. He noted digitalisation and big data helped the carrier implement the service, as well as adapting to customer preferences. Mr Joyce stated a stop between Perth and London “was a pain point” for customers, and passengers do not have a “problem travelling 17 hours”.

Looking at other potential fleet decisions, Mr Joyce described Boeing’s proposed New Midsize Airplane (NMA) as “the perfect aircraft” for Australian domestic operations. He said the twin aisle aircraft holds the ability to operate Melbourne-Sydney with a turnaround time of 30-35 minutes and slot in to the carrier’s current schedule to provide “massive growth”.

There will also be a direct “competition between the MAX and the neo” to replace the carrier’s current 737 fleet, with the CEO undeterred by the ongoing grounding of the MAX and holding the belief that Boeing will “fix the MAX issues and there will be a competition between the two”.

Qantas recently committed to acquire the new A321XLR long-range variant of the short-haul airliner, an order Mr Joyce said “opens up” new destinations for the airline with Melbourne-Singapore and Cairns-Tokyo both routes under consideration. He explained the group’s order of 36 A321XLRs “could be Qantas or could be Jetstar” as it has so far “not made a call” on aircraft allocation.

HEAR MORE… Qantas CEO Alan Joyce discusses some of the airline’s focus areas as it looks to increase its market opportunities in an environment of relatively flat capacity expansion. The carrier is examining new ways to drive additional ancillary revenue, and is planning to grow its North American network through its partnership with American Airlines. Further aircraft orders are also on the horizon.

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