Qantas’s international network has achieved a double-digit increase in passenger numbers in January, as the boost in capacity in the month was more than met by market demand.
The Flying Kangaroo’s overseas flying carried 618,000 passengers in January, up 13.3 per cent from the prior corresponding period, figures from Qantas’s monthly traffic figures released on Monday showed.
Revenue passenger kilometres (RPK) rose 11.8 per cent in the month, while capacity measured by available seat kilometres (ASK) was up 10.3 per cent. With demand running ahead of available capacity, load factors grew 1.1 percentage points to 85.3 per cent.
“Qantas International capacity rose by 10.3 per cent in one of the peak international travel months of the year, with growth coming from increased utilisation of group aircraft,” Qantas said.
“Qantas International RASK (revenue per available seat kilometre) was higher in January compared to the prior year, with strong inbound demand and steady outbound demand meeting increased capacity on routes including in Asia and the US.”
Qantas has flagged international capacity growth of nine per cent in the second half of the 2015/16 financial year, driven by increased fleet utilisation.
“It is really efficient growth that is driving it,” Qantas international chief executive Gareth Evans said during the airline group’s first half results presentation to the financial community on February 23.
“We are growing in an environment where we have got strong demand growth and we are matching that supply to demand.”
Evans said the focus on capacity growth in the second half would be “spread around the world, though there is a lot of focus on Asia coming in the second half”, noting there was the full-year effect of new services already launched such as the Brisbane-Tokyo (Narita) and Sydney-San Francisco routes, and extra flights to Hong Kong and Singapore.
Meanwhile, Qantas Domestic, which includes QantasLink achieved a 5.2 per cent increase in passenger numbers, while available seat kilometres was up a slender 1.2 per cent in January. Load factors rose 1.9 percentage points to 74.7 per cent.
Growth at Jetstar’s Australian domestic services was more sedate in January, with the low-cost carrier carrying 1.7 per cent more passengers in January compared with the prior corresponding period, while ASKs grew 0.7 per cent. Load factors were up 0.2 percentage points to 82.6 per cent.
“Group Domestic (comprising Qantas Domestic and Jetstar Domestic) capacity in the month was 1.0 per cent higher compared to the prior corresponding period, with growth on East Coast and leisure routes and continued right-sizing of capacity in resources markets,” Qantas said.
Qantas chief executive Alan Joyce said the airline group expected a $50 million impact from the ongoing slowdown in the resources sector in the second half of 2015/16.
“The scale and fleet mix in the Qantas group means we are able to adjust our capacity footprint to mitigate the earnings impact,” Joyce said during Qantas’s 2015/16 first half results briefing to the financial community.
“We have been deploying smaller aircraft on the affected routes and we have been taking the aircraft freed up, mostly 737s, and redeploying them to meet demand on the east coast or international routes where we can make a return.
”It is unclear when exactly the resources downturn will bottom out but are making sure our operations are right-sized to meet any demand environment.”
While Qantas did not disclose its yield – a measure of average revenue per passenger – performance in the monthly traffic statistics, the company did say RASK at both its Australian domestic and international operations was positive in the month compared with a year ago.
On February 23, the airline group reported statutory net profit after tax for the six months to December 31 2015 of $688 million, more than three times the $203 million in the prior corresponding half.
NOTE: The March edition of Australian Aviation, on sale now, includes managing editor Gerard Frawley’s NOTAM column about the changing fortunes of Qantas’s international operations. It can also be read online here.