Qatar Airways pursues further Australia expansion benefitting consumers

Qatar Airways continues to pursue rapid expansion in the Australia market as it upgauges its Melbourne service to the A380 at the end of Jun-2017 and prepares to launch Canberra in early 2018.

Qatar’s Australia traffic grew by 77% in 2016 to 721,000 passengers, according to BITRE data. Its capacity was up 82% to 888,000 seats, driven by the launch of services to Adelaide and Sydney.

Qatar’s Australia traffic has nearly quadrupled since 2012, when the airline only had one service to Australia. Melbourne was launched in Dec-2009, followed by Perth in Jul-2012, Sydney in Mar-2016 and Adelaide and May-2016.

All four routes are served with one daily flight with the exception of Adelaide, which is currently operated with five weekly flights but will return to daily from 2-Dec-2017. Qatar operated the Doha-Adelaide route daily from May-2016 to Oct-2016 before switching to the current five times per week schedule.

Qatar would likely add a second frequency to Melbourne and Sydney but is currently restricted by the Qatar-Australia air services agreement to 21 weekly flights to Australia’s four main gateways. Qatar has also indicated multiple times that it would launch flights to Brisbane if could secure more traffic rights to Australia. At the last CAPA Australia Pacific Aviation Summit in Aug-2016, Qatar Airways VP aeropolitical and corporate affairs Fathi Atti said the airline’s future growth in Australia “is fully dependent on how much we can grow here according to the bilateral”.

The launch of Canberra should enable Qatar to continue recording rapid traffic growth in the Australia market in 2018.

There are no limits on flights from Qatar to any of Australia’s secondary gateways, which is enabling Qatar to launch services to Canberra. Qatar announced in Nov-2016 plans to serve Canberra and is now preparing to launch the service in Feb-2018. Within the next few months Qatar is expected to announce an initial schedule for Doha-Canberra and set an exact launch date. Qatar will be Canberra’s second foreign airline after Singapore Airlines, which launched Singapore-Canberra-Wellington services in Sep-2016.

The launch of Canberra should enable Qatar to continue recording rapid traffic growth in the Australia market in 2018. Growth is continuing in 2017, driven by the up-gauging of Melbourne and the full year impact of Adelaide and Sydney.

The 30-Jun-2017 switch from the 777-300ER to the A380, which Qatar 517 seats in three class configuration (461 economy, 48 business and eight in first) will result in a 44% increase in seat capacity on the Doha-Melbourne route. Qatar has been using the A380 on the Doha-Sydney route since Sep-2016. Qatar operated the Doha-Sydney route with the 777-300ER for six months before transitioning to the larger A380.

Qatar will need more traffic rights to continue its growth in Australia beyond 2018. More new routes from Doha to other secondary gateways are not likely viable. Qatar prefers to enter the Queensland market with a service to Brisbane rather than experimenting with Gold Coast or Cairns.

Qatar is also unable to further add capacity in Melbourne and Sydney now that it will soon be operating the A380 – its largest gauge aircraft – in both these key markets. Perth, which has been operated with a wide combination of aircraft (including multiple 777 variants, the A350 and the 787), is too small to support the A380.

Even smaller Adelaide is currently served with the A350. Qatar became the first airline to operate the A350 to Australia when it launched service to Adelaide in May-2016.

Qatar’s average Australia load factor has been above 80% the last two years, an indication the capacity it has added has been quickly absorbed and the market could support further capacity increases. Qatar is significantly smaller than its two Gulf rivals in the Australia market and is obviously keen to narrow this cap. Etihad carried 1.2 million passengers to and from Australia in 2016 and Emirates carried nearly 5 million.

It is time for Australia to fully open up the Qatar-Australia market for the benefit of consumers.

Qatar Airways annual Australia passenger traffic and average load factor: 2017 to 2016

Source: CAPA – Centre for Aviation & BITRE